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4. Fundraising: Understanding Institutional Donors, Module 2

4. Fundraising: Understanding Institutional Donors, Module 2

In MODULE 2 we will examine institutional donors. Institutional donors are those organisations whose purpose it is to provide funding for various projects, programs, or initiatives. They can be foundations that focus on very particular causes or issues, national governmental agencies that promote public policy objectives, or international development agencies. Ultimately, these organisations exist to provide funding and technical support to organisations like yours. Many people feel uncomfortable going to someone and asking for program support or funding, but don’t. Their job is to give NGOs and other organisations money. It’s important that we take a minute to understand how the institutional donor community works. You have the donors, whose job is to support development, you have the implementers that use donor support to address needs in communities, and you have the beneficiaries of that support. Institutional donors can be international government agencies. Each country has a policy of how they will support international development, some committing a specific percentage of their national budgets to development. They determine where their funding will go, to whom, and what programs to fund
usually based on identified international development priorities of that country. These priorities can change over time, and with changes in government or policy makers. National and international foundations that support community development usually have narrow focus. Some foundations for example may have as their objective to address global climate issues, so would seek partners cleaning communities, or educating populations on environmental concerns. In our home countries; government departments or agencies may provide funding for community development projects, public health initiatives, or cultural promotion. Their motivation for giving, like international development agencies, is tied to policy and political priorities. So those are the institutional donors. They identify and work with implementers, who are responsible for working on the ground to address specific needs, issues, or conditions. There are non-governmental organisations that work around the world, also called INGOs, and then there are implementers that only work in their home country, they are National NGOs, even if they only work in their immediate community. In transitional countries, ones without a long history or experience of active and organised civil society, many international donors (both development agencies and foundations) will work through INGOs. Many will insist that INGOs work with National NGOs and
that they support the development of NGO capacity. It is important to remember that many international donors have very high standards of accountability for the money and support they provide. They are often accountable for their decisions to the ministries and legislatures in their home countries. So this obliges them to work with implementers capable of following strict finance and program management regulations, which often means they are unable to directly support new national NGOs operating in transitional countries. They may want to work directly with national NGOs, but need to know that the organisations they are working with have the internal management practises, financial systems, and programmatic abilities that ensure the support is responsibly used. Understanding the motivation of donors is, as we discussed in module 1, important. Local, regional and national governments support national NGOs for a variety of reasons. Where government departments might not have adequate human resources to fulfil government program obligations, they might partner with community based organisations to deliver services, or complement services being delivered. Foundations will partner with individuals, groups or organisations that advance their particular interests; whether environmental, cultural, human capacity, or what ever their focus might be. International development agencies get their mandate from their home governments or legislatures. Their mandate usually addresses some defined international development policy of that particular country. Most often, development agencies are provided annual budgets and must determine how to meet the development assistance priorities of their governments. Understanding the priorities of international development agencies is important if you intend to approach them for support. You need to constantly inform yourself of what these priorities are, because they change over time. Priorities change as a result of new governments, crises, and international agreements. Before approaching international donors for support, you should do your research. Most international foundations and development agencies have a presence on the internet and researching their home pages is a very good first step. Annual reports, or strategic direction documents are helpful in understanding what the priorities are. If available, also examine documents or materials regarding projects or programs the donor has supported or in the past. If there are links to partner organisations, reach out to them and ask about their experience working with that donor. You may know other organisations in your community that have received donor support, ask them about their experience. Once you understand what the donor priorities are, make sure that whatever “ask” or proposal you submit reflects their priority areas. And don’t submit any proposal without doing some research into the potential donor. Because you need to be comfortable with the expectations they have of you and the support they are providing. You’ve done your research and you’ve identified a donor or an opportunity. Applying for funding or support is not a one way street. No donor is going to give funding and forget about it. They have expectations. They will want to know that you have a clear understanding of the issue you propose to address with their support, and that that issue matches their priorities. They will want to know you are being realistic about how you intend to address that issue, that you have the ability to manage the project responsibly. They will likely insist on certain accountability measures with respect to how the funding is used, and how you account for it. Most donors will want to know that you have experience in what you are proposing. If you can describe similar projects, or demonstrate internal skill and expertise, then they will have greater confidence. Most donors will expect programmatic and financial reporting from their implementers, and sometimes these require lots of work, and are stringent in the documentation. A good rule of thumb is that every penny used should be backed up with documentation. Also, be sure you understand what the donor allows and disallows program money to be used for. Importantly a donor wants results from the support they provide. Sometimes the results are unexpected, but your organisation needs monitoring and evaluation mechanisms to demonstrate results. Sometimes organisations will propose activities without being able to answer, “So what?” For example, you may notice that there is a lack of awareness in an area you are passionate about; the environment. You may feel very strongly that there needs to be greater awareness about the environment. A donor may not disagree with that, but may not be satisfied that you have answered the “so what” about raising awareness. So you raise awareness, so what? You need to be able to link your activity to some measurable outcome. For example: Research shows low awareness results in pollution that threatens population health; awareness raising seminars provide opportunity to identify environmental champions who promote pollution reduction in the community; we conduct research after awareness raising to measure pollution related illness. Results have to be measurable. Before accepting donor funds, or signing a contract, be very clear what the donor expectations are and that you and your organisation can meet those. International donors regularly compare notes about implementers in an effort to maximise the impact of their development assistance. Incapable implementers do not enjoy donor support for long. Often NGOs that do not have extensive donor experience are uncertain, or uncomfortable engaging. Many will see a call for proposals and simply submit an application without doing any of the necessary ground work that improves your chances of getting funding. First thing to remember – the business of the donor community is to provide funding and support. So don’t feel uncomfortable engaging with them and asking questions about their business; It’s the smart thing to do, but be prepared. Take the time to introduce your organisation explaining what the issues are you are addressing, why you choose to address those, and what you have done. Donors like to understand why you do what you do, understand the values of your organisation. An introduction serves to let someone know who you are, its establishing a rapport. Don’t expect that you will get funding or support the first time you engage with a donor, but use the opportunity to build a trusting relationship. Ultimately, anyone is more comfortable giving support to individuals and groups that they know, than to someone they’ve never met. And as with all relationships it’s important that you stay in touch with donors. Send them periodic updates of the work that you do. Invite them to events or even a cup of coffee. If the donor is physically located far from you, stay in touch through email or social media. While the particular donor you have a relationship with may not have the resources to support your work, they may know others, and a good reference is always important. Foundations operate differently than international development agencies. They have their own internal mechanisms for grant making, and tend to be much less bureaucratic. They also tend to be more focused on specifics issues or geographic regions. Usually they have small infrastructure with a very few people doing most of the work. This presents opportunity for NGO implementers to provide them with information and updates from regions they typically do not focus. They are not generally accountable to legislatures for their decisions, though are obliged to work within the law. So if a dispute rises between implementers there is often fewer avenues for addressing the complaint than with political systems. Importantly, foundations and endowments are not highly pursued by the implementer community, so it is worthwhile establishing relationships and applying for foundation money. In module 2 – we examined the nature of institutional donors and the importance for NGOs to get to know them and their priorities before applying for support. In the next module, Module 3, we will examine how to present ideas to a donor. Production team: Preparing material:
Francesca Binda, Carlo Binda, Mohammad Khasawneh Translation: Farah Ismail
Editing: Halla Hadidi Design and montage:
Amjad Hassouneh, Mohammad Khasawneh Arabic voiceover:
Afnan Jafari, Sarah Ismail This training material prepared by
Binda for International Consulting (BCI) for Institute of War and Peace Reporting (IWPR)
within Ante Raeda Project Funded by the British Government

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