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Fundraising for NGOs

Participants Manual

The greatest use of a life is to spend it on something that will outlast it.

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, lets review our goals for today.

At the end of this workshop, participants should be able to: Understand the nature of fundraising. Assess their organizations 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.

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 organizations fundraising strategy. Is it effective? Are there some activities that are not providing a return, and need to be suspended? __________________________________________________________________________________

__________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ 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. __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

What is fundraising? It isnt 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.

Its 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.

Its about building relationships


Its 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. __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

The core activity of fundraising is______________________________________________________

People give because you have met needs, not because you have needs.

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 cant just assume or take for granted. NGOs 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? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Describe what your organization does from the point of view of the recipients/beneficiaries. __________________________________________________________________________________ __________________________________________________________________________________

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

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.

__________________________________________________________________________________ __________________________________________________________________________________ What is the mission of your organization? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

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? Dont 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. __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

What resources does your organization already have? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ What do you still need? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ What are the cost implications? (Get quotes, or estimate a cost for each need.) __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ 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? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

Getting where you want to go... Create an Action Plan


Many NGOs 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 shortterm 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: Its crucial for goal achievement that you are able to track your progress towards your objective. Thats 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, its also a good idea to sit down and define your core values. TIME-BOUND: If you dont 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).

Donors dont give to institutions, they invest in ideas and people in whom they believe.

Section 3: The Process of Fundraising Some things you should never do!
The worst thing that NGOs 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. Dont 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.

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 NGOs 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 NGOs 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 NGOs 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 NGOs, 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.

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 NGOs, 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 NGOs and start-ups with funding. Look at the web sites and annual reports of other NGOs 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 NGOs. 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 donors 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 arent giving you any funding yet. With some persistence and relationship building these might become current donors. Unknown donors dont 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 NGOs 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 organizations 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.

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
Newspaper Articles

How and Why?


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. 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. 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. 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. Again, keep these short, not longer than 4 pages. A funding enquiry can be sent this way. 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. 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. (Trainers 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.) 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. 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. This is when other people advocate your work and you dont 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. 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.

Brochures

Newsletters

E-Mail

Fax Messages Face to face meetings

Television

Video

Radio

Word of mouth

Annual report

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. __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

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 organizations 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) dont 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 dont 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.

Theres 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 cant 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.

Lets look at the typical responses provided by funders.


Their response: You submitted too late and missed the deadline. Their funding budget is already allocated or exceeded. You are not in their focus area e.g. women, youth, unemployment. Your response to this: Make sure you submit way in advance next time. Same as above get your proposal in early. Send the information to an organization in your community that addresses these issues so that they can access the funding. Its a yes to development in your community! Find out what relevant networks exist and join one as soon as possible.

They only fund networks and not small projects

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 NGOs raise funds from a donor, and then just disappear! The donor doesnt 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 NGOs. 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. __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________

Dont judge each day by the harvest you reap but by the seed you plant. Plato
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. Dont 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

Introduction
This describes the general aims and objectives of the organization and the date it was established. It describes the organizations 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 organizations 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 timebound. 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 organizations 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 organizations activities; lines of accountability. If you are applying for the first time attach copies of your constitution and NPO certificate. Newspaper cuttings of your organizations work. Letters of support (from community leaders, members of the community etc.) Photographs of similar project activity.

I am a great believe in luck, and I find the harder I work, the more I have of it. Thomas Jefferson 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 cant 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 wont 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 wont remember. Also keep a list of organizations youve 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 dont 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.