Summary: Workshop on Financing Civil Society Organizations

What are the main constraints NGOs face when applying for financing? What are the main problems donors face when deciding where their resources will go? Is there a problem that’s faced by all NGOs when asking for funds, a loan or a donation? 

The goal of this workshop was to discuss with Civil Society representatives the problems they face when trying to find financing. The Chair, Mr. Stanislas Zuin of Mandat International divided the session into two parts:

1. first he introduced speakers who shared their views and the experiences of the solicitants;
2. then to those of the donors.

Challenges when fundraising
Mr. Erik Volkmar of Medair, an international NGO focusing on operational relief in crisis situations, pointed out that it is at times very challenging to find donors, especially when the donation is linked to a potential risk, for example when a bank is asked to provide a financial guarantee for a humanitarian operation. He mentioned a situation, where a Government donor used the donation as a means of power to ensure that a a recommendation be accepted.

According to Mr. Volkmar, the threats that humanitarian NGOs face are:

• Institutional Donors are reducing contributions to NGOs;
• Institutional Donors are also reducing the number of partners;
• Management requirements increase, while the willingness to cover costs decreases.

But there are also some new opportunities:

• Find higher percentage in the business world and among private individuals, in order to increase the independence from politicised Governments;
• Present joint proposals, consider building platforms with other NGOs, joint projects, mergers, partnerships;
• Partner to invest in mature markets, invest in emerging markets.

Mr. Afanou Kokuda from Togo presented the difficulties he faces when financing the NGO he represented, Jardin du Village, a simple group of agriculture products that was created in 1993. The NGO organizes women from different states in Economic and Social Interest Groups that in certain way generated the revenue (production, distribution, storage and commercialization of raw materials and others). They have asked for bank loans and also for contributions. He also noted that this issue is highly politicised in his country, corruption has invaded this sphere so donors lack the confidence to cooperate with them. it is just impossible to separate politics from NGOs. He proposed as a common solution for all the NGOs from the South to increase the collaboration between NGOs from the North and South.

Mr. Regis de Battista, Director of Maison des Associations told the long ordeal, his organization had been through in order to be established now as the House of the NGOs in Geneva. 53 NGOs are housed there, they offer conference rooms and cafeteria, technical equipment, exhibition halls, documentation center, etc.

After years of fighting, rejections from banks, foundations, sponsors, etc. they finally got a loan, two of their buildings belong to the Republic and Canton of Geneva and the City of Geneva has lend them two more, for the others they have to pay the interest to the bank so they ask for a minimum rent and that is how they have been going so far.

He pointed out that political independence is a key issue when receiving a donation. An expert that helps present the project is a key factor and lots of lobbying should be done.

The donors perspective
Two representative of donor organizations now presented their views. The Chairman asked them to clearly point out the major problems they were facing when financing NGOs.

Ms. Sarah Impens of European Foundation Centre gave a clear presentation about her organization, noting that they are not a foundation, but rather represent foundations that are active in Europe.

She provided a clear definition, golden rules, principles of fundraising, "Do’s and Don’ts" that all NGOs should keep in mind while sending applications to Foundations.

Mr. Hans Petter Buvollen of UNDP spoke about organizations similar to the ones in the session that have been rejected by UNDP, because their projects were not well enough outlined. Working at field level in Guatemala, he has noticed that technical assistance is more likely to be granted. Their main partners are Governments that ask for help to execute national interest programs. European countries channel money through them for specific projects. Although their funds are tending to decrease as years go by, they still have some programs with civil society organizations that vary from country to country. There are small grants that depend on the officer in charge in that country.

Mainly, the mechanism of funds designation is done through the UNDP system, but in his case, in Guatemala they have considered: the liability of the project, the seriousness of the NGO, the technical criteria, and the analyze, whether it can probably be done by contracting an NGO.

Surprising issues
An issue was that NGOs from developing countries are weak, they hardly ever benefit from or have access to resources. This the panelists agreed that this particular issue was a problem, as local organizations very much need support, in order to increase their reach and power. How to try to solve it? One solution might be to create a corporate structure, an umbrella organization in a sense of a 2nd-floor type organization, which has the strength and skills to do this reach-out work.

Interesting questions
A woman from the Democratic Republic of Congo exposed her case, asking for funds to finance a banana plantation, generating income for several women in one community. She explained her project to the “donors” side, asking for their feedback on why, according to them, her project had been rejected. They suggested that an agrarian expert revise it, both to analyze its contents and to asses the viability of the program. The economic impact, the results in the short, medium or long terms. Also to have somebody endorsed it.

Conclusions
Financing is crucial for NGOs. Mechanisms for assigning funds vary depending on the wide spectrum of foundations, UN agencies, private donors and the business sector.

NGOs have to design a clear specific strategy that describes and clarifies any doubt when submitting a project. A better chance to get financing is by forming partnerships among NGOs with the same kind of targets and applying for credits under an umbrella organization.

Solidarity and cooperation among NGOs from the North and South is another important aspect.

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19.05_volkmar_erik.doc (23 K)

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