Where to start when thinking of diversifying funding?
Before embarking on a journey to diversify funding, you should have a strong understanding of your current funding, your future needs based on the end dates for current funding streams and plan for growth, and a sense of the minimum amount of funding needed to continue activities and services. With this understanding, you should consider the six questions outlined below. Answering these questions is best done collectively, with key leaders reflecting on the organization’s growth.
What do your clients need?
Think about the clients in the community and their current needs.
How have those needs changed over time?
What services will they need a few years from now?
Are your organization's current services and programs adequately addressing the client needs and demands?
What changes are needed to make service delivery and the program model serve the client needs and demands in the future?
What is the funding landscape in your country?
Understanding the breadth and depth of donors in country is important when assessing what options are available.
You should look at your organization’s current funding mix (types of donors and amounts of funding) and the overall funding landscape. Consider local, national, and international sources investing in similar CSOs, topics, and regions.
Check in with any associations of CSOs or consultants who work in business development and use Google to explore if another organization may have already compiled this type of information.
Also, consider the laws in country. Are there certain activities the organization can or cannot pursue based on the type of registration in country?
Are there threats to your current funding?
Tip: Make sure to compile basic information such as name, website, types of funding available, model of funding for each option in a usable format.
Note that the funding landscape is not static! It changes over time and with new and emerging priorities and can be influenced by civil society actors. Consider speaking with funders about the type of funding mechanisms you would like to be able to access.
What is the organizational funding cycle?
Analyze the amount of funding your organization receives, the points in time when it is received, and the ways in which it is utilized. This may correspond with budgeting or proposal cycles for major donors or align with major donation campaigns the organization establishes.
Are there key times of the year when there are gaps in funding?
Are staff overstretched with responsibilities related to current funding?
What is your organization's vision?
Reflect on the vision or organizational strategy for the future of the CSO including key strategic areas for expansion, core areas to maintain the business, and new innovations to explore.
Are there new strategies the organization is planning to offer in coming years?
Are there geographic regions where the organization would like to start to deliver services?
What is the strategic vision for growth of the organization in the short and medium term?
What resources do you have to devote to these efforts?
Consider the resources your organization has available to support this work for funding diversification and sustainable funding.
Any type of resource mobilization requires initiative from the organization’s leadership, staff time, and dedicated skills in marketing, finance, management, communications, relationship-building, and technical areas.
How much staff time and effort can the organization commit to develop and implement a funding diversification strategy?
Can the organization commit resources to train staff or hire new staff, so they have the skills to help the organization pursue different funding models?
When thinking about the CSO’s vision for future growth and impact, what additional resources are needed to bridge the gap between the present and that future vision?
Also consider financial resources available to the organization to support business development efforts such as travel to meet with new funders, time to develop concepts and pitches, and working capital that can fund services while waiting for payments or reimbursements.
What level of autonomy would the CSO like to have over how funding is spent?
Consider the amount of control the organization has over decision-making regarding its program and service design and delivery.
Often donor funding comes with specific restrictions, responsibilities, or limitations on how the funding can be spent. Funding may also be constrained to implement key activities rather than allowing the organization to make decisions as to how costs can be allocated to achieve a goal.
What level of autonomy does your organization need to have?
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