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18
ideas for avoiding a funding crisis!
Frank
Julie
February 08, 2007
http://sangonet.org.za/portal/index.php?option=com_content&task=view&id=6357
We live in difficult
times with most NGO’s and CBO’s trapped in the grip of a severe
financial crisis. The causes are varied. Some organizations think
that using fundraising consultants will get them out of this crisis.
For some this simply becomes a short tem solution to a long term
challenge. Here is what your organization can do without having
to use a consultant. And you don’t even have to be an expert to
do all this.
It may only
need about 2-3 hours per week over 3 months to develop all the ideas
and then to maintain it. Get a serious team together who believe
in what you do and get them to work on some if not all of these
ideas.
A: EXTERNAL
DONOR INTERVENTION
1. Retain
your existing donors and get them to give more
Make
sure that your current donors stay with you for as long as possible.
Get them to commit more funds. Make sure that you act as a good
recipient to build more donor trust and hence strengthen your existing
relationships. And make sure you deliver on your promises in terms
of impact and delivery. Stop making excuses.
2. Make
a list of your previous donors and investigate the possibility of
recruiting them again
It
is better to invest resources in past relationships. Ask yourself
why the donor contract came to an end. Unless the donor changed
complete focus, approach the donor for renewed funding. If they
had problems with your work, show them that you have addressed these
concerns. Show them you took their concerns seriously. Sometimes
donors are just waiting for you to contact them.
3. Cultivate
your potential donors
Make a
list of donors who know about you or that you know and who fall
within you focus area. Find out who is the contact person and set
up a consultative meeting or at least an exchange of information
about your organization. Draw up a funding enquiry where you highlight
your funding needs but most of all highlight your track record.
Donors want to buy into success and not your desperation for funds!
And don’t forget to take out all your regret letters. Remember,
a regret letter is simply a delayed yes. It is how you read it.
You may be sitting on a gold mine!
4. Market
yourself to unknown donors
You
cannot create continuous interest in your organization without a
clearly formulated communication and marketing strategy. I must
still find a NGO who can convince me that they have one and more
importantly, that it is implemented. Trapped in survival mode, many
NGO’s forget to raise visibility about their work in the form of
newsletters (print and electronic), websites, blogspots, articles
in newspapers, brochures, pamphlets, letters, faxes, block e-mails,
etc. So trapped in survival mode, they forget their work is about
changing human lives and that they need to celebrate their successes.
And don’t hide your challenges! Let others know about it! And tell
them what you are doing about it.
B: MOBILIZING
RESOURCES (FINANCIAL, MATERIAL AND INTELLECTUAL) THROUGH THE ORGANISATION
Develop
a cost containment strategy
Simply
put, this is how to prevent waste! Just because you are not working
with your own personal finances does not mean it must be wasted.
There are many NGO’s who simply spend funding because it is in the
budget and must be spent. This is dangerous. You don’t build donor
trust in this way. Treat donor funds as if it is yours personally
and treat it with respect!
Here are some
ideas of how to contain expenses:
Staff
containment:
Ensure
that all full-time staff positions are justified. Staff salaries
will be your biggest expense and it must be justified with actual
need and performance. Don’t employ full-time if part-time employment
can also get the job done. And stop using consultants unnecessarily.
Develop the capacity inside your organization. Some dishonest consultants
who look for the next contract like to see problems where none exist.
Be careful.
List
overheads to be contained e.g. electricity, telephone, transport,
etc
Make
a list of your main overheads and educate staff and volunteers on
how to contain these costs. The telephone is the one thing always
abused. With cellphone calls becoming more expensive, and with most
people without airtime, they start using the organization’s telephone!
Paper
recycling
Always
use paper on both sides when used for internal consumption, like
minutes of meetings, memos, e-mail print outs, etc. And contact
a paper recycling company to put a big box in your office for recycled
paper. This may not generate a lot of income but it shows the donor
the respect you have for the resources entrusted to you.
Identify
your service providers and negotiate discounts
Make
a list of your service providers like banking, cleaning services,
catering, insurance, auditing, etc. Set up meetings with them and
educate them about your work. Ask them for discounts. Remember,
if you don’t ask you will never get! Let them know that you will
take your business somewhere else. Let them know you will exercise
your choice.
Make
a list of friends of the organization and get them to give on a
monthly basis
You
may know many individuals who support your work but cannot get involved
actively due to other commitments. Get them to commit a monthly
or annual donation. Start by making a list of at least 10 individuals
and grow this list by at least another 10 every year. Ask for a
specific donation but leave open the possibility of giving more
than what you may request. And make sure that you know what is in
it for the person e.g. a free newsletter, annual certificate, regular
update about success stories, access to training, referrals, access
to information, etc. Remember, you are building a partnership. And
partnerships always start with what you can share with the other
party. Before you ask, be prepared to give first!
Develop
services e.g. workshops that you can offer at a small fee
Many
NGO’s are experienced in their field of operation but don’t know
how to package their intellectual capital and market it. Get someone
with expertise to assist you. Offer regular workshops and charge
a small fee. This will also market your organization.
Recover
your costs
Charge
for services or products you offer (like counseling, booklets, t-shirts,
etc.) at a small fee that is affordable. Develop a scaling system
that segments people according to their ability to pay e.g. unemployed,
professionals, students, etc. and charge fees accordingly.
Develop
a mailing system
This method
is not only for big NGO’s. There are many NGO’s especially in the
field of training, who assist literally thousands of beneficiaries
over many years. And they never get these beneficiaries to give
back to the organization. Every beneficiary should be treated as
a potential donor. Keep their names and addresses. Write to them.
Track them. Meet with them and get them to commit to the organization.
Inspire them with your success stories. Show them how they can now
help others like them. There are many beneficiaries who simply wait
for you to contact them. They want to show their appreciation. Go
through your files. List the names of those who benefited successfully
through your services and get them to give to you. Set yourself
a target and get them to give more each year. Develop this system
and get a volunteer to maintain it. This is a long term job with
huge potential so invest time and resources in it.
Develop
a sustainability fund to use for emergencies
Funding
gaps and donors who change focus areas are a constant reality for
all NGO’s. Don’t complain about the donor when your funding happens
to be 3 months late or when they inform you that they have changed
focus. You have little control over donor agendas. But you can control
your response to it! Developing a sustainability fund (or reserve
fund) is one way of responding. And don’t wait for the next funding
crisis before you act! A reserve fund will save you from using bank
overdrafts that will incur interests. And then you have another
expense! Start building your reserve fund by committing a small
amount each month in a special account.
Use
different accounts strategically to maximize interests
Many donors
pay huge amounts of funding that you will not necessarily use immediately.
Utilize different bank accounts strategically to generate maximum
interest. Negotiate an interest rate with your bank manager. Become
more assertive!
What
is your staff contributing?
Get
your salaried staff to pay 1% of their salary back to the organization
and/or offer to work an extra hour per day or per week (without
overworking themselves!) to maximize their contribution to the organization.
If staff members are not prepared to give to their own organization,
few other people will. Staff must show their commitment to their
own vision and mission. They must learn to give as well including
your board. And you must set the example as director!
Start
a small scale consulting service using staff expertise and generate
income
Consultants
are simply people selling and sharing their experiences with other
people and organizations. And they get paid for it. Many NGO’s have
people with enormous experiences but they are not utilized effectively
to generate income. Identify these individuals and without deviating
from your core focus, let them market their experiences to others.
And charge for it! If you don’t know how, get someone to assist
you or discuss this with an organization who is doing this already.
Develop
strategic partnerships with other organizations to add value to
your work
Identify
NGO’s who can help you with staff development or other services.
Why pay if they are prepared to offer it free to you? Or even at
a discount? Before you pay, learn to negotiate first. Many NGO’s
contact me for discounts and I am always happy to concede to their
requests. And remember again, partnerships start with what you have
to share!
Investigate
bequests, i.e. people who want to leave behind a legacy
There
must be people with loads of money who are looking for worthwhile
causes to support. In the previously advantaged communities this
is a powerful form of fundraising. There are people who want to
leave behind a legacy. Get in contact with them. Help them choose
your organization. And be sensitive when you use this method!
Don’t
only look for money
Remember,
fundraising is not just about money raising. It is about mobilizing
resources, anything that can help you to achieve your strategic
objectives. When you only look for money then you are bound to miss
other opportunities. Ask for material donations, draw on people’s
intellectual capital, connections, referrals, sources of valuable
information, etc.
C: AND
FINALLY, DON’T CHASE AFTER DONORS, LET THEM CHASE YOU!
All the above
can only work effectively if you ensure that you have a fundable
organization. You must get donors to chase you. This is what you
must focus on:
- Make sure
your organization is well governed with a clear vision, mission
and strategy. Focus on continuous board development to avoid role
confusion and hence unnecessary conflict or tensions. Get your
board on board!
- Programmes/projects
objectives must be clear with well trained and experienced support
staff and programme personnel. Clear job descriptions with continuous
performance appraisals and continuous staff development focusing
both on the task and the person. This is a necessity and not a
luxury.
- Reflection,
planning, monitoring and evaluation must be done constantly and
not because donors require it. And share the lessons of your evaluation
results with your partners.
- Focus on
being effective and not just busy. Ensure staff come to work with
clear work plans and objectives link to your strategic objectives
and not just to kill time, pretending to be busy or duplicating
each other’s work. Avoid too many meetings. You cannot work and
meet at the same time!
- Have a fully
developed communication and marketing strategy in place. Become
more visible. This is the only way to ensure that others will
buy into you. You must sow the seeds. It may germinate in unexpected
places!
- Leadership
and management training must be continuous with succession plans
in place for all departments. This is one of the main weaknesses
in many NGO’s. There is no thinking about succession planning
forget about having those plans in place. We almost invite crises
around succession. This is dangerous.
- Clear organizational
policies are in place and implemented. These policies include
financial-, staff development-, car-, leave-, remuneration policies,
etc.
- A fully
developed risk management strategy is in place to protect the
organization against any unforeseen circumstances. This includes
funding gaps, loss of income through donor withdrawal or fraud,
burglary, succession, fire, etc.
And remember,
if you fail to plan, you plan to fail!
*Frank Julie
is an independent development consultant and author of "The
Art of Leadership and Management on the Ground" (A practical
guide for leaders and managers to develop sustainable organizations
for permanent social change).
Please credit www.kubatana.net if you make use of material from this website.
This work is licensed under a Creative Commons License unless stated otherwise.
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