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2016-03-09 | Financing

Fundraising is one of the most important pieces of the organizational tasks. Quite clearly, without funds, an organization will cease to exist or at least not be able to effectively serve the communities that it has been set up to serve. You could get trapped in the thinking that without funds our capacity is limited, but we often lack the time, resources and skills to fundraise effectively. This Fundraising guide aims to share information, tools and tips to help you strengthen your fundraising.

Money or Organizational Values - What comes First?

Fundraising is one of the most important pieces of the organizational tasks. Quite clearly, without funds, an organization will cease to exist or at least not be able to effectively serve the communities that it has been set up to serve.

You could get trapped in the thinking that without funds our capacity is limited, but we often lack the time, resources and skills to fundraise effectively. This Fundraising guide aims to share information, tools and tips to help you strengthen your fundraising.

CSOs should not seek for funding only to get money but to reach their goals. Values and vision should come always before money. Otherwise it is a commercial unit and no CSO. On the other hand, it is nevertheless important to say that any work should be properly paid and CSOs should not treat themselves as beggars.

Some of us are natural fundraisers, brimming with resolute confidence and being unfazed at declinations to donate. But many people are anxious about the idea of fundraising, often for reasons like being uncomfortable talking about money, people might say no, and that will be embarrassing or being nervous or shy.

In order to be a confident and courageous fundraiser, it’s important to address these fears and anxieties, and lay them to rest (which will likely be a process more than a one-stop shop). Responses to common fears could be:

  1. Keep some perspective : Attitudes about money vary from culture to culture, but in many, conversations about money are taboo. Kim Klein, a professional fundraiser in the United States, explains that “our attitudes toward fundraising are a subset of our larger attitudes about money … if you are anxious about asking for money or would rather not ask, this is normal. But ask yourself if what you believe in is bigger than what you are anxious about. Keep focused on your commitment to the cause and that will propel you past your doubts, fears, and anxieties.”

  2. People have the right to say ‘No’ : ‘No’ happens. Life teaches us this is all kinds of ways. Sometimes universities will tell us ‘No’, potential employers will tell us ‘No’, and potential donors will tell us ‘No’ too. We often say ‘No’ ourselves. The reason people decline to make a donation varies, but it is never something to take personally. Finances might be tight this month, someone might be having a difficult day, or maybe someone donated to a worthy cause just last week. Regardless, when someone declines to make a donation, is not a personal attack on you. As Klein writes, “If you don’t hear ‘No’ several times a week, you aren’t asking enough people!”

  3. Practice Confidence: Fundraising will be a great way to prepare and build confidence! Start with potential funders with whom you feel most confident and comfortable and practice with them.

  4. Fundraising is an exchange: Kim Klein explains that “begging is when you ask for something you do not deserve. If you are doing good work, then you deserve to raise the money to do it. What you must do is figure out how to articulate what you are doing so that the person hearing it, if they share your values, will want to exchange their money for your work. They will pay you to do work they cannot do alone.” Don’t think of our fundraising as an imposition; think of it as a proposition. You are proposing an exchange (support for service) that provides benefits to both you and your donor. It is your responsibility to make sure your donor understands the ways in which supporting your work positively impacts their life as well.

Theoretical background

This section will show different types of funds and sources of funding for CSOs.

Possible sources to fundraise public money and think thoroughly about the categories for your particular application or call:

Level Institutions What will be supported Range / amount of grants What do you have to do
UN UNEP
UNDP
    Apply for calls with partners
EU Europe Aid     Apply for calls with partners
National National Ministries, Foundations, Embassies, Energy Agencies     Apply for projects
Use your contacts
Regional Municipalities, Sponsoring, Membership Fee, Partnerships with win-win situations     Know their constituion
Apply for projects
Use your contacts

Another possibility is to fundraise private money from the business or the private sector.

Examples for each country, ideas how to further investigate possibilities (internet research, network building).

Writing a project proposal

  • Structure
    Keep your proposal clear and easy to read by having a strong and coherent structure. There may be a pre-given structure or format you have to fill in or not. If you have to write the proposal without any specifications from scratch try to figure out a format and structure that allows to fill in all necessary information while still easy to understand. The challenge with having any specifications is to make the points you have already in mind fit in this structure.
  • Professional wording
    The wording has to be professional in content and style. Take the time and use proofreading.
  • Budgeting
    Show a clear and transparent budget calculation with the different type of costs and check it with your bookkeeping.

Planning/developing a fundraising strategy

Getting Everything in Place

There are several things to get in place before putting together the fundraising strategy, outlined on the table following page. Getting these things together can be done with different levels of intensity - in a very systematic way or with more of a ‘light touch’. Whichever way you go, you should aim to cover the areas outlined in the table on the following page to ‘get your ducks in order’.

The ultimate purposes of the strategy will be to:

  • Provide a critical internal tool for maintaining financial stability and strategic direction that is aligned with the mission.

  • Save time and resources in the future through a long-term approach.

  • Set priorities to help secure unrestricted as well as restricted funding.

  • Engage stakeholders and encourage dialogue within the organization that builds teamwork and promotes a shared vision.

  • Give confidence to potential funders, reassure existing ones, and support future grant applications.

  • Assist trustees to consider risks associated with any fundraising actions and protect the organisation.

  • Help you to diversify the fundraising sources and find new ways of raising money by looking at the bigger picture.

Making sure your ‘ducks are in order’ before putting together your fundraising strategy
Organization’s Mission, Vision and Values A strong organizational mission, vision and values help to develop clear fundraising goals and methods and to be ‘mission-focused’ rather than ‘funder-led’.
Strategic Planning and Objectives Your strategic objectives need to align with your mission which should also inform your fundraising objectives.
Fundraising audit Typically, this is a comprehensive and structured process to:
  • Analyze the context for your fundraising to assess internal capacities (SWOT) and external collaboration or competition opportunities;
  • Identify areas of untapped potential or gaps that need to be addressed;
  • Identify the ‘best practice benchmarks’ in the area you operate in;
  • Measure aspects of your current fundraising, such as the attrition rate (% of donors that are lost in a given period), response rates – (e.g. on Christmas appeals) and return on investment – the ‘fundraising ratio’ between what you spend on fundraising efforts (in different forms, such as grant applications vs. events) and how much goes towards the cause;
  • Evaluate the current fundraising activities and how effective they are.
Case for support This answers the question: ‘why should anyone support our cause?’ You should consult internal stakeholders and donors, and use information gathered in your fundraising audit. A convincing case for support clearly articulates:
  • What does the organization do?
  • What is its purpose for existence?
  • What is unique about it?
  • What is it trying to accomplish?
  • How will the fundraising activity help it to accomplish that?
  • How is the donor going to be involved?
  • Why should the donor give their money, time, or energy?

Develop a set of priorities for the funds to be spent on. Some different areas are:
  • General Funds – to cover your running costs;
  • Project funding – to start new projects or maintain existing ones;
  • ‘Pump priming’ – to stimulate existing projects.
Controls This is about being clear about systems, processes and policies you need to have in place as ‘controls’ to manage risks and provide confidence to funders, e.g. a risk management process, addressing potential risks, their likelihood, and a plan for mitigating those risks. Often, small organizations that rely on a single source of funding, or who lack an exit strategy, face a crisis when a project reaches an end.
Resource input With constantly changing external forces your organization should be able to adapt through learning, innovation and flexibility. The right kind of resources should be in place to support this, including individual and collective knowledge, commitment and time, a can‐do attitude, as well as financial investment (e.g. for new technology).

Assembling your Fundraising Strategy

Having made sure that things are in place as outlined above, reviewing your case for support and ensuring the right controls are in place, you can start to produce your fundraising strategy.

It is worth starting the planning process by asking some ‘big picture’ questions: What should the purpose be for the fundraising strategy? To raise income? To raise profile? To recruit supporters? To build something? Try to take a ‘360 degree’ view on the need to fundraise in your organization.

Be realistic, practical and specific. By the end of the planning process your organization should have an action plan for how it will achieve the fundraising target for the year (or longer), setting out who will do what and by when.

Ask practical and specific questions:

As part of being realistic, you should ensure that your discussions and the final strategy document address different timescales, both the long term; the medium term, for instance developing a 3-year plan which identifies the resources (financial, human and capital) needed to implement it and sets out robust monitoring and evaluation processes; and the short term, where you should take a closer look at your operations and provide a breakdown of the individual initiatives that require funding and the tactical plans to achieve that.

Suggested Elements of a Fundraising Strategy Document
Mission, Vision, Values These statements should be reiterated at the beginning of your plan as a reminder to keep the contents in line with the organizational purpose.
Strategic Objectives - Organizational Organizational objectives should also be listed here. Your projects, services and funding sources can change, but the ‘big picture’ of mission, vision and strategic objectives should remain constant.
Strategic Objectives - Fundraising These should link in with the organizational objectives. Ensure that your fundraising targets are based on thorough analysis, realistic and achievable (i.e. SMART objectives). Otherwise you set yourself up to fail. As a minimum, they should address:
  • The amount of funds that will be raised;
  • For what purpose (general funds or specific projects, restricted/unrestricted);
  • The categories of donors, funders and activities that will supply these funds;
  • The acceptable costs of raising these funds.
Priorities This lists your key priorities for fundraising, considering both your core and project funding requirements.
Assessment and Context This is an overview of the current position, identifying (SWOT) factors that may influence the fundraising plan both positively and negatively.
Case for funding and leadership Your case for support is an expression of your cause ‐ why you exist and to make what difference ‐ and why it warrants support.
Controls and resources This outlines what resources will be needed, the length and cost of each project, and the controls in place. Resources may include a list of people involved in the process, time required, and level of commitment. Controls may be strategies, training and support for staff and volunteers, strong governance, and technological systems.
Budget The budget outlines the projected expenditure and the amount of income expected to be raised and from whom. Ideally, this will list a diverse range of fundraising sources, which will help to spread risks and ensure that fundraising will consider both restricted and unrestricted income.
Tactical Plans This section outlines an action plan or schedule that lists your Key Performance Indicators (KPIs) or measures of success and your exit strategies. Typically, exit strategies outline what you intend to do at the end of the project or initiative and how you will keep it sustainable. This should always be one of the first things to consider.
Monitoring and review process Monitoring and Evaluation will help you determine the success or failure of an initiative. It should be an ongoing process, rather than left until the end of the project. Your strategy should detail how you will keep records, demonstrate learning from aspects of your fundraising initiatives that didn’t work, and improve on your successes.

Implementation and Monitoring of the Fundraising Strategy

After you have developed your fundraising strategy, it is time to get going! Get in contact, write proposals and see what you will get.

After some time has passed, check if your strategy works or if it has to be adjusted. Use the lessons learned for the next proposals and stick with your fundraising projects.

The dear price of reporting

Or: How to present your activity as project activity

In the NGO environment reporting is normally treated as an obligations from donor. It’s true but only in part. Most of people underestimate the importance of reporting for development of the organisation. Reporting is a way to assess efficiency of work and to increase it.

The good report is where connections between goals set in the proposal and achieved results are clear. We repeat: qualitative report it’s not a lot of presented activities but rather strong reliance between aims of the call and achievements of the project. Good report proves that NGO is able to act according to defined plan and to hold true to pre-defined goals. And good report is a basis for future grant support from the same donor as well as from other ones.

Writing a report take into account that it must be easily understandable by a person who is not familiar with your project (perhaps the first time they learn about your project is from the report). Support a report with as many information as possible, use links to web-site, attachments, photos to prove a successful completion of the project. As it was mentioned above - always check with goals and aims of your project and of the call for proposals. Make sure that the report responds to these goals.

Be flexible in presenting project activities and other activities. Most of NGOs’ activities lead to development of public society and awareness raising. Which means that most of activities should be included in some of reports. Sometimes, different components of an activity can be included in different reports, while the activity remains the same. Let’s have a look at the next case: the training for local energy managers when part of a day is dedicated to the creating of working group, that will communicate by e-mail after the end of the training. The training itself goes to one report and working group - to the another one. But of course, such synergy between activities must be developed at the projecting stage. Here it’s necessary to stress that the same activity should never be included twice in different reports. However, as it’s described in the example, there is a possibility to highlight different aspects of the activity for different reports.

Do not afraid to present your faults in the report. Sad but true: if something is not worked well it’s necessary try to analyze why and explain it in the report. Never conceal such facts as it could lead to wrong decisions of the donor/other NGOs in future. Be honest with the donor and sincerely explain why things does not went as planned. In the same time it is essential to describe how you tried to complete an objective. The only way to justify faults is to prove that you tried hardly enough but still failed.

Tips for fundraising

12 Opportunities and Innovative Ideas

  1. Raise funds for 'thematic' areas: 'targeted' giving that's more flexible than restricted funds.

  2. Capitalize on key dates e.g. World Climate Day and events e.g. COP 21 Paris or Election days in your country.

  3. Attend the National Fundraising Convention.

  4. Ask beneficiaries to share their story – 'the human touch' at events or via video.

  5. Use social media – a cheap way for marketing and building awareness.

  6. Use bright graduates for work experience and internships – there are lots! Ideally skilled volunteers should stay for longer periods and have a clear job description and goals.

  7. Build relationships with 'high net worth individuals' and communicate to their interests.

  8. Do presentations and events in schools – reaches 'next generation ambassadors' and parents.

  9. Explore income generation in‐country – e.g. project expansion with existing partners.

  10. Get a good overview: dedicate time to research and keep up‐to‐date with calls for proposals from small trusts, and use Google analytics to track traffic on your website.

  11. Link in with networks that match your NGOs work e.g. faith, diaspora, or environmental groups.

  12. Partner with other NGOs.

Rules of thumb for successful fundraising

  1. Hold true to your priorities. Financing shouldn’t in any way influence the priorities and values of your organisation. It will never result in any good for you. What’s more: if donors see that you often change your areas/priorities in order to receive funding they will be less likely to support you.

  2. Know your donor. Before writing a proposal for any call it’s good to study potential donor, check it’s priorities and already supported projects. This will help you to make accents in your proposal and to highlight which of your priorities are in-line with the donor’s ones.

  3. Carefully read(1), understand(2) and meet(3) conditions of the call. Simply read twice or three times guidelines or any other document describing conditions of the call. Better - ask your colleagues to read it and check if all of you have common understanding. If there are still uncertainties - do not hesitate to ask the donor for clarifications. The only stupid question is the one that goes unasked. All issues NGO are working with are important however only few of them are relevant to certain call. Before starting an application ascertain that your idea responses to the aim of the call. Pay special attention to the details (i.e. signatures, organisational info, CV’s of staff members etc.) as violating formal rules could lead to a disqualification of your application.

  4. Don’t be “cheap”. You should not try to make your budget as tiny as possible. Work of NGOs is as real work as any other work (sometimes - it’s even much harder) therefore it must be paid properly. Quite seldom the one can meet a professional who is ready to work for low salary. So low salaries means for a donor a low quality of your work. You aren’t going to pay for a low quality work even if it’s cheap, aren’t you? The same rule applies to costs of any actions. In the same time, your project budget should not be prodigious. It just must be adequate: it is self-evident that an accommodation of young activists and mid-level officials will cost differently.

  5. Match your activities with your budget. Each item of budget must be explained in an action plan or a project description. Double check coherence between a budget and a proposal itself before submitting the application. A budget must be as detailed as possible: indicate amount of working hours, people invited to your trainings, numbers of printed publications etc.

  6. Prove your expertise in a subject of a call. Describing experience of your NGO first of all highlight skills and knowledge that are necessary for this specific call.

  7. Never, never lie in your application.But you can make accents. If in your project proposal you write something unrealistic to make it look better for a donor you much likely to have problems during implementation. If the donor on any occasion discovers inaccurate information in your application it will be rejected and a reputation of your NGO lost. However if you want to win a competition you should show how good your project and organisation fits requirements of the call. In order to do that it’s needed to speak only about issue relevant to the call and skip other details about your NGO and project. We would like to illustrate it with the next example: let’s say your project is about few lectures on RES for small village community. Depending on the call priorities it can be presented as awareness stressing on knowledge obtained during the lectures or as gender equity stressing on amount of women involved or as youth development stressing on amount of youth involved.

  8. Constantly monitor possibilities for funding. There are a lot of internet resources where information about support programs is presented. Create your list of such sites and check them regularly. Usually it’s possible to subscribe for an e-mail newsletter. Communicate with other NGOs and donors. If an NGO has a project idea it is good to have a short description with approximate budget for it even if there is no relevant call for proposals. Sharing such ideas increase chances to find funds for its realization.

  9. Work qualitative and maintain your reputation. The quality and success of your work speaks better than any application. Avoid of involvement in any kind of dingy activities or events. But what to do If you only start your NGO and don’t have a portfolio of projects neither good reputation? Seek for more developed [and honest] partners or start with small activities by your own. Mind that a quality can be expressed in many ways: communication with partners, attitude towards your work, responsibilities you take and complete in time. That’s how good reputation of an NGO is built.

  10. Do. Is not it obvious? You can read a book or ten books about fundraising but the only way to receive funding for your cause is actually writing a proposal. Normally only 20-30% of submitted proposals will be supported. And other 70% it is an investment into experience of your NGO. Therefore do not be distressed by the first reject application and just keep going.

Practical advice, out of WECF and partner’s experience, 2 – 3 best-practice examples

Best Practice: Cooperation City of Munich - WECF Germany.

So far, three WECF-projects received grants from the City of Munich, out of their Agenda-21 budget for sustainable development.

A best practice example for cooperation between municipalities and CSOs.

 

Related materials

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What is a logical framework and how to use it to present develop project. Audio-record of webinar by the Executive Director of WECF International Sacha Gabizon.

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