DECISION MAKING IN NPO SECTORLECTURE 30

MPA 505 Riffat Abbas Rizvi

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

RESOURCE A resource is a source or supply for which

benefits are produced. In Economics (Resources are scarce)

BENEFITS Resources are transformed to produce

benefits. Benefits such as:

Increasing wealth Meeting needs and wants Proper functioning of a system Enhanced well being

RESOURCES Human resources Financial resources Technological resources

Best bet is to mobilize them

SOCIOLOGICAL THEORY (1970) Resource acquire Mobilize people

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.

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.

ALTERNATIVE SOURCES OF FUNDS The result is to find out alternative sources of

funds and the pressure on management is mounting day by day.

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.

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

SOCIAL CHANGE If we talk about any process, the end result is

to come up with the social change in the society.

RESOURCE MOBILIZATION Three integrated concepts Relationship Building Communication and prospecting Organizational management and

development

SOCIAL RELATIONSHIP “People don’t give money to cause, they give

to people with cause”

GRASS ROOT ORGANIZATIONS Grass root organizations are also known as

community based organizations formed at the community level to support a community level initiatives.

CHARACTERISTICS OF GROS Ability to leverage Issue identification Problem identification Team NGO

FRIEND RAISING Form of fund raising Involves be friendly with an organization or

individual for the purpose of fund raising.

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: 1. Communication leads to image building 2. Image building leads to brand 3. Sometimes we or donor get carried away.

FRIEND RAISING Prospecting Major Donor Repeat Donor Donor(potential donors such as general

public)

WHY NATIONS PEOPLE PROVIDE RESOURCES? International framework Political Regional Social Ideological Personal Reasons

WHAT DONORS LOOK FOR? Legitimacy Transparency Accountability

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.

STEP 1: ORGANIZATIONAL SITUATIONAL ANALYSIS Team Role clarity Lead / Focal Person SWOT Analysis

SWOT ANALYSIS Strengths

Good team Good governance Good reputation Network Presence Contacts Past performance Relationship with donors / stakeholders Celebrities Working group

WEAKNESSES Lack of skill/training Less expertise Lack of will Poor scheduling

OPPORTUNITIES Awareness Increasing trend Incidence Support from government Segment of untapped stakeholders Demand

THREATS Economic downturn Political Social Stakeholder’s perception Competition Demographics Young earners

STEP 2: RESOURCE MOBILIZATION: ENVIRONMENT RESEARCH AND DONOR MAPPING International donor (RFPs) Local Donors Individual donors

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

DONOR RESEARCH AND MAPPING Web search Broad category Sub category

FUND FLOW PATTERN State to state State to people People to people People to state

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

STEP 3: CONSTRUCTING THE STATEMENT OF FUNDING NEEDS

Actual statement Targeted amount Resource timeline Current situation Target amount (when required).

STEP 4: PROSPECTING AND COMMUNICATING WITH INTERNATIONAL DONORS Brief summary of one or two pages about:

Organization Team Mission PlansDonors MapWho could be / who should be approached.

Statement of funding needs What needed and when needed.

Selecting the Right Mix

1.core donors / contributors

2.Repeat donors/ contributors3.First time

donors/contributors

STRATEGY Acquisition strategy Nurturing Strategy

ACQUISITION STRATEGY To bring in front first time donors /

contributors raising awareness about your organization

Email/ Boucher Little / No contact Friends Supporters Volunteers

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.

DEVELOPING A CASE STATEMENT

The needManageable Quantifiable Supporting a evidenceSurveysStatisticsYour quantificationWhy this fund you and why not others.

BENEFITS FOR YOU Tangible results/targets What is in for you? What is in for them?Negative impactIf not done now what will happen in future

MEETING THE DONOR Prior Research

Name Designation Area of responsibility Supporting material Business Card Plans/Donors details/Map Proposal

BEFORE MEETING Team Structure Team Leader Spokesperson Specialists

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

AFTER MEETING Send a thanking letter /email Donot immediately bombarded Later send a letter with a news letter Observe and act

STEP 5:MONITOR AND EVALUATION What to monitor When to monitor How and who will monitor Feedback

PERFORMANCE INDICATORS Return on investment Acquisition cost Response Time Average Donation Attrition rate

DONOR RELATIONS AUDIT Documentation Review Observation Survey Interview Focus group discussion

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.

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.

ENDOWMENTS A fund that is made up of gifts and bequests

that are subject to a requirement that the principal be maintained intact and invested to create a source of income for an organization

Source About.com

THREE DISTINCT PHASES OF ENDOWMENT FUND Creation Growth UseThe first phase is tapping funds related. The second phase marked by investments The last stage is the usage of income.

CONCLUSION Plan resource mobilization in a strategic,

mission-driven — as opposed to donor-driven — manner;

Build skills in proposal writing, handling face-to-face meetings, and communicating key messages;

Design, implement and monitor resource mobilization activities; and

Learn how other development research organizations in the region have

Addressed resource mobilization challenges.