How to Fund my Organisation, Not Projects
0 likes1,710 views
The document outlines a holistic approach to funding organizations rather than individual projects, emphasizing the need for improved business models to tackle complex global issues. Key recommendations include maximizing unrestricted income, systematic business development, and developing alternative revenue streams to reduce dependency on traditional grants. The document also highlights common financial pitfalls organizations face and offers strategies to overcome these challenges for sustainable funding.
How to Fund my Organisation, Not Projects
- 1. How to Fund my Organisation, Not Projects A Holistic Approach to Funding.
- 2. WHO WHAT We build better NGOs We help them to be funded better Joseph Nelson Senior Consultant
- 3. From Project to Organisational funding in 3 steps Maximise Unrestricted Income through efficiencies Eliminate Losses Flows Systematic business development Build A Continuous Flow Alternatives A funding mix that works for you Scale Up Alternative Revenue Streams We know you know... 1. Out of the many things you can do, here are three concrete steps 2. This talk aims to move from ambition to action Efficiencies
- 4. IMPACT The most protracted, complex and pressing problems we have in the world today need innovative solutions, sustained over time. That does not match a donor template. Most organisations tackling these problems need a better business model.
- 5. Change & Disruption like never before
- 6. Efficiency - Do (only) what you cost Top 4 Reasons Our Clients Suffer Regular Financial Difficulties: 1. Programme Overruns - Supporting programme activities from unrestricted funding due to implementation issues. 2. Disallowables - Compliance oversight leading to donors recouping funds after the programme has ended. 3. Poor Budgeting - Programme budgets which do not include key delivery aspects which are later paid for through unrestricted funding. 4. Cost Recovery Policies - Organisations lacking clear knowledge about their need to recover indirect costs from donors, leading to organisations taking loss making projects consistently. MzN Client approached us with structural deficit issues that they needed resolving: Consistent Annual Deficits Reducing Reserves Good Programme Volume Long Term Donors
- 7. Efficiency - Some levers to look at Programme Overruns What we Found Programmes consistently exceeded budgets due to poor operational decisions on the ground and ineffective reporting to the Headquarters. What we Recommended The systematic strengthening of the programme delivery function, project management capacity building in the field and an increased oversight function based in Headquarters. Disallowables What we Found Audits consistently found compliance problems following the programme implementation. Upwards of $250,000 were recalled annually from donors. What we Recommended Support and guidance at both the field and Headquarters level to ensure donor policy compliance.
- 8. Efficiency - some more levers Poor Budgeting What we Found Programmes were overrunning in terms of costs across the range of country offices because core and standard activities were not included or underestimated. What we Recommended Organisation wide budget training was recommended to ensure that each country office understood the full extent of the requirements of implementing programmes Cost Recovery Policies What we Found The organisation as a whole did not understand the implications of the indirect cost recovery aspect of grants and did not have a holistic understanding of the organisational requirements. What we Recommended A core cost analysis to understand what the organisation needed to recover from donors as well as a portfolio audit to understand the current average recovery rate. We implemented an updated business development plan to move the average to the organisational requirement within 12 months.
- 9. AVOID the gap Donor Scoping Application Contracting New Projects Contracting should be a continuous process Avoid the: Get a grant - Implement a Programme - Complete it - Scramble Around - Loose People - Find another Grant, Race
- 10. 1. Systematic Business Development - Donor scoping needs to be an accessible and interactive document (ideally cloud based or on a platform). The work needs to be systematic, not ad hoc and the process needs to be owned. 2. Understand your Parameters - Donors have a range of criteria and eligibility standards. Your organisation has specific capabilities and a mission to fulfil. Make sure that both of those aspects are accounted for within your pipeline. Time wasted on ineligible projects is de-motivational and costly. 3. Research the Donors - This is an exercise of strategic importance; the devil is often in the detail. Time spent conducting proper research builds effective prospect lists as well as avoids disappointment. 4. Build a Prospect Table - This is where you summarise and prioritise the opportunities identified by your research. 5. Apply! Funding is a Simple and Logical Process Once you have defined your funding strategy - You should follow these simple steps to build a sustainable pipeline: Flows - Create a Pipeline that is a Continuous Flow
- 11. Flows - Create a Pipeline that is a Continuous Flow The problem • EU based NGO • 7 countries • Development and advocacy mandate • $15m annual spend • Irregular flows of funding • Critical lack of unrestricted Our Actions • Zero-based analysis of funding type and consistency needed for strategy realization • What type of funding do we need? • What amount of funding do we need? • How frequently do we need to apply and what is our average success rate? • What overheads do we need to cover for that? • Funding projection where and by when to obtain this funding and investments needed • How can we get the type, amount and frequency of funding needed? • What investments do we need to make? • What time-scale is realistic? • Structural changes and investments committed aiming at a new income portfolio. • Developed a business development function dedicated to prospect and donor research as well as leading the application process. • After 18 months there is a consistent flow of funds which allows for the continuation of operations without disruption.
- 12. Alternatives to Grants - Scale Up Alternative Revenue Streams Funding Raised (campaigns, crowdfunded, members, sponsorship) This is a sample text. Insert your desired text here. This is a sample text. sample text. Unrestricted funding (High net worth giving, e-campaign) Inst. Donors (USAID, EU, Gates, DANIDA, DFID) Other 80% 16% The problem • EU based NGO, development and advocacy mandate • Not enough funding overall but critically overly reliant on grants from institutional donors. • Critical lack of unrestricted funding
- 13. Build a new income stream 1. Commercial Contracts (Fixed Price) 2. Income Earning Business 3. Fundraising scaling ____________________________________ BASE IT ON WHAT YOU DO
- 14. Funding Raised (campaigns, crowdfunded, members, sponsorship) This is a sample text. Insert your desired text here. This is a sample text. sample text. Unrestricted funding (campaign, membership, sponsorship, etc) Income earned (charity business, contract services, etc) Inst. Donors Other “We are shock-proofing our ability to generate income.” CEO at Top 10 Humanitarian NGO Alternatives to Grants - Scale Up Alternative Revenue Streams Changing the Business Model and Thinking Differently about Revenue
- 15. STAY IN TOUCH! Joseph Nelson joseph@mzninternational.com Christian Meyer zu Natrup chris@mzninternational.com Check out our blogs and upcoming events on our website: www.mzninternational.com