However, supervision should be calibrated so as to avoid stifling the initiative of the non-profit institutions, draining their capacity to act and ultimately reducing the benefits to civil society. 5. Financing the non-profit and voluntary sector There are four possible sources of funds for the non-profit sector: private donations, government transfers, debt capital and self-financing.
Government contributions bulk large in Italy, whereas private donations are marginal. The relationship between the two is specular, and in fact in countries where private donations play a larger role they are encouraged by favourable tax treatment.