The Fundraising strategy Preliminary remarks Raising funds should

The Fund-raising strategy

Preliminary remarks • Raising funds should always start with a planning stage: – decide on a general funding strategy of the organisation – select the donors

Define a general funding strategy • Decide on a general funding strategy within the NGO, so as : – to guarantee its independence and autonomy – to ensure its resources and hence its survival • This should be based on two main concepts: – the balances to be taken into account – the limits to be set

Three main types of funding • Public funds - from national co-operations (French Ministry of Foreign Affairs, USAID, etc) - from multilateral organisations (European Commission, United Nations, World Bank, etc) • Earmarked private funds - from foundations, NGOs, individuals or companies - funding for a specific project. • Own Funds - from private sources - are not earmarked

A balance to be found: Public funds • Advantages of public funds: – substantial amounts – usually pluri-annual funding or renewable annual funding – do not require too many efforts and investments • BUT… – – long selection process impose strict contractual requirements not very flexible funding not neutral

A balance to be found: Private earmarked funds • Advantages of private earmarked funds: – usually independent from political or commercial considerations – usually shorter selection procedures – more flexible funding and impose fewer requirements on NGOs • BUT… – directly affected by economic recessions – rather restrictive selection criteria – sometimes exclude administrative costs / running costs

A balance to be found: Own funds • Advantages of own funds – – – neutral and without specific requirements enable the launching of activities at the most appropriate period enable the independent implementation of activities provide the necessary complement to co-financing contracts can cover costs that many donors are reluctant to finance prevent NGOs from the « race for projects » • But… – – tremendous amount of work to attract funds from individuals can be expensive (mailings, awareness campaigns, public events) strongly linked to the economic situation tendency to stagnate at a certain level

A balance to be found It is up to each organisation to define a good balance between public funds, private earmarked funds and own funds to achieve its goals, while remaining independent and retaining the flexibility for the smooth running of its projects.

The limits to be determined • The organisation should establish ethical guidelines regarding fund-raising. – Shall we accept funds from any donor ? – Are there any types of projects or budgetary items in which the organisation wants to invest own funds only ?

Select the donors When selecting donors, you have to take into account: - the characteristics of your project, - the specificity and criteria of each donor.

Identify the project’s features • type of project (emergency, rehabilitation or development) • size of the project • sector (education, health, rural development…) • type of activities (training, construction, medical care, etc) • country or region of implementation • beneficiaries (women, children, refugees, etc) • etc. . .

Identify donor’s specificity and criteria • Timing issues: – dates of decision ? – specific deadlines to present projects ? – length of the selection procedures ? – possibility of retroactive funding ? – Start of the fiscal year ?

Identify donor’s specificity and criteria • Duration of the funding: – if possible, a pluri-annual project should be covered by at least one main pluri-annual funding, • so as to avoid to multiply the funding applications and to write numerous reports • so as to ensure the continuity of activities

Identify donor’s specificity and criteria • Amount / percentage of funding: – as long as a sufficient amount of funding has not been obtained, the project can not be launched. • Does the donor have any maximum or minimum contribution? • How much is the total budget of this donor ? • Is there any participation required from the applicant organisation ?

Identify donor’s specificity and criteria • Modality of payment: – When will payments be made? • A single payment at the signature of the contract • a single payment after the approval of the final report • an advance and intermediate payments linked to the presentation of intermediate reports – Does the NGO have sufficient treasury to advance funds and start the project before the signing of a contract with a donor ?

Identify donor’s specificity and criteria • Use of funding: – Are funding earmarked ? – Does the donor refuse certain budget lines ? • Administrative costs, running costs, management costs, vehicles, expatriates, exploratory mission. . • Requirements imposed by the donor: • tendering procedures, rule of origin • antagonism of certain donors • administrative requirements (specific account, bank guarantee, etc…)

The funding strategy • Identify one main donor (EC, national cooperations, United Nations), and -if possible - for several years. • Complete with smaller contributions from other donors (foundations, NGOs, etc).

The funding strategy • Why one main donor ? • So that you do not spend your time prospecting for a multitude of small donations • To avoid splitting the project into many small ones, which would result in a multitude of reports • To make the follow-up of contracts easier during one project • To ensure the durability of the project (if the main donor contributes for several years); • Because a major donor makes the project more credible in the eyes of other potential donors and local authorities.

The fund-raising strategy Hence, fund-raising should not be spontaneous. It requires much reflection and a good preparation.