By John Greensmith
BONDSeptember 2002
John Greensmith, International Executive Director, Plan looks at trends in fundraising and giving by International NGOs
Following a trend among official donors to decentralise decision-making to embassies and missions in developing countries, INGOs are relocating their fundraising troops as well. INGOs also understand that sustainable development requires local people and institutions to have a growing financial stake in their own development. INGOs help the national NGOs and Community Based Organisations (CBOs) they work with to build their resource mobilisation capacity, and most work with the Resource Alliance to do so.
lan derives an increasing proportion of its funds from institutional donors, corporate donors, foundations and bequests. This revenue stream stands now at 20 per cent of our total income. Although still very small, Plan is now also raising more funds in its program countries. 'Local fundraising', as we call it, has become the third most important source of our non-sponsorship income. It is important to develop constituencies of support and enhance local ownership in the program countries where we work. Local resource mobilisation is more and more emphasised in our program work. We have come to stress the importance of counterpart contributions from the communities, partner organisations or governments we work with. Although they are often hard to quantify (and are not included in our own accounts) they are a substantial resource and we see them as essential for the sustainability of programs.
Many Southern NGOs looking at INGOs as a source of funding should prepare for disappointment. They should have a minimum of competence in adding value and offer a minimum promise to deserve funding for investment in further building their capacity. In the meantime there is no reason to believe that INGOs will not further and aggressively penetrate their local philanthropic markets. ODA-donors may disapprove of this but have insufficient leverage to prevent any of the major INGOs to raise funds wherever they can legally do so.
The top twenty INGOs may well account for half of the flow of grants to developing (and Eastern European plus Central Asian) countries. All these INGOs give a breakdown of their income. All have a healthy amount of money coming from private donations so that they are quite independent from official donor agendas. All are expanding their fundraising efforts to the South. Some establish national offices or foundations and boards in developing countries.
I see the following possible future developments which may affect INGOs, national NGOs and CBOs, and therefore require new strategic answers and organisational development.
• Private giving and demographics. There is a decline in giving and volunteering by younger generations. INGOs need to find ways to appeal to 'new cohorts of givers', probably by a higher rate of product diversification and innovation and away from planned giving.
• Mega private funds. The emergence of the Soros Foundation, Ted Turner, Bill and Melinda Gates Foundation and others illustrate a growing social responsibility of the international business community. There is a tendency among these large funders to seek equally large partnerships of INGOs and for-profits.
• Official Development Assistance and world problems. The trends are towards greater effectiveness: good governance, civil society, donor co-ordination, partnerships, local ownership and PRSPs and Comprehensive Development Framework.
• Fundraising and program delivery without borders. European economic integration opens the Euro-market for national fundraisers and not-for-profit service providers. There are promising fundraising opportunities in the South, especially in Latin America and Asia, and among quickly growing migrant communities in the North. International trade liberalisation may extend to not-for-profit social service providers. International INGOs, if not allowed access, may incorporate in the South or establish Southern franchise's. Southern INGOs may become new kids on the block in the North. The Internet becomes an essential channel for fundraising, rendering national fundraising legislation futile.
• Scale. Larger fundraising investments are made, for instance to enter new markets. In slowly growing markets already large INGOs are likely to further grow to the detriment of smaller and passive players.
• Branding and visibility. Oxfam, World Vision and Plan offer examples of organisations that have gone through a re-branding process. This helps the organisations to be recognised, build brand equity and defend or expand market share in fundraising markets.
• Specialisation. Inevitable trends towards greater effectiveness and efficiency will further lead to the emergence of more specialised agencies for marketing, fundraising, program management, implementation and evaluation.
• Accountability. Trends in improved communications and transparency will continue. NGO communication policies need to be in place.
• Resource mobilisation capacity and indigenous resources. It is critical for CBOs and national and INGOs to manage their dependency on fickle institutional donor funds. Building resource mobilisation capability is essential and indigenous resources, including indigenous practices, know-how and knowledge, and other domestic resources deserve more attention.
More Information on NGOs
More Information on NGOs and Funding
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