Funding Strategy for Sustainability
Filed under: Planning, Policy & Networks
When planning a new project all too often fundraising is left to
the last minute. As a fundraising consultant working with a range of
voluntary organisations, I am always surprised that it is not
systematically integrated in the project planning stages.
A fundraising strategy should be planned during the project
development in parallel with developing the project, while discussing
the project activities and outcomes with staff and partners.
What is a project fundraising strategy?
Maybe it is the term fundraising strategy that puts environmental
organisations off. In fact a fundraising strategy for a single project
can be a simple as one side of A4. What it needs to identify is the
following:
How much money is needed for the project?
How much is already secured (in cash and in kind)?
What kind of donors is likely to be interested in the project (government, Lottery, trusts, corporate, etc)?
What kind of grant is each kind of donor likely to be able to award
(for example: small: under £35,000; medium: £35,000 to £350,000; and
large: over £350,000)?
Are there any known deadlines to start of the project or apply to the donors?
How long will it take each donor to confirm a decision?
When planning your fundraising strategy, it is worth trying to stick to the following basic principles.
Planning ahead
Some major reasons why you should be planning ahead include:
1. Donors want to know about your other sources of funding;
2. Donors take longer and longer to reply to applications;
3. It will allow you to integrate community involvement and
partnerships in the project plan and application and therefore increase
your chances of success;
4. The amount of funding available is probably not on the increase.
Why a fundraising strategy must identify more than one donor?
Of course, you will have read before that the best project
fundraising strategy allows for a diversified funding mix. In plain
English, it means not putting all your eggs in one basket.
A fundraising strategy planning for 100% of the funding to come
from one donor is a high-risk strategy. Few donors favour funding a
project 100%. Even donors who consider a 100% grant application are 1
to 3, and sometimes 1 to 10, times more likely to turn down a 100%
grant application.
Donors generally ask for information about other donors approached on their application forms.
Another high-risk strategy is to approach a donor new to the
organisation with a completely new project. It is preferable to
approach past or existing donors with a brand new project for the
organisation or to approach a new donor with a well-proven project.
Delays in donor responses
The simple fact that different donors do not all take the same time to respond to an application is often overlooked.
Bear in mind that some donors will not give a grant if the project
has already started. Larger donors will normally indicates how long it
will take them to give organisation a positive or negative answer. Even
if no indication is given a good rule of thumb to remember is:
Trusts and corporate 2-6 months
Lottery 4-6 months
Government 6-12 months
EC up to 18 months
Decision times are not getting shorter, as donors are receiving
more and more applications. Now more than ever, environmental
organisations should be conservative in their planning and allow for
the upper time limit. It is also worth noting that many grant-making
trusts can now only guarantee that an application will be considered by
the panel if it is received 6-10 weeks before their internal deadlines.
The advice above is not new. Still too many organisations do not
follow it and make a difficult job even more difficult. My advice to
clients is always to work backwards from the slowest donor to schedule
the start of the project and to plan when applications to various
donors need to be submitted.
Community involvement and partnerships
There are other reasons why planning projects well ahead is increasingly important: community involvement and partnerships.
Donors have taken on board some of the principles of sustainable
development and recognised that environmental projects are more likely
to be successful if the communities affected by a project are involved
in its planning and delivery. Consultation is positive but time
consuming if it is to be carried out properly. Similarly working out
the level of involvement of the community or other partners in the
project delivery and dissemination is extremely worthwhile, but it will
lengthen the planning process for a project.
Engaging in this process can increase the projects size and amount
of funding needed for its delivery. But, more importantly, it also
means that more sources of funding are open to you as, for instance,
those donors traditionally focused on working with disadvantaged people
are more likely to consider an environmental project eligible if it
involves and targets socially-disadvantaged groups.
Why is a fundraising strategy more important than ever?!
As mentioned above, the number of applications received by all
types of institutional donors is rising. In addition, the amount of
money available is certainly not on the increase. There are many signs
that, in the next few months and possibly for the next financial year,
fundraising from institutional donors will be more competitive: the
Lottery is not selling as many tickets as before; number of corporate
donors are reporting lower profits; and lower interest rates and the
fall in the stock market is likely to have an impact on the revenue of
many grant-making trusts.
Of course other types of fundraising, e.g. direct mail, legacies
and other membership activities, might make up for it, but for those
voluntary organisations highly reliant on grants from Lottery
operators, grant making trusts and the corporate sector, I advise a
greater degree of planning.
But dont take my word for it. I am a consultant after all! Just
reflect on the fact that donors want to know what your fundraising
strategy is. What better reason would you need for allocating the
necessary time to developing a good fundraising strategy but knowing it
will help you maximising your chance of success. Once it is developed,
you may just as well use it to plan your fundraising activities
accordingly.
Fabienne Poulet
Greenstone Consultants Ltd
51 Milner Road
London SW19 3AB
020 8540 0796
Fax: 0870 133 7801
fabienne@greenstoneconsultants.co.uk
September 2002