Guidelines and suggestions for methods and principles of fund raising aimed at the financing of community based projects.
Fund raising is a valuable part of the strengthening of CBOs, NGOs and communities; cash (and non cash) contributions are needed by them to carry out their desired and planned activities. The obtaining of resources is therefore a desired and honourable task; fund raisers should be acknowledged and praised. Fund raising is a job to which all should contribute, and for which all should be responsible.
Many of the techniques and skills of fund raising (some of which are included here) can be or have been adapted from the commercial profession of “marketing” (in fact, fund raising is referred to as “marketing” by many NGOs). While marketing and sales skills can be valuable, they must always be applied in an ethical manner. Every fund raiser (paid or volunteer) must first and foremost be completely convinced of the value, integrity and benefits of the organization, and the activities for which the raised funds will be used.
These guidelines, must be modified in each community so as to be adapted to the differences that characterize every community
1. Principles of Fund Raising:
Principles of fund raising
Techniques of fund raising.
1.1 The Profession of Marketing:
Many of the skills and techniques of fund raising used by NGOs and some UN agencies have been developed by, and adapted from the commercial profession of marketing. Some people (often those outside or unsuccessful at the profession of sales and marketing) see this as a cynical and insincere activity. Maybe that is so as it is practised by some, but it does not have to be, and often is not. If a sales or marketing professional sincerely believes in the value of the product, sales can be effected honestly and ethically.
The principles of sincerity and ethical integrity especially apply to fund raising. Fund raising should be the responsibility of all members of the organization, although they may participate in different ways. It should not be simply left to the professionals. All of us/you, therefore, should know about principles as well as techniques of fund raising. The fund raiser, first and foremost, must be honestly convinced in the integrity of the organization, and in the benefit and value of the activity or project of the organization. Potential and past donors very quickly spot insincerity, dishonesty, and diversion of “their” donated resources.
1.2 Acknowledgement of Donations:
Acknowledgement is a must. Many donors use their donations to gain prestige and honour in their communities. It is a small price to praise every donor. Ensure that communities we assist are aware of the need to acknowledge all donations, and praise the donors for their loyalty to the community and their much needed and appreciated donation (cash and kind).
1.3 Thank You!
The most important two words in obtaining funds, and running a successful NGO, CBO or community project, are the words, “Thank you!”
Many NGO staff have wondered why enthusiasm for their activities has dried up, and funds cease to roll in; and the simple cause is often found to be that the NGO forgot to acknowledge and thank the donors.
1.4 Progress Reports:
Further to a simple “thank you,” donors want to know what was achieved with their donated money. The most effective form of thank you is a progress report. Donors are less interested in your activities; they are more interested in the results of your activities; have you reached, or partially reached, the objectives you stated when you asked for the donation? CMP has prepared other documents about report writing; use them and integrate report writing with obtaining resources. Fund raising and report writing are not independent activities.
A high level of integrity must be maintained at all times. This applies to the set up and activities of the organization in general, and specifically to its fund raising activities. An important aspect of that integrity is full accountability.
All actions must be accountable; all funds must be accountable. This means accurate, complete, understandable and honest narrative reports and financial reports, available at any time to any member of the public.
Along with accountability is transparency. The group must not have any secret agenda, and must be public and honest about all its activities and all its expenditures. Account records must be open, that is available to any member of the public to inspect at any time. Honesty can not be compromised. The good ends (goals or objectives) of the organization must not be compromised by questionable means used to get to those ends.
Those people responsible for implementing the activities of the group, including the activity of obtaining funds, must be honestly and totally convinced of the goodness of the group and its objectives, and the worth while values and benefits of the project. This level of integrity is essential for the sustainability of the group, the completion of the project, and the benefit of the community.
1.6 The Importance of a Positive Attitude:
Not everybody is a donor. Some of the people, agencies or groups can or will not give to your community or organization. If you do not recognize that failure to obtain a donation from one source does not imply that you or your organization is a failure, you may be tempted to be discouraged and give up.
Do not give up. You can not allow yourself to be discouraged; it is a luxury that you, your organization and your community can not afford. You may experience eight rejections; do not give up because the ninth and tenth may bring the needed donation.
1.7 Calculating and Recording Project Inputs:
It is important to maintain accurate records of all resources used in a community project.
Too often some donations (especially communal labour and gifts in kind) are forgotten or under-valued, and the correct amount of the community contribution is higher than what is recorded and reported. This under valuation is detrimental for several reasons: (a) the community members have a lower estimate of self worth and this lowers confidence, (b) the outside donors have a lower estimate of community contribution and will be more reluctant to contribute more or (c) will not recognize the worth of the community inputs.
You/we must ensure that the CBO or the executive committee of the community that is planning to undertake a community based project, recognizes the value of hidden community resources. An accurate estimate of the cash value of donated resources ─ eg communal labour for construction, donated skilled labour, time spent by community members and leaders in meetings for planning, or non cash physical donations ─ must be made by the community. You/we should encourage the community to identify and record these. These financial estimates should be included in the cost estimates of the project proposal, and should be recorded during the actual construction activities.
When the total costs of a community based project are calculated, they should therefore include the actual cash contributions of donors, international and local, Governmental and non-Governmental, and others, plus the cost estimates of all non-monetary donations, whether in the form of non-cash physical items or services, or human time and energy.
2. Types and Sources of Donations:
Donations from a wide range of potential donors, except those from donor agencies which require formal proposals. (Those are discussed in the document, Resource Acquisition).
That wide range of potential donors means there is a wide range of specific techniques that can be applied to the process of (a) identifying donors, (b) getting a message to them, and (c) collecting the donations. Don’t forget the (d): thanking them.
A good workshop handout to accompany this section is: Internal Resources Checklist.
2.1 Urban Versus Rural Communities:
There are several differences in emphasis in techniques of raising project resources, based on the different characteristics of communities. Urban communities, for example, are usually larger, and therefore more full of factions and schisms. Small rural communities are more easy to organize and unite, but there is no guarantee.
Urban communities have more social schisms (divisions/factions), and are harder to organize than rural ones, although within urban areas slums are easier to organize than rich neighbourhoods. Donations in cash are easier to obtain in urban than rural communities, donations of food and agricultural products are more common in rural communities.
2.2 Public Fund Raising Events:
These take many forms. Large community fund raising events can be quite elaborate, with high profile officials making speeches, and rich persons making ostentatious donations. There may be several bands, drummers, dance groups, including singers and dances from the community schools.
In East Africa, the word “harambee” is used to describe such a fund raising event. (2)
Footnote (2): A harambee is not always necessarily a community event; nowadays it is often used by a single family to raise money for a student’s school fees or a medical bill.
In West Africa, especially in rural towns, the town chief may preside, and the entertainment may include dancing, drumming and spirit possession from the local gods or cults.
Such events may draw urban migrants back to their rural home towns and, like funerals, also serve purposes other than fund raising, notably for the migrated and extended community members to keep in touch with each other and to maintain their identity as community members even though residing outside the community. Many liaisons are made on these occasions, for example, that may later lead to marriages or business partnerships.
2.3 Urban Donors to Rural Communities:
Urban migrants maintain links to their home communities. This can be exploited by rural CBOs. A small percentage of the urban migrants make fortunes in the cities, and can be persuaded to contribute to their home community development. A feeling of guilt at not being home, or of loyalty in spite of absence, may result in some very large donations from rich urban migrants.
2.4 Commercial Donations:
Commercial donations include gifts from firms and businesses that want to advertise their good will and support of the community. (They should be acknowledged and thanked in public meetings). The community should be encouraged to identify ways they can convince the commercial donors that it is in the interest of the commercial donor to assist the project (increased publicity and good will for the commercial donor, for example).
2.5 Communal Labour:
This is an important internal resource (sometimes includes labour of volunteers from outside). Communal labour involves time and labour donated by community members, some unskilled (like clearing grass, laying bricks), some skilled (carpentry, masonry), management, leadership, meetings, planning, supervision.
It is important that you/we encourage the planners and designers of community based projects that they should carefully evaluate the cash value of donated communal labour. Too often that contribution is undervalued, because of ignorance of its worth or, more importantly, an indication of a low level of confidence and a low self evaluation of the worth of the community by the community members.
Sometimes some community members wish to hide their resources on the mistaken assumption that we or others will only bring outside resources if we believe that the community is very poor, and that we or other donors may withhold funds if the community is thought to have too many of its own resources. You/we must ensure that all community members understand that they are more likely to obtain outside resources if they demonstrate that they are committing internal resources.
2.6 Agricultural Donations:
Farmers may donate food for the project: (a) to communal workers who are working on the project, or (b) to the executive committee to sell to raise cash for the project. They may also donate other resources off their farms (eg timber, sand, limestone, non-food crops) which may be used directly or indirectly for the project.
2.7 Donated Food Preparation:
While a farmer may donate food to the project, it still needs to be prepared for eating. Other donors may include people who donate the preparing of food and refreshments to the community members on communal working days. Do not forget to thank the people who cook and prepare food for communal labourers.
2.8 Contributions and Pledges:
Contributions and pledges may be made at public community fund raising events. Participants make their decisions to donate in a public meeting or event.
2.9 Raffles and Lotteries:
Raffles and lotteries, gambling-based fund raising techniques. are better suited to well organized, sophisticated urban NGOs, rather than new, rural, small CBOs.
2.10 Anonymous Donors:
Anonymous donors are benefactors who remain unknown. They often have private ideological or religious reasons, but wish to remain unpublicized.
Whatever our actions in encouraging and assisting communities to plan and implement their own community based projects (including the calculation of financial resources) you/we must keep the following in mind at all times and to guide all our actions:
The calculation of costs of financing community based projects must be fair and accurate, and estimates must not undervalue non-cash community donations. When mobilizing a community to undertake a community based project, we should encourage them to identify a variety of outside resources (reducing dependency on any one donor), and to identify and mobilize many (often hidden) of their own internal resources.
Obtaining resources for a community project is an honourable and valuable responsibility; do it with enthusiasm, integrity and confidence.
(- Phil Bartle)