OD TOOLKIT

Read: organisations 7: Fundraising

At times when donors withdraw and other sources of income are as yet not available, organisations - struggling for survival- embrace the idea of fundraising.

Some topics should be discussed and some questions should be answered before actually throwing one self in fundraising activities:

is being funded self-evident?
reasons to be funded
reasons not to be funded
potential funders and their characteristics
what does a NGO need for successful fundraising?

Is being funded self-evident?

The natural birth of a NGO (look at: dynamics 1: Mushrooming of NGO's in countries of former Yugoslavia) is the action group of volunteers, indignant about a specific societal problem. The members are inspired by ideals, work hard and sometimes achieve success. Those groups that have success will expand their activities and attract more and sometimes other people who want to join in. The fist success is often breaking the silence around the problem by being able to put the topic at the public and political agenda..

Public recognition of the work of the group is one of the first results.

In a more or less normal life cycle of a NGO this is the moment that being subsidised becomes a topic within the group. The government or the local authorities might be willing to subsidise housing, or an office, or maybe one paid staff coordinator.

In societies where action groups are born in conflicts or war, trying to alleviate the suffering of refugees or sexual violated women, subsidy is often available at a very early moment. International aid organisations recognise that help is desperately needed and groups who can help receive funds. Such groups are rapidly transformed into NGO's, choosing a legal form apt for receiving money. These circumstances lead to the fact that being subsidised is considered normal.

When the conflict cools down foreign donors usually withdraw. Although a lot of problems are still to be solved. And leaving behind the young NGO's without the money they got used to. The withdrawal of relatively abundant grants makes them vulnerable and defenceless. Most of these groups or organisations have hardly known a period of growing and maturing without any money at all. What to do without money. How to survive?

Reasons to be funded

Coming from a situation in which no money was available, funding opens the perspective to a lot of desiderata:

basics as an office, housing, material, machines, the possibility to consult experts, putting out some work to contract like book keeping.
it may give the organisation some sustainability and it makes it possible to direct all the energy to the goals themselves.
being subsidised is a form of recognition and may legitimate the organisation in the eyes of other parties,
the products may be sold at lower prices and are thus within the reach of more people..

Other reasons to welcome subsidy may be the conviction that

paid jobs for women help their economic independence and
may heighten their societal influence

For organisations confronted with withdrawal of their sources of income, the question if subsidy will be found is a matter of keeping or losing paid jobs, keeping or losing housing or lodging, and keeping or losing activities that cost money.

Reasons not to be funded

Being funded means being accountable, writing reports, investing time and energy in funding and in accountability.
Being funded means control, rules, being encapsulated. Donors paying money to critical groups can be a way to control them.
Being funded may mean at the long run an infringement of the pioneer mentality, of the organisational culture that encourages people to spend their unbridled energy, to give their best at impossible moments. Being subsidised is losing the unique position of highhandedness. Being subsidised means a transition to another organisational identity, from action group to a professionalising NGO, becoming part of the mainstream.

Being funded should require a real decision, considering arguments related to the advantages of freedom and to the advantages of more comfortable possibilities.

Potential funders and their characteristics

A rough distinction can be made between different subsidising funders:

supra national funders like the European Community
foreign developmental donor organisations like Oxfam, Novib
the national government or local governing bodies
big funds like Ford, van Leer, Rockefeller, originally related to trade and industry
organisations coming from trade and industry
private funds (civic organisations, unions, churches, professional associations etc.)
private persons

In all cases the key question is: how do we pay for being funded.

The government or local authorities.
In countries in which civil society is not yet a broadly accepted and appraised field of activities, the government will not be used to spend money on organisations that are critically towards governmental policies and try to enforce good governance. NGO's will rather be considered as adversaries than as logical partners in societal development.
In the process of transition to democracy and the development of civil society government may gradually become more friendly towards NGO's but still suspicious towards their political angle. The most probable form of subsidy is a small amount of money, equally distributed to all kinds of players in the civil society. NGDO's, oriented towards developmental goals, will have the same status as NGO's with socialising goals.
If NG(D)O's nevertheless want governmental funding, they should be careful about conditions. Governmental agencies work within a framework of rules that is not always easy compatible to that of a NGO. The kind of control and the amount of paperwork that accompanies government funding could well ruin the appetite for subsidies.
Trade or industry. Some big multinationals have funds with an autonomous board (the above mentioned funds like Ford and Rockefeller). They subsidise projects that fit in their priorities and meet their quality standards. There is no connection to the business whatsoever. Great!
But other companies from trade and industry who are willing to fund an organisation shall make demands in return. The least is use of the work of the NGO for public relations purposes. The effect upon the public image of the organisation of such a connection should be a matter of consideration.
Private funds. Some of them are big, providing big funds, the smaller ones usually grant for limited projects, with limited amounts of money, for a limited period. Some of them provide money for projects and overhead, a lot prefer to fund activities, no overhead. Each fund has its own criteria and regulations. If the NGO can find funds with related goals, funding is an attractive possibility for both parties.
Private persons. Worldwide the private donors form together a pyramid:
10 % of them raise 60% of the proceeds, 20 % raise 20% and 70 % of the private donors raise 20% of the total sum. This pyramid means that some big donations are needed in order to reach a reasonable total sum.
Private donors are a very good source of funding, in each and every country.
Finding the apt groups is the key activity, which can be very time consuming.
People want to give because they believe in certain goals, because of their societal responsibility, because they know someone in the organisation. Sometimes they give true to tradition, they give because giving causes feeling good, because they want to belong to other people and because they are asked to do so. Raising funds from private persons should be based on the needs of the people who may give.

What does a NGO need for successful fundraising?

Making intelligent conditions and developing the right attitude, these are the two major necessities for successful fundraising.

Fundraising should only be done under the following conditions:

no risk that the quality of the products or services is reduced
no risk of reduced accessibility because of funding
no risk of incompatible influence of donors on the policies of the NGO
no risk of harm to the credibility of the NGO
a balance between time, money and human energy to get funded and the funds themselves.
the NGO should be able to handle fundraising and ready to be transparent and accountable

Fundraising demands a specific attitude towards money and towards asking money. Fundraising is offering others the opportunity to invest in matters that make life worthwhile. Fundraising is investing in a relationship with whom are asked to give and understanding why they might give. The representatives of the organisation should transfer the feeling that funding is a chance to join in the work of the organisation, with money.

For whom is interested to read more about funding: