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It is a fact of life that the best projects often do not get funded; it is also equally sad, but true, that some very bad projects do get funded. Why is this?

Very largely, the reason lies in the fact that the skills of raising money from donor agencies are quite different from the skills needed to manage and implement effective projects and programmes on the ground.

The purpose of this article is to highlight some of the key issues that a project or programme manager needs to think about when looking to raise money for their work. For simplicity, I have broken down the process of seeking funds into ten steps:

1. Always think in the long term. A strategy for fundraising must always flow from well-defined plans and actions foreseen in programmes or large projects. By "large" I don't necessarily mean large amounts of money but "large" in the sense of covering a substantial length of time. Looking for funds in the short term or in small quantities is much harder work and quite dangerous because the more donors you have, the more likely it is that you will not end up achieving the fundamental objectives of your programme of work. This is because each donor will have reporting requirements which will stretch your administrative capacity and will also each seek to move, in more or less subtle ways, the overall goals of the project.

It is, therefore, important in general terms to identify the financing needs of your programme or project for at least the next three years and, ideally, five years.

2. Before approaching any specific donor, you must carry out, at a general level, investigations to identify the sort of donor agency which would be interested in funding the work that you are doing. This can be done in a number of ways, depending on the country that you are based in. There are various resource books available in some countries listing agencies and their areas of interest. If those books are not available, then investigation will have to proceed on a much more personal level by talking with contacts to find out what interests they and other agencies may have in this sort of work. It is also worth discussing with other implementing organizations although, to be fair, they are often not going to be particularly keen to divulge information on the donors who are funding their work, for obvious reasons.

3. Make a short list of those agencies with the best potential for funding and carry out a deeper investigation of these agencies particularly concentrating on the following things:

  • the maximum size of projects they fund (in time and in money);
  • principal interests or restrictions (for example, micro-enterprises, gender, NGOs/government bodies);
  • the funding cycle, that is the time of year when proposals should be submitted;
  • contacts within the agency;
  • previous contacts of your organization with the agency, both successful and unsuccessful;
  • the structure of the agency, including any international links they may have;
  • guidelines on how to prepare proposals for funding and how to submit those proposals.

4. From this list, choose at most three or four agencies with the greatest potential and approach them. Should all four fail, you could always go back to a second list but if you try to approach too many agencies at the same time, you will not have adequate time to follow them all up and you may well miss the agency with the best potential.

5. Prepare the project proposal. The style of the proposal can be quite different from one agency to another but usually it is a case of presentation rather than substance. It is very important that you should avoid undertaking too much additional work for a specific agency. Usually, the questions that an agency asks you would have already asked yourself and the answers should be readily available. If there are specific guidelines from the agency on how to prepare a proposal, it is extremely important that you follow them. There are many proposals that have failed simply because they have not followed the guidelines of that particular agency.

The most common elements of a proposal are as follows:

  • background justification and feasibility;
  • target beneficiaries;
  • framework of the project;
  • location, methodology of work, action plans, foreseen results, method of monitoring and evaluation;
  • timing of the phases of the project;
  • resources required, e.g. human, equipment, transport, etc;
  • budget.

It is worth noting that the size of a document can sometimes be quite critical. Some agencies request specific documents with a lot of additional material while others require quite brief documentation, particularly initially. Usually, there are guidelines about the size of the document and, again, it is important that you fit in with those guidelines.

Most often, there are also guidelines with regard to the budget, in particular a maximum percentage set for general overhead costs. It is essential that any budget should follow those specific guidelines but, at the same time, it is important that your project does not lack sufficient funds to enable it to succeed. There are often ways that these two conflicting objectives can be met; for example, while the EC insists on a maximum of 6 per cent for overheads, they will also allow you to claim for the costs of project preparation as an additional element. This can go some way towards covering those overhead costs not otherwise met.

6. Approach the donor. Follow extremely carefully any guidelines for submission and also any previous experience that you or any colleagues may have on this particular donor. If you have a specific contact in that agency who is in the right part of the agency, then make quite sure that they are completely behind your proposal as they might well be able to make all the difference to the success or failure of achieving funds.

7. Follow-up of a submission is extremely important. That is the reason why you must not present proposals to too many agencies at the same time. Follow-up is to make quite sure that any donor agency does not forget you; because they are receiving many proposals from many different directions at the same time, it is very easy for your proposal to go to the bottom of the pile. You have to make sure that it keeps coming back to the top of that pile. If any agency asks for more information on the project, it is vital that you provide that information extremely rapidly. Do not forget that if they are asking for more information, it usually means that they are interested, not that they are looking for excuses to refuse funding. Do not be afraid to seek advice from people with more experience of fund finding than yourself.

8. Success rates are low but do not despair! Three or four projects should create, with a bit of luck, a couple of expressions of interest and perhaps one definite commitment for financial support, if you have done your initial research effectively. If the donor wants to change your project significantly, you must refuse the funds. If you accept funds with those strings, there are likely to be many problems down the line as you try to pursue objectives that are different from those of your donor's. The worst outcome at the end of the day is a donor who is completely dissatisfied with your work because not only will you never receive money from them again but they will also spread the word through the donor community that you do not follow the objectives that were agreed at the beginning of the project.

9. When the firm offer or financial support arrives, write a letter of thanks immediately. When the funds arrive (which could be much later), acknowledge receipt of those funds straightaway. Make absolutely sure that you and the donor are in complete agreement about the presentations of reports, be they actions, results or financial reports. Once the project has achieved its funding targets, inform and thank any other agencies who may be holding your proposals that you no longer need funds from them.

10. Follow all the steps and paperwork assiduously. A donor, once committed to an organization, is much more likely to fund new work in the future. Keeping a happy donor is much more cost-effective than finding a new one. If there are deadlines in any part of the project, let the donor know straight away. If the budget changes for any reason and the funds supplied are not sufficient and the changes are for reasons that are quite clearly justified, then ask the donor for more. Donors know as well as the rest of us that project costs are not entirely predictable. They may say "yes", they may say "no", but as long as the reasons why the budget has changed are quite clear, there should not be any threat to the relationship with that donor.

These ten steps will not guarantee funds for your particular project, but what I would say is that ignoring these ten steps will almost certainly guarantee failure..
Last edited by Miriam Hansen .
Page last modified on Wednesday October 6, 2010 10:16:52 GMT.
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