Decision making in npo sector Lecture 30

1. Decision making in npo sectorLecture 30 MPA 505 Riffat Abbas Rizvi

2. Agenda • Preview of last lecture • Resource • Benefits • Resource mobilization • Sociological theory (1970) • Need for resources • Characteristics of civil society organizations • Why don’t just depend on foreign funding? • Being business like in non profit organizations. • Issues of non profit distributing • Entrepreneurial thinking • Social entrepreneurship • Foundations • Grass Root organizations • Self Reliance • Endowments

3. Resource • A resource is a source or supply for which benefits are produced. • In Economics (Resources are scarce)

4. Benefits • Resources are transformed to produce benefits. • Benefits such as: • Increasing wealth • Meeting needs and wants • Proper functioning of a system • Enhanced well being

5. Resources • Human resources • Financial resources • Technological resources Best bet is to mobilize them

6. Sociological theory (1970) • Resource acquire • Mobilize people

7. Need for resources • Resources are needed by all types of organizations and so as for the civil society organizations(CSOs). • The resources should be effective as well as should be able to inculcate sustainability in the overall systems. • While forming strategies at/by any level of the management resource considerations are always given due importance.

8. Funding requirements • However, it is obvious that funding requirement which are available in pakistan from the North america and europe based funding agencies have some underlying requirements which time to time surface out.

9. ALTERNATIVE SOURCES OF FUNDS • The result is to find out alternative sources of funds and the pressure on management is mounting day by day.

10. REASONS • The recent global economic downturn and geo-political events have also made the environment for CSOs more dynamic than ever as some of these traditional funding sources are drying out.

11. The availability of these traditional funding sources may not be guaranteed in coming years.

12. Social change • If we talk about any process, the end result is to come up with the social change in the society.

13. Resource Mobilization • Three integrated concepts • Relationship Building • Communication and prospecting • Organizational management and development

14. Social relationship • “People don’t give money to cause, they give to people with cause”

15. Grass root organizations • Grass root organizations are also known as community based organizations formed at the community level to support a community level initiatives.

16. Characteristics of GROs • Ability to leverage • Issue identification • Problem identification • Team • NGO

17. Friend Raising • Form of fund raising • Involves be friendly with an organization or individual for the purpose of fund raising.

18. Friend raising • 1992-Ken Burnett • Charitable organizations move towards dealing with donor then look the donor from “individual perspective” as we look at the individual history. • Communication: • Communication leads to image building • Image building leads to brand • Sometimes we or donor get carried away.

19. Friend Raising • Prospecting • Major Donor • Repeat Donor • Donor(potential donors such as general public)

20. Why nations people provide resources? • International framework • Political • Regional • Social • Ideological • Personal Reasons

21. What donors look for? • Legitimacy • Transparency • Accountability

22. Resource Mobilization Action Plan • Step1: Organizational Situational Analysis • Step2: Resource mobilization environment • Step3: Constructing your statement of funding needs. • Step4: Prospecting and communicating with potential donors and contributors. • Step5:Monitoring and evaluation your Resource mobilization efforts.

23. Step 1: Organizational situational analysis • Team • Role clarity • Lead / Focal Person • SWOT Analysis

24. SWOT analysis • Strengths • Good team • Good governance • Good reputation • Network • Presence • Contacts • Past performance • Relationship with donors / stakeholders • Celebrities • Working group

25. Weaknesses • Lack of skill/training • Less expertise • Lack of will • Poor scheduling

26. Opportunities • Awareness • Increasing trend • Incidence • Support from government • Segment of untapped stakeholders • Demand

27. Threats • Economic downturn • Political • Social • Stakeholder’s perception • Competition • Demographics • Young earners

28. Step 2: Resource Mobilization: Environment research and donor mapping • International donor (RFPs) • Local Donors • Individual donors

29. Trends are highlighted on the basis of research • Gender • Women experience • Education • Poverty reduction • Child care • Agricultural economics • Energy • AIDS Eradication • Baseline surveys • Impact/Assessment slides • Funds delivery

30. Donor research and mapping • Web search • Broad category • Sub category

31. Fund flow pattern • State to state • State to people • People to people • People to state

32. Resource mobilization plan • By this time • Clear targets • How much we need to raise • When • From whom • Time line define • In which year • In which quarter

33. Step 3: constructing the statement of funding needs • Actual statement • Targeted amount • Resource timeline • Current situation • Target amount (when required).

34. Step 4: Prospecting and communicating with international donors • Brief summary of one or two pages about: • Organization • Team • Mission • Plans Donors Map Who could be / who should be approached.

35. Statement of funding needs • What needed and when needed.

36. core donors / contributors Repeat donors/ contributors First time donors/contributors • Selecting the Right Mix

37. Strategy • Acquisition strategy • Nurturing Strategy

38. Acquisition Strategy • To bring in front first time donors / contributors raising awareness about your organization • Email/ Boucher • Little / No contact • Friends • Supporters • Volunteers

39. Nurturing / Cultivating Strategy • To maintain or promote the existing donors/contributors to the next level of the pyramid. • Grant competition • Invitation to visit your organization • News/ Letter • Member card.

40. Developing a case statement The need Manageable Quantifiable Supporting a evidence Surveys Statistics Your quantification Why this fund you and why not others.

41. Benefits for you • Tangible results/targets • What is in for you? • What is in for them? Negative impact If not done now what will happen in future

42. Meeting the donor Prior Research • Name • Designation • Area of responsibility • Supporting material • Business Card • Plans/Donors details/Map • Proposal

43. Before Meeting • Team Structure • Team Leader • Spokesperson • Specialists

44. During meeting • Present the card • State the purpose clearly • Introduce the team members • Build rapport • Proposal with material • Listen • Build with more material • Close future action • Remember friendship leads to funds

45. After meeting • Send a thanking letter /email • Donot immediately bombarded • Later send a letter with a news letter • Observe and act

46. Step 5:Monitor and Evaluation • What to monitor • When to monitor • How and who will monitor • Feedback

47. Performance indicators • Return on investment • Acquisition cost • Response Time • Average Donation • Attrition rate

48. Donor relations audit • Documentation Review • Observation • Survey • Interview • Focus group discussion

49. Reserve Fund • Special funds • Developed and maintained by the CSOs in which the earnings or extra amounts are deposited for future funding needs. • These funds can be generated from any activity which can be the extra amounts from some completed projects or can be the money received as part of some alternative financial activity such as investments.

50. REPORTS CONCERNING SERVICES • There has been reported increase in services demand of non profit organizations and decline in the contributions/donations world wide. • As all NPOs are required to prepare surplus fund. • Flat sum of money • Fixed portion of annual revenue • Percentage of annual budget • Based on expense consideration.