Training Manual - Fundraising for NGO's
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Transcript of Training Manual - Fundraising for NGO's
Section 1: Getting Started
Fundraising is one of the most important activities in any NGO, bot not
many directors are trained in the art of raising funds. Financial planning
is done with the hope that at some time during the year, the money that
is needed will come from somewhere. Financial stress is a great
discouragement, whether it is present in a family or an organization.
Many organizations collapse because of a lack of resources, and social
entrepreneurs become disillusioned and burnt out. There is also the
reality that there are thousands of organizations appealing for money
from the same sources. A professional approach to fundraising will enable
your organization to be one of those that receive the funds they apply for,
and will contribute to building a sustainable and thriving organization.
Workshop Objectives
Research has consistently demonstrated that when clear goals are associated with learning, it occurs
more easily and rapidly. With that in mind, let’s review our goals for today.
At the end of this workshop, participants should be able to:
• Understand the nature of fundraising.
• Assess their organization’s fundraising strategy.
• Put together a strategic plan for their organization.
• Understand different types of funders and their needs.
• Learn to identify possible funders.
• Put together a funding strategy and fundraising plan.
• Write funding proposals.
• Report to funders.
The greatest use of a life is to spend it on
something that will outlast it.
Introduction: Fundraising Review
Where does your current funding come from?
In the table below, list the fundraising activities that your organization has undertaken in the past 3
years. Record how often you have done these activities and describe who the target market was. If
the target market was individuals, note things like their socio-economic group, age group, and
language; if the target market was companies, what sector of the economy are they in, what is their
size and turnover (e.g. small, medium, large). Make notes on how successful these fundraising
activities were.
Type of Activity How often was it
done?
Target market Results
Evaluate your organization’s fundraising strategy. Is it effective? Are there some activities that are
not providing a return, and need to be suspended?
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Discuss your evaluation in groups of four. Allow other group members to give you feedback or
encouragement.
Further questions…
• Where do you hope to find more funding?
• What are the challenges you face in fundraising?
• What could you be doing better?
• If you came away from this workshop with only one thing, what would that be?
Take a few minutes to think about these questions and write your answers below.
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What is fundraising?
It isn’t begging!
Some people think like this because fundraising involves asking for
money, but if you think like this you put yourself at a psychological
disadvantage before you even begin. Social development is the
building of capacity in others to develop themselves. Through
fundraising we develop relationships with others in order to
facilitate development in the communities we work in. The work
you do has value and dignity. Funders recognize the value you
create in your community by contributing financially towards your work. In return, you report on
how you used their money and the results achieved.
It’s not an event!
Fundraising is not something we do when our organization is struggling to make ends meet.
Fundraising is an ongoing process that needs to be understood, planned and managed.
It’s about building relationships
It’s about building friendships with other people. This means that we do not
only go to other people when we need something. We invest in the relationship
when things are going well. This means building friendships with people, finding
out about their families and interests, and being genuinely interested in them
as people.
People enjoy giving!
There is something within human nature that makes us enjoy giving. It is how we ask, and what we
do with what we are given that will determine whether we get something.
The key to successful fundraising
In your groups, discuss the things that you think are the most important aspects of successful
fundraising. Try to list them in order of importance.
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The core activity of fundraising is______________________________________________________
Section 2: Before you even think about asking for anything…
Why does your organization exist?
It is very important to define the need that your organization
meets. This is something you can’t just assume or take for granted.
NGO’s operate on the same market principles as any other
organization, especially when it comes to fundraising. Your
organization is a product. It cannot sell unless there is a need for it.
What is the need that your organization meets?
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Describe what your organization does from the point of view of the recipients/beneficiaries.
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Be REALLY clear on the need your organization is meeting
It is a good idea to do some kind of needs analysis in your community. A Needs Analysis attempts to
discover the felt needs of the community. This can be done through formal research or some kind of
informal survey, such as visiting a certain number of community members and asking them what
they see as the greatest needs in the community and keeping a record of these interviews. A mistake
many outsiders make is to assume they know what a community needs, and then impose their
solutions on the community. Doing a Needs Analysis can also be a great opportunity to network in
the community. It gives other members of the community an opportunity to give their input and
possibly offer their services or expertise.
A further step that is valuable is to do a Situational Analysis. This documents the situation in the
community in terms of the population, the number of people who have the need you are trying to
meet, other organizations who are addressing that need, and other stakeholders in the community.
The need you are trying to meet may be obvious to you, especially if you are part of the community.
However, it is important to be able to show potential funders that the need you are trying to meet is
People give because you have met
needs, not because you have needs.
there. Doing a Needs Analysis and a Situational Analysis also demonstrates that your approach is
both consultative and thorough.
Vision and Mission
Vision and mission arise out of the need to exist. The vision is your dream
of a future reality that does not yet exist. You want to bring it into being.
Your mission is the implementation of your dream – what you are going
to do to make it happen. The actions your organization takes from day to
day need to be focused on making that dream a reality.
What is the vision of your organization? If you do not have a vision
statement, write a single sentence that describes the future
circumstances you want to bring into being.
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What is the mission of your organization?
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Thinking ahead….
What are the current and future needs of your organization?
Once you have a clearly defined vision and mission you can start thinking about what you need to
accomplish your dreams. What does your organization need? Don’t only think about the financial
and material needs of your organization; think about equally important things like staff training.
List some of the current needs of your organization. You can think about things like staff, facilities,
vehicles, computers, money for operating expenses. There is a danger of creating an unrealistic
“wish-list”, but try to think of all the things you would need to fulfill your mission as an organization
for the following year.
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What resources does your organization already have?
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What do you still need?
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What are the cost implications? (Get quotes, or estimate a cost for each need.)
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Describe the process of financial planning and budgeting in your organization. Who is involved? How
often does it take place? How often is it reviewed?
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Getting where you want to go...
Create an Action Plan
Many NGO’s think only in terms of their overall mission when it comes
to planning and fundraising. This can be very discouraging because the
needs for the overall project seem too great and there is often no real
sense of progress. It helps to break the bigger task your organization is
trying to accomplish down into many smaller tasks. These can each be
given a time frame and the financial and human resources needed for
each can be assessed and allocated. A project management tool such
as a Work Breakdown Structure can be a useful way to do this. A copy
of a work breakdown structure is at the back of this manual.
This process is helpful in a number of ways:
• Smaller tasks are easier to accomplish within a specific time-frame.
• By accomplishing these you experience the feeling of success as each milestone is achieved.
• There is a clear sense of progress.
• Staff members and volunteers learn skills and develop competency.
Most importantly, from a fundraising perspective, it is often easier to get funding for smaller short-
term projects – especially when you are starting out. The added advantage is that funders see results
and a return on their investment relatively quickly, and this usually leads to more funding.
Setting SMART objectives
SMART is a convenient acronym for the set of criteria that an objective or goal must have in order
for it to be achieved.
• SPECIFIC: Success coach Jack Canfield states in his book The
Success Principles that, “Vague goals produce vague results.”
In order for you to achieve an objective, you must be very
clear about what exactly you want. Often creating a list of
benefits that the accomplishment of your goal will bring to
the organization, will you give stakeholders a compelling
reason to pursue that goal.
• MEASURABLE: It’s crucial for goal achievement that you are
able to track your progress towards your objective. That’s why all goals need some form of
measuring system so that you can stay on track and become motivated when you see that
you are making progress.
• ACHIEVABLE: Setting big goals is great, but setting unrealistic objectives will just de-motivate
you. A good objective is one that challenges, but is not so unrealistic that you have virtually
no chance of accomplishing it.
• RELEVANT: Your objectives must be in line with your vision and mission, otherwise they are
not going to help you bring about the future your organization dreams of creating. Before
you even set objectives, it’s also a good idea to sit down and define your core values.
• TIME-BOUND: If you don’t set deadlines for your objectives, you have no real compelling
reason or motivation to start working on them.
There is a goals and objectives worksheet at the back of this manual that will help you to set
SMART objectives when you do your planning.
Planning for your organization involves answering the following questions:
• What needs to be done?
• How do you intend to do it?
• Who will do it?
• When will it be done and how long will it take?
• What resources will be required?
• What results do you want to achieve? Try to quantify this: how many?
• Why do you want to do this? (What are your underlying assumptions?)
• Are there any other things you need to do before you can start?
Remember, the more thorough your planning is, the easier it is going to be to
get the resources that you need to achieve your objectives. There is a saying that
no one ever plans to fail – they just fail to plan. If your planning is done properly
you will be able to manage the project properly. You will be able to see when
you are going off track, and make the necessary adjustments that will enable
you to accomplish your objectives.
Implement the Action Plan
Carrying out the action plan involves things like the following:
• Communication (making sure everyone who needs to know about the plan is sufficiently
informed: staff, volunteers, donors, the community). Note that different groups need
different amounts of information.
• Basic management duties like making appointments, delegating, having meetings, clarifying
expectations etc.
• Getting feedback. All of the above will generate a lot of information. This needs to be
processed and then acted on. This information may come to you informally (e.g. in passing
conversations) or formally (e.g. in meetings or consultations).
• Evaluate the results. Are you on track with your plan? How far are you from your target? Do
you need to make adjustments in terms of things like personnel, resources, time-frame etc?
Exercise
Use the worksheet for setting SMART goals and objectives to set out the objectives of your
organization over the next year. Break the bigger objectives down into smaller tasks. Sequence the
tasks by giving them a time frame (a start date and an end date).
Section 3: The Process of Fundraising
Some things you should never do!
The worst thing that NGO’s can do is to rush out and try to get money
wherever they can. Often the financial situation in the organization is
desperate and funds are needed for things like salaries. In situation like this it
is easy to become desperate and sound desperate. This is counter-productive.
In order to build a sustainable organization, fundraising needs to be
approached with a clear plan.
Avoid the following at all costs:
• Post to online discussion groups or send emails or letters via post with desperate pleas for
money. You will not gain funds this way. You may even harm your credibility and create bad
feelings about your organization among potential supporters.
• Send out information riddled with spelling errors.
• WRITE EVERYTHING IN ALL CAPITAL LETTERS. This is the equivalent of shouting online or in
print.
• Give Up. If you are not successful with your first attempts, keep trying. Review the reasons a
donor has rejected your request, and use the information you gather to improve future
requests. If you don't receive a reason, ask, respectfully, and say it is because you would like
to be able to do better in the future. Don’t pester the same donor with multiple requests,
but if your NGO changes its work or administration and you believe your NGO's operations
now better fit a funder's guidelines, consider contacting a potential donor again,
emphasizing how your proposal is different than the one previously rejected.
Step 1: Networking and Establishing Credibility
Many funders want to know that an NGO is credible before they will even
reply to an organization's request for funding. Establishing credibility
doesn't take money – it takes time, effort and personal attention. The first
impulse of many NGOs seeking funding is to request the contact
information for possible funders, and once such information is received,
these NGOs often write immediately to the potential funder, stressing how
desperately funds are needed. Unfortunately, this approach often harms
the NGO's reputation, rather than garnering support. Not only does it rarely
attract funding, it can turn funding sources against the NGO altogether.
Donors don’t give to institutions, they
invest in ideas and people in whom they
believe.
The activity to start with for successful fund-raising is networking: establish relationships - formal or
informal – with other local NGOs, local government offices, community service organizations (Round
Table, Rotary etc), and large employers in the area.
To network, start with:
• local reporters or local media outlets (newspaper, radio, etc.)
• large employers in your area
• local and regional government offices (Social Development etc.)
• other NGO’s in your area
• local communities of faith
• local universities and schools
• any associations in your area (such as associations for small businesses, associations of
women farmers -- such associations can be formally or informally-organized)
• local embassies or consulates
• Research other NGO’s that are doing similar work to you. Try to find out what the best
practices are in your field and who is doing these. Approach leading NGO’s and ask them if
they can help you with training and/or resources, and if you can form some kind of informal
relationship with them.
Meet face-to-face with these people, whenever possible, to let them know
what your NGO is doing - do not emphasize what your organization needs
but, rather, the good work that it is doing, and why the organization believes
its mission is important, even essential, to the area. Invite representatives of
these organizations to visit your organization and see your work first hand -
invite them more than once! If you can, give them printed information about
your organization. And people representing your NGO should attend their
events and accept their invitations too!
By doing this, you will lay the groundwork for funding. You will significantly increase your chances of
receiving resources if you engage in these networking and reputation building activities. It is even
better if this networking is able to lead to formal associations/affiliations with other local NGOs,
International NGOs, or government agencies in your area, in the form of partnerships, collaborative
activities or shared resources. Potential funders view all such associations very favorably when
considering who to fund.
But remember: when networking initially, do NOT ask for funds, nor describe your organization as
desperate for support. The purpose of networking is to establish your organizations reputation for
excellent, quality work, and to create a network of organizations and people who will verify to others
that your organization is legitimate, credible and worth supporting.
In groups of four, discuss possibilities for networking in your community. Who are the people with
whom you need to build relationships to further the objectives of your organization?
Step 2: Understanding Donors
Different Donor Markets1
The Internal Market
This is one of the most neglected sources of money – within your own organization! There are a
number of activities over which you have control. Examples of generating income in this market
include containment strategies like recycling paper, not wasting electricity or water, not abusing the
telephone etc. Your biggest cost will always be staff costs, so try to contain staff expenses by using
part-time staff and volunteers where possible. You can raise some money by charging nominal fees
for your services, or some kind of membership fee. You can also generate money from activities such
as recycling.
The Community Market
You may be able to raise funds in your broader community. This can be by means of a nominal
charge for the services you offer. Raising money might not be the most important objective in this
market though, it may be more important to build relationships. Through this you may be able to
access volunteers or people with expertise in specific areas.
Look at other NGO’s, schools, churches and organizations in your community and think about how
you can build relationships and partnerships with them. If you start out by thinking about what you
can do for the other party, it is usually an effective starting point for a partnership. Building
partnerships also takes time – so be patient.
1 From Julie, F 2007. The Art of Leadership and Management on the Ground. Cape Town: Frank Julie
The External Market
This is the corporate donors, government agencies, charitable trusts and foreign donors. This is
where you may be able to generate most of your funds, so it is where your most skilled employee/s
should focus their efforts. Ideally this should be your director or someone just under them. A
consultant can be employed to do this kind of work, but this can create problems:
• The experience and learning from fundraising never filter down into the organization; with
the result that internal capacity is never built.
• A consultant is paid a commission, and some funders may see the percentage earned by the
consultant as a negative factor when deciding whether to give you funding or not.
• Funds raised by a consultant are not always well aligned with the needs of the organization,
and the NGO can find itself being forced to change goals and programmes to match the
requirements of the donor.
The way you usually access donors in this market is through a funding proposal. While some
organizations have their own proposal forms that you need to complete, writing good proposals
is a skill that is worth developing. Writing proposals requires an in depth understanding of how
the organization works and what its needs are.
Step 3: Before you even start, have these things ready
Some NGOs are so small, so grassroots and so limited that they
have no paperwork, no official documentation, and no official
recognition by the government. Therefore, they must rely solely
on local, in-person networking to attract local support, as most
national or international funders require documentation and
official registration.
The following activities may not be possible in your geographic
area, or your NGO may not have the funds to do all of these, but
realize that the following are absolutely essential to attract
international funding, and sometimes local funding as well, and being able to adapt even some of
them to your situation will increase your organization's chances of receiving support. If your NGO
can't do the following, many potential funders will feel that your organization cannot handle basic
management/governance and, therefore, is too risky to fund. All of the following are items that most
potential funders are going to want to see immediately. Therefore, do NOT start soliciting funds until
you have all of the following in order and ready to share on demand:
References
Have a list of people and organizations, and their contact information (phone number, postal
address, email) who are willing to affirm your organization's work and credibility, should they be
contacted by potential funders. If called upon, they will verify to potential donors that your
organization is worthwhile and credible. Other NGOs in your area, an international NGO serving the
same geographic area, a representative from a nearby university, or a local corporation that has
supported your organization in the past in some way, all make good references. Ask these
organizations if they would be willing to be references regarding your organization, and to be listed
in your funding proposals. Even if your NGO is so small and has such limited resources that it cannot
undertake any of the other following activities in this category of suggestions, it should, absolutely,
have references.
Official documents
You need to have copies of your organization's registration papers as an Non-Profit Organization,
and if possible as a PBO (Public Benefit Organization).If you are not registered yet, it is worth
registering with the Department of Social Development before trying to raise funds.
Other documents
It also helps if you have brochures, press releases, a staff list, and budgets/financial statements.
Potential funders will look at how quickly and completely you respond to their request for these
documents, so get these in order and ready-to-share before you start meeting with such
organizations.
Budget
Have at least a one-page budget that shows, for the budget vs actual income
and expenses for the previous year and your budget for the current financial
year. If you have this budget on your web site, it will add even more credibility
to your organization, as it will show that you are "transparent", a word very
important to potential funders. Donors want to see accountability and
transparency. They want to know how your organization's funds are spent, so
they can have an idea of how a donation they make will be spent. Having this
information ready to share -- even sharing it unasked for with a potential
donor -- will demonstrate your organization's accountability and
transparency.
Demonstrate That You Are Not a One-Person Organization
Donors are reluctant to fund one-person organizations. Even if the NGO has just one employee, and
that employee happens to also be the founder, your organization should also involve local
volunteers, and these local volunteers should have a voice in what the NGO does, and how it works.
Your written communications should demonstrate that a number of different people are involved in
the decision making and management of the NGO. Provide the names of people who serve on the
NGO's board; this may be, for instance, parents of children your organization provides services for,
who help your organization make decisions about programs and strategies.
Governance Issues
It is beyond the scope of this workshop to explore the corporate governance issues and financial
controls that are essential in order to attract funding. Have some kind of summary available of the
way your organization is managed, to whom you are accountable, and the financial management
systems that you have in place.
Step 4: Finding Donors
Mapping the donors active in your area
A helpful way to start looking for potential donors is by
undertaking "donor mapping". What organizations are funding
NGO activities in your geographical area? What companies are
funding for-profit activities (mining, farming, manufacturing, etc.)?
And what activities in your local community are being funded by
local, regional or national government funds? These are all
potential funders for a NGO. And if you engaged in appropriate
networking activities, they already know about your organization
and its work.
Contact embassies. They often have small grants programs, and favour organizations with whom
they are already familiar (hence the importance of networking activities). But be aware that these
grants are often one-time-only. You cannot depend on these grants being renewed every year.
Local government may be able to provide small grants. The City Council may have a some kind of
forum for NGO’s, such as an MSAT. Becoming a member of an official structure such as this will give
you access to city funding. Local government departments usually have funding. They might not fund
the overall activities of your NGO, but, for example, the Department of Sport might fund a sporting
programme, or the department of Arts and Culture a programme that is aligned with their interests.
The Department of Social Development can be an excellent source of funding.
Large multi-national corporations are reluctant to fund local NGOs unless the corporation has an
office or factory somewhere in or near the geographic area of the NGO. If you decide to approach a
multi-national corporation about funding, look at that company's web site and read all information
posted about that company's philanthropic activities. Find out if they have an office in your
geographic area. If the company has guidelines for submitting funding proposals, RESPECT THOSE
GUIDELINES. If the company states that it does not fund environmental organizations, for instance,
and your organization is focused on environmental issues, do not ask for funding. Also, before you
solicit funding from such companies, consider creating volunteering opportunities for that
company's local employees, and invite the company's participation. These local employees, through
volunteering, will get to know your organization, and may be willing to champion your organization
for funding within the company.
Charitable Foundations can be approached, but often, only through larger NGO partners. There are
some Foundations that assist smaller NGO’s and start-ups with funding.
Look at the web sites and annual reports of other NGO’s that work in similar areas to the one you
work in. They usually have a list of donors who they thank. It is likely that donors will support other,
similar NGO’s. You will need to do some research to get the details of the relevant people in the
donor organization, but this can usually be done via the donor’s web site.
Donor Management2
Current donors are the ones funding your organization at the moment. They have funding contracts
with you are you are reporting on how you spend their money.
Potential donors are the ones that know about your organization but aren’t giving you any funding
yet. With some persistence and relationship building these might become current donors.
Unknown donors don’t know that your organization exists. This is where it is important to have a
marketing and communication plan as part of your fundraising strategy. You need your organization
to become visible to as many funders as possible.
Remember that your current donors will hardly ever continue to support your organization on an
ongoing basis. It is common for donors to limit their involvement for 3-5 years. After this they expect
your organization to become more financially sustainable without them. This means that it is vitally
important to look for new donors before funding from a current donor comes to an end. Looking for
new donors is a 24 hour a day job that never ends. Many NGO’s have been plunged into a crisis
when they depended on 1 or 2 large donors, and when these donors stopped giving the organization
ran out of funds and collapsed.
This is why it is important to have a clear fundraising plan, and to be thinking 3-5 years ahead when
it comes to finding new donors and securing the organization’s future. Fundraising never stops. It is a
24/7 activity, 365 days a year. As you network and inform other people of the work your
organization does, be aware that many of the people you meet might be potential funders, or be
able to introduce you to potential funders. Every staff member and volunteer is therefore an
ambassador for the organization.
2 From Julie, F 2007. The Art of Leadership and Management on the Ground. Cape Town: Frank Julie
Some Ideas of How to Contact Donors3
The Medium How and Why?
Newspaper Articles Your media strategy should involve regularly writing to newspapers about issues on which
your organisation focuses. This is also called advocacy. Build relations with journalists.
Invite them to your graduations or other special events. Write a press release. Community
newspapers are always looking for interesting stories. Feed them! Articles in a newspaper
are like sowing seeds. You never know where it will germinate.
Brochures Update your brochures regularly and send them to targeted donors, both current and
potential donors. Do this at least 2 or 3 times a year. For donors to consider funding your
organisation they must know what you do.
Newsletters If you do not have a newsletter then you are not serious about your work. You must have
an organ to communicate to the outside world. The need you are addressing is in the
outside world not behind four walls. Tell potential donors what you are doing and how you
are doing it. Share your success stories and your challenges. Be open and honest.
E-Mail Keep this short and sweet. Funding enquiries and proposals are normally transmitted in this
way. Try to get permission from your potential donor that this method of transmission is
okay with them.
Fax Messages Again, keep these short, not longer than 4 pages. A funding enquiry can be sent this way.
Face to face meetings This is the best form of communication. You are present to answer any possible questions
that the donor may have about your work. Try to get your potential donor to your office or
project. Bring them to where the action is. Always try to close the gap of communication
between you and the potential donor. This will minimize any miscommunication.
Television Not many organisations use this medium. Try it! This is one of the most potent ways to
create awareness amongst unknown donors of your work. (Trainer’s note: This does not
need to cost you money. Send news, inspiring stories, and invitations to special events to
programs such as Morning Live, Expresso, talk shows and SABC and ETV news.)
Video Keep this short, not longer than 10 minutes. Donors are overwhelmed with requests for
financial support. They do not have the time to watch a movie.
Radio Have a strategy in place to get on to radio often enough to create awareness about your
work. With the mushrooming of community radios, there is ample opportunity to get your
message across to unknown donors.
Word of mouth This is when other people advocate your work and you don’t even know it. Remember:
people will only spread knowledge about your work if they like what you do. Give people a
bad experience and they will kill you wherever they go.
Annual report If you produce an annual report, send it to your various stakeholders. This shows your
commitment to accountability; accounting for the funds entrusted to you by others. It also
celebrates your successes and provides insight into your challenges.
3 From Julie, F 2007. The Art of Leadership and Management on the Ground. Cape Town: Frank Julie
Finding New Potential Donors
There are different types of donors:
• Government (local, provincial, national)
• Corporate
• Trusts and Foundations (local and international)
• NGO Networks
• Foreign governments (through embassies)
• Faith based organizations
• Individuals (through fundraising activities, bequests, donations)
In groups of four, try to brainstorm ways of identifying and contacting donors in each of the above
groups. Write these down on the large sheet of paper provided. You can also make notes in your
workbook.
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The Funding Enquiry
This is a short document (maximum 2 page) that you will send to a donor to find
out what type of projects they are funding (their focus areas) and the format
that funding proposals should take.
It should contain the following:
• A brief description of your organization, its vision and mission.
• Describe the project or programme for which you are making the enquiry.
• Highlight past successes/impact you have had.
• Indicate your organization’s ability to deliver results.
• Give an idea of accountability structures: governance (e.g. Board) and financial controls.
• Ask the donor whether they would consider a proposal from your organization.
Call the organization and find out the name of the person who deals with funding proposals. Address
the enquiry to that person and fax it to the donor late at night. Use fax because some emails are just
deleted when the recipient does not recognize the sender. Send it at night because the
telephone/fax lines will be open. In the morning the secretary will pick up your fax and put it in the
correct inbox. Make a phone call the next day to find out if the enquiry was received, and ask how
long it will take for the donor to give a response. If they give you a certain period (e.g. 10 days) don’t
keep on phoning them and hassling them every day. Wait until the 10 days are up and if there is no
response by that time, call them again. It helps to link your request for a response within a certain
time-frame to your planning for the next year or quarter. This also shows the donor that you are
organized and do proper planning.
Donors can respond by telling you:
• That you don’t fall into their focus areas.
• That you fall into their focus areas, but that their funds are already allocated.
• By sending you a funding request form to fill in or asking for a detailed proposal from you
and giving you details on when it needs to be sent etc.
There’s no such thing as “No”!
Most of you will have received responses in which the donor tells you that
they regret to inform you that they can’t fund you. These letters can be very
discouraging if you think they are saying “no”. In reality they are not
communicating this. They are actually a delayed “yes” or a “yes” to someone
else.
Let’s look at the typical responses provided by funders.
Their response: Your response to this:
You submitted too late and missed the deadline. Make sure you submit way in advance next time.
Their funding budget is already allocated or exceeded. Same as above – get your proposal in early.
You are not in their focus area e.g. women, youth,
unemployment.
Send the information to an organization in your community
that addresses these issues so that they can access the
funding. It’s a “yes” to development in your community!
They only fund networks and not small projects Find out what relevant networks exist and join one as soon
as possible.
Remember, donors receive hundreds of requests for funding and have to employ people just to read
your proposal. Even just getting a response from them is a positive because now they know who you
are. You are on their database and you may be given a reference number. You have achieved the
first stage in strategic communication: they know about you and your work. The letter you get back
from them is full of useful information:
• correct addresses, telephone numbers and email addresses
• names of board members
• it is signed by someone, so next time you communicate with them you know exactly who to
address you request to.
Develop a funding strategy
Based on your evaluation of the current fundraising strategies of your
organization, develop a strategy for the next 3 years. This involves
developing a fundraising plan, which will contain the details and
objectives of all of your fundraising activities, and a fundraising
calendar, which will highlight the important dates for activities, the
submission of proposals, and dates when current funding is due to be
paid to your organization.
Create a funding plan
Use the template at the back of this manual to plan your fundraising for the next 3-4 years. You need
to be thinking further ahead than the next year or two, because most funders will only fund your
organization for 3-5 years, and the new needs will arise in your organization.
Keeping a funding calendar
There is an example of a funding calendar provided at the back of this
workbook. This is a very valuable tool to keep track of your fundraising activities
and the requirements of donors for the submission of proposals and reports.
The more successful you become at fundraising, the more you will need
something like this to keep track of everything. Failure to submit proposals on time, or the failure to
submit a report on time WILL cost you money.
Reporting to donors
This is one of the most important – and most neglected – aspects of fundraising. Many NGO’s raise
funds from a donor, and then just disappear! The donor doesn’t hear from you again until the next
financial crisis hits and you need more funds. Make sure you keep you donor up to date with the
latest information about your project. Send them newsletters, newspaper clippings, photographs
etc. Invite them to opening ceremonies, launches, graduations etc. Send them your annual report at
the end of each year – and remember to acknowledge them and the contribution they made to your
project. Remember the WIIFM factor. Your donors need to know that they are getting a return on
their investment. This means that they money they gave you has been spent on the correct things; it
also means that they get to be in photographs of your project that show the difference they are
making in your community, and allow them to celebrate being part of your success.
An informed donor is one that will continue to give. Most donors give smaller amounts the first time
you apply for funding, but will increase their funding if you report and communicate well.
Why do people give?
In small groups try to come up with a list of 5 or 6 reasons why
people give to an NGO. If you understand why people and
organizations give, it will help you write funding proposals that
address the need they have when they give money to NGO’s. For
example, wealthy individuals might give in order to feel less
guilty about the luxury they live in. They night not want publicity.
A business in your community might give as part of a marketing
exercise – to raise the profile of the business in the community.
They would want recognition and publicity. A foundation that
supports social development would want to see tangible results because they are giving in order to
see social transformation. Understanding why people give helps you to keep different kinds of
donors happy, with the result that they give more.
In groups of 4 try to come up with as many reasons as you can for why people give.
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Section 4: Writing a Good Funding Proposal
A good funding proposal has a number of elements:
• The cover letter
• Cover page
• Introduction
• Problem statement
• Uniqueness of the Organization
• Objectives
• Expected Benefits
• Operational Plan
• Personnel
• Evaluation
• The Budget
• Attachments and other documentation
There is no single correct way to write a funding proposal. A lot depends on what is required by the
donor or the type of project for which funding is required. Some donors also have their own
application forms designed to make it easier for organizations to apply for funding.
The Cover Letter
This contains a brief description of the content of the proposal. It must not have too much detail in
it. Don’t put pressure on the donor or sound as though you are desperate or begging. The most
senior staff member in the organization should sign the cover letter. The chairperson of the board
can also co-sign.
Cover Page
This contains the following information:
• Name and address of the organization applying for funds
• Telephone, fax and email numbers
• Title of the project
• Time period of the project
• Name of the potential donor
• Date of submission
• Fundraising and NPO number of your organization
• Name of the contact person
Don’t judge each day by the harvest you
reap but by the seed you plant.
Plato
Introduction
This describes the general aims and objectives of the organization and the date it was established. It
describes the organization’s target group and can provide some statistics that support or motivate
your proposal.
The Problem Statement
Identify the target group and then identify the needs that your organization wishes to address.
Explain the scope of the problem or need that you wish to address, and its impact on the
community. Describe the current resources or lack of resources in the community to address the
problem. There are six basic questions that the problem statement needs to address:
• What is the problem or need?
• Where is the problem?
• When does the problem occur?
• What is the scope of the problem?
• Who is affected by the problem?
• How are they affected by the problem?
Uniqueness of the organization
Describe why your organization is the most suitable to address your problem. You need to convince
the donor that there is a real need that will not be addressed without your organization’s
intervention. If, for example, you want to start a job creation scheme in a community where there
are already a number of such schemes, funders will be reluctant to support you. It will appear as
though you have not done a proper needs analysis or situational analysis.
In this section describe why your organization is best positioned to meet the needs you are
addressing. Describe the approach you are going to use and give reasons for using this approach.
You can also refer to your track record and past projects to help convince the donor that you can be
trusted.
Objectives
• Describe the objectives that you want to achieve and what each will cost.
• The stages/phases in addressing the problem.
• Remember, your objectives must be SMART.
Expected Benefits
List all the benefits for your target group. A potential donor will also be interested t know if a project
will lead to things such as: more capacity in the community; better methods and models for
addressing problems/needs; models that can be shared with other organizations. Donors work with
other organizations doing similar work to yours in other parts of the country or world. They like to
be able to share success stories and methods that work in order to increase the impact that the
organizations they support make in their communities.
It is also important to describe how the project fits in with national or provincial government focus
areas. (e.g. what are the Integrated Development Plans in your region and community, and how do
you fit into these?)
When you solicit funds, stress how the funding will be used, NOT how desperate you are for funds.
Examples of a well written explanation:
Donations will be used to pay the transportation costs of five computers and networking equipment
being donated to our organization by ABC Computer company, as well as to pay a local person to
connect the computers to the Internet; all of this will allow us to provide Internet access to local
women and children as part of our various community education activities.
Funds will be used to provide a breakfast of oatmeal porridge and a lunch of sandwiches, five days a
week, for 285 children attending the local primary school, as well as to pay the travel expenses of
the six volunteer workers who will prepare and serve the breakfasts.
Here is an example of a poorly-written explanation:
If we do not receive donations, our doors will close!! We need funds immediately, or we must turn
children away!! We urgently request your assistance!!
Operational Plan
This is the heart of the proposal. It is a realistic management plan for the duration of the project, or
the period for which funding is required. It specifies the starting date and completion date for each
task and activity. This should be in a monthly sequence and should describe:
• What will be done?
• By whom?
• How will it be done?
• When will it be done?
• Resources needed to complete the tasks
• How will success be measured?
• Who is accountable for the completion of each task?
Project management tools such as a Work Breakdown Structure or a GANNT Chart can be a very
useful way of documenting this, not just for the donor, but for the person managing the project.
Personnel
The success of a project depends on the people who are doing the work. Donors feel more
comfortable with people who: are qualified; have the necessary experience; have a track record of
successfully completing projects; have integrity.
It is a good idea to list the people involved in the project, with the following information:
• Job title
• Education and qualifications
• Specific responsibilities
• Previous experience in similar projects
Monitoring and Evaluation
Evaluation must be carried out to determine whether you are accomplishing your objectives. The
evaluation must be done in line with the objectives you have set out in your proposal. How are you
going to measure the progress you are making towards each objective? If you find it difficult to do
this, you need to go back to your objectives and make sure that they are measurable and time-
bound. When you describe monitoring and evaluation for your project, the donor will want to know:
• When will it be done? (how often)
• By whom?
• What are the success indicators for each objective and how will progress towards these be
measured?
• The kind of reporting you will do: how often and to whom.
The Budget
This is a detailed and realistic description of your organization’s projected income and expenses over
a specific period of time.
Specify income that your project will generate. This is important because donors want to see that
your project is financially sustainable. Indicate the income you already have from other donors. Do
not forget to include donations of materials or other resources.
Expenses can be divided into:
• Core cost expenses that the organization has (rent, communication, staff expenses)
• Capital expenses for the project or programme.
• Operational expenses for the project or programme.
Break down large amounts like salary expenses; show the amount each staff member will earn as a
separate budget item. When you budget ahead for the next year, increase all expenses by the
current inflation rate (usually between 4% and 7%). If you struggle to estimate the cost of things
ahead of time, contact a more experienced organization and ask for help. You can also ask suppliers
for discounted rates based on your status as an NPO. Avoid inflating your budget. Donors pick this
up very quickly and easily and your application will be turned down.
You may want to add notes to your budget explaining things like:
• Items that are once off purchases that will not be repeated.
• How you are going to diversify your funding and become financially sustainable.
• You can also attach quotes and estimates for capital expenses like vehicles or building to
support the cost for these items.
Other Documents you may want to attach
• An organogram showing: your organizational structure; how the project fits into the bigger
picture of the organization’s activities; lines of accountability.
• If you are applying for the first time attach copies of your constitution and NPO certificate.
• Newspaper cuttings of your organization’s work.
• Letters of support (from community leaders, members of the community etc.)
• Photographs of similar project activity.
Advice from an experienced NGO project director and fundraiser
The more you do the more people want to give you money. Start small, do something with
measurable results and low cost.
Have good financial and management systems in place.
Have a good website and keep it up to date. If you can’t do it yourself, pay someone else. It will be
worth it.
Once you get started, diversify your funding base. Never ask any one donor for more than 33% of
what you need. If you lose a big donor it can take your whole organization down.
Look carefully at how much admin you will have to do to get, keep and report the funding. Some
donors are really hard work.
If you get a “difficult to report” donor, ask for big buy things rather than lots of little things. It will be
easier to report.
If you won’t get the funding until next year, add 10% because costs will go up.
Try and build relationship with your donors. Get to know their names and a bit about them. Invite
them to visit. Send them photos and updates.
Keep a funding calendar with application dates, report dates, payment dates. You won’t remember.
Also keep a list of organizations you’ve applied to so you can check up on the progress of your
application.
Donor bodies have their own funding calendar. Find out when to apply.
If you get a rejection that says you are the right organization but they don’t have any money, try
again every 6 months until they say yes.
Donors can be corporate, individuals, embassies/foreign govt, local (SA) govt, benevolent institutes.
Fundraising events are a lot of work for small return but are great for start out capital or for a
particular project you struggle to get funding for other ways. If you can use your own fundraising to
market yourself at the same time then that is a bonus (e.g. the iKhaya calendar).
It is great if you can generate some income for yourself and there is a big push in the sector to be
self supporting to some extent. It improves sustainability of your project in the long term.
I am a great believe in luck, and I find
the harder I work, the more I have of it.
Thomas Jefferson