By Marina Mahathir
Resource AllianceApril 2002
Introduction
This conference is very timely because many of us non-governmental organizations and community-based organisations are facing issues of funding, especially in the last few years when the economies in Asia including ours were suffering. In bad times it is much more difficult for even the most generous of our donors to provide their usual support. Unfortunately for some of us, the bad times are exactly when our services are needed most and consequently we need more money to run them.
In the past nine years I have been a fundraiser, or as I sometimes characterize myself, a professional beggar. My organization, the Malaysian AIDS Foundation, was established in 1993 with only RM17O 000, not enough money to even fund a HIV/AIDS prevention programme for much more than two years. Thus when I joined the MAF as Chair, one of my first tasks was to try and build the reserves of the Foundation to a level at which the many programmes of the Malaysian AIDS Council could be funded on a sustainable basis. We knew that AIDS was not going to be a temporary problem, that it would be with us for a long time. Therefore we were only too aware that the prevention, treatment, care and support programmes that our affiliates and we ran had to be implemented for the long run as well.
Today the MAF has an endowment of some RM1O million, a sum that seems like a lot considering our beginnings. But it has been a long hard road to reach that seemingly large sum, a road that threatens to stretch on endlessly into the future.
In the Beginning
When I first joined the MAF in 1993, AIDS was still something of a mystery to many. Some 6000 people had already been reported Infected with HIV since 1985 but that seemed a tiny sum compared to the population of Malaysia and compared to the numbers of people affected by other diseases. But the Malaysian AIDS Council, which had been formed the previous year and which is an umbrella body of NGOs working in HIV/AIDS, was aware that AIDS is an insidious epidemic that needed urgent and concerted action or else it would spread and wreak untold damage to the country. Already we had seen what the older epidemic in Africa had done to so many countries.
To deal with a problem that could be very big in the future, we needed money and that was why the MAF was set up. But how could we convince people to donate funds to us? At the time few people knew much about HIV/AIDS. What they did know was often erroneous and it was not unusual for us to be asked, "Why should we donate to help these drug users and prostitutes?" The perception was that the disease could infect only certain groups of people, those that society deemed non-contributors and therefore marginalised.
Thus the problem of fundraising is directly affected by society's perception of a problem. If donors were not convinced that there was a problem, or that it was of a magnitude that warranted concern, then they were unlikely to provide any support. Our problem then hinged on convincing donors that there was indeed an epidemic, even though for the moment it was largely invisible. We had to persuade donors that it was important to act immediately while the problem was still small and still relatively cheap to organize a response.
I cannot say that it was very easy to convince local donors of this at first. But it helped a great deal that the government, through the Ministry of Health, was beginning to raise concerns about HIV/AIDS as well and to also encourage NGOs to respond at the grassroots levels. The private sector began to notice this and slowly began to respond to requests for donations.
Another important factor for us in our fundraising efforts was our own credibility. For one, we had to show that we knew what we were talking about. To that end, my colleagues and I learnt as much as we could about the disease and the global pandemic so that we were prepared to answer any questions that people might have. We also had to learn to speak to people ‘in their own languages'. For instance, in talking to the business sector it was important to talk about the economic impact of HIV/AIDS, how it would affect the economy and businesses. In talking to religious leaders, we needed to emphasise the impact of HIV/AIDS on families and communities especially the issue of AIDS orphans and the stigma and discrimination that People Living with HIV/AIDS and their families face.
Credibility is important because donors who are being asked to provide large sums of money are accountable to their shareholders and others. Therefore they must feel secure in providing money to NGOs. Too often NGOs have a reputation of being of dubious vintage and suspicions sometimes lurk about what happens to donated funds. Therefore if donors feel comfortable that the money they provide will go to real programmes and needs, then they are more likely to fork out.
Accountability is also not limited to donors. Receivers of funds must also be accountable to their funders, as part of convincing them of their credibility. To this end, one of the first things that the MAF did was to set up a system of fund management that is transparent and accountable. We persuaded a well-known and reputable firm KPMG to be our auditors and we published our accounts yearly. Our accounts are available for scrutiny by anyone and indeed the Treasury audited us twice last year and said that our system should be copied by all NGOs.
I have to say that it is not easy to setup a system of accountability in an NGO. As we dispense funds to other NGOs, our system requires a strict reporting process from the affiliates we fund, not least because we are required to adhere to a strict reporting process by our funders especially the government. This has not always made us popular because sometimes people feel we are poking our noses into other people's business. But the philosophy at the MAF is that the money we receive is ‘amanah rakyat', public money given to us in trust for the good of society and therefore we must be accountable. Based on this outlook, we have carried on with our system and have found that it has worked well, especially in establishing our credibility with donors. Many others have found their sources of funding drying up because of lax accountability.
In being strict about our fund management, I cannot stress enough the importance of a good Board of Trustees. The MAF by-laws allow us to invite outsiders to join our Board and we have been strategic in our choices, inviting members of the private sector who are renowned for their financial acumen as well as those who have experience in NGO work. As a result, not only do we have a Board that has a great sense of responsibility in managing our funds through many original and workable ideas for fundraising but where there is a cross-fertilisation in knowledge and skills that benefits all.
How do we raise funds?
When we seek to raise funds, it helps to look at how we market ourselves. The fundraising world is competitive because there are so many worthwhile causes. But if we look at those who manage to consistently attract funds, there are some common characteristics of these NGOs. Over the years, we at the MAF have learnt several important things when we seek funding and I would like to share these with you:
1. Know your funders
Funders often have certain criteria before they provide funds. Some corporations have made children or sports their preferred cause so you are unlikely to be successful if yours do not fit into their priorities. It is not good enough to think of a large corporation as simply moneybags and therefore should be able to help you out. Companies receive thousands of appeal letters every year and they cannot help everyone. Those that best fit their own criteria are more likely to succeed.
Also the more successful the corporation, the more likely they are to fund community services. At the MAF, we make it a point to study the newspaper business pages and we know who would be good ‘targets' and who would not. Of course sometimes there are generous people even in less successful businesses. But the bottom line matters and companies will generally only donate if they can afford to.
2. Always be professional
In dealing with corporate sponsors and donors, it is important that we act as professionals. This means not only knowing our cause very well but also knowing how to approach potential donors in a well-organised way. Sometimes appeal letters are written sloppily, names are mis-spelt or, in this protocol-conscious country, titles are outdated, and it is not clear from the letter what and how much is being asked for. This almost ensures that the letter is headed for the dustbin. Depending on whom you are writing too, formality is almost always appropriate. But I have seen an appeal email for a charity race that was so funny that you can't help but want to support it.
3. What are you going to give THEM?
Often NGOs think that fundraising is a one-way road, with money flowing towards the NGO and nothing flowing back. This is a mistake. Companies donate for certain reasons and pure altruism is the least of them. They do it to show that they are good corporate citizens. Therefore they want publicity. If we can provide them with a way to gain publicity from their donation, then they are more likely to donate. Press conferences are one way of acknowledging them. Giving them special awards or putting up a plaque is another. They must see their contribution as providing some value back to themselves.
Sometimes donors are small ones, individuals who may have bought a ticket to a dinner or a show. It is still important that they feel that their donation had some value to it. For instance, the show you are providing must be of a certain quality. There is nothing worse than donors who go away feeling that they had a terrible time; they will forever associate that disastrous evening with your organisation. The MAF has had several very successful fundraising dinners and for each one, we have taken great pains in ensuring that our donors feel acknowledged and respected. We try to ensure that they are well-entertained and cared for and that they have a good time. Creative ideas in acknowledging donors always go down well.
4. Always show your appreciation
It's not difficult to write a thank you note and it should always be done.
Everyone who donates, no matter how small a contribution, should get one.
They will always remember it and they may respond again the following year.
Appreciation can also be shown in a small gift in return or a mention in annual reports. People like to see their names somewhere.
5. Keep donors informed of your activities
It is important that donors do not feel that you only view them as sources of money. We can always keep them engaged in our issues by keeping them informed of our activities. Sending them annual reports helps them to feel that they are supporting a credible organisation, one that is really making a difference to the community. They might just see something that fits into their own community support programmes or become interested in a new area of work.
6. Think of sponsors as partners
Viewing companies as partners makes it easier to do all that I have mentioned before. If we see them as equals who, while not as knowledgeable on the issue as us, have other things to contribute, we can actually engage them better. These days, ‘smart partnerships' is an important catchphrase but many people do not know how to establish these partnerships. Therefore it helps to spend time thinking about synergistic partnerships between the private sector and NGOs that would help to achieve common goals. A fine example of these partnerships is the Population Development Association in Thailand led by Mechal Viravaidya. The PDA has almost perfected the art of smart partnerships with businesses by doing projects in which both the private sector and the organisation benefits. They have been successful in getting businesses to locate their factories in rural areas, thereby providing jobs and eliminating the necessity for people to migrate to cities to work. They have set up a very successful restaurant that provides jobs, raises funds AND educates people about HI V/AIDS all at once. Each success only leads to more and the PDA is a role model for all of us.
In Malaysia we have embarked on smaller partnerships with the private sector. For example, we had a partnership with the Association of Accredited Advertising Agencies where advertising agencies lend their wealth of creative talent on a pro-bono basis to develop IEC materials for us. Some of our affiliates have had partnerships with companies like The Body Shop to sell items to raise funds. We have a programme called Community Rewards where vouchers for services are sold and the bulk of the proceeds go to us. We are also in partnership with several pharmaceutical companies and the government to deliver antiretroviral drugs to lower-income Malaysians with AIDS.
Sustainability: The Biggest Dilemma
Fundraising takes up a lot of energy and time. Often the people who are fundraising are also the ones running programmes and this creates the problem of which to prioritise. In fact prioritising is difficult because each job depends on the other. If you don't have funds, you can't run programmes; if you can't run programmes properly, you can't get funding. It helps often to separate the two functions so that those who are fundraising can spend their time just doing that while those running programmes can concentrate on their work. But these two arms must always be connected. This is the philosophy of the relationship between the MAC and the MAF where the former runs the programmes and the latter raises and manages funds.
The biggest issue for many of us however is sustainability. We may have programmes that are running well and then suddenly, for whatever reason, the funding dries up and we are unable to continue. This disruption can endanger our credibility as well as destroy relationships we have established with our clients. In some cases, for instance in HIV prevention, we can actually reverse the fruits of a lot of hard work.
Therefore ensuring sustainability is paramount for NGOs and is a dilemma that the MAF has been facing, especially given that the HIV/AIDS epidemic in Malaysia is not showing any signs of slowing down. As I mentioned before, we have what seems like a large sum of money in our coffers. But due to the recent economic crisis, donations have dropped drastically to about only 25% of what we require annually. Since we cannot cease operations or stop programmes, we have had to delve into our reserves. It is not hard to see that if this trend continues, in a few years we will have nothing left. Yet, if we are unable to provide programmes for prevention and treatment, the numbers of infected people and the numbers of deaths will surely increase.
Thus at the MAF, we are looking at more sustainable sources of funding and looking to develop a way of getting regular annual contributions from companies, or to develop some business projects much like the PDA. We are also careful with our investments so that they always make us money. To date we are still thinking carefully about our options, mindful as always that we are holders of a public trust. To this end also, we are looking at our programmes to fund those that are of greatest value in terms of impact and effectiveness and can be sustained rather than one-of projects:
Conclusion
Fundraising remains a dilemma for many NGOs. We are subject to the economic environment we live in; the worse the economic situation, the harder it is to obtain funding. Conversely also, if our economic situation is good, we cannot get funding from foreign sources such as foundations and overseas aid and development funds because it is deemed that our own country can well-afford to assist us. Sometimes a too high profile can also work against us. For instance, many people assume that the MAF has a lot of money and does not need help because we seem to be always accepting donations, when in fact, as I said previously, our expenses far outstrip the funds we receive.
But in the world today, there is a growing, understanding that NGOs are necessary to undertake many social services and to partner with the government and the private sector to adequately respond to certain issues. This is definitely the case with. HIV/AIDS. None of this can be possible without adequate funding. This is one of the reasons that the United Nations has set up the Global Fund for AIDS, TB and Malaria, with a target of US$lObillion which they aim to provide to both governments and NGOs.
Therefore while on the one hand, fundraising still remains difficult, there is also a lot of money around. It remains therefore for NGOs to get their acts together in order to be able to access those funds.
I wish you all the best for your conference.
Thank you.
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