FUNDRAISING IN A TIME OF AUSTERITY!
By Frank Julie
November 2023
Non-profits live and operate in extremely difficult times! The fundraising scene for non-profits is getting worse, exacerbated by Covid-19 and perpetual unbridled corruption! Just like government budgets were diverted towards the World Cup in 2010, so they are now diverted away from social programmes. Unlike other sectors who received billions of rand of bail outs to survive, the financial needs and sustainability of NPOs have been totally ignored by government. We are not even an after-thought!
Instead of pursuing the politically corrupt who steal and feast on the dead bodies of the poor in broad daylight, the non-profit sector is made a sacrificial lamb! Again and again our interventions to support the poor are sacrificed on the alter of financial austerity!! Social development budgets are cut to the bone!
Non-profits employ about 1.5 million people, more than the mining industry. Our role in maintaining social cohesion, protecting and providing a lifeline to the poor is unquestionable. Despite this reality, it is estimated that 25% of the NPO sector have been
obliterated during Covid-19 leaving millions of people destitute!
To make matters worse, over the years donors (and government) are moving more and more toward very big non-profits who can demonstrate big impact so that they can justify their appeals for raising funds from their sources (especially corporates and international donors). The effect is that more and more medium to smaller non-profits are pushed to the periphery and being marginalised. According to research by Resep at Stellenbosch University, 90% of funding goes to 10% of non-profits in South Africa! Yes, read that again slowly!!
Faced with a stagnant economy with mass unemployment, rising cost of living, worsened by load-shedding (and water shedding), the base of individual income that many non-profits depend on, has been decimated! Social media are littered with desperate appeal after appeal for funds from local community projects trying to face the challenges of a society in perpetual crisis! A country where children eat sand and mothers kill their children to escape the poverty trap!
Over the last few years, more and more international donors have exited South Africa claiming we are now a middle income country and must look after itself. What they conveniently forget is that in terms of the black population SA is a “third” world country with the highest ratio of income inequality in the world. Already many international donors like Atlantic Philanthropies from the US, Ford Foundation, Cordaid, Hivos and many others have already exited South Africa.
In order to survive this onslaught, non-profits will be forced to reposition themselves as a matter of urgency!! If a climate of urgency does not permeate the corridors of each and every non-profit then there is a big problem!! It is extremely desperate and difficult times!!! The sector is facing an existential crisis of epic proportions!
All this is happening on top of an existing deepening funding, and at a deeper level, a leadership crisis, with its roots post 1994. Even non-profits who were well funded with highly professional staff are now feeling the pinch with some having closed down. The shift towards right wing administrations in Europe and America coupled with the deepening global economic crisis are exacerbating an already precarious situation.
Here are some tips for non-profits to consider seriously in order to face the challenges ahead:
• Training, training, and more training of ALL staff, board and volunteers in understanding the importance of fundraising/resource mobilisation for the organisation. Not just training for a few selected members or depending on a fundraiser with a silver bullet as a panacea for your funding crisis.
• If your non-profit does not have a comprehensive fundraising strategy in place right now it would be better for the board to close it down! This is an absolute necessity!!! You need to have a strategy to guide you in this crisis situation. Without this strategy it will amount to an army going into battle without a plan!! Absolute suicide!! And in this strategy you need to focus on maintaining your current donors, increase their current funding, reconnect with previous donors and research potential donors A strategic communication strategy to maximise visibility amongst unknown donors is a necessity!!
• A dedicated team (around the director or fundraiser) to fundraise continuously and not only when they have some extra/free time. And this team must be well trained with continuous evaluation. Bounce off ideas with people from the outside in your sector to check that you are on the right track. And be open to learn, learn, learn and more learning!!
• Develop a diverse donor base. The days of single donor support is long gone. Various donors must be targeted such as government (where funding is concentrated, especially in an election year), corporates, individuals, current and previous beneficiaries, friends of your organisation, municipalities and IDP's, international donors (those that are still left), national donors, staff giving, volunteer labour, cost containment (containing overheads), donations in kind, etc.
• Build relationships, relationships, relationships!!! Be in your donors face. Stop depending ONLY on emails, SMS, WhatsApp, social media, etc. Make personal contact, let them see you, meet with you! Invite them to your events, visit their offices if possible! But be in their face!
• Learn to get personal!! Get to know your donors better - as people! Find out who they are, what makes them tick, their interests, likes and dislikes, family background, etc. When you make this extra effort, donors will learn to respect you. It shows them they are more important to you than their funding! Learn to make specific requests to specific people based on their specific interest. Stop making general requests to all and sundry. Get personal...NOW!
• Where possible, cut your overheads immediately! Go through your list of overheads and ask yourself what is absolutely necessary to spend money on.
What are those things that are just luxuries and what can you dispense with. Contain your costs to run your operations. Go to banks, insurance companies and other services providers to renegotiate contracts. They must either scrap or lower their rates. And when you go to see them, go as a consortium, as a group of non-profits, preferably in the same sector or in the same community.
• Get more strategic volunteers and advisors, i.e. increase your social capital. Recruit more people in your line of work to add value to your operations. Recruit bookkeepers, managers, HR professionals, facilitators, legal experts, health professionals, accountants, auditors, journalists, marketers, etc. Cultivate them, they are also donors. Let them commit to spend some time with your org to add value to your work. And never stop thanking them, acknowledging them, always!!!! Develop a list of strategic advisors or a "Friends of the Organisation".
• Join or start a network forum. Get like-minded non-profits together and share ideas, experiences and best practices. Stop working in isolation, afraid that others will find out who your donors are. And learn about the art of networking, building healthy relationships to maximise impact. Stop duplicating and competing...it does NOT work and cannot work these days! It is madness!!
• Within your organisation, break down any real or perceived silos! Everybody must learn to understand the importance of team work, not competition! Every department must work in an integrated manner, as a whole. There is no place during these days for individual inflated EGOS!!
Those who cannot let go of their egos must be shown the door... In a crisis situation inflated egos become a luxury you cannot afford.
• Go the extra mile: these days there can be no business as usual!! If you have worked 8 hour per day, increase that to 10 hours per day or maybe and extra 3/4 per hours per week or per month (without burning yourself out of course), show commitment! Show your donors that you take your work and its impact seriously. And record those extra hours...that is social capital, that is raising funds from yourself!! I know many of you are already working overtime without compensation, but whatever you do now, do it better and better!
• Stop the negative attitudes: every crisis contains potential opportunity! Learn to focus on your successes, your track record! Nothing sells better than what you have already done or achieved, not what you still PLAN to do! Donors don't buy good intentions, they buy results!
• Donations-in-kind: Stop only focusing on money, money, money!! Focus on donations-in-kind, material support! Intellectual capital...
• Get your board involved: you either have an active board or a board that is bored! Make sure you have the board members on board. They must open doors, help with advocacy, marketing the organisation. Too many board members are just paper members, totally inactive and uncommitted. This must stop! Get rid of the dead wood!
• Look for opportunities: Your fundraising office must resemble a campaign room!
Your team should be busy everyday scanning newspapers, magazines, social network sites, Internet websites, etc. to research opportunities. Visit other non-profits, make appointments, visit donors, government departments, send out emails, etc. to find out what and where is the next opportunity for your organisation. Sometime ago I saw an advert about a funding opportunity from an oil company in KZN in the Cape Times. I shared it with many clients. One of them received R100 000 eventually! Simple...
• And please, please, please! If you can avoid it, do not cut on your programmes!! Cut some overheads yes, but avoid cutting your programmes where your beneficiaries are located. Explore how to go online. Use social media where possible. They are the reason for your existence, so avoid cutting at this level unless you have explored ALL possibilities and alternatives! Don't cut away the reason for your existence!
• And lastly: stop moaning about what you don't have and focus on what you already have. Maybe you are not so worse off than others.
And learn to have fun despite the hardships we are all facing! We are in the business of changing and saving lives. Nothing can be nobler, fulfilling and more rewarding. We cannot give others what we don't have!!
And remember, knowledge is power but consciousness is light!!
By Frank Julie
November 2023
Non-profits live and operate in extremely difficult times! The fundraising scene for non-profits is getting worse, exacerbated by Covid-19 and perpetual unbridled corruption! Just like government budgets were diverted towards the World Cup in 2010, so they are now diverted away from social programmes. Unlike other sectors who received billions of rand of bail outs to survive, the financial needs and sustainability of NPOs have been totally ignored by government. We are not even an after-thought!
Instead of pursuing the politically corrupt who steal and feast on the dead bodies of the poor in broad daylight, the non-profit sector is made a sacrificial lamb! Again and again our interventions to support the poor are sacrificed on the alter of financial austerity!! Social development budgets are cut to the bone!
Non-profits employ about 1.5 million people, more than the mining industry. Our role in maintaining social cohesion, protecting and providing a lifeline to the poor is unquestionable. Despite this reality, it is estimated that 25% of the NPO sector have been
obliterated during Covid-19 leaving millions of people destitute!
To make matters worse, over the years donors (and government) are moving more and more toward very big non-profits who can demonstrate big impact so that they can justify their appeals for raising funds from their sources (especially corporates and international donors). The effect is that more and more medium to smaller non-profits are pushed to the periphery and being marginalised. According to research by Resep at Stellenbosch University, 90% of funding goes to 10% of non-profits in South Africa! Yes, read that again slowly!!
Faced with a stagnant economy with mass unemployment, rising cost of living, worsened by load-shedding (and water shedding), the base of individual income that many non-profits depend on, has been decimated! Social media are littered with desperate appeal after appeal for funds from local community projects trying to face the challenges of a society in perpetual crisis! A country where children eat sand and mothers kill their children to escape the poverty trap!
Over the last few years, more and more international donors have exited South Africa claiming we are now a middle income country and must look after itself. What they conveniently forget is that in terms of the black population SA is a “third” world country with the highest ratio of income inequality in the world. Already many international donors like Atlantic Philanthropies from the US, Ford Foundation, Cordaid, Hivos and many others have already exited South Africa.
In order to survive this onslaught, non-profits will be forced to reposition themselves as a matter of urgency!! If a climate of urgency does not permeate the corridors of each and every non-profit then there is a big problem!! It is extremely desperate and difficult times!!! The sector is facing an existential crisis of epic proportions!
All this is happening on top of an existing deepening funding, and at a deeper level, a leadership crisis, with its roots post 1994. Even non-profits who were well funded with highly professional staff are now feeling the pinch with some having closed down. The shift towards right wing administrations in Europe and America coupled with the deepening global economic crisis are exacerbating an already precarious situation.
Here are some tips for non-profits to consider seriously in order to face the challenges ahead:
• Training, training, and more training of ALL staff, board and volunteers in understanding the importance of fundraising/resource mobilisation for the organisation. Not just training for a few selected members or depending on a fundraiser with a silver bullet as a panacea for your funding crisis.
• If your non-profit does not have a comprehensive fundraising strategy in place right now it would be better for the board to close it down! This is an absolute necessity!!! You need to have a strategy to guide you in this crisis situation. Without this strategy it will amount to an army going into battle without a plan!! Absolute suicide!! And in this strategy you need to focus on maintaining your current donors, increase their current funding, reconnect with previous donors and research potential donors A strategic communication strategy to maximise visibility amongst unknown donors is a necessity!!
• A dedicated team (around the director or fundraiser) to fundraise continuously and not only when they have some extra/free time. And this team must be well trained with continuous evaluation. Bounce off ideas with people from the outside in your sector to check that you are on the right track. And be open to learn, learn, learn and more learning!!
• Develop a diverse donor base. The days of single donor support is long gone. Various donors must be targeted such as government (where funding is concentrated, especially in an election year), corporates, individuals, current and previous beneficiaries, friends of your organisation, municipalities and IDP's, international donors (those that are still left), national donors, staff giving, volunteer labour, cost containment (containing overheads), donations in kind, etc.
• Build relationships, relationships, relationships!!! Be in your donors face. Stop depending ONLY on emails, SMS, WhatsApp, social media, etc. Make personal contact, let them see you, meet with you! Invite them to your events, visit their offices if possible! But be in their face!
• Learn to get personal!! Get to know your donors better - as people! Find out who they are, what makes them tick, their interests, likes and dislikes, family background, etc. When you make this extra effort, donors will learn to respect you. It shows them they are more important to you than their funding! Learn to make specific requests to specific people based on their specific interest. Stop making general requests to all and sundry. Get personal...NOW!
• Where possible, cut your overheads immediately! Go through your list of overheads and ask yourself what is absolutely necessary to spend money on.
What are those things that are just luxuries and what can you dispense with. Contain your costs to run your operations. Go to banks, insurance companies and other services providers to renegotiate contracts. They must either scrap or lower their rates. And when you go to see them, go as a consortium, as a group of non-profits, preferably in the same sector or in the same community.
• Get more strategic volunteers and advisors, i.e. increase your social capital. Recruit more people in your line of work to add value to your operations. Recruit bookkeepers, managers, HR professionals, facilitators, legal experts, health professionals, accountants, auditors, journalists, marketers, etc. Cultivate them, they are also donors. Let them commit to spend some time with your org to add value to your work. And never stop thanking them, acknowledging them, always!!!! Develop a list of strategic advisors or a "Friends of the Organisation".
• Join or start a network forum. Get like-minded non-profits together and share ideas, experiences and best practices. Stop working in isolation, afraid that others will find out who your donors are. And learn about the art of networking, building healthy relationships to maximise impact. Stop duplicating and competing...it does NOT work and cannot work these days! It is madness!!
• Within your organisation, break down any real or perceived silos! Everybody must learn to understand the importance of team work, not competition! Every department must work in an integrated manner, as a whole. There is no place during these days for individual inflated EGOS!!
Those who cannot let go of their egos must be shown the door... In a crisis situation inflated egos become a luxury you cannot afford.
• Go the extra mile: these days there can be no business as usual!! If you have worked 8 hour per day, increase that to 10 hours per day or maybe and extra 3/4 per hours per week or per month (without burning yourself out of course), show commitment! Show your donors that you take your work and its impact seriously. And record those extra hours...that is social capital, that is raising funds from yourself!! I know many of you are already working overtime without compensation, but whatever you do now, do it better and better!
• Stop the negative attitudes: every crisis contains potential opportunity! Learn to focus on your successes, your track record! Nothing sells better than what you have already done or achieved, not what you still PLAN to do! Donors don't buy good intentions, they buy results!
• Donations-in-kind: Stop only focusing on money, money, money!! Focus on donations-in-kind, material support! Intellectual capital...
• Get your board involved: you either have an active board or a board that is bored! Make sure you have the board members on board. They must open doors, help with advocacy, marketing the organisation. Too many board members are just paper members, totally inactive and uncommitted. This must stop! Get rid of the dead wood!
• Look for opportunities: Your fundraising office must resemble a campaign room!
Your team should be busy everyday scanning newspapers, magazines, social network sites, Internet websites, etc. to research opportunities. Visit other non-profits, make appointments, visit donors, government departments, send out emails, etc. to find out what and where is the next opportunity for your organisation. Sometime ago I saw an advert about a funding opportunity from an oil company in KZN in the Cape Times. I shared it with many clients. One of them received R100 000 eventually! Simple...
• And please, please, please! If you can avoid it, do not cut on your programmes!! Cut some overheads yes, but avoid cutting your programmes where your beneficiaries are located. Explore how to go online. Use social media where possible. They are the reason for your existence, so avoid cutting at this level unless you have explored ALL possibilities and alternatives! Don't cut away the reason for your existence!
• And lastly: stop moaning about what you don't have and focus on what you already have. Maybe you are not so worse off than others.
And learn to have fun despite the hardships we are all facing! We are in the business of changing and saving lives. Nothing can be nobler, fulfilling and more rewarding. We cannot give others what we don't have!!
And remember, knowledge is power but consciousness is light!!
