FUNDRAISING AND SUSTAINABILITY FOR NON- PROFITS IN SOUTH AFRICA !

1. FUNDRAISING AND SUSTAINABILITY FOR NON-PROFITS IN SOUTH AFRICA! 28 February2014 Facilitator: Frank Julie

2. Program • Welcome and introductions • Defining sustainability • Fundraising and fund development • Funding trends in South Africa: • Government; • Corporate social investment; • Community philanthropy • Elements of a sustainable NPO Frank Julie and Associates

3. Continue • How to avoid an external donor crisis • Cost effective marketing strategies • Strategic communication: How to recruit donors for life! • Professional networking for sustainability • Important fundraising tools – the funding proposal and funding enquiry • Elements of good proposal writing • A proactive response to regret letters • The funding enquiry Frank Julie and Associates

4. Continue • Managing funding gaps in times of crisis • Guidelines for a formalised approach and strategic plan for guarding against funding gaps • Cash flow strategy in times of crisis • Getting your board on board  • The importance of strategic NGO Leadership • The Board Skills Audit • The Treasure Audit • The Time and Trust Audit Frank Julie and Associates

5. Defining sustainability – what do we mean? • Exploring various definitions • Allan Kaplan defines sustainability as: • “… achieving the ability to keep moving, changing and achieving one’s response-ability to inevitably shifting circumstances, rather than assuming that those circumstances will ever be • finally and successfully resolved, once and for all.” • Viewed from this perspective, it becomes clear that sustainability is not only about financial sustainability. It goes beyond finances to strategic organizational issues. Of what use is it anyway • to have a lot of money in your bank account just to find out that you are not making impact in your organizational interventions? Or that you are unable to manage your finances effectively leading to the potential for financial mismanagement and hence a serious lack of donor trust? • Organizational sustainability is therefore a constant interplay between the need, solution and capacity. Those in leadership must constantly check the relationship between the 3 components. • (See the Organizational Fit Model) Frank Julie and Associates

6. Fundraising vs Fund Development • Fundraising is probably the easiest of the two terms to define. It is activity that is conducted with the intention of raising money for a non-profit organization or charity. It usually involves asking people for donations, using a variety of communication methods, asking people to purchase a product or service that supports the charity, or having people participate in an event of some sort. Some extend the definition of fundraising to include activities like sponsorship sales, which is essentially a form of advertising, gaming and gambling activities that benefit charity, and application for funds from government programs. • Fund development is the process by which organizations use fundraising to build capacity and sustainability. Fund development is a part of the strategic marketing of a non-profit organization. Frank Julie and Associates

7. Continue • It is the concerned not only with raising money, but doing so in a way that develops reliable sources of income that will sustain the organization through the realization of its long term mission and vision. Fund development usually involves building relationships with people and other organizations that will support the charity. It requires a strategic plan that relates funding to the purpose and programs of the organization. A part of the strategic plan will be a fund development plan that coordinates various forms of fundraising, marketing, communications, and volunteer management.Article Source: http://EzineArticles.com/460403 • A key decision an organization must make is what type of fundraising or fund development strategy it should use based on the type of organization it is and if it has long-term needs. Many organizations start with meeting their needs through short-term fundraising strategies and at some point must make the transition to fund development strategies. Otherwise, they will flounder, moving from one fundraiser to another without developing sustainable relationships. (Ron Strand) Article Source: http://EzineArticles.com/460403 Frank Julie and Associates

8. Funding trends in South Africa • In 2012/13 • More than 85 000 non-profit organisations were registered in terms of the Non-profit Organisations Act (NPO Act) at the end of March 2012. From October 2012 until January 2013 more than 23 000 organisations were de-registered by the Directorate for Non-profit Organisations which falls under the auspices of the Department of Social Development. In addition, more than 35 000 organisations were marked as ‘non-compliant’. In contrast, during the 2011 financial year only 468organisations were de-registered. All organisations were, in the wake of a public outcry, reinstated and reflected as re-registered during February 2013. Organisations have been given a six-month period to become compliant. Frank Julie and Associates

9. Continue • More international donors exiting – e.g. Cordaid, Novib, Oxfam Solidarity, BroederlijkDelen, Atlantic Philanthropies, Ford Foundation, Pepfar Fund scaling down…etc. • Claim SA is a middle income country • Shift towards right wing governments in Europe • Shift towards funding bigger NGOs who can demonstrate impact • Medium and smaller size non-profits being marginalized

10. Trends… • Prioritizing other African countries poorer than SA • Funding request now stipulated in foreign currency, means losing income due to fluctuating exchange rate. • Donors demand networking and eliminating duplications • Retrenchments becoming common in the sector Frank Julie and Associates

11. Trends … • Treasury cut funds to some departments (In 2010 the budget of our National Development Agency’s was cut from R146 million to a paltry R86 million.) • The period 2013/2014 is going to be extremely challenging • Corporate funding stagnant (R7.5 billion) • CSI concentrated in Gauteng Frank Julie and Associates

12. Philanthropy • It is “…the desire to promote the welfare of others or private initiatives for public good.” • South Africa has an established culture of formalised philanthropy. • Also a high density of networks and institutions interested in tracking or reporting philanthropic activity. (e.g. Inyathelo, Community Chest, Grant.net, etc.) Frank Julie and Associates

13. Some good news… • “In 2011, donors reported $1.2 billion in disbursements to South Africa with $90 million (around R820 million) for “governance and civil society”.However, upon closer examination, the data clearly illustrates that in terms of donor spending, in the ‘governance and civil society’ sector, donors are not supporting local NGOs. While donors may be committed to the sector in principle, the data shows that more money goes to government and donors' own activities than to local NGOs.The data shows that of the $90 million, only $21 million went to what the OECD classifies as national, local or regional NGOs at an average payment of $154 000. This means that of the total $1.2 billion disbursed to South Africa, less than 2% is recorded as for local NGOs in the governance sector.” • See http://www.sacsis.org.za/site/article/1623 • Alexander O‘ Riordan (Aid Effectiveness and Donor Funding Researcher) Frank Julie and Associates

14. A reactive vs a proactive approach • A continuum of effective organizational intervention • From UNDERSTANDING (the big picture, external environment) – BUILD INTEGRITY (practice what you preach, true identity, vision/mission, accountability, transparency, good governance) – expanding networks – effective resource mobilization/fundraising interventions to make impact! Frank Julie and Associates

15. Elements of sustainable organizations Identity Staff dev plan Planning Leadership and management Structures and systems Resources

16. How to avoid a donor crisisExisting/current donors • Retain your existing/current donors and get them to give more: • Make sure that your current donors stay with you for as long as possible. Get them to • commit more funds. Make sure that you act as a good recipient to build more donor • trust and hence strengthen your existing relationships. And make sure you deliver on • your promises in terms of impact and delivery. Stop making excuses. Frank Julie and Associates

17. Previous/lapsed donors • Make a list of your previous donors and investigate the possibility of recruiting • them again: • It is better to invest resources in past relationships. Ask yourself why the donor • contract came to an end. Unless the donor changed complete focus, approach the • donor for renewed funding. If they had problems with your work, show them that you • have addressed these concerns. Show them you took their concerns seriously. Frank Julie and Associates

18. Potential donors • Cultivate your potential donors: • Make a list of donors who know about you or that you know and who fall within your focus area. Find out who is the contact person and set up a consultative meeting or • at least an exchange of information about your organization. Draw up a funding • enquiry where you highlight your funding needs but most of all highlight your track • record. Donors want to buy into solutions/success and not your desperation for funds! And don’t forget to take out all your regret letters. Remember, a regret letter is simply a delayed yes. It is how you read it. You may be sitting on a gold mine! Frank Julie and Associates

19. Unknown donors • Market yourself to unknown donors: • You cannot create continuous interest in your organization without a clearly • formulated communication and marketing strategy. I must still find a NGO who can • convince me that they have one and more importantly, that it is implemented. • Trapped in survival mode, many NGO’s forget to raise visibility about their work in the Frank Julie and Associates

20. Continue… • form of newsletters (print and electronic), websites, blogspots, articles in • newspapers, brochures, pamphlets, letters, faxes, block e-mails, etc. So trapped in • survival mode, they forget their work is about changing human lives and that they • need to celebrate their successes. And don’t hide your challenges! Let others know • about it! And tell them what you are doing about it. Frank Julie and Associates

21. Avoiding an external donor crisis Current Donors Unknown donors Lapsed Potential donors Frank Julie and Associates

22. The Resource Mobilisation Pyramid and the 80-20 Ruleis a graphic depiction of the proportion of an organisation’s supporters vis-à-vis their level of involvement in its activities. Major Donor Repeat Donor Donor Potential Donors/General Public Frank Julie and Associates

23. Continue • Major donors make up only 10% of an organisation’s support base, but contribute 70% of total donations received. • Repeat donors make up 20% of an organization’s support base, and contribute only 20% of total donations received. • First-time donors make up70% of an organisation’s support base, but only contribute 10% of total donations received. Frank Julie and Associates

24. Cost effective marketing strategies • Develop your own voice – newsletter • Use local newspapers • Develop a website and negotiate links with partners • Contribute articles to relevant websites/magazines • Use radio/TV • Block emails/SMS’s • Murals at strategic places • Pamphlets, brochures, t-shirts (use churches/schools/taxis) • Use your annual report • Develop a profile doc for presentations/DVD (10 minutes) • Word of mouth • Host open days • Host breakfasts/lunches/suppers • Information boards • Use social media effectively (Facebook, Twitter, LinkedIn) • Branding of vehicles/training materials • Door to door campaigns • Public exhibitions/schools/libraries Frank Julie and Associates

25. Networking for sustainability • 1. Have a strategy • 2. Training for all staff and volunteers • 3. A focal person to drive networking • 4. Resources (time and money) allocated for networking • 5. It cannot be an after thought in meetings • 6. Evaluate continuously Frank Julie and Associates

26. Segmenting your influencers (Karl Smith) Allies Advocates Actors Associates Acquaintances Accidents

27. 10 essential principles

28. Strategic communicationHow to recruit a donor for life! • Its about asking/requesting the right • THING • PERSON • TIME – MANNER • RESULT • IMPACT • Step 1 – awareness • Step 2 – develop interest • Step 3 – action stage • Step 4 – taking ownership • Step 5 – becoming an advocate!

29. Strategic communication AWARENESS ACTION OWNERSHIP INTEREST ADVOCATE FOR THE ORGANISATION

30. How to keep your donors on board • Be open and honest • Regular reports • Go the extra mile to keep donor informed • Realistic budgets • Invite donors to events • Never bad mouth a donor • Acknowledge your donors all the time Frank Julie and Associates

31. Continue… • Name building/space after your donor • Send thank you cards/sms/faxes/emails • Buy small gifts • Get to know your donors as friends • Refer your donors to good projects • Never deviate from agreements; first get donor approval • Send back funding not being used Frank Julie and Associates

32. Continue… • Share both successes and failures • Tell your donor what you will do about your failures • Don’t distort reports/lie to donors by omission • Submit audited financial statements on time • Spend more time to build relationships face to face • State clearly how you will monitor your own progress and evaluate yourself • Acknowledge funds received Frank Julie and Associates

33. What is a proposal? • Document to introduce your organization • Identified a need/problem – you propose how you will address it • Request for an investment • You are selling: • Your understanding of the problem and beneficiary needs • Innovative solution • High level of success • Expertise • Institutional reputation and integrity • Ability to deliver results Can be solicited or unsolicited proposals

34. Proposal preparation • Be clear why and for whom, are you writing • Understand the donor for whom you are preparing it • Be clear about your own identity, your strengths and weaknesses, present a credible track record ito of technical competence, impact, financial management, etc. • Plan the project, i.e. understanding the context, set aims and objectives, design program activities, M/E, etc.

35. Elements of a winning proposal • THE COVER LETTER • TITLE PAGE • INTRODUCTION • PROBLEM STATEMENT • UNIQUENESS OF THE ORGANIZATION • OBJECTIVES • EXPECTED BENEFITS • OPERATIONAL PLAN • PERSONNEL • EVALUATION • THE BUDGET • ATTACHMENTS AND OTHER DOCUMENTATION

36. Presentation and style • Keep it brief, easy to read, free of typographical errors • Simplicity – use plain, concise language • Use as few words as necessary to make your point. • Don’t repeat yourself; • Avoid “filler” words • Clarity – avoid jargon, support facts with full references, spell out acronyms when first used • Consistency – ensure all sections of the proposal support one another, ensure all terminology used are the same, check that nr’s, figures and percentages are the same • Responsiveness – follow all donor requirements as provided, connect with donor desires • Active voice – avoid the passive voice, e.g. “We will do …” not “X…will be done.” • Use strong verbs not weak one such as “is, was, does, has, etc.” • Format – consistent use of fonts, bold and italics to highlight key points, don’t try to fit in as much text onto one page, include graphics when relevant • Run a spell check, check accuracy, ask others to read and make comments

37. Elements of strong and weak proposals

38. Some reasons why proposals are not funded • You missed the deadline • Not following donor guidelines as prescribed in the RFP • Proposal not organized so that distinct sections can be easily matched against RFP evaluation criteria • Poor quality of writing; hard to read; sweeping generalizations and jargon; repetitiveness; too long • Lack of attention to detail (typos, pages upside down) • detailed monthly or quarterly schedules missing; timetables to accomplish work too optimistic • Management responsibility and capability not clearly demonstrated • Proposed project appeared beyond the capacity of the organization to carry out • Not a priority topic for the funding agency • Rationale for selecting a certain approach not well thought out • Nothing unusual or innovative being offered • Lessons learnt from previous projects not shown or made relevant to proposed project • Role of the beneficiaries not clear

39. Regret LettersWhy donors regret applications • Miss the deadline • Funding cycle complete/inadequate financial resources • Too little information • Not in their focus area • Not in their geographical focus • Not legally compliant, etc. • Already funding similar organisations

40. Is it YES or NO for development • Look at each reason and decide if it is YES or NO for development (not for your organisation only) • Then look at how to turn a NO into a potential YES

41. Is it yes or no?

42. How donors operate in terms of managing applications • Medium size donors can receive up to 50-100 applications per day • Applications must be assessed according to their criteria • Special staff need ot be appointed and paid to make these assessments – its a cost to the donor • Responding to your application is also a cost

43. What “Regret Letters” offer free of charge • Reference nr: an invitation to apply again • A file was opened for your organisation • Date: indicate urgency and internal efficiency • Signature: a direct contact person for future reference • All contact nr’s: physical, postal, email, website, cell nr’s, telephone, fax nr • Names of board of directors: people you may be familiar with in your networks • You overcome the first stage of strategic communication (awareness-interest-action-ownership-advocate)

44. Follow up on “Regret Letters” • Always thank a donor for a regret letter • E.g. “Dear donor, it is with great appreciation that i wish to thank you for the time you took to study and respond to our request for funding. To enhance our own learning of your requirements, it will be appreciated it if you could be so kind and furnish us with the reasons for your response. We can assure you that we will try our best to fulfill these requirements in future applications. Yours in development...” • Update your funding register • Make a request to stay in touch to deepen the relationship e.g. Via your newsletter, invitations, donor updates, etc. • Use the “We are very impressed with your work and wish you well with your future endeavours”

45. Funding enquiries • HOW TO ACCESS INFO ABOUT DONOR FUNDS QUICKLY • It is a good strategy to draft a funding enquiry as soon as your funding proposal has been • completed. Many donors are aware that there are organizations that do not have access to the • expertise to draft comprehensive funding proposals. They therefore make it easier by designing • their own forms to be filled in by the applicant. • A funding enquiry is a way of checking with the donor: • 1. What they are funding (their focus areas) • 2. The format in which funding should be requested Frank Julie and Associates

46. Continue… • When drafting a funding enquiry, please make sure that you: • • Keep it short (not more than 2 pages) • • Give a brief description of your organization, its vision and mission • • Say what you are enquiring about (the project or programme) • • Highlight your successes (impact that you make) • • Indicate your organization’s ability to deliver results • • Give an idea of your accountability structures (governance and financial) • • Don’t forget to request from the donor whether they would consider a full proposal from your • organization. Frank Julie and Associates

47. Managing funding gaps • Funding gaps: the period when funding is promised (based on your grant agreement) and when it is ACTUALLY paid in. • A funding gap can be managed effectively to avoid disruptions to programme implementation. • You start with: • Strategic plan (over 3 years) • Annual financial plan (break it down to 12 months) • Quarterly financial budget (break it down over 3 months) • Monthly budget • Weekly and daily cash flow • Involvement of key staff is critical in this process. • Transparency is vital to make it work. Document all plans for proper review and analysis. Frank Julie and Associates

48. The board skills audit Frank Julie and Associates - Knowledge is Power but Consciousness is Light!

49. Treasure audit (Resource mobilization) Frank Julie and Associates - Knowledge is Power but Consciousness is Light!

50. Time and Trust Audit Frank Julie and Associates - Knowledge is Power but Consciousness is Light!