Under certain conditions, it may be possible to have a program which depends primarily upon volunteer services to function. Such programs are the exception rather than the rule.

Fee-based programs are built upon the assumption that people will pay for the literacy benefits being provided. Fee-based programs typically cover only the cost of the teacher's salary, not other program costs such as facilities, materials, and supervision.

Fee-based programs may be based on cash or in-kind fees. In-kind fees usually take the form of labor exchange such as working the teacher's field in exchange for the teacher's contribution to the classroom. They may also involve in-kind contributions such as produce, artifacts, or animals.

Fee-based programs are not reliable in most traditional cultural contexts. In most households, the flow of cash is seasonal or erratic. At times, there may be an abundance of resources after crops are in, a period of labor has been accomplished, external payments have been received, major assets have been sold, or weddings have taken place. At other times, no one has cash and a fee-based system typically breaks down.

Fee-based programs also tend to break down when used in a socioeconomic system where one must share assets with members of his or her extended family.

Budget-based programs are sometimes used where there are well-established and well-run political systems operating with dependable sources of income. In such cases, these units (whether village committees, commissars, or councils) may write a literacy program into their budget. This is even more likely if the proposed program is a formal education program.

Since it is desirable that literacy programs be self-sustaining, it is attractive to plan for a parallel income-generating project in the community to provide funds.

Such dual programs are attractive to external donors who do not want their literacy funding to continue indefinitely and who want to assist in community development.

Income-generating projects are occasionally a reliable source of funding, but not generally so. There appear to be technical and structural reasons why income-generating programs fail:

• In the technical domain, the program does not generate the expected income for any of a number of reasons such as technical inappropriateness, poor management, equipment breakdowns, or marketing problems.

• In the structural domain, programs often fail because

  • those producing the income want to spend it at their discretion, not for the literacy program
  • applying profits from the income-producing project to the literacy program requires rather abstract and sophisticated accounting skills that are often lacking, and
  • local networks of social obligations often prevail and siphon off funds being held for the literacy program.

• In order for an income-generating project to work, experience has shown that

  • there must be a significant effort to train local leaders, project managers, and opinion makers in the principles of the income-generating project
  • the project needs to operate under the watchful eyes of a "mentor" for a number of years, and
  • the income-generating project needs to mature and develop both as a concept and as a generator of cash flow before it is tapped for literacy program expenses.