The Financing Challenge of the Non-Governmental Organizations for Development (NGOD) in Portugal

The Financing Challenge of the Non-

Governmental Organizations for Development

(NGOD) in Portugal

António Gameiro Henriques

Advisor

Susana Frazão Pinheiro

Dissertation submitted in partial fulfillment of the requirements for the degree of MSc in

Business Administration at Universidade Católica Portuguesa.

June 2010

Universidade Católica Portuguesa

António Gameiro Henriques 1

Abstract

Dissertation Title: The Financing Challenge of the Non-Governmental Organizations for Development

(NGOD) in Portugal

Author: António Gameiro Henriques

The funding process - the action of obtaining resources from third parties - plays a key role in the

activities and performance of Non-Governmental Organizations for Development (NGOD). Devising a successful fundraising strategy enables organizations to maintain and extend their social activities, and

increase their social impact.

Most NGODs acting in the Portuguese third sector face funding problems caused by their limited number of volunteers, increasing competition for the funds available, and lack of professionalism when

providing services. The Portuguese third sector is necessary and is still underdeveloped.

The present study analyses the result from a survey conducted to Portuguese NGODs, and five

interviews conducted to nonprofit organizations operating in the social field. Findings suggest that depending on the organizations‘ area of intervention and capabilities, there are strategies and funding

sources that are more adequate to the support of their actions. These two factors constrain the

organizations‘ approach to the ―NGODs‘ Strategic Funding Model‖, which was developed taking into consideration all the Portuguese third sector trends registered during the present study.

Key words: Non-Governmental Organizations for Development • Funding • Fundraising • Third Sector



Portuguese Abstract

Título da Dissertação: O Desafio do Financiamento das Organizações Não Governamentais para o Desenvolvimento (ONGD) em Portugal

Autor: António Gameiro Henriques

Angariação de fundos, o processo de obter recursos junto a terceiros, desempenha um papel chave na

performance das Organizações Não Governamentais para o Desenvolvimento (ONGD). Alcançar uma

estratégia de angariação de fundos de sucesso permite às organizações manter e estender as suas actividades, e aumentar o seu impacto social.

A maioria das ONGDs a actuar no terceiro sector Português enfrenta problemas na angariação de

fundos que são causados pela número limitado de voluntários, o aumento da competição pelos fundos, e a

falta de profissionalismo nos serviços por eles prestados. O terceiro sector português é necessário e está ainda em desenvolvimento.

O presente estudo analisa os resultados provenientes de um questionário destinado a ONGDs, e cinco

entrevistas de organizações não lucrativas que actuam no sector social. Os resultados sugerem que as estratégias, e fontes de angariação de fundos que são adequadas para suportar cada organização, variam

dependendo da área de acção da organização e das suas capacidades. Estes dois factores limitam a

abordagem das organizações ao ―Modelo Estratégico de Angariação de Fundos para ONGDs‖, que foi

desenvolvido tendo em conta as tendências que afectam actualmente o terceiro sector português.

Palavras chave: Organizações Não Governamentais para o Desenvolvimento • Angariação • Terceiro

Sector



Acknowledgments

The author would like to thank the following:

- The advisor Prof. Susana Frazão Pinheiro, whose never-ending patience supported and enriched

this dissertation, and who shared her time, contacts, and knowledge to improve its quality.

- To Ms. Vanda Santos for her support in the final stage of the linguistic revision of the

dissertation.

- To Ms. Helena Gata (Vice-President of TESE), Mr. Alfredo Soares Ferreira (President of E&O),

Mr. Manuel Jerónimo (Member of CADIn), and Ms. Susana Damasceno (President of

AIDGLOBAL), who granted me interviews, for their time and kindness.

- To WACT organization for the availability to support and clarify questions linked with both the

organization and the sector. Particularly to Mr. João Loureiro Rodrigues and Mr. João Cotter

Salvado, who have always provided data and information with readiness and generosity.

- To the family – Francisco, Mother, Father, and Grandparents – for the constant support, strength,

and understanding during the elaboration of this work.

- To the beloved girlfriend, Mafalda, for the understanding, reassurance and love, in times of

worry, stress and sadness, and for all the good moments we spent together.

- To the closest friends, for always having a word of motivation and inspiration, and for always

giving me moments of fun, entertainment and relax.

- To the University for teaching me.



Table of Contents

Abstract ................................................................................................................................................... 1

Portuguese Abstract ................................................................................................................................. 2

Acknowledgments ................................................................................................................................... 3

1. Introduction ..................................................................................................................................... 5

2. Literature Review ............................................................................................................................ 6

2.1. Portuguese Nonprofit Sector History ........................................................................................ 6

2.2. Third Sector Organizations ....................................................................................................... 7

2.3. NGODs’ Funding Sources .......................................................................................................... 9

2.4. NGODs’ Situation and Limitations........................................................................................... 18

3. Method and Data ........................................................................................................................... 19

3.1. Surveys’ Data ......................................................................................................................... 20

3.2. Interviews’ Data ..................................................................................................................... 23

4. Findings......................................................................................................................................... 25

4.1. NGODs’ Funding Sources ........................................................................................................ 25

4.2. NGODs’ Funding Situation ...................................................................................................... 26

4.3. NGODs‘ Funding Limitations and Opportunities .................................................................... 29

5. Discussion ..................................................................................................................................... 31

6. Final Remarks ............................................................................................................................... 39

7. Future Research ............................................................................................................................. 40

References............................................................................................................................................. 41

Appendixes ........................................................................................................................................... 43



1. Introduction

The purpose of the present Work Project is to study how Non-Governmental Organizations for

Development (NGOD) collect funds in order to finance their activities and services, to understand what

their limitations are, and to draw a model that defines the best strategies to create sustainability.

There is no doubt that ―nonprofits need a fund-raising strategy carefully crafted‖ (Dolby and Gregory

Dees, 1996) in order to sustain their activities and existence. In that sense, the research conducted in this

dissertation project is used to create and support a funding model developed to guide NGODs in the

funding process with the aim of reinforcing and ―blurring the boundaries between private, public and third

sector‖ (Nicholls and Pharoah, 2008), consolidating knowledge about the different funding sources, and

improving NGODs‘ efficiency to attract financing across the different possible funding sources.

As Selby (1978) refers, the nonprofit sector is somewhere ―(…) between business and government

and between people and their communities‖ being seen as an unprofessional and disorganized element of

the society by those that try to contribute to its development – ―executives increasingly see themselves in

a no-win situation‖ (Kramer & Porter, 2002).

Adding to this, to become sustainable and to ensure a constant funding source, NGODs usually have

to complement government services, and compete with other for-profit organizations with similar

business models.

Furthermore, on the one hand there is a tendency for philanthropists and donors to become more

strategic about their donations, and a desire to see the performance and return of their donations. On the

other hand, there is increasing competition among NGODs for funding, and therefore increasing demand

for new ways to raise funds. Taken together, this leads to an increasingly greater need for NGODs to

fundraise in a more structured manner, and hence to develop fundraising models.

―This is driving social purpose organisations towards more efficient and responsive service delivery

models‖ (Nicholls and Pharoah ,2008), which means that NGODs have to be credible, professional, and

efficient in the way they manage and practice services and funds in order to maximize the potential

amount of funding collected.

Therefore, it is the objective of the funding model to boost NGODs capacities to increase their

funding, focusing on four vital and complementary elements of the organization – governance role,

funding process, defined strategy, and support provided (Figure 1) – development and improvement.



Simplifying, the work project starts by clarifying the Portuguese third sector history and the NGODs‘

legal status. This is followed by a description of the most common fundraising methods used by NGODs,

and a clarification of what is perceived as the current situation and limitations of NGODs. Then the

methodology used to consolidate the information available is explained and the main findings are

highlighted. Finally, the discussion is focused on the development of the funding model, which includes

what are considered the best fundraising methods, and conclusions are presented.

2. Literature Review

2.1. Portuguese Nonprofit Sector History

The Portuguese Nonprofit Sector has a rich history of civil society activities. ―Three impulses rooted

deeply in the country‘s history, as well as one that has emerged more recently. Included here are first, the

Roman Catholic Church; second, the country‘s long tradition of mutuality and self-help; third, its equally

long history of authoritarian political control; and fourth, the development in recent decades of key

elements of a modern welfare state and a growing reliance of state‖ (Campos Franco et al, 2004).

As Hudson (1999) mentioned, ―the history of the third sector and the special problems of its management

go back to the earliest civilizations‖. Thus, the Portuguese nonprofit sector is at least as old as the

Portuguese nation-state (foundation date: 1143), since the Roman Catholic Church was in the territory

even before then. Therefore, in order to understand the Portuguese nonprofit sector it is important to

understand the social and historical context of the appearance of NGODs.

The Roman Catholic Church‘s impact on the development of the civil society sector in Portugal was

linked to initiatives in the social, health and educational areas, having a strand that has tended to be

paternalistic and assistant in character (Campos Franco et al, 2004). It can be said that in Portugal, as in

other Southern European countries, the Church assumed a quasi-public status (Archambault, 2001).



As Portugal slowly entered the industrial era in the first quarter of the 19th century, there was an

emergence of workers' self-organizations to fight for the defense of their rights. Mutualism was based on

the principles of democracy, freedom, independence, and solidarity (Campos Franco et al, 2004).

In 1926 a New Order philosophy (by Oliveira Salazar) was enforced in Portugal, in which the

freedom of associations was seen as contrary to the national interest and, therefore, forbidden and

persecuted. As a consequence, the New Order resulted in a decline of nonprofits in general, and of the

mutualism movement in particular (Campos Franco et al, 2004).

―Authoritarianism finally gave way to a new political impulse in Portugal in the late 1960s,

unleashing a substantial revival and strengthening of civil society organizations‖ (Campos Franco et al,

2004) and leading the way to the development of the Portuguese Nonprofit Sector, which is still

underway.

From the 1960s on, the sector has re-emerged with the entrepreneurial skills and social conscience needed

to address today‘s social, educational and environmental problems. It is felt that the crucial contributions

of the sector are the ability to represent people‘s view to innovate, and to provide people with a sense of

citizenship (Hudson, 1999).

2.2. Third Sector Organizations

The objective of this dissertation project is to develop a fundraising model for NGOD acting in the

Portuguese Jurisdiction. In order to understand how the Portuguese third sector is organized, it is

important to identify the different kinds of entities that are involved with the sector. According to the

study conducted by Campos Franco, ―Portuguese civil society organizations take a variety of legal

forms.‖ These include:

o Associations, formed either under private law and specific sections of the Civil Code and in some

cases also under the Public Utility Statute.

o Foundations, a type of nonprofit organization which is a relatively recent phenomenon in Portugal.

o Local Development Organizations (LDOs), operating mainly in rural areas to empower

disenfranchised people and territories. The legal form of the LDO varies and can include public,

private for-profit, and nonprofit entities.

o Holy Houses of Mercy (Misericórdias), Catholic Church affiliated organizations that are among the

oldest nonprofit organizations in Portugal.

o Museums, legally recognized as nonprofit- distributing institutions, though many of these are public.

o Mutualist associations (associações mutualistas) formed under the statute of Private Institutions for

Social Solidarity (IPSS) to provide mutual aid to members and their families, financed essentially

through membership dues.



o Cooperatives, governed by a special Cooperatives Law, which are allowed to distribute profits to their

members.

o Non-Governmental Organizations, private nonprofit organizations that maintain social, cultural,

environmental, civic or economic programs that benefit developing countries, although many of them

operate in Portugal itself.

Non-Governmental Organizations (NGO) are nonprofit associations whose activities distinguish them

from the State and other organizations, ―NGOs can be classified in different ways according to their

activities, their geographical influence, (…)‖ (Plataforma Portuguesa das ONGDs; Netgraphy 1).

Therefore, in order to identify which organizations this work project study applies to, it is essential to

understand the differences between NGOs registered as Private Institutions for Social Solidarity (IPSS),

NGOs not registered as IPSS, and NGOs for Development (NGOD). It is a common mistake to confuse

the rights and obligations of these entities due to their legal similarities; however, funding opportunities

and sources, benefits (tax exemptions, patronage benefits, and government support) and charges are very

different among them.

Private Institution for Social Solidarity (IPSS)

Associations, foundations, holy houses of mercy, mutualist associations and cooperatives can acquire

the status of Private Institution for Social Solidarity, which means that an NGO can acquire the IPSS

status if that is the organization's objective. Those institutions are not administered by the State or a local

government body (Diário da República: Decree-Law No. 119/83 of 25 February, Article 1; Netgraphy 2).

IPSS are registered in the General-Directorate of Social Security, whereby they acquire the status of legal

persons of public interest and receive, by the government, the allocation of benefits (tax exemptions,

financial support) and charges (accountability, obligation to cooperate with the Public Administration)

(Diário da República: Decree-Law No. 119/83 of 25 February, Article 8; Netgraphy 2). To carry out the

social security objectives, the District Centers of Social Security usually get a cooperation agreement with

the IPSSs, which have to guarantee the management of social services to the population.

Non-Governmental Organizations not registered as IPSS (NGOs)

Nongovernmental organizations do not legally have to cooperate with the Public Administration and

nor have they the adequate and relevant government support given to IPSS institutions. These entities

have tax exemptions in the Corporate Tax Revenues (Imposto sobre o Rendimento das Pessoas Colectivas

(IRC)) if revenues come from donations, fees, and revenues from activities related to programs and

projects of development cooperation, humanitarian assistance, emergency assistance and protection and

promotion of human rights. However, these entities are IRC taxpayers and are taxed by the total income

when the incomes are not related to the activities they are legally allowed to execute. (IRC – Ministério



das Finanças: Articles 3., paragraph 1, b), 49., paragraph 3 and 4, 81. º, 109. , No. 6, b) of the CIRC;

Netgraphy 3). Regarding the organizations‘ profits, nongovernmental organizations ―are not primarily

commercial in purpose and do not distribute profits to a set of directors, stockholders, or managers. Civil

society organizations can generate ―profits‖ in the course of their operations, but any such surpluses must

be reinvested in the objectives of the organization.‖ (Campos Franco et al, 2004).

Non-Governmental Organization for Development (NGOD)

Finally, a Non-Governmental Organization (NGO) becomes a Non-Governmental Organization for

Development (NGOD) if registered in the Portuguese Institution to Support the Development (Instituto

Português de Apoio ao Desenvolvimento (IPAD)), which belongs to the Ministry of Foreign Affairs

(IPAD – Netgraphy 4). In general, an NGOD acts in the following areas: education and culture, scientific

and technical assistance; health, including medical care, medication and food; employment and vocational

training; protection and defense of the environment; social and community integration; rural

development; strengthening civil society by supporting similar associations and associations based in

developing countries, education for development through the dissemination of the realities of the

countries in developing public awareness and through public opinion (Diário da República: Decree-Law

No. 66/98 of 14 October, Article 9; Netgraphy 5). The status of NGO is assigned by IPAD and is valid for

a period of two years. After this period, the NGO must renew the application for the statute. By obtaining

the status of NGOD, the organization benefits from the status of legal person of public utility and after

three years of activity is able to apply for both co-financed projects, and Education projects for

development (IPAD – Netgraphy 6).

With the legal status of NGOD, these entities can also apply to the NGOD Platform (Plataforma

Portuguesa das ONGDs), which gives them several benefits at the approximate cost of an annual fee of

360€ (Plataforma Portuguesa das ONGDs; Netgraphy 1). Moreover, NGOD benefits from the ―Patronage

Act‖ (Ministério das Finanças: Decree-Law No. 74/1999, of March 16; Netgraphy 7), which allows

entities to receive donations, and gives to the donor a reduction in taxes through the augment of the

auditing cost of the donation made (the objective is to give a tax benefit to the donor, as a way of

incentivizing donations) (Ministério das Finanças: Decree-Law No. 74/1999, of March 16; Netgraphy 7).

Finally, Non-Governmental organizations for development can apply for specific funds designed for them

from the Portuguese government, the European Union, and several foundations.

2.3. NGODs’ Funding Sources

The main sources of NGO funding are divided into five categories: the government; the private and

public sector (all the private and public entities that have specific activities in the community);

international funds (although there are a variety of international funds, this study will only consider the



European Union funds); public; and own business. ―It is recommended that sources of funding or income

be diverse and multiple to avoid dependence on a single funder.‖ (Conradie, 1999).

1) Government

Government support is done as payments for service rendered in the form of government grants,

through direct contracts, and payment for specific services (Dolby & Gregory Dees, 1996). The

Portuguese government has specific funding programs for NGODs and is under the obligation to ensure

that those funds are properly distributed in order to achieve their social objectives (Programa do XVII

Governo Constitucional; Netgraphy 8). These programs are implemented because the government does

not have the capacity to implement all the social activities it intends to, so incentives NGODs to carry

them out. ―(…) people have begun to worry that they [public agencies] do not possess the competence to

do it well. In response to these concerns (…) [government decided to do] (…) direct contracting with

nonprofits and businesses for services previously delivered by public agencies, the government serving as

a third-party payer for the services, or the government issuing vouchers to consumers.‖ (Gregory Dees,

1994). NGODs must use this government need for support as an opportunity to ensure financing for their

activities, and to reassure other potential funders that the organization has the capacity to manage funds

and projects ―the presence of on-going government funding might reassure [other] donors that their

providing start-up funds will not be in vain since the organization has another source of support‖ (Dolby

& Gregory Dees, 1996).

However, organizations must ensure that they are not dependent on government payments because

the government usually has co-financing rules that are not sufficient to finance the whole project, and

incurs on payment delays. News about those delays is recurrent: ―Concerns about delays in the

distribution of lottery funding to NGOs are once again in the news. With many NGOs already taking

financial strain or having to respond to ever-increasing demands for services as a result of the economic

crisis, serious questions have to be raised about the ongoing inefficiencies at the National Lottery.‖

(SANGONeT; Netgraphy 9).

Government funding for NGOs comes from different sources, namely national funds from

government, the national budget, European funds, and through national lottery, among others, and each

one of them has different processes.

There are, therefore, several challenges in fundraising for NGODs. According with the European Anti

Poverty Network (EAPN; Netgraphy 10), one of the NGOD funding problems is the lack of information

about fund processes, requirements and potential. Thus, it is important to provide a brief explanation

about the processes to obtain funding from the allocation of the Individual Revenue Tax (IRS), the

Portuguese Institution for the Development, and the Social Security. The process to obtain funds from



other public entities is then described because fund processes differ according to the purposes of the

funding.

Tax benefits of share allocation of the Individual Revenue Tax (IRS)

According to Tax benefit of share allocation of the Individual Revenue Tax (IRS), nonprofit

institutions can receive 0.5% of taxpayers IRS. For that, taxpayers have to indicate the intended recipient

for the donation in Table 9 of Appendix H – Tax Benefits and Deductions (model 3). Although the

decision to donate is made by the taxpayer, the donation is considered as made by the government

because it is a percentage of the taxes paid to the government (Agência Financeira, 2007; Netgraphy 11).

Organizations have to register in the Ministry of Finance to be able to receive donations from the Tax

Benefit of share allocation of the IRS. This is done through a letter to the Ministry, with all the documents

that prove the organization‘s existence, registration, activities and situation. During the process, the

Ministry will analyze and decide whether the organization can or cannot receive donations from the Tax

Benefit of share allocation of the IRS (Ministério das Finanças; Netgraphy 12).

Portuguese Institution for the Development (IPAD)

The status of NGOD allows organizations to apply for both co-financed projects, and Education

projects for the development after three years of activity. Organizations have to apply in accordance with

the rules of either the Co-financed Projects Program, or Education Projects for Development Program,

respectively. Those rules demand the presentation of the following documents: Eligibility Criteria;

Proposed Program; Project Cooperation Model; and Financial Plan (IPAD; Netgraphy 13 and 14).

Social Security

Social Security is a system that aims to prevent and remedy situations of deprivation and socio-

economic inequality, dependence, dysfunction, exclusion or social vulnerability, and the integration and

promotion of people from the communities through the development of their capabilities. The protection

of social action takes place through the provision of: cash benefits of any nature and in exceptional

conditions; benefits in kind; and access to the national network of services and social equipment and

support for programs to combat poverty, dysfunction, alienation and social exclusion. Entities responsible

for implementing these programs are: General-Directorate of Social Security (DGSS); Institute of Social

Security (ISS); District Centers of Social Security; Private Institutions of Social Solidarity (IPSS); and

other private entities (like NGOD) (Segurança Social; Netgraphy 15).

Although NGODs can implement social security programs, their activity is subject to licensing,

inspection, and supervision from relevant departments of the Ministry of Labor and Social Solidarity

(MTSS) (Segurança Social; Netgraphy 16). The application for licensing the activity is done by

submitting the application in its own model addressed to the competent organ of the Institute of Social



Security, I. P. in the geographical area in which the establishment is located (Segurança Social; Netgraphy

17).

2) Public and Private Entities

In this category all the private entities are included – corporations and other nonprofit organizations –

and public entities – for-profit companies – that have specific activities in the community and have the

freedom to decide if they want to fund an NGOD through the payment of a service that is provided by the

organization to the entity, or through a donation that can be made in exchange of either nothing (the entity

donates and does not want anything in return), or of a sponsorship (which gives visibility and promotes

the entity).

For-profit companies (Public and Private)

The business community and the world‘s capital markets are urgently needed as partners to transform

vision into tangible impact (Lubber, 2010).

NGODs can adopt two approaches when considering for-profit companies as a funding source. The

first approach is the traditional one named ―pure corporate philanthropy‖. And a second approach is one

described by strategic visionaries like Michael Porter, which can be defined as ―strategic philanthropy‖.

The ―pure corporate philanthropy‖ approach has been the usual practice. For-profit companies use

―Philanthropy as a form of public relations or advertising, promoting a company‘s image or brand through

cause-related marketing or other high-profile sponsorships. (…) They are intended for as much as

improve employee morale as to create social impact.‖ (Kramer & Porter, 2002). However, ―more

competition for grants and philanthropy, and changes in public service delivery policy, increasingly

enabled third sector organizations to look for contractual product and service income‖ (Nicholls &

Pharoah, 2008). This caused a shift from the ―pure corporate philanthropy‖ to the ―strategic philanthropy‖

approach: ―the nature of grants and philanthropy is changing as more engaged and demanding ‗venture

philanthropy‘ models emerge. Creative philanthropy aimed at innovation, scaling and replication as much

as project support is also becoming more fashionable (Anheier and Leat, 2006), as are notions of a

philanthropic capital ‗market‘ (Bernholz, 2004).‖ (Nicholls & Pharoah, 2008).

The ―strategic philanthropy‖ approach has the potential to maximize the amount of donations and

grants made by for-profit companies if NGODs are able to structure a strategy that brings benefits for

both parts. As Porter and Kramer stated, ―It is true that economic and social objectives have long been

seen as distinct and often competing. But this is a false dichotomy; Companies do not function in

isolation from the society around them (…) the more a social improvement relates to a company‘s

business, the more it leads to economic benefits as well‖, which means that a company becomes more

competitive the more effectively it uses its competitive context. Moreover, there are other authors that are



even more radical about how companies should look for the third sector ―Sustainability cannot be viewed

by companies and investors as a side project. It‘s not something that can be relegated to the HR team, or

one or two sustainability managers. Sustainability needs to be integrated across entire business models —

from the boardroom to the copy room, across supply chains and throughout products, to customers and

beyond.‖ (Lubber, 2010).

Therefore, NGODs can use their activities and services to enhance companies‘ social and economic

goals, improving a company‘s long-term business prospects ―for example: an established socially

entrepreneurial organization in the service delivery field may well build new models on existing

operational best practice (lower innovation) but demonstrate more sensitivity to its beneficiaries (higher

sociality) and explore new resource strategies, including earned income (higher market orientation)‖

(Nicholls & Pharoah, 2008). This creates an incentive for companies to give their money to an NGOD,

because it enables them not only to contribute to the NGODs social activity, but also to leverage its

capabilities and relationships in support of charitable causes. However, a ―strategic philanthropy‖

approach implies a big commitment and demands a professional service from NGODs over corporation

because ―the impact achieved by a donor, then, is largely determined by the effectiveness of the recipient‖

(Porter & Kramer, 2002), and NGODs have to ensure the donor that its donation will create impact for

both society and the company's competitive context through reports that measure the social impact and

return caused by the service. As a result, ―companies would be more confident about the value of their

philanthropy and more committed to it.‖ (Kramer & Porter, 2002). However, this poses a problem as

issues like ―liquidity, exit frameworks, types of returns, scalability, track records, business models by

which value is being delivered (new business models and innovation), need for metrics‖ (Frazão Pinheiro,

2009) are not always easy to measure in social projects.

Foundations

Foundations can be seen as social investors, providing funds for NGODs that have activities in the

same area of the foundation. To receive a foundation grant contribution, the key is to find a foundation

whose funding orientation fits the mission of the nonprofit organization. ―If foundations are an

appropriate source of funds for the venture, the first step is to identify a manageable number of

foundations to approach. The screening process should be based on a sense of fit between the venture and

the foundation‖ (Dolby & Gregory Dees, 1996). As for the public and private entities funds, there is

usually strong competition for these funds ―foundations are already heavily invested in social enterprises,

mainly through grants, and donations‖ (Nicholls & Pharoah, 2008) making it difficult for small/new

NGOs for development to obtain them. The process of applying for grants varies among foundations, but

usually requires a formal proposal whereby organizations are required to present their projects and have



to show how transparent and reliable they are in order to deserve the fund. ―Pioneering Groups such as

ASHOKA (…) have challenged current investment and grant-making practice. They have called for

foundations to apply their funds to more innovative and transformative models of social change – ones

that are replicable and economically sustainable in the long-term‖, which means that the tendency for

adopting a ―strategic philanthropy‖ approach instead of ―pure corporate philanthropy‖, happening with

for-profit companies, is also happening with foundations.

Nonprofit Institutions as intermediary Platforms

There are some NGODs that work as intermediaries, collaborating and helping NGODs to obtain the

financing they need. One illustration of this is the fact that in the United States ―The number of

specialised finance intermediaries such as CDFIs and Credit Unions has grown, and has widened access

to loan funds, but these organisations themselves have yet to reach scale‖ (Nicholls & Pharoah, 2008).

CDFIs (Community Development Financial Institutions) and Credit Unions are small financial

institutions that provide finance and support to individuals and enterprises.

In Portugal, there are few of these intermediary organizations, but it is important to draw the attention

to ―Plataforma Portuguesa ONGDs‖ and ―Bolsa de Valores Sociais – BVS‖. The Portuguese Platform's

mission is to help improve and enhance the work of Portuguese NGODs. For an annual fee of 360€, the

platform promotes NGODs‘ work, monitors and influences the design, implementation and evaluation of

development policies in Portugal, and works as an interlocutor of both government organizations and

supra-governmental organizations on issues of development and cooperation (Plataforma Portuguesa das

ONGDs; Netgraphy 18). Bolsa de Valores Sociais (BVS) replicates the atmosphere of a stock exchange

and its role is to facilitate the meeting of NGODs with relevant work and proven results in the area

of education and entrepreneurship, and social investors (donors) willing to support these organizations by

purchasing their social actions. Following the example of what happens in the capital market, the BVS is

the space that promotes the meeting between social organizations and social investors, and ensures the

required transparency (Bolsa de Valores Sociais; Netgraphy 19).

Loans

There are banks and other similar intermediary institutions that are starting to take an interest in

NGODs through loans and other financial instruments: ―a very small number of social enterprises are

beginning to deal in bonds and share issues‖ (Nicholls & Pharoah, 2008). However, this is not a common

practice among NGODs for several reasons: ―limited liquidity, ownership restrictions, lack of

performance data, and no developed stock exchange marketplace‖ (Nicholls & Pharoah, 2008). Adding to

these, most of the NGODs are not self-sustainable, which means that the only way to pay back the loans



is through donations, which are not always certain. These are some of the reasons that limit the

development of loans as a source of fundraising.

3) European Union Funds

The European Union (EU) is a unique economic and political partnership between 27 democratic

European countries, which aims to create peace, prosperity and freedom for its citizens. To achieve its

objectives, EU countries set up bodies to run the EU and adopt its legislation. The main ones are: the

European Parliament (representing the people of Europe); the Council of the European Union

(representing national governments); and the European Commission (representing the common EU

interest) (European Union; Netgraphy 20).

The European Commission is the EU‘s executive organ that manages the day-to-day business of

implementing EU policies and spending EU funds. The European Union funds are designed for small

and medium enterprises (SMEs), public bodies, farmers, young people, researchers, and NGOs. Non-

Governmental and civil society organizations are a natural target group eligible for a vast part of EU

funding, as they are involved in many areas covered by EU policies on a nonprofit basis, a precondition

for receiving funding from EU coffers (European Union; Netgraphy 21).

In practical terms, NGODs may receive two types of funding: one is through a proposal for a concrete

project under a EU program which covers the organization‘s area of activity and, if successful, this

particular project will be co-financed by the EU through an action grant. The other is under a specific

operational program, where the NGOD pursues a project delineated by the European Union. These funds

are known as structural funds and are managed by national or regional entities (Official Journal of the

European Union: Regulation (EC) No. 1081/2006 of the European Parliament and of the Council of 5

July 2006 on the European Social Fund and repealing Regulation (EC) No. 1784/1999; Netgraphy 22). In

2007, the European Union launched a new set of programs: up to € 975 billion over a seven-year period

(2007 – 2013). However, the application process demands that NGODs have people who study the

process in order to have knowledge of it, and who are able to correctly deliver the documentation

requirements. Moreover, to apply to the EU budget managed by national and regional authorities, the

organizations have to find out which operational programs are adequate to their activity area, what entities

are responsible for the management and control of the budget (when more than one entity is involved),

when the applications are available, and for which regions they are meant. Adding to this, each

operational program has different application programs and different requirements that change over time

(European Commission; Netgraphy 23).

4) Public

The public that donates is motivated by a sense of gratitude, personal passion for a particular cause,

the desire to help others, the wish to honor a family member, and finally, the need to improve the donor‘s



public image or social standing (Dolby & Gregory Dees, 1996). Adding to this, people have fiscal

benefits when donating to nonprofit institutions according to the ―Patronage Act‖ (Ministério das

Finanças: Decree-Law No. 74/1999, of March 16; Netgraphy 7). The fiscal benefit varies according to the

legal status of the recipient for the donation. Finally, grass roots campaigns gather a large number of

small donations from individuals that can be made in innumerous ways, depending only on the

organizations‘ capacities and creativeness. A widespread support is important in order to avoid

dependence on a particular donor (Dolby & Gregory Dees, 1996) and to overcome the hard competition

for public donations.

5) Own Business

Own business is the final category of fundraising. Here are considered the funds created by the

NGODs without depending on other entities‘ funding rules, in other words, they are uncommitted funding

sources that are made through payments for goods or services. Note that services that imply contracts

with public and private companies are excluded from this category, which is the case of the ―strategic

philanthropy‖ approach described in the public and private entities category of funding source (please see

Page 11).

Membership Fees

NGODs‘ board members ―assist the internal workings of the NGO by setting criteria for membership

of, and appointing review panels and/or support groups‖ (Mostashari, 2005). The membership system can

be implemented with a fixed fee for every member, allowing the organization to receive an annual

donation from those who want to collaborate with it. What differentiates the fee from a donation is that

the fee must imply a counterpart to the member, a benefit offered from the organization to the individual.

Events

―Special events come in all shapes and sizes‖ (Ilona Bray, 2008). Organizations can create two kinds

of events: Events that are directly related to the nature of the activity developed by the organization,

which means that the organization is carrying out an activity aligned with the legal purpose of the

organization (e.g. a conference whose subject is to call people‘s attention to the current social problems in

Portugal, and how they can be prevented and countered). And events that are not directly related to the

nature of the activity developed by the organization, and whose only purpose is to collect money,

entertain people, or provide an opportunity for people involved in the same activity to know each other.

According with Ilona Bray (2008), events ―are occasions outside your nonprofit‘s usual activities, where

your membership and/or the public is invited to attend and support your work, usually by paying an

admission fee or buying things once they get there.‖



Sales (Merchandising)

Merchandising products can be of every kind, must sell the image of the organization, and create a

relationship with the buyer. Like events, merchandising ―gives you an opportunity to reach out to people

beyond your usual donor base‖ (Ilona Bray, 2008), which means that the interested buyers can possibly

become donors. When selling merchandising products, the organization is not necessarily selling a service

or product related to the legal nature of the organization's activities. Like Ilona Bray (2008) wrote,

―everything that you sell with a tag or label on it should loudly proclaim what your organization is about

and how the buyer is helping an important cause‖.

Sustainable Business Model

―Financial sustainability is critical for NGOs to be able to sustain their organizations and programs‖

(Conradie, 1999). Furthermore, the business models adopted by NGODs increase their profitability and

self-sustainability without losing sight of their original goal. According to Elkington and Hartigan, there

are three business models, namely ―leveraged nonprofit‖, ―hybrid nonprofit‖ and the ―social business‖.

All of these structures pursue social or environmental ends that the markets have failed to address, and

NPOs use different means to do so. However, given the Portuguese legal structure, NPOs cannot adopt

the ―hybrid nonprofit‖ model, because they are not allowed to reinvest revenues and profits in purposes

other than their legal one. Instead, in case of making a profit, nonprofit organizations have to allocate the

profits to future social projects. As Andrea Heinecke, founder and director of Dialogue in the Dark says,

―It would be very interesting to come up with a new type of company that would be for-profit with a

strong social mission that would also have the fiscal advantages of a nonprofit organization (…) what I'm

looking for is a hybrid that would combine the best parts of both groups‖ (Goldsmith, 2009). This

business model would bring great benefits to the Portuguese third sector if it was allowed, but in this

study it will not be considered. Therefore, we will focus only on the ―leveraged nonprofit‖ and ―social

business‖ models, when approaching the NPOs way of doing business - in other words, their way of

carrying out their social activities and collecting funds.

o The first model is the ―leveraged nonprofit‖ venture and is very common in cases of market failure,

where the government or regular companies are not capable to provide the ―service‖ or ―good‖

needed‖ (Elkington and Hartigan, 2008 (mainly ―public goods‖), being considered very risky for

them to try to. The NGOs that adopt this business model are financed by philanthropic entities, the

government, or own resources, like paid services related to their area of activity and fees, thus being

very limited in terms of sources of financing.

o The third model is called the ―social business‖ venture and is more common where more obvious

market opportunities exist, because these entities are ―for-profit entities focused on social



missions.‖(Elkington and Hartigan, 2008). They operate like a normal company, being pro-profit,

sustainable and not dependable on donations or public/private funds. Given the Portuguese

legislation, Non-Governmental Organizations ―(…) can generate ―profits‖ in the course of their

operations, but any such surpluses must be reinvested in the objectives of the organization‖ (Campos

Franco et al, 2004). This regulation prevents Non-Governmental Organizations from adopting a

―hybrid business‖ model; however, the ―social business model‖ is an alternative that can be adopted

by these organizations in order to be able to have paid services that are not related to the social area.

This increases their scope of action and reduces the organization dependence on donations or other

funds. This alternative is the creation of a ―social enterprise‖, which is the creation of a for-profit

company separated from the NGOD in legal terms, but linked to it through the mission of achieving a

better common good, reverting all the profits to the NGOD in the form of donation. This enterprise

has to pay taxes and does not have the ―patronage status‖. ―The enterprises‘ financing – and scaling –

opportunities can be significantly greater because social businesses can more easily take on debt and

equity.‖ (Elkington and Hartigan, 2008).

Each of the models described can be used to address any of the great social and environmental

divides. ―The good thing about a for-profit company is that it is less burdened by regulations than

nonprofit organizations. On the other hand, nonprofits enjoy significant tax advantages that […] for-profit

organization […] misses out on because of its for-profit status. This status also prevents it from receiving

grants or donations from foundations even though it is driven by a strong social mission‖ (Goldsmith,

2009). In every model and for every market need these models seek to address, entrepreneurs must raise

funds and know how to raise them and use other resources.

2.4. NGODs’ Situation and Limitations

The studied carried out by Campos Franco claims that Portugal‘s civil society sector is a major and

significant economic force. It represents 4.2 percent of GDP (Gross Domestic Product), it has a quarter

million full-time equivalent workers (70 percent being in paid positions), and employs more people than a

few industries in Portugal, like the utilities and transportation industries. However, this information

reveals the importance that the third sector is beginning to get in Portugal. There are some problems when

managing third sector organizations:

First of all, there is only a weak link between providers of funds and service users, making the public

less aware of social problems (Hudson, 1999), and there is little understanding of organizations as

constituting a single cohesive sector. This lack of sector consciousness limits the sector‘s ability to

promote philanthropy, attract public support, and secure policies favorable to its future development

(Campos Franco et al, 2004).



Secondly, companies do not know how corporate philanthropy can add value to their competitive

context. ―The majority of corporate contribution programs are diffuse and unfocused (…) in fact; most

corporate giving programs have nothing to do with a company‘s strategy‖ (Kramer & Porter, 2002).

Companies need to change their philanthropy strategy in order to focus on social needs that affect its

corporate context and utilize its unique attributes as a corporation to address them, creating a stronger

impact on both society and the company‘s competitive advantage.

Adding to this, according to Hudson (1999), volunteerism is an essential ingredient. However, the

perception of Portugal nonprofit employees is used to justify low wages and long hours, leading to low

employee retention, with qualified workers leaving social institutions for public or private for-profit ones

(Campos Franco et al, 2004). It is a challenge for NGODs to retain their employees, who have a valuable

role in the whole process of fundraising.

Moreover, third sector management structure is intricate (Hudson, 1999). Portugal currently has a

diffuse and confusing body of laws governing the formation and operation of different types of

organizations (Campos Franco et al, 2004). This creates a lack of understanding of the legal framework,

diminishes the impact of the nonprofit sector in Portugal, and limits the number of business models that

can be applied by NGOs in order to improve their activities and increase revenues.

Finally, ―Close to half (48 percent) of the revenue of Portuguese nonprofit organizations comes from

fees and sales, followed closely by public sector support (40 percent)‖ (Campos Franco et al, 2004),

which means that NGODs rely heavily on government funds. This is a situation that has to be changed,

because the actual crisis is causing a social impact, forcing the government to incur in cost reduction

initiatives, which include cuts in social funds. Recently, the Government announced the recovery plan

where it was clear that ―the Government intends to reduce the annual expenditure made with the Social

Integration Income in at least EUR 137.8 million by 2012, reveals the Stability and Growth Plan‖

(Público, 2010; Netgraphy 24).

3. Method and Data

In order to indentify the most important factors that contribute or influence the funding process of

these organizations and to carry out an analysis of a sample of Portuguese Non-Governmental

Organizations for Development, we have conducted a survey and interviews.

Survey

A survey was administered to a large number of Portuguese civil society organizations, bearing in

mind that no two respondents could come from the same Internet address. This measure may have

prevented two respondents from responding from the same computer and ensured a greater diversity of

respondents. The objective of the survey was not to have quantitative research, which would have been



considered ―poor‖ since there is not that much data on the NGODs' current situation to work on which

would drive to sustained conclusions. The plan was to identify NGODs among a large number of

Portuguese third sector organizations, and analyze/evaluate the information regarding their funding

situation. Appendix 1 offers a summary of the observed questions, and how NGODs‘ answers are

distributed (all the other entities‘ answers were removed). This filter is applied because only NGODs‘

answers contribute to the development of a funding model for NGODs.

Interviews

After the survey, a research based on structured interviews with open-ended questions was used, as it

is considered to be the most useful interview format for qualitative research (Barrio, 1999). Four

interviews were carried out to the Heads of four different NGODs. These interviews were based on a

script of predetermined questions (please see Appendix 2) with a well-defined structure in order to obtain

the maximum information relevant for the funding model development. Interviews are divided in four

sections of open questions: the first section gathers specific information regarding the legal status; the

second section shows which activities the organization does in which areas; the third is to understand

what the organization‘s main sources of financing are, and which methods the organization has used to

raise them; the fourth section is about the organizations‘ problems in obtaining financing, and about the

respondent‘s opinion regarding possible solutions.

A fifth interview did not follow the same structure of the previous interviews, because it was

conducted to an IPSS to get more information about their business model. The goal was to understand the

idea behind the model, which can then be adapted to NGODs. Therefore, the structure of this interview

was different from the used in the NGODs interviews, with questions only about the organization‘s legal

status, activities, and business model. Appendix 3 shows the interview guide.

3.1. Surveys’ Data

The survey was conducted online, and sent to approximately 110 organizations. From the

organizations that were invited to participate in the survey, 37 organizations completed the survey, from

which 6 did not identify themselves (16.2%). Among the 37 respondents, there were 7 NGOs, 20

NGODs, 4 IPSS, and 5 nonprofit associations. From the 37 organizations that completed the survey, all

the answers that were not from NGODs were not considered. This filter left 20 responses that were used

in the present analysis, in order to support the NGODs funding model.

To understand the size and importance of the sample obtained, the information available about the

existing number of NGODs is that up to March 19, 2009 there were 160 NGODs registered in IPAD

(IPAD; Netgraphy 25). However, there are NGODs that do not exist anymore, or that are not carrying out



any activities. Therefore, we can consider that if every NGOD that registered in IPAD until March 19,

2009 is still active, then the survey sample represents 12.5% of the NGOD universe.

Organization’s Profile

Regarding the organization‘s profile, in the final 20 responses data set, the majority of the

organizations have 1 to 10 members (8 NGODs, or 40%), 6 have between 11 and 49 members (30%), 4

have between 50 – 99 (20%), and two of them have more than 1000 members (10%). The year in which

the organizations were founded varies between 1949 and 2008, and the majority of them were founded

between 1995 and 2008 (14 NGODS, or 70%). 18 organizations have activities in Lisbon (90%), and 15

operate also in other regions of Portugal (75%). 11 NGODs have activities in the Community of

Portuguese Language Countries (CPLP) (50%), and one has activities outside Portugal and CPLPs. All of

the organizations have activities in the development area (economic, social, and community development)

and housing category (using ICPNO Reference), which makes sense, given their legal nature. Beside this

area of action, education and research is the second most practiced (15 NGODs or 75%), health and social

services activities are both practiced by 9 organizations (45%). Regarding the organizations‘ activities,

the majority of NGODs conduct training activities (18 NGODs, or 90%), and right after that activity,

events are the second most practiced (14 NGODs, or 70%). The information about NGODs‘ profile was

collected from questions 1 to 6 from the survey (please see Appendix 1).

Information about funding sources

Questions 7 to 10 are about the financing sources used by NGODs. Regarding the most used

financing sources, the government provides funding to 16 NGODs (80%), being the most common source

of financing among the respondents. Next, public donations are received by 15 NGODs (75%), and events

are the third most used source of financing, being implemented by 14 organizations (70%). Sales, fees,

and international funds are all sources of financing used by 10 respondents (50%), respectively (Figure 2).



Every respondent agreed that there are limitations to the fundraising process and those limitations

were identified as: limited human resources without the capacity to carry out fundraising effectively (11

NGODs, or 55%); limited visibility and reputation (9 NGODs, or 45%); limited number of financing

sources (5 NGODs, or 25%); and the size of the organization (4 NGODs, 20%) (Figure 3).

9 organizations state that the financing they obtain does not limit their activities (45%); however, the

remaining 11 organizations (55%) agreed that their activities were limited due to the financing they

were capable of obtaining, for several reasons: First, 7 NGODs say that had to cancel some of the

projects they intended to do because they were rejected by the funders (35%). Secondly, 5 NGODs

believe that their activities are limited to the financing capital available because of some of the financing

sources demands and rules (25%). Those rules are: The rule of reimbursement, which means an initial

investment from the organization and later the financer reimburses the organization, which implies

availability of working capital. The rule of co-financing, which is the sharing of the cost payments

between the NGOD and the financer, creates the same problem as the reimbursement rule. The length of

the financer's contribution to the project is usually short term (12 months), which limits the project

duration and sustainability (Figure 4).



The last question asked organizations how financial sources contribute to an improvement in the

organization’s management efficiency and capacity. The most common reason to explain the direct

relationship of more financial capital leading to an improvement in the organization‘s management was

given by 10 organizations (50%) that stated it gives more independence to the organization, not being

limited to the bureaucratic rules and payment delays of the financers. Secondly, 6 NGODs explained that

more financial resources capacitate organizations to attract more human resources with specific

technical capacities (30%). Thirdly, also 6 NGODs stated that it improves the organizations‘ capacity to

meet community needs (30%). Fourthly, 5 NGODs stated that it allows organizations to plan and

execute sustainable and long-term projects (25%). Finally, one organization stated that it gives more

visibility to the organization (5%) (Figure 5).

3.2. Interviews’ Data

Live interviews were carried out with four of the survey respondents, plus one other organization

whose profile did not fit the requirements of the survey. The people interviewed were chosen in order to



give better insights into the information needed to develop the model. The interviews were conducted in

Portuguese and took between 30 and 90 minutes. All interviews were transcribed and translated into

English for posterior analysis and interpretation.

Interviews’ Purposes

Four of the interviews were carried out with NGODs that had replied to the survey and whose profiles

allow the organizations to apply the funding model developed in this work project (the required profile to

use the funding model is to be an NGOD with ongoing activities). The objective of these interviews was

to take inferring conclusions about the actual fundraising strategies that NGODs use nowadays. The

chosen NGODs were: ―WACT‖, ―AIDGlobal‖, ―TESE‖, and ―Engenho & Obra (E&O)‖. Among all the

information gathered in these four interviews – about the organizations‘ legal situation and activities – the

main focus/objective was to understand what their main sources of financing are, the reason why they

have those funding sources, and the methods the organization uses to raise them.

A fifth interview was arranged with an IPSS, but this interview was just to understand the business

model used by the organization, which gives a sustainable mode of operation to the organization. That

organization is ―CADIn‖. This interview had a different focus from the previous ones, bent on getting

better insights into sustainable models, which can be a good strategy to avoid fundraising problems, and

ensure a constant source of revenues.

Information Gathered

All the interviews were carried out in person, transcribed into the computer, and not recorded (please

see Appendix 6). In order to have a better understanding and to facilitate the analyses of the information

gathered from the interviews, the data collected during the interviews were transferred into tables, through

a process of clustering the information according to the area under study (please see Appendix 4).

Therefore, the information collected from the NGODs‘ four interviews is displayed in six tables,

where it is possible to compare answers from the different interviewees. Those tables are available in

Appendix 4. The first presents information regarding the NGODs legal status, natural obligations and

benefits (please see Appendix 4, Table1); information about other organizations‘ activities from a funding

perspective, and costs approach is presented in Appendix 4, Table2; after that, different sources of

fundraising information regarding the funding process, problems, and preferences (please see Appendix 4,

Table 3, 4 and 5); and finally information about transparency and accountability is presented (please see

Appendix 4, Table 6).

Information about the CADIn business model interview is available in Appendix 5. This interview was

extremely helpful to understand how a nonprofit organization can implement a sustainable business

model.



4. Findings

Through the analysis of the data collected from surveys, interviews, internal documents, and

corporate websites, it is possible to compare and infer conclusions about the current NGODs‘ financing

situation, the problems and the procedures that these organizations have to face in order to get funding.

The analysis focuses on these topics, because this is crucial information to support the funding model that

is here developed.

4.1. NGODs’ Funding Sources

In the interview, the four organizations were asked to describe the processes and problems

encountered when obtaining funds from the different possible sources – companies; foundations; public;

government; events; sales; training; fees; international funds; and loans – and a synthesis of that

information is available in Appendix 4.

Starting with the government, interviewed organizations receive funds from IPAD, public entities

and from the IRS consignation. IPAD has several funds for development. However, organizations

criticized these funds because the organizations can only apply to the fund after completing three years of

activity. Adding to this, the funds are available with periodic breaks, and there is strong competition for

them. Moreover, sometimes there are delays in the payment. These conditions force organizations to look

for alternative sources of funding. Regarding the IRS consignation, organizations have to send the

account statement and a report of their activities to the Tax General-Directorate, which is a process that

takes a year to be implemented, being very bureaucratic (which explains why it is used by only one of the

interviewees). Public entities‘ funds are given through sponsorship, support, service fees, or partnership

contracts, like with private entities (this source of funding is evaluated together with private entities). To

conclude, the government is the most common source of funding among the surveyed organizations

(80%), which means that NGODs are very dependent on these funds. The organizations' criticism about

these funds (delays, competition, and bureaucracy) adding to the fact that the government has decided

to cut on social expenditure because of the social economy situation, suggests that the organizations

will have to break free from their dependence on these funds in order to avoid pitfalls in their activities.

To obtain funds from private and public entities (private and public companies and foundations), the

organizations explained that they have to approach them and convince them of the organization‘s

credibility and capacity to develop good projects and activities that will bring benefits for the entity.

Foundations and companies are the least common source of funding of the surveyed organizations

(excepting training), with 9 organizations receiving funds from foundations (45%), and 7 from companies

(35%), which means that organizations are not using an effective strategy when approaching these

entities, or that the companies' and foundations' willingness to fund third sector activities is still very



low. Organizations will have to change the companies‘ mindset, creating projects and changing the way

they approach them (pure corporate philanthropy versus strategic philanthropy approaches) emphasizing

how beneficial a social project can be for the companies‘ competitive context.

Own business – events, sales, training, and membership fees – activities have trouble in

collecting support to carry them out in a way that generates profit. This support can be provided by

entities‘ funding or human resources' collaboration. However, not having full time employees and

stability is referred as a big limitation to own business activities, because, in the majority of the cases, the

volunteers are the ones who do the selling, act in events, pay the fees, and give training. Events when

implemented are pointed out as an opportune moment to make sales and request public donations.

Public donations are a punctual source of funding for all the interviewed organizations, due to

the strong competition to get them. Organizations pointed out that networking and the capacity to

present a credible project are key success factors.

International funds show some of the problems of IPAD and other funds from the government: they

are periodic funds, for very specific purposes, under great competition and complex rules. However, they

are considered to have great potential (please see Appendix 4, Table 5), and according to the President of

E&O (Alfredo Soares Ferreira), the European Commission is the biggest international source of

funds, which is confirmed by the European Commission slogan: ―Europe is the biggest provider of

development aid in the world‖ (European Commission; Netgraphy 26)

Loans are not seen as a considerable source of funding. Like João Loureiro, President of WACT,

stated ―I have never considered this hypothesis, because we do not want to become indebted to do social

activities, we would always lose the interest and the amount of money borrowed‖ (please see Appendix 4,

Table 3).

Visibility, good networking, experience, knowledge of the selecting criteria, and capacity to

develop a good project/activity that is aligned with the other entities’ objectives, are mentioned as

key success factors to get funding (please see Appendix 4, Table 3).

4.2. NGODs’ Funding Situation

In the survey, when organizations were asked whether the financing they have limits their activities or

not, 9 organizations said that their activities are not limited (45%), and 11 said they are limited

(55%). This result is almost split in halves, and the cause for it leads us into very interesting conclusions.

A filter was applied to separate the results of the survey into two groups of answers – the organizations

that have their activities limited due to the financing they obtain, and those whose activities are not

limited – and the results were conclusive.



9 of the 11 organizations that have their activities limited due to the financing sources have less

than 50 collaborators (90%) (Figure 6), against only 4 of the 9 organizations whose activities are not

limited, which have less than 50 collaborators (44%) (Figure 7). More people means more resources to

implement projects, more skills to do fundraising, more possibilities of having a team dedicated to

attracting more funds and more volunteers, and more contacts that can possibly help the organizations in

several aspects (a bigger network). In this sense, it is understandable that the organizations with more

collaborators do not have their activities limited due to lack of fundraising. In the limit, it is possible to

state that collaborators can substitute funds in some purposes. This reality becomes stronger when 11 of

the respondents state that one of their limitations to obtaining funds is the limited number of

human resources, or the lack of competencies in the fundraising area (55%). Moreover, president of

WACT João Loureiro affirms in the interview that ―the difficulty to ensure the continuity of volunteers,

and not having full time employees‖ constitutes a problem in obtaining funds from the organizations‘ own

activities (please see Appendix 4, Table 2).

Another important outcome that resulted from this filter has to do with the sources of funding used by

both groups. When the sources of the two groups of organizations were compared, the organizations

with activity limitations due to lack of financing (11 NGOD, or 55%) had more financing from the

government (10 to 6 organizations), foundations (6 to 3 organizations), and international funds (6 to

4 organizations) (Figure 6). However, the group of organizations whose activities are not limited (9

NGOD, or 45%), have more financing coming from companies and own business (sales, fees, events,

and training) (Figure 7). This result proves what has been stated about the different sources of financing,

and contradicts the idea that organizations have that the number of volunteers is not an important resource

in the fundraising process (please see Appendix 4, Table 4).

Group of NGODs with activity limitations

As mentioned above, those organizations that have limited activities due to lack of financing have in

their majority few collaborators - less than 50 collaborators - which limits their possibilities to implement

their own business sources of financing, such as events, sales, membership fees, training, and services for

private and public entities (the number of volunteers was pointed out as a critical factor in the

implementation of own business activities) (please see Appendix 4, Table 3).

Therefore, this group of NGODs is forced to look for funding in other sources – government,

companies, public, and international funds (Figure 6) - which presents some limitations: first,

government, foundations and international funds are in big demand, so there's strong competition to get

them – Susana Damasceno, President of AIDGLOBAL, pointed out that competition is the main problem

to obtain funds from these three sources (appendix 4, table 2). Secondly, those funds are occasional, being



available in specific periods, which limits the organization‘s freedom. Thirdly, the funds are for specific

projects, which does not allow the allocation of the financing from the fund to other projects. Adding to

this, the funds from the government also have the problem of payment delays, and reduced availability

caused by the economic crisis – Helena Gata, Vice-President of TESE, admitted they are currently feeling

these effects in government and public funding.

Although the organizations have mentioned those limitations in government, companies,

international, and public funds, these are funds that are present in almost every NGOD’s funding

structure as is clear in Figure 2, and the organizations recognize the importance of those funds in their

activities and management maintenance - when asked to evaluate in a scale from 1 to 9 the importance of

each funding source in their structure (please see Appendix 4, Table 5).

Group of NGODs without activity limitations

In contrast, the group of organizations without activity limitations has more collaborators, which

gives NGODs more possibilities to implement their own business sources of financing. According to the

interviewers' statements, these funding sources seem to be the best for organizations – events, training,

and services for private and public entities (Figure 7) – giving them more independence and autonomy

from the financer's rules.



Although these funds are appreciated among NGODs, the interviewees make a distinction in the

importance of these funding sources for their organizations. The four organizations classified services for

private and public entities as the best source of financing, recognizing the importance, impact and

potential that this source of funding has or can have in their funding structure (appendix 4, table 5). While

fees, merchandising/sales and events are considered less important than the funds provided by companies,

foundations, government, public, and international entities, these funding sources (fees, sales and events)

give NGODs more independence and autonomy. However, these funds generate less money and therefore

have less impact on the overall NGODs funding and that reflects negatively on the organizations' capacity

to implement their activities. (please see Appendix 4, Table 5).

4.3. NGODs‘ Funding Limitations and Opportunities

NGODs’ Funding Limitations

Some organizations do not have any activity limitations caused by lack of funding (Figure 3), but that

does not mean that those organizations do not have limitations in obtaining funding (Figure 4).

The lack of human resources and their limited competencies in the fundraising area are pointed out by 11

organizations as a funding limitation (55%), recognizing the importance of human resources in the

fundraising process, and contradicting the evaluation made by the interviewed organizations, where the

number of volunteers was pointed out only as a helpful resource (please see Appendix 4, Table 4).



The second most mentioned factor that limits the obtaining of funding is the lack of reputation

and visibility of the organization (45%), which was also misevaluated by the interviewed organizations

which pointed it out as an important factor, but only in sixth place (please see Appendix 4, Table 4). This

shows that the fact that organizations consider that limited human resources and lack of

reputation/visibility are factors that limit the funding process, that does not mean they give them the

deserved importance and attention, when collecting funds.

The organizations also point out that the lack of available funding sources (25%), and the size of

the organization (20%) limit the organization‘s capacity to obtain funds. Again, the number of

volunteers is the resource that makes organizations grow and enables them to apply to a bigger number

of funds. Adding to this, another factor that is directly linked with the availability of funding sources is

the NGOD‘s project nature, which was considered a very important factor in the funding process. The

nature of the project determines which and how many sources are at the NGOD‘s disposal.

NGODs’ Funding Opportunities

In the survey, organizations were asked to describe how funding contributes to their management

improvement (Figure 5).

More independence from the financers’ rules (reimbursement, co-financing, length) was pointed

out by 10 NGODs (55%). Those rules require organizations to have working capital available to apply in

the project; therefore, they make organizations look for alternative funding. This is a common procedure

in the third sector, and is something that own business activities avoid.

Attracting more human resources is another benefit that funding availability brings to the

organization (30%), which means that with more funds, organizations have more capacity to attract more

funds, generating a virtuous circle.

More capacity to meet the community needs, longer projects, and more visibility are factors that

become easier to achieve with funding; and all of them contribute to improving the organizations‘

capacity to collect funds, to have better visibility, more human resources, and more independence from

third parties.

Finally, the interviewed organizations mentioned that having a good service/project is the most

important factor in the process, followed by having good connections, and human resources with

competencies to sell and do fundraising.

Transversal to all sources of funding is the way organizations register their funding in audit terms.

The NGODs‘ legal status (Diário da República: Decree-Law No. 66/98 of 14 October, Article 15;

Netgraphy 5) states that their services are free of tax when related to the third sector. This was verified

during the interviews, by asking how the organizations register their funding, and all the organizations



confirmed that the receipts they deliver for their services – contracts with other entities, events, fees,

training, merchandising – are free of tax because all of them are created with social purposes, and the

same happens with donations. CADin has a sustainable activity using a ―social business‖ model,

providing services for the public. Therefore, their activities are free of tax because their services are

related to the third sector. This is an incentive for organizations to implement and develop services that

make them self-sustainable while doing activities linked with the social sector, and organizations

must profit from it.

5. Discussion

Through the analysis of surveys, interviews, internal documents and official websites, it is possible to

develop an inductive reasoning that will support the discussion of the NGOD‘s financing model - named

“NGODs’ Strategic Funding Model” - which focuses on the actual needs and challenges that NGODs

face nowadays.

As it was shown, both organizations with and without activity limitations caused by their funding

situation seek to overcome their funding limitations, and to become financially sustainable. The NGODs

Strategic Fundraising Model is a framework that informs NGODs about all their potential sources

and ways of funding, guides organizations through the process, and establishes the best practices

taking into consideration the current limitations and challenges that NGODs face today. Ultimately, the

model intends to improve the development of the Portuguese social sector, to capacitate/empower

NGODs, increment their social impact, and increase the number of social projects and NGODs.

The model covers every factor and activity that influences the fundraising through four interlinked

advanced components (please see Figure 8). Those components are Strategy; Governance; Process; and

Support. The strategy component involves the definition of the funding scope (what financing sources to

consider, how much is needed, what counterparts there will be, how the relationship is), the operation

(length of the project; geography; activity areas; services), and the culture (how to motivate volunteers

and break barriers to the funding). The governance component refers to the role that administrators have

in the fundraising, having to identify the need, define a fundraising team responsible for the funding

process, estipulate what the organizations‘ members responsibilities are (of volunteers and members of

the board), and the communication strategy. The Process component is composed by four stage gates:

Searching for potential funds; approaching; selection; and project development. Finally, the support

component is the part of the project where the organization defines how to maintain the whole funding

model. There are lots of different supporting tools, some of them are the creation of campaigns to

promote the fundraising initiative, activities to increment the organizations' visibility, definition of



incentives to attract volunteers, creation of training courses to increase the volunteers‘ capability to raise

funds, increasing and preserving good networking, transparency methods, and others.

This model was developed considering all the factors, limitations, bottlenecks, and opportunities

related to the Portuguese NGODs. The third sector‘s economic situation, the NGODs‘ legal context,

surveys, interviews, meetings, and reading about different strategic points were all used to support the

model. The model is transversal to every NGOD - different ways of applying the model will depend on

two factors: the NGODs‘ area of intervention, and capabilities (number of volunteers, skills, resources,

experience, visibility, reputation, and others).

Strategy

In a business context, strategy is the process whereby the commander's view, the commander‘s plan,

and the commander‘s ability to marshal the successful deployment of resources and capabilities are put

into practice, in a competitive environment and in a manner that is conducive to success. The strategy

defines ―how‖ the team will achieve their responsibilities and goals, and how the governance, process and

support component will behave. This depends on the scope, culture, and operations of the organization.

The funding scope is about which funding sources to consider, how much is needed, and the type of

agreements to make. During the interviews, it was common to affirm that when selecting the possible

sources to satisfy the financing need, the organization must analyze if the financer's mission/activity is

aligned with the organization‘s mission, to avoid breakdowns between the two parts and increase the

change of mutual benefits. Therefore, when the organization decides it needs a new funding source, the

organization must evaluate what the nature of their activities is, what resources they have at their disposal,



and how much money is needed. After that, the organization is able to define what the category, or

categories, of funding sources are that best suit their mission/capabilities – own business; government;

private entities; public; and international funding – where the organization will apply efforts to get the

funding. The scope depends on human resources availability, the organizations‘ own experience and

visibility, and on the characteristics of the different funding sources. Regarding the last point mentioned,

it is very important to keep in mind what the study suggests about the different sources: to keep

government‘s funding as an option, but never depend on it; always try to implement own business

activities (as Conradie (1999) says, ―NGOs that are successful in selling their services or goods at market-

related prices are often in a better position to become less dependent on continuous funding support from

outside sources‖); to stay aware of the international funds criteria and availability; to create opportunities

to receive public donations every time there is a chance; and to explore opportunities to align private

entities' interests/businesses with social projects.

Because the study revealed that the nature of the project is one of the key influencers of the funding

process, the strategic project component is the definition of the project length, dimension/scale,

geography, activity nature/area, and type of services. To approach any source of financing, the

organization needs to define the what, where, and how of the services/activities it intends to do, and in

which area of activity – health, education, social development, or other. This component is fundamental

so that givers can know what they are contributing for and what the impact caused by the activities he is

financing will be.

The study carried out suggested that it is hard to retain and create stability of the human resources

available, which is a real problem when devising a funding strategy. The culture component of the

strategy is crucial to create and ensure the adequate environment that motivates the organization members

to explore, investigate and approach different financing sources. The team must identify the barriers to

this behavior and deploy measures to counter them. Ultimately, understanding the underlying motivators,

triggers and enablers is essential in order to decentralize the fundraising process, and create a

collaborative environment involving everyone. Human resources are a key component in the funding

model, and the organization must captivate them.

Defining a strategy is a continuous and long process. The world is changing fast, the economy is

uncertain, financers‘ funding availability changes, and there is more and more competition for funders‘

attention. Those responsible have a key role in strategy delineation, and must set the example.



Governance

The governance structure of the fundraising process changes from case to case, depending on the

resources of the organization. In other words, the president of the organizations can be either directly

involved in the fundraising process, or not.

In the interviews, the Presidents of the organizations confirmed that their role in the fundraising was

fundamental, being directly involved in the process, which makes sense. According to Dolby & Gregory

Dees, the board members must lead the way in fund-raising. The organization‘s directors must appoint,

from the beginning, a team responsible for the financing of the organization, and define their

responsibilities. In the case of the NGODs, all the interviewed admitted that the directors were always

responsible for the funding process. This situation has to change for two reasons: first, the fundraising

model has more chances to work with a bigger number of people involved in the process, which means

that if only the organization‘s administration can be involved in the funding process, there is a limitation

in the funding process. Secondly, the people in charge have to manage and supervise other areas of the

organization, which means that less effort is being dedicated to the funding process than the effort that

should be dedicated. The creation of a funding team that is constantly involved with the rest of the

organization has the advantage of decentralizing the funding process, keeping directors involved but not

depending on them.

This team has to identify the need for capital resources in order to know where funds are needed,

and to start the funding process. During the interviews, there was a perception that the need for funding is

constant. Even though the need is constant, the funding team has to identify where the funds are going to

be allocated, in which area of development, and for what purposes. This will facilitate the identification of

entities interested in the same activities, and the creation of bonds. In order to achieve a desirable result

before and after the project, the funding team must act in line with the organizations‘ strategy (scope,

operations and culture).

Therefore, it is crucial to have an ongoing communication process between the different departments

of the organization, and with the exterior. The communication process must be defined by the funding

team, and can be achieved through regular meeting, activity reports, social networks, events and reports.

This will allow the funding team to have a better understanding and identification of the financing needs,

and the other departments within the organization will become closer related to the funding process. And

it will make financers feel more connected with the organization's social achievements.

Governance efficiency depends on the capacity to: identify the need, ensure collaborators‘ involvement in

the process, keep a close and friendly relationship with the financer, respect the organization‘s strategy,

and manage the available funds.



Process

The fundraising process is composed of four stage gates – search; approach; select; and develop – and

each one of them demands serious commitment and professionalism from the organization. According to

the head of NGOD TESE (Helena Gata), if the organization wishes to have sustainability it must stop

acting with the informality that is characteristic of this sector. The objective is to act professionally, like

for-profit organizations, but for social purposes.

The process begins with the searching stage. As we have already seen, the type of funding sources

where the organization will search for funding opportunities is defined in the strategic component of the

model, which has to take into consideration the organization‘s mission, sources, geography, dimension,

services, and area of activity of the initiative. In the searching stage, the organization must look into the

funding ―market‖, and find different alternatives inside each one of the funding sources' categories

(governance, own business, private entities, public, and international funding). Within these funding

sources‘ categories, the organization has to find ways of generating funds, such as: own business

opportunities (e.g. implement a sustainable business model that can be either a ―leveraged nonprofit‖

model – like CADin has - or a ―social business‖ model; companies interested in the service of the

NGODs‘ project (e.g. to do social consultancy services for private and public organizations, either

adopting a ―strategic philanthropy‖ approach – like TESE does – or adopting a ―pure corporate

philanthropy‖ approach; government and international funds that are in the same strategic line as the

NGOD‘s projects; and public willing to donate.

Most important of all, the organizations must segment what they will ask to whom, and never ask the

same thing from every third party. Different funding sources are willing to help in different project areas,

and with different amounts of money. What the organization needs is a criterion that defines which

entities the organizations must look for.

After selecting the possible funding sources, the organization has to find how to approach those

sources, what the procedures are, and what is demanded. The approach stage is the part of the process in

which the organization is involved with several different financing sources at the same time. The

objective is not only to make a funding proposal but to create a relationship with the funder. Before doing

the approach, organizations must collect the maximum information about the funding source‘s

possibilities, objectives, and requirements.

When the funding source is a private entity, public entity, or any fund from the government, and

foreign (international funding), the organization must prepare a funding proposal, in a written document,

and a presentation if possible. This proposal must explain the background, objectives, functioning,

management and financial system of the NGOD, the value of the project, the positive and social



outcome/impact, and how the third party will participate in the project (as some of the interviewed

organizations have). The organization must also create a budget with the costs, provisions for capital and

other proposed expenditures. Adding to this, the vice-president of TESE explained that in these funds,

entities give preference to the creation of partnerships between NGODs, because those organizations

complement their activities, and ensure more transparency in the allocation of funds. Thus, if the

organization has the chance to cooperate with another one, the organization must consider that chance as

an opportunity to obtain a government/international fund. Finally, the organization must identify and

choose the strategic lines of action, and the selection criteria of those funds.

Moreover, if the organization decides to invest in an own business activity, it must evaluate every

implication of the business (competitors, potential collaborators, own resources, demand), decide if the

desired service suits a ―leveraged nonprofit‖ or a ―social business‖ model, and make an effort to sell their

services and products at market prices.

The strategy for the public entails looking for and understanding the philanthropists‘ disposal to fund

their activities and what they desire in exchange. And maximize the opportunities of getting donations at

every event, points of sale, training, and other activities related.

After receiving some responses, the organization begins the selection stage. From the funding

proposals made by the organization, the organization must compare the different funding sources and

rank them in accordance with what is demanded and what the implications are required by the funding

entity (social impact that will be achieved, financing contribution, resources needed). It is expected from

the organization to discuss what is being offered and proposed from both parts. The organization must

prove that they have a reason for receiving money, that there is a concrete necessity and a real problem.

When choosing the funding sources, the organizations must keep in mind that the funder is a partner and a

friend that wants to make part of the process, and to understand the return of its support.

Finally, the organization has to develop the project/activity that it has decided to implement. Part of

the organizations that participate in the study stated that one of the activity limitations they had was

created by the financers' rules of reimbursement and co-financing, which means that to develop a project,

the organization needs working capital. To avoid these limitations, it is crucial to have more than one

funding source at the same time, and to invest in sustainable activities. In the project development stage,

the organization plans and monitors the procedures and resources required to implement the project.

Decisions must be coherent with: the organization‘s mission, the financers‘ demands, the transparency

methods, and employees‘ expectations. The project management is the final stage where the financing

team must cooperate with the volunteers who have the responsibility of respecting the financing

agreements.



Organizations must make a great effort at this stage, for two reasons: First, it is not enough to have a

great fundraising model. For all the funding categories – own business activities (leveraged nonprofit

model, or social business model); services for private/public entities (strategic philanthropy approach, or

pure corporate philanthropy); government and international funds (proposal of projects, and partnerships);

and public donations (in this study we conclude that loans are not a good funding source) - if the project

does not produces the expected social and strategic return, or if the project is not attractive, the funding

source will stop providing the needed capital. Secondly, if the organization‘s performance in managing

the funds is below expectations, the organization's visibility and credibility is damaged, negatively

affecting future funding opportunities. It is important to remember that the interviewed organizations

attributed great importance to the maintenance of healthy relationships and of good connections.

Support

This is the part of the project where the organization develops activities to support the whole funding

model. Up to this part of the model, we have seen how important it is to respect the organization‘s

strategy, have a fundraising team, and define the different implications and decisions that the organization

faces during the process. However, the financing team will not be able to respect the strategy, accomplish

their responsibilities, or go through the fundraising process without the right resources and capabilities in

place. Having said that, it must be clear that the support component does not explain how to approach the

different sources, or which the most appropriate business models are, or which the best funding sources

are – these decisions depend on variables that were mentioned in the previous components of this model –

but it explains what the best practices to be successful with the funding model are.

The study revealed – through the information gathered from both surveys and interviews – that for all

the categories of funding sources there are factors that facilitate the organization's funding, like: the

organization's visibility and reputation; number of human resources and their skills; professional and

rigorous behavior; transparency; networking and relationships management; and some others. These

factors require supporting activities that facilitate the funding process, and that should be considered by

the organization and implemented according to the organization's needs and skills.

To increase the organization's visibility and reputation, the organization must differentiate its

positioning, the way it performs its services, collaborates with other entities, and defends the causes that it

is involved in. First of all, the more visible and important the cause defended by the organization is, the

greater will be the willingness from volunteers, companies, donators, funds and other Non-Governmental

Organizations to contribute and collaborate with the organization. Secondly, the organization must

provide a professional service with solid results and returns, showing their collaborators that the choice to

work with them was a good and worthy decision. This will leave everyone involved with the organization



feeling positive and satisfied, and willing to engage in further collaboration with the organization. Third,

almost three thirds of the organizations that answered the survey have events, which are activities that

must be well planned and organized in order to work as a funding source, and as a way of disseminating

the organization's causes and activities. Finally, it is important to invest in communication strategies –

increasing presence in social networks, word-of-mouth, and attracting sponsors that are linked with the

organization‘s causes (celebrities that are willing to support the cause), are useful and free ways of

increasing the organization's visibility.

Directly linked with the previous factor - the organization's visibility and reputation – is the number

of human resources that collaborate with the organizations, and their level of competencies. In the

survey, organizations pointed out their size as one of the causes that limits the funding, which makes

sense, given that volunteers are useful resources in the implementation of projects, support events, and in

the integration of the organization's funding team. It becomes easier to attract volunteers to the

organization, if it has visible activities, strong causes, and incentives that retain the volunteers in the

organization. Adding to this, the survey showed that 85.3% of the organizations already have training

activities, which means that most NGODs have the capacity to develop fundraising training for their

collaborators. Alfredo Soares Ferreira, President of E&O, explained that all his collaborators had access

to diverse types of training in order to be better prepared for projects and bureaucratic work. The

organization must implement periodic training in funding practices and procedures in order to create

incentives for volunteers to collaborate with the organization, and to avoid the problem of the volunteers'

underdeveloped skills in the funding area, which was the most popular problem among the respondent

organizations.

Moreover, a larger volunteer base gives access to a larger network and group of contacts. In the

survey, contacts were pointed out as an important factor in obtaining funds. Interviewers explain it by

saying that people outside the third sector look at the sector as non professional and not competitive,

which makes the decision about where to allocate the money for the third sector be based on contacts. It is

believed that the trend in the third sector is for organizations to become less informal and more

professional (as it is recommended in this model). Nevertheless, having a ―good contacts network‖

constitutes a competitive advantage. Meeting and connecting with people that are interested in the causes

that the organization stands by and defends, and trying to establish a long-term, mutually beneficial

relationship of give and take are relevant factors. Networking is not asking for something when meeting a

person, or asking for something the second time that one contacts them. There are some simple ways to

effectively increase the network: attending social conferences; asking for business cards, and creating a

database where you can add personal data that distinguishes the person (like birthday, marriage situation,



number of sons, family names, etc). After knowing someone that was recently introduced, it is important

to follow up with that person: to say thank you; provide results and information regarding the

organization's activities; to keep the person updated on the organization's causes, distribute articles related

to it; congratulate when the person achieves something; do recommendations; and communicate with the

person constantly, preventing long temporal gaps in communication.

Another way of improving the relationship the organization has with its network, collaborators, and

funder, is through practicing transparency activities. ―The growing influence of NGOs requires that

donors, academics, and policy makers start carefully examining transparency and accountability both in

micro and macro level‖ (Lawrence & Nezhad, 2009). All the information that the organization can

provide about its activities, projects, services, results, and finance is welcome and useful to eliminate any

doubts about the organization‘s competences and professionalism, and to increase the importance of the

organization activities' impact. This can be made through videos, project presentations, results reports,

and audit reports. The study revealed that funders like to know where their money was invested, what the

impact created was, and what their contribution to it was.

Finally, for approximately 360€ per year, organizations have access to “Plataforma Portuguesa das

ONGDs” services, which is very good to complement the support component of this model. First,

services improve human resource competencies and the organization‘s networking capacity through the

provision of scientific and technical information in the area of development, information about lines of

funding, and information about the Portuguese legislation. Secondly, it has a group of volunteers

available to support organizations, giving them more capabilities to implement projects. Finally, it

promotes the NGODs' activities, increasing their visibility.

6. Final Remarks

This study was focused on the Portuguese nonprofit sector and in NGODs in particular. The

challenges and opportunities regarding NGODs‘ funding situation observed and analyzed have led to the

development of the ―NGODs‘ Strategic Funding Model‖ with the intention of not only improving

NGODs‘ efficiency to attract financing across the different possible funding sources, but also increasing

the social impact caused by the Portuguese third sector.

The study revealed that the presence of more volunteers in NGODs is very important to enlarge the

organizations‘ capacity to reach more funding sources (international funds, governmental funds, private

and public entities funds, and public funds), to implement their own activities more efficiently (fees,

sales, services for third parties, and events), to decrease dependence on specific funding sources, and to

increase their visibility and number of connections (which has a positive effect in the fundraising

process).



Regarding the funding sources, services for companies (private and public entities) and foundations

are sources that must be explored given their potential to provide funds to NGODs (depending on the area

of social intervention). A shift of strategy from the ―pure corporate philanthropy‖ approach to a ―strategic

philanthropy‖ approach, aligned with the practice of transparent and professional behaviors will change

these entities' attitude regarding fund giving.

Adding to this, own business activities (which is the case of services for companies and foundations)

also have the benefit of reducing the organization‘s dependence on specific sources (very important in

order to ride out of problems caused by the economic crisis), and attract more human resources

(increasing the organization's size and reducing the competition for funding impact).

Finally, the ―NGODs‘ Strategic Funding Model‖ took into consideration these and other trends that

are not immediately linked with the success of a fundraising strategy – NGODs‘ funding situation,

potential funding sources, and funding sources limitations – in order to guide and inform NGODs into the

best practices of fundraising. The way the model is applied by NGODs depends on two factors: the area

of intervention, and the organizations‘ capabilities.

7. Future Research

It is known that in this globalized world, the tendencies observed in this study are also registered by

many of the third sector organizations in countries across the world, more specifically in the Community

of Portuguese Language Countries (CPLP), with some differences accounted for by the countries‘

economy and jurisprudence.

Therefore, many innovative programs – within the ―leveraged nonprofit‖ and ―social business‖

models – have been emerging to respond to this growing trend as an opportunity to further capacitate the

third sector, and to cause more impact. These models come from the field of social entrepreneurship;

however, successful identification and exploitation of these opportunities requires sensitivity to the

distinctive challenges of effective management of social-purposes ventures.

Thus, the challenge in all this is to help social enterprises adopt and adapt the best business practices

in Portugal and other countries of the Community of Portuguese Language Countries (CPLP), without

losing crucial social value in the process. WACT has shown their enthusiasm, since the beginning of this

dissertation project, for supporting and experimenting the ―NGOD‘s Strategic Funding Model‖ while

implementing innovative social programs both in Portugal and the CPLPs.



References

Books, Journals, Newspapers, Articles and Cases:

- Anheier, H. and Leat, D., 2006. Creative Philanthropy, Routledge

- Barrio, C., 1999. The use of Semistructured Interviews and Qualitative Methods for the Study of Peer

bullying, Universidad Autónoma de Madrid, Spain.

- Bernholz, L., 2004. Creating Philanthropic Capital Markets, Wiley.

- Bray, I. J. D., 2008. Effective Fundraising for Nonprofits: Real World Strategies that Work, 2nd

ed.,

Nolo.

- Campos Franco, R., Wojciech Sokolowski, S., Hairel, E. and Salamon, L., 2004. The Portuguese

nonprofit sector in comparative prespective, Universidade Católica Portuguesa and Johns Hopkins

University.

- Conradie, H. F., 1999. Non-governmental organizations and financial sustainability, Journal of the

Development Bank of Southern Africa (DBSA), 16(2).

- Dolby, N. and Gregory Dees, J., 1996. Sources of Financing for New Nonprofit Ventures, Harvard

Business School.

- Elkington, E. and Hartigan, P., 2008. The Power of Unreasonable People: How Social Entrepreneurs

Create Markets That Change the World, Harvard Business Press.

- Frazão Pinheiro, S., 2005. Investing for Impact: Catalysing an emerging industry, Social Edge.

- Goldsmith, R., 2009. For-profit or not for-profit? Social enterprises seek a better way, INSEAD.

- Gregory Dees, J., 1994. Social Enterprise: Private Initiatives for the Common Good, Harvard

Business School.

- Hudson, M., 1999. Managing without profit: the art of managing third sector organizations,

Harmondsworth: Penguin.

- Kramer, M. R. and Porter, M. E., 2002. The Competitive Advantage of Corporate Philanthropy,

Harvard Business Review.

- Lawrence, P. G. and Sheila, N., 2009. Accountability, transparency, and government co-option: A

case study of four NGOs, International NGO Journal, 4(3), pp. 076-083.

- Luber, M. S., 2010. Business as the engine for social change [online] (Updated 13 April 2010)

Available at: http://whatmatters.mckinseydigital.com/social_entrepreneurs/business-as-the-engine-

for-social-

change?utm_source=quarterly&utm_medium=marketing&utm_campaign=SE_forum_q_alert2_lubbe

r [Accessed 30 May 2010].

- Mostashari, A., 2005. An Introduction to Non-Governmental Organizations (NGO) Management,

Iranian Studies Group at MIT.

- Nicholls, A. and Pharoah, C., 2008. The landscape of social investment: A holistic topology of

opportunities and challenges, University of Oxford and Skoll Centre For Social Entrepreneurship.

- Selby, Cecily Cannan., 1978. Better performance from nonprofits, Harvard Business Review, Sept. -

Oct. (1978) 92-98.

http://whatmatters.mckinseydigital.com/social_entrepreneurs/business-as-the-engine-for-social-change?utm_source=quarterly&utm_medium=marketing&utm_campaign=SE_forum_q_alert2_lubber






Netgraphy:

1) Plataforma Portuguesa das ONGDs: http://www.plataformaongd.pt/site.aspx?info=ongd.

2) Diário da República: http://www.dre.pt/pdf1sdip/1983/02/04600/06430656.PDF.

3) IRC – Ministério das Finanças:

http://info.portaldasfinancas.gov.pt/pt/apoio_contribuinte/guia_fiscal/irc.

4) IPAD:

http://www.ipad.mne.gov.pt/index.php?option=com_content&task=view&id=110&Itemid=141.

5) Diário da República: http://files.dicasmagazine.com/200000455-

888fc8981f/Lei%20n.º%2066%20(1998.10.14).pdf

6) IPAD:


7) Ministério das Finanças: http://www.igf.min-

financas.pt/inflegal/bd_igf/bd_legis_geral/Leg_geral_docs/DL_074_99.htm.

8) Programa do XVII Governo Constitucional:

http://www.portugal.gov.pt/pt/Documentos/Governos_Documentos/Programa%20Governo%20XVII.

pdf.

9) SANGONeT: http://www.ngopulse.org/blogs/lottery-funding-and-ngo-sector).

10) EAPN:

http://www.eapn.org/index.php?option=com_content&view=article&id=1396&Itemid=18&lang=en

11) Agência Financeira, 2007: http://www.agenciafinanceira.iol.pt/economia/iol/892925-1730.html.

12) Ministério das Finanças: http://www.min-financas.pt/.

13) IPAD:


14) IPAD:


15) Segurança Social: http://www1.seg-social.pt/left.asp?03.06.

16) Segurança Social: http://www1.seg-social.pt/left.asp?01.03.

17) Segurança Social: http://www1.seg-social.pt/left.asp?01.03.05.

18) Plataforma Portuguesa das ONGDs:

http://www.plataformaongd.pt/site.aspx?info=plataforma/oquefazemos.

19) Bolsa de Valores Sociais: http://www.bvs.org.pt/view/viewQuemSomos.php .

20) European Union: http://europa.eu/abc/panorama/index_en.htm.

21) European Union: http://europa.eu/abc/panorama/howorganised/index_en.htm#commission.

22) Official Journal of the European Union: http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0012:0012:EN:PDF

23) European Commission: http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm.

24) Publico, 2010: http://economia.publico.pt/Noticia/governo-corta-despesa-com-rendimento-social-de-

insercao-em-1378-milhoes_1427373.

25) IPAD:

http://www.ipad.mne.gov.pt/index.php?Itemid=142&id=111&option=com_content&task=view.

26) European Comission: http://ec.europa.eu/development/index_en.cfm

http://www.plataformaongd.pt/site.aspx?info=ongd

http://www.dre.pt/pdf1sdip/1983/02/04600/06430656.PDF

http://info.portaldasfinancas.gov.pt/pt/apoio_contribuinte/guia_fiscal/irc

http://www.ipad.mne.gov.pt/index.php?option=com_content&task=view&id=110&Itemid=141

http://files.dicasmagazine.com/200000455-888fc8981f/Lei%20n.%C2%BA%2066%20(1998.10.14).pdf

http://files.dicasmagazine.com/200000455-888fc8981f/Lei%20n.%C2%BA%2066%20(1998.10.14).pdf


http://www.igf.min-financas.pt/inflegal/bd_igf/bd_legis_geral/Leg_geral_docs/DL_074_99.htm

http://www.igf.min-financas.pt/inflegal/bd_igf/bd_legis_geral/Leg_geral_docs/DL_074_99.htm

http://www.portugal.gov.pt/pt/Documentos/Governos_Documentos/Programa%20Governo%20XVII.pdf

http://www.portugal.gov.pt/pt/Documentos/Governos_Documentos/Programa%20Governo%20XVII.pdf

http://www.ngopulse.org/blogs/lottery-funding-and-ngo-sector

http://www.eapn.org/index.php?option=com_content&view=article&id=1396&Itemid=18&lang=en

http://www.agenciafinanceira.iol.pt/economia/iol/892925-1730.html

http://www.min-financas.pt/



http://www1.seg-social.pt/left.asp?03.06

http://www1.seg-social.pt/left.asp?01.03

http://www1.seg-social.pt/left.asp?01.03.05

http://www.plataformaongd.pt/site.aspx?info=plataforma/oquefazemos

http://www.bvs.org.pt/view/viewQuemSomos.php

http://europa.eu/abc/panorama/index_en.htm

http://europa.eu/abc/panorama/howorganised/index_en.htm#commission

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0012:0012:EN:PDF

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:210:0012:0012:EN:PDF

http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm

http://economia.publico.pt/Noticia/governo-corta-despesa-com-rendimento-social-de-insercao-em-1378-milhoes_1427373

http://economia.publico.pt/Noticia/governo-corta-despesa-com-rendimento-social-de-insercao-em-1378-milhoes_1427373

http://www.ipad.mne.gov.pt/index.php?Itemid=142&id=111&option=com_content&task=view

http://ec.europa.eu/development/index_en.cfm



Appendixes

Appendix 1 – Surveys Questions and Answers Distribution (Filtered to show the results only from

the NGODs’ answers).

Organizations’ Profile

1. What is the size of the organization, in terms of number of people (including volunteers and administrative)

Answer Options Response Percent

Response Count

1-10 40.0% 8

11-49 30.0% 6

50-99 20.0% 4

100-999 5.0% 1

>1000 5.0% 1

answered question 20

2. In which region does it operate?


Response Count

Lisbon 90.0% 18

Other Regions of the Country (outside Lisbon) 75.0% 15

Community of the Portuguese Language Countries (CPLP) 55.0% 11

Other Countries 5.0% 1




3. In which year was it registered?


Response Count

2009 0.0% 0

2008 10.0% 2

2007 5.0% 1

2006-2003 20.0% 4

2002-2000 5.0% 1

1999-1996 10.0% 2

1995-1990 20.0% 4

1989-1980 10.0% 2

1979-1970 10.0% 2

1969-1950 5.0% 1

1949-1900 5.0% 1

1899-1800 0.0% 0


4. How is the organization legally registered? (Note: The answers to the survey were filtered to have only NGODs)


Response Count

NGO 0.0% 0

NGOD 100.0% 20

IPSS 0.0% 0

Association 0.0% 0

Other 0




5. What is the nature/category of the Activities’? (ICPNO Activities Reference)

Answer Options Response

Percent

Response

Count

Culture and Recreation 30.0% 6

Education and Research 75.0% 15

Health 45.0% 9

Social Services 45.0% 9

Environment 20.0% 4

Development (Economic, Social, and Community Development) and Housing

100.0% 20

Law, Advocacy, and Politics 10.0% 2

Philanthropic Intermediaries and Volunteerism Promotion

20.0% 4

International Activities 35.0% 7

Religious 10.0% 2

Business and Professional Associations, and Unions 5.0% 1

Other 3


6. Which activities does the organization have?


Response Count

Training 90.0% 18

National Volunteering 35.0% 7

International Volunteering 50.0% 10

Services for Private Entities 25.0% 5

Services for Public Entities 30.0% 6

Events 70.0% 14

Other (Specific) 6




Organizations’ Sources of Financing

7. Which are the organization’s sources of financing?


Response Count

Government 80.0% 16

Public (Philanthropy) 75.0% 15

Companies 35.0% 7

Foundations 45.0% 9

Sales 50.0% 10

Fees 50.0% 10

Events 70.0% 14

Training 35.0% 7

International Funds 50.0% 10

Other 1


8. Do you have any limitations in the fundraising process?


Response Count

No, we do not have any limitations 0.0% 0

Yes, the size of the Organization 20.0% 4

Yes, Lack of Organization’s reputation and visibility 45.0% 9

Yes, Human Resources (Limited or without competencies in the fundraising area)

55.0% 11

Yes, lack of financing sources 25.0% 5

Yes, Other… 5


9. Does the financing you get from the fundraising limit your activities?


Percent

Response

Count

Yes 45.0% 9

No 55.0% 11

If not, why? 11




10. How important is fundraising for the organization’s management?


Count

20


11. Please indicate the name of the Organization. Thank you!


Count

20




Appendix 2 – NGODs Interview Guide

Organization's Profile and Legal Status

1) How did you have the idea of creating an NPOs? In which year did you register?

2) Where are you based? Under which legal code [legislation]?

3) How many staff people do you have and how many volunteers?

4) What is the status of the Organization?

5) Why this status (what benefits would it bring against another status)?

6) Where was it registered?

7) What are the advantages of being registered in IPAD?

8) Are you registered in Plataforma Portuguesa das ONGDs (Platform of Non-Governmental

Organizations for Development)?

Organization's Activities

9) What is the nature of the Activities you have?

10) What kind of services/activities do you do? Can you describe each one of them?

11) Which are your main costs?

12) How do you register those activities in Audit terms (receipts)?

Organization's Sources of Financing

13) Which are your sources of fundraising? Can you describe each one of them?

14) How was the process of getting the funds from each source that you mentioned above?

Organization's Financing Problems and Solutions

15) What are the main problems of getting financing from:

a) Government

b) Corporations

c) Foundations

d) Funds

e) Loans

f) Public

g) Own Activities

16) What is the governance role in the fundraising process?



17) Order the following resources in the fundraising process, from the most to the least important.

Resource 1 - 7

a. To have a good service, a good project

b. Nature of the project

c. Good selling capacity (good human resources with competencies to

fundraising)

d. Good connections

e. Good reputation

f. Number of volunteers

g. Transparency

Scale: 1 – 2 (Very Important); 3 – 4 (Important); 5 – 6 (Helpful); 7 – Not Relevant

18) Score each fundraising source in terms, in a scale from 1 to 9, where 1 is a very good source of

fundraising, and 9 the worst source of fundraising.

Fundraising Source + 1 2 3 4 5 6 7 8 9 –

Events

Membership Fees

Service for Private/Public

Entities

Merchandising/Sales

Foundations’ Funds

Companies’ Funds

International Funds

Government Funds

Public Donations

Loans Scale: 1 – 2 (Great Potential); 3 – 4 (Big Impact); 5 – 6 (Some Impact); 7 – 8 (Not Relevant); 9 – Not Applied

19) In terms of transparency, do you have:

a) Audit Reports?

b) Videos?

c) A department that takes care of the organization image?

d) Project Reports?



Appendix 3 – CADin Interview Guide

Organization's Profile and Legal Status

1) How did you have the idea of creating an NPOs? In which year did you register?

2) Where are you founded? You are under which legal code?

3) How many staff people do you have and how many volunteers?

4) What is the status of the Organization?

5) Why this status (what benefits would it bring against the other status)?

6) Where was it registered?

Organization's Activities and Business Model

7) What is the Nature of the Activities you have?

8) What kind of services/activities that you do? Can you describe each one of them?

9) Which are your main costs?

10) How do you register those activities in Accountability terms (receipts)?

11) How would you define your business model? Is it sustainable?

Organization's Sources of Financing

12) Which are your sources of fundraising? Can you describe each one of them?

13) How did you go about the process to get the funds from each source that you mentioned

above?



Appendix 4 – Information Gathered From NGODs’ Interviews

Person Interviweed: João Loureiro Rodrigues, President WACT – We Are Changing Together – main objectives are economic and social progress based primarily on effective partnerships among individuals, communities, governments, companies, among others. Wact wishes to establish itself not only in developing countries but also in developed countries, adapting its strategy to the particular reality of each country.

Person Interviewed: Helena Gata, Vice-President As an NGOD, established in 2002, TESE has been focusing its assistance in a positive and innovative approach, finding in social needs an opportunity to act, promoting partnerships between the public and private sectors, as well as civil society organizations. TESE uses its knowledge and experience to provide consulting services to public and private institutions in order to highlight the positive social and environmental impact of its actions.

Person Interviewed: Alfredo Soares Ferreira, President E&O – Engenho & Obra – aims at designing, implementing and supporting programs and projects of development cooperation, humanitarian assistance, emergency assistance, and protection and promotion of human rights. It is also involved in education and culture areas, scientific and technical assistance, employment and vocational training, environmental protection, rural development, and implementation of all type of services aiming at developing and improving the populations’ life standards. Recently has had as its objective the promotion, dissemination and spread of English worldwide.

Person Interviewed: Susana Damasceno Pereira, President AIDGLOBAL promotes Actions in the areas of Integration and Development (AID) at Global level. This NGOD intends to: participate in inter-cooperation for fair and sustainable development; contribute to the respect for human rights and for the culture of peace and human development; promote social inclusion projects in urban and rural areas; participate in projects for poverty eradication and integrated development in local communities, especially in African Countries of Portuguese Official Language (PALOP), Brazil, and Timor; to contribute to local development actions elsewhere in the world; develop actions to promote the rights and duties of immigrants; to develop the artistic and cultural cooperation; and encourage volunteering as a practice of responsible citizenship.



Table 1 - Organizations’ Legal Status

WACT AIDGLOBAL TESE E&O

Why NGOD Our activities are in the development area.

Scope of activity was larger than with other status

We work in the development area.

Gives access to NGO’s sources of

financing.

Allows us to apply to Funds in the

European Union and act oversee

(outside Portugal).

Companies do not see NGODs as

a competitive threat to their

business.

People trust in NGODs is

increasing,

We had many people that had

worked in the cooperation and

development area.

Our mission is to contribute to

the autonomy and

development of the

Portuguese and CPLC

countries.

For these reasons, NGOD was

the most logical legal status to

have.

IPAD advantages The advantages are that you are able to have the patronage status (Estatuto de Mecenato)

After three years of activity you can apply to some funds.

You have to present our audit report to IPAD every year.

To candidate to their funds for education and cooperation for development

Gives access to funds. Networking in the area of education for development and other international and national networks through events, debates, and project sharing (happens 3 to 4 times per year).

We have to be registered in IPAD

It allows us to act in countries of Portuguese expression and to be recognized as an international institution.

Gives us the possibility to apply to their Portuguese funds announced by the Ministry of Foreign Affairs

Plataforma Portuguesa das ONGDs advantages

We are not in the Platform.

You get several benefits from being in the platform,

but we have to pay 300€ per year, and given our resources, we wouldn’t be able to take advantage of the benefits that the platform offers.

The Platform represents the NGOs that work in the area of cooperation

Provides information about the several fundraising lines available inside and outside Portugal.

The Platform is the intermediary entity between NGOs and the government.

We have to pay 300€ per year to be in the platform.

Gives access to several National and International lines of funding.

Give information about the legislation.

Has a network of volunteers that is available to support the NGODs

Does advertising for the organizations.

Provides scientific and technical information in the area of development and international cooperation.

Organizations have to pay 365€.

We have the benefits of being associated to a national network of NGODs, which makes the connection to CONCORD – a European platform that makes the connection with the European Union, which is the biggest international funder.

The platform also makes the connection and represents NGODs in the Portuguese government.



Table 2 - Organizations’ Activities


Activities Developed (From revenues perspective)

Volunteering

Events: All are events to collect revenues. Some events are with the WACT brand, but others are without the brand.

Training: For internals (no revenues)

Campaigns to support social causes: No revenues.

Volunteering;

Events: 2 Projects: “Fado Acontece” and “Mãos Solidárias”. Both are paid events.

Training: All are paid courses.

Public Services: Project paid by Casa Pia (Public Entity)

Volunteering

Events: to support the services for private/public entities

Training: For internals (no revenues)

Water Projects in CPLC

National and International Volunteering

Training activities for people outside of the organization (also to internals, but they are not paid)

Services for public and private entities

Events

Fees

Activities’ Costs Portugal Budget: Office Equipment

São Tome Budget: Airplane Tickets; Insurance; Housing; Food; and Visas.

Events: Space for the event; catering service; Food & Drinks.

Our account statement is available on the website.

Water projects: To buy solar panels, and water systems.

Consultancy Services: our main costs are Human Resources and their training.

Transportation costs.

Daily costs when working outside.

Costs with projects

Activities registration in Audit terms (receipts)

Our training courses are for internals, therefore there are no revenues and no receipts.

The events are for the public in general, this service is free of tax and we can give them a receipt

The same with fees.

Sponsors and supporters, we give a donation receipt.

Every organization has to give proof of their work every time it applies to an IPAD fund, or to the IRS consignation. It is also important in terms of transparency.

Every receipt is passed in the donation form

With the exception of service activities, where we give service receipts. But we are still free of tax because our services are humanitarian services

In this way, the organization does not have to pay IVA or IRC.

We write receipts for services or donations. We never pay taxes.

We have our auditing organized by an external auditing professional.

We give receipts for all our revenues – fees, donations, and services.

Everything is transparent, and always free of tax.



Table 3 - Organizations’ Fundraising Sources Description

WACT AIDGLOBAL IES E&O

Public and Private Entities (Services; Sponsorship; Partnerships; Support)

Description

Martini (sponsorship – event);

Bayer (sponsorship – São Tomé);

Associação de Estudantes da NOVA (partnership/sponsorship – event);

Excentric (support – website).

We do not have any sponsorship.

We just have some supports for our events.

Those supports are crucial to make events happen.

Note: Companies on the website

We do consultancy services for those entities.

Constitutes a key factor to our sustainability. This is the service that grants bigger autonomy.

We try to match our service in qualitative terms to the professional consultants, but we differentiate our services because we act in the social area, being aligned with our mission.

Note: Companies on the website

Public entity – municipal council – and for an NGOD.

The intention of the service is to help the entities to apply for funds or projects.

The problem is that the competition is intense, and this is not our core business, we do not do this as a form of sustaining the organization.

Process

We approach them.

Martini – Visibility (photos);

Gebalis – Image in every place where we mention the project; It is an annual application;

Bayer – Visibility

It is the same to collect funds from corporations and foundations;

Approach them, and convince them of our credibility.

Show them how good the activities are.

The more meetings you have, the better.

Both for foundations and companies, we have to approach them with a project and invite them to be our partners.

This is a game of seduction and interests. We have to stimulate in the financer the interest in our project.

It is crucial to present results, to be professional, and show the professionalism and quality that we give to our projects.

We have to meet their interests, and prepare the proposal for the client specifically.

This demands a study of the entity's capabilities; otherwise they will not trust us.

We divulgate our organization in lots of banks, big companies and medium companies.

Problems to Obtain

Visibility and a good networking

Good capacity to develop projects that involve companies and bring benefits for them.

Convince them that they have benefits in the project.

Competition.

We have to be Coherent/Aligned with the other entity's objectives.

Project with big visibility

Companies have preference for organizations that already have big visibility.

Quick and tangible returns are demanded as well.

Economic Crisis and competition.

Social capital (contacts)

It is not a core activity in our organization

We do not have the capacity to compete with other consultancy companies that do the same.

Competition

In Portugal there is indifference from the big companies and banks towards these causes.

Foundations

Description

Not Available Not Available Do the same services for foundations than those that we do for companies.

Note: Foundations on the website

We have one fund from Fundação Belmiro de Azevedo

Process

We made an application to a Gulbenkian’s Fund in the health area.

It is made through papers. We didn’t get the fund.

Not Available The same from Corporations We have applied for one fund from Calouste Gulbenkian but it was not successful.

Now we are waiting from a reply from Fundação EDP.

Problems to Obtain

The same problems to obtain as from corporations.

Same explanation used for corporations

Competition.

We have to be coherent/aligned with the foundation’s objectives.

The same from corporations Strong competition;

Margin of success is low;

It is necessary to have experience and to have a considerable number of projects done in order to succeed.



Public (Philanthropy)

Description With occasional

donations With occasional

donations We used to receive big donations

but not anymore We receive some donations,

and they are significant.

However, they are few.

Process

Not Available Not Available We have two ways of doing it.

Through our project called “Ser Humano”, in which a person can do a donation to support a person in Africa.

The other is through direct approach to the persons, and asking money for a project. In those cases we try to create a bond between the person and our project.

In every event that we are present

We give people the opportunity to donate.

We also ask to our associates to donate if possible.

Problems to Obtain

Networking

Capacity to present a credible project.

Competition Economic crisis causes a decrease in public donations.

We have already stopped allocating efforts looking for their funds.

Competition is also a problem.

Social capital (contacts)

They are very few and hard to get.

Government Funds

Description

We have to complete 3 years of activity to apply to the IPAD funds.

Sponsored by a public entity

IPAD – Public help to the development;

Casa Pia (Public Entity) – Project Teach for Development;

IRS Consignation – It is the first time we can obtain revenues from this source, so we will see.

Work with Public entities (the same consultancy service done for private entities)

Receive Funds from IPAD

3 projects financed by IPAD

Process

Not Available IPAD - We apply for the fund when they have it available;

Casa Pia (Public Utility) – The same process to collect funds from Corporations and foundations;

IRS Consignation – To get it you need to apply, by sending the account statement and a report of your activities to the Tax General-Directorate. It was a process that took a year to happen).

It is key to know what the strategic lines of action in the area are, which we are requesting funds from.

Understand which the necessities of the government in the social area are, in order to complement them with our projects/services.

Create partnerships with other important organizations. It is also important to have capacity to co-finance the projects, and to have the capacity to continue the project development after their financing.

Know the selection criteria

The best thing to do is to have a well defined strategic plan, with the objective of being successful.

In our strategy we have to define to each funds we can apply, and which projects we are able to develop.

This has to be done every year.

It is also positive to have a local partner

Problems to Obtain

To have a good networking

Experience

Know what the evaluation criteria to select the project are

The capacity to structure and plan good projects

Competition Co-financing rule.

Competition.

Economic Crisis

Strong competition

Margin of success is low

It is necessary to have experience and to have a considerable number of projects done in order to succeed.



Events

Description

Castiços

Geração Solidária

FazTrazPaz

Gala

Castiço Joga e Petisca

“Fado Acontece”

“Projecto Mãos Solidárias”

We do events to support the services/projects provided to the public/private entities that asked for our services.

The only event that we received revenues from was in Brussels - a conference about engineering.

Process

Not Available Not Available Companies ask for visibility in those events

Insurance that the impact they want will happen.

These events are just to support and create visibility of the projects/services that we are doing with the private/public entity.

Through invitations to participate in other events,

Or events communicate our activities and increase the number of members.

Problems to obtain

The difficulty to have continuity in the volunteers.

Stability

Not having full time employees.

To collect supports in order to realize our activities and to generate revenues.

It is necessary to collect supports that cover the different components of the events.

Get the desired Public It is difficult for us to carry out events because we have to cover the costs.

Sales

Description

Merchandising. We have T-shirts, Key tapes; Playing cards; and others.

Promotion of Soldiery Products (revenues come in form of donations)

Not Available Not Available

Process

We sell them at our events;

Or we give them to the volunteers to sell to their family and friends.

We have events where we sell our merchandising


Problems to obtain

The difficulty to have continuity in the volunteers.

Stability


To collect supports in order to do our activities and to generate revenues.


Training

Description

We have but only for internals. (No revenues generated)

We educate for development, citizenship, volunteering.

Our training courses are paid services, and are registered as services.

The target is the public in general (children, young adults, and adults).

We have them just for internals For internals not paid

For the exterior training is paid

Process

Not Available Not Available Sometimes companies come meet us and do the training for free

We tried to implement training on sustainable energy but without success.

In 2011 we intend to do a training course for teachers about sustainable development.



Problems to obtain

The difficulty to have continuity in the volunteers;

Stability;


To collect support in order to carry out our activities and to generate revenues.

Costs It is not our core business

We do not have the capacity to compete with other consultants

Competition

Fees

Description

2€ per month – 24 per year for everyone

Members have to pay an annual 25€ fee to become a member of the board of directors.

Not Available We receive the application payment

And an annual fee

Process

We are currently implementing the process

We have to communicate the initiative, and clarify the advantages for the payers.

Not Available Not Available We promote this possibility at the events we are present, and every time we have the chance

Problems to obtain

The difficulty to have continuity in the volunteers;

Stability;

Not Available Not Available It is difficult to keep the group of associates.

From one year to the other we lost 50% of our associates.

International Funds

Description Not Available Funds from POPH

(Qren) Note: Funds on the website No, we do not receive any

international funds.

Process

Not Available We applied to the fund

It is key to know what the strategic lines of action in the area are, which we are requesting funds for.

Create partnerships with other important organizations. It is also important to have capacity to co-finance the projects, and to have the capacity to continue the project development after their financing.

Know the selection criteria

We applied for 3 international funds from the POPH operation program, but never with success.

Problems to obtain

Experience

Know what the evaluation criteria to select the project are

The capacity to structure and plan good projects

Competition Co-financing rule.

Competition.

Economic Crisis

Big competition;

it is necessary to have experience and to have a considerable number of projects done in order to succeed.

Loans

Description Not Available Not Available Not Available Not Available

Process We have never done it We have never done

it We have never done it We have never done it

Problems to obtain

I have never thought about this hypothesis because we do not want to indebt ourselves to carry out social activities.

We would always lose the interest and the amount of money borrowed, because our activities do not have profits. It is a social project.

Not Available Not Available Not Available



Table 4 - Evaluation of the resources in the fundraising process.

WACT AIDGLOBAL TESE E&O Average

Good service; Good project 1 2 2 1 1.5

Nature of the project 1 3 2 2 2

Selling capacity (human resources with fundraising competencies) 2 4 2 2 2.5

Good connections 3 1 1 1 1.5

Good reputation 4 5 2 2 3.25

Number of volunteers 4 7 6 5 5.5

Transparency 4 6 2 1 3.25


Table 5 - Evaluation of the source of fundraising

WACT AIDGLOBAL TESE E&O Average

Events 1 7 5 3 4

Membership fees 1 8 9 4 4.5

Services for Private/Public entities 1 1 2 2 1

Merchandising/Sales 2 6 9 5 4

Foundation’s Funds 2 8 2 2 5

Companies’ funds 2 4 5 2 3

International Funds 4 4 2 2 4

Government Funds 4 5 2 2 4.5

Public Donations 4 3 3 3 3.5

Loans 9 9 9 9 9

Scale: 1 – 2 (Great Potential); 3 – 4 (Big Impact); 5 – 6 (Some Impact); 7 – 8 (Not Relevant); 9 – Not Applied



Table 6 - Governance and Transparency Role in the Fundraising


Governance Role

It is fundamental because the

major part of the contacts

comes from the

administration.

The majority of the good

businesses are made at the

administration level.

We depend a lot on the

administration in the

fundraising process

We need to decentralize that.

It is primordial.

Everyone inside the

organization does

fundraising.

But as the executive

director, I am involved in

the strategic process of the

organization

I am the person who better

communicates what the

communication is, does,

and desires.

It is crucial, because we

lead the fundraising

process.

We are the ones who

transmit trust and to the

funder.

We have to be

continuously looking for

them, and create the

bridge between our

organization and the other

entity.

Our role is absolutely

central.

The president of the

direction is present in all

the initiatives that

involve the promotion

and future of the

organizations.

Our executive team is

composed of three

people who are always

related to these

decisions. We are the

face of the organization.

Transparency

Accounting Reports

We do but we do not have to

present them to the Ministry

of Finance.

But we have to present them

to IPAD.

And the government can

always do an inspection

Yes, and they are available on our website.

Yes. They are available on the website

We always present them to the entities that work with us. Even when they do not ask, to show our professionalism.

Yes

Videos Yes Yes, we have them on

youtube. Yes Not yet but we will

Image Department

Yes Yes, we have a Marketing and External Communications office.

Yes Yes

Project Reports

Yes we do, but it is not a

commercial report to be

delivered in companies or to

the public talking about our

past projects.

Yes. Each project needs to

have intermediate and

final reports.

Those are not available on-

line, but they make part of

the organizations’

management.

We do have the name of

the project online,

objectives, the costs, and

the beneficiaries.

We do not have an

institutional kit to show to

organization, but we are

developing it.

Yes we do. It is crucial to

present the intended

results before the project

And show the results after

the project, in order for

our partners to understand

what was achieved.

Yes, we do. Physic

Execution Reports and

Financial Execution

Reports



Appendix 5 – Information Gathered From CADin’ Interview

Person Interviewed: Manuel Jerónimo, Member of the organization CADIn is a Private Institution for Social Solidarity (IPSS) whose main objective is to provide medical treatment to children and adults with development problems in the psychiatric and neurological area.

Table 1 – CADIn Interview

CADIn

Why IPSS It gives us several benefits: Tax benefits (free of IVA; IRC).

Because our services have a humanitarian and not for profit purpose.

It also facilitates protocols with the District Centers for Social Security.

Activities Services for Private Entities: We give medical treatment to children and adults with development problems in the psychiatric and neurological area.

National Volunteering: We provide the same services for children and adults that cannot afford the price of the treatment through our “Bolsa Social”

Activities Costs Employees;

Payments for services provided;

Daily management;

Costs of “Bolsa Social” which are 20.000€ per month.

Activities registration in Audit terms (receipts)

Our services are registered as services, and because they are humanitarian and not for profit services, they are tax free.

Merchandising sales are registered as donations.

We are currently analyzing whether we can register merchandising sales as sales, and make them free of tax.

Business Model It is a clinic that supports children and adults with development problems in the psychiatric and neurological area.

At the moment I consider it sustainable, yes.



Appendix 6 – Interviews’ Transcription

WACT Interview with João Loureiro, President

Organization’s profile and legal status 1) How did you have the idea of doing an NPOs? In which year did you register? Own Initiative, in 2007 2) Where are you founded? Under which legal code are you? Founded in Portugal, and works both in Portugal and São Tomé and Principe. 3) How many staff people do you have and how many volunteers? Administratives: 50; Volunteers: 26 São Tomé; 15 Portugal (41); Total: 91 4) What is the status of the Organization? Legal Status: ONGD 5) Why this status (what benefits would it bring against the other status?)? We are a Non Governmental Organization and the nature of our activities is economic, social, health, educational, and community development. Therefore, our legal status is of a Non Governmental Organization for Development (Organização Não Governamental para o Desenvolvimento – ONGD). We chose this status because the scope of activity was larger than with other status. To conclude, our legal status was chosen given the scope/dimension of the activities we could do. The problem of being a Private Social Institution (Instituição Privada de Solidariedade Social) is that the services are too much focused. And I am not sure, but being an IPSS doesn’t give you the patronage status (estatuto de mecenato), majoring in 140% the cost of donation for companies or people that give donations. 6) Where was it registered? In the Portuguese Institution for the Development. We sent a letter to the IPAD with our proposal of Activity Plan Structure. What they required is that the Structure of the Activity Plan be sustainable to function for 3 years. After three years of activity, we will be able to apply for some IPAD funds – which will happen in December this year. 7) What are the advantages of being registered in IPAD? To be a Non Governmental Organization you need to be registered in IPAD. The advantages are that you are able to have the patronage status (Estatuto de Mecenato), and after three years of activity you can apply for some funds. On the other hand, you have to present your audit report to IPAD every year for credibility, and transparency purposes. 8) Are you registered in Plataforma das ONGDs (Platform of Non Governmental Organizations for

Development)? No, we are not. You get several benefits from being in the platform, but we have to pay 360€ per year, and given our resources, we are not able now to take advantage of the benefits that the platform offers. Organization’s Activities 9) What is the Nature of the Activities you have?

Culture and Recreation

Education and Research

Health


Engineering 10) What kind of services/activities do you do? Can you describe each one of them?



National Volunteering In Bairro da Padre Cruz we have three different initiatives – ABC; Music Box; and Comunidade Viva:

o ABC is a project of school support for children aged between 5 and 12 years old. o Music Box is a recreation project to attract young adults to modify their behavior via what they

are interested in. Activities are linked with art in general, focusing on music and painting. o Comunidade Viva is focused on the development of issues related with the families' day-to-day

life – health, budget management, and family support.

International Volunteering In São Tomé and Principe.

o During 3 months (June; July and August) we have our initial project that focuses on different areas: Skills (management support to small businesses). Engineering Training (architecture and electricity). Alert (health care) and the summer dream (summer school of English, mathematics and Portuguese).

o Now we have started an annual project in São Tomé called Rotas (to create tourism development).

Events With WACT brand we have Castiços (an event with food and drinks to university students). Geração Solidária (like castiço but for a different target - executives). We co-organize with other 5 organizations an event called “FazTrazPaz” that happens annually in the summer. And we have an annual gala. Without the WACT brand we carried out a soccer event called “Castiço Joga e Petisca”. The objective of not using the WACT brand is to avoid having people associate our events to fundraising activities. We want to avoid the idea of charity in our events.

Training Only internally and about Leadership. The goal is to start doing it to private institutions.

Public Services We don’t have a public service but our national volunteering is sponsored by Gebalis (A government-owned organization)

Campaigns to Support Social Problems In São Tomé we participated in a demonstration to protect motorcyclists. 11) Which are your main costs? Portugal Volunteering: Office Equipment. São Tome Volunteering: Airplane Tickets; Insurance; Housing; Food; and Visas. Events: Space for the event; catering service; Food & Drinks. 12) How do you register those activities in Audit terms (receipts) Our training is done internally; therefore there are no revenues and no receipts. The events are for the public in general, this service is free of tax and we can give them a receipt. However, the receipt is never asked for. The same happens with fees. To our sponsors and supporters, we give them a donation receipt. Organization’s Sources of Financing 13) Which are your sources of fundraising? Can you describe each one of them?

Government (State) We have a Sponsorship for the national volunteering from Gebalis (Public Entity).

Private (Philanthropy) A few

Sales Merchandising

Fees



2€ per month, 24€ per year.

Events Castiços; Geração Solidária; FazTrazPaz; Gala; Castiço Joga e Petisca.

Companies (Partnerships, sponsorships and support) We have a Sponsorship for the national volunteering from Gebalis (Public Entity); Sponsorship for the international volunteering from Bayer; Sponsorship for an event from Martini, and from Associação de Estudantes da Universidade NOVA; We have the support for the website construction from Excentric. 14) What was the process to get the funds from each source mentioned above like?

Companies (Services; Sponsorship; Partnerships; Support) We approach them and they asked: Martini – Visibility (photos); Gebalis – To have their image in every place that we mention in the project; Bayer – They asked for visibility in every family planning; Gebalis - Is an annual candidature to get their sponsorship.

Foundations We applied for a Gulbenkian Fund in the health area. It was made through papers. We didn’t get the fund. We didn’t get it.

Government We applied for Gebalis's sponsorship. It is an annual application. From IPAD we will have to wait to complete 3 years of activities.

Sales Merchandising. We have T-shirts, Key tapes; Playing cards and others. We sell them at our events, or we give them to the volunteers to sell to their family and friends.

Public (Philanthropy) We do not have a policy to collect donations. We will try to be available to receive the IRS consignation, but we do not look for donations. In some of our events, we give people the opportunity to donate, but it is not usual, and never in a direct form.

Fees We are currently implementing the process. We have to communicate the initiative, and clarify the advantages for the payers. Organization’s Financing Problems and Solutions 15) What are the main problems of getting financing from: a. From Government I believe that is a question of having good networking. It also helps to have experience and to know what the evaluation criteria to select a project are. In that sense you can deliver a better application. Finally, the capacity to structure and plan good projects is also important. b. From Corporations Visibility and good networking. Good capacity to develop projects that involve companies and bring benefits for them. The big problem is to convince them that they have benefits in the project. c. From Foundations Same explanation used for Corporations d. From Funds Same explanation used for the government. e. From Loans I have never thought about this hypothesis, because we do not want to indebt ourselves to do social activities. We would always lose the interest and the amount of money borrowed, because our activities do not have profits. It is a social project.



f. From Public Networking. Capacity to present a credible project. g. Own Activities The difficulty to have continuity in the volunteers. Stability. Not having full time employees. 16) What is the governance role in the fundraising process? It is fundamental, because the major part of the contacts comes from the administration. The majority of good deals are made at the administration level. This applies also to private organizations. We depend a lot on the administration in the fundraising process and we need to decentralize that. 17) Order the following resources in the fundraising process, from the most to the least important.

Resource 1 - 7

h. To have a good service, a good project 1

i. Nature of the project 1

j. Good selling capacity (good human resources with fundraising skills) 2

k. Good connections 3

l. Good reputation 4

m. Number of volunteers 4

n. Transparency 4


18) Score each fundraising source in terms, in a scale from 1 to 9, where 1 is a very good source of fundraising, and 9 the worst source of fundraising.


Events X

Membership Fees X

Service for Private/Public entities

X

Merchandising/Sales X

Foundations' Funds X

Corporations' Funds X

International Funds X

Government X

Donations X

Loans X Scale: 1 – 2 (Great Potential); 3 – 4 (Big Impact); 5 – 6 (Some Impact); 7 – 8 (Not Relevant); 9 – Not Applied

19) In terms of transparency, do you have: a) Audit reports? We do, but we do not present them to the Ministry of Finance. Non Governmental Organizations do not have to pay VAT (Value Added Tax). But we have to present them to IPAD. And the government can always do an inspection if companies start to present receipts passed by WACT of large amounts of money (due to donations WACT received). b) Videos? Yes c) Department that takes care of the organization image? Yes d) Project Report?



Yes we do, but it is not a commercial report to be delivered to companies or to the public talking about our past projects.

AIDGLOBAL Interview with Susana Damasceno, President

Organization’s profile and legal status 1) How did you have the idea of doing a NPO? In which year did you do the registration? Own initiative 2) Where are you founded? Under which legal code? We have activities in Portugal and in the Community of Portuguese Language Countries. We were founded in 2005. 3) How many staff people do you have and how many volunteers? Administrative: 2; Regular Volunteers – 4; Occasional volunteers – 4; Total: 10 4) What is the status of the Organization? Legal Status: NGOD 5) Why this status (what benefits would it bring against the other status)? We work in the development area. Therefore, being and NGOD was what would make more sense. 6) Where it was registered? We went to the Office of Registration and Notary, IP (IRN, IP) to be constituted as NGOD. And then we registered in IPAD to be recognized as an NGOD by the Ministry of Foreign Affairs. 7) What are the advantages of being registered in IPAD? To apply for their funds for education and cooperation for development 8) Are you registered in Plataforma Portuguesa das ONGDs (Platform of Non Governamental

Organizations for Development)? The Platform represents NGODs that work in the area of cooperation, providing information about the several fundraising lines available inside and outside Portugal. Moreover, The Platform is the intermediary entity between NGODs and the government. We have to pay 360€ per year to be in the platform. The platform has initiatives of their own responsibility, being granted by the Ministry of Foreign Affairs. Organization’s Activities 9) What is the nature of the Activities you have?

International Volunteering

Development (Economic, Social, and Community Development) and Housing 10) What kind of services/activities do you do?

Training We educate for development, citizenship, volunteering. The target is the public in general (children, young adults, and adults).

Volunteering in developing countries In the CPLP, we have library equipments, and provide skills to the libraries’ technicians. We support a Community Support Center of Chimundo (Mozambique) with infrastructures and supplies to children.

Prestação de Serviços Públicos In Portugal we have Project “Educar para cooperar” where we educate to development. It is developed in Casa Pia de Lisboa

Eventos Project “Fado Acontece” and “Mãos Solidárias”. Fado is an annual show. Mãos Solidárias is the promotion of solidarity products (t-shirts, purses, bags and others); all the products are available on-line.



11) Which are your main costs? Our account statement is available on the website. Every organization has to give proof of their work every time it applies for an IPAD fund or to the IRS consignation. It is also important in terms of transparency. 12) How do you register those activities in Audit terms (receipts) Every receipt is passed in the donation form, with the exception of the service activities, where we pass the service receipts, and we are still free of tax, because our services are humanitarian. In this way, the organization does not have to pay IVA or IRC. Organization’s Sources of Financing 13) Which are your sources of fundraising? Can you describe each one of them?

Companies (Partnerships, sponsorships and support) We do not have any sponsorships. We just have some supports for our events. Those supports are crucial to make events happen.

Government IPAD – Public help to development; Casa Pia (Public Entity) – for the project to teach for development; and IRS Consignation – It is the first time we can obtain revenues from this source, so we will see.

Private (Philanthropy) With occasional donations

Sales Promotion of Soldiery Products (revenues come in form of donations)

Fees Members have to pay an annual 25€ fee to become a member of the board of directors. The By-Laws of Global Aid state that the mandate of the board is 3 years, and every member has the right to vote.

Events “Fado” and “Projecto Mãos Solidárias”

Training We train for development, citizenship, volunteering. The target is the public in general (children, young adults, and adults).

International Funds We have funds from POPH (Qren) 14) What was the process like to get the funds from each source that you mentioned above?

Philanthropies It is the same as collecting funds from corporations and foundations, which is to approach them, and convince them of our credibility. Show to them how good our activities are. The more meetings you can have, the better.

Corporations and Foundation The same explanation used for philanthropies.

Government IPAD - We apply for the fund when they have it available; Casa Pia (Public Utility)– The same process as collecting funds from Corporations and foundations; and IRS Consignation – To get it you need to apply by sending the account statement and a report of you activities to the Tax General-Directorate. It was a process that took a year to happen).

Sales We have events where we sell our merchandising

European Fund POPH . We applied for the fund



Organization’s Financing Problems and Solutions 15) What are the main problems of getting financing from: a. From Government Competition b. From Corporations Competition. We have to be coherent/aligned with the other entity's objectives. c. From Foundations The same explanation used for Corporations d. From Funds Competition e. From Loans Not Answered f. From Public Competition g. Own Activities Collecting support in order to carry out our activities and generating revenues. It is necessary to collect support that covers the different components of the events. 16) What is the governance role in the fundraising process? It is primordial. Everyone inside the organization does fundraising. It is not centered in me, but as executive director I am involved in the strategic process of the organizations, and therefore I am the person who best communicates what the organization is, what we do, and where we want to go. 17) Order the following resources in the fundraising process, from the most to the least important.

Resource 1 - 7

o. To have a good service, a good project 2

p. Nature of the project 3

q. Good selling capacity (good human resources with fundraising skills) 4

r. Good connections 1

s. Good reputation 5

t. Number of volunteers 7

u. Transparency 6 Scale: 1 – 2 (Very Important); 3 – 4 (Important); 5 – 6 (Helpful); 7 – Not Relevant



Events X

Fees X

Services for Private/Public Entities

X


Foundation Funds X

Corporation Funds X


Government X

Public Donations X




19) In terms of transparency, do you have: a) Account reports? Yes, and they are available on our website. b) Videos? Yes, we have them on Youtube. c) Department that takes care of the organization image? Yes, we have a Marketing and External Communication office. d) Project Report? Yes. Each project needs to have intermediate and final reports. Those are not available online, but they are part of the organization's management. We do have the name of the project, objectives, the costs, and the beneficiaries online. We do not have an institutional kit to show to organizations, but we are developing it.

TESE Interview with Helena Gata, Vice-President

Organization’s profile and legal status 1) How did you have the idea of doing an NPOs? In which year did you register? Own initiative. 2002 2) Where are you founded? Under which legal code are you? Portugal and PALOPs. 3) How many staff people do you have and how many volunteers? 11-49: 32 people (PT and PALOPS); 3 or 4 volunteers 4) What is the status of the Organization? NGOD 5) Why this status (what benefits would it bring against the other status)? We are known as an institution of public interest, which gives us access to financing sources that are specifically addressed to NGODs. The status of NGOD is given by the Ministry of the Foreign Affairs, which allows us to apply for Funds in the European Union and act oversee (outside Portugal). Another advantage of being an NGOD is that companies do not look at NGODs as a competitive threat to their business, while we actually are. Moreover, Edelman barometer study shows that people's trust in NGODs is increasing, which is crucial for us to keep in business. 6) Where was it registered? Registered in 2004 in the Ministry of Foreign Affairs In Guinea-Bissau we are already registered. In Mozambique, we have been waiting for a year. 7) What are the advantages of being registered in IPAD? It gives access to funds. Networking in the area of education for development and other international and national networks through events, debates and project sharing (happens 3 to 4 times per year). 8) Are you registered in Plataforma Portuguesa das ONGDs (Platform of Non Governmental

Organizations for Development) Yes, and we are part of the organization. Plataforma Portuguesa das ONGDs gives access to several national and international lines of funding. It gives current information about legislation. It has a network of volunteers that is available to support the NGODs. Does advertising for the organizations. And provides scientific and technical information in the area of development and international cooperation. Organizations have to pay 360€. Organization’s Activities 9) What is the Nature of the Activities you have?




Health

Environment


International Activities 10) What kind of services/activities do you do? Can you describe each one of them?

Training We have it to enable the members of our organization

Services for Private and Public Entities We do consultancy services for those entities. The development of the consultancy service in an NGOD like ours constitutes a key factor to our sustainability. This is the service that gives us bigger autonomy and sustainability. We try to match our service in qualitative terms to the professional consultants, but we differentiate our service, because we act in the social area, being aligned with our mission.

Events We carry out events to support the services/projects provided to the public/private entities that asked us for our services.

Water Projects for in the CPLC. 11) Which are your main costs? For the water projects in the CPLP we have to buy solar panels and water systems. For the consultancy services, our main costs are Human Resources and their training. 12) How do you register those activities in Audit terms (receipts) We pass receipts for services or donations. We never pay taxes. Organization’s Sources of Financing 13) Which are your sources of fundraising? Can you describe each one of them?

Government Funds

Public Donations

Foundations

Events

International Funds

Services for Private and Public Entities Note: The information about our sources of funding and clients is available on the website. http://www.tese.org.pt/ 14) What was the process to get the funds from each source mentioned above like?

Government Funds The funding we receive from public entities is the same process and service that we have with private entities. For the government funds, it is key to know what the strategic lines of action in the area are, which we are requesting funds for. We have to understand which the necessities of the government in the social area are, in order to complement them with our projects/services. They value if we do partnerships with other important organizations. It is also important to have the capacity to co-finance the projects, and to have the capacity to continue with the project development after their financing.

Companies/ Foundations Both for foundations and companies, we have to approach them with a project and invite them to be our partners. This is a game of seduction and interests. We have to stimulate in the financer the interest in our project. It is crucial to present results, to be professional, and show the professionalism and quality that we give to our projects. We have to meet their interests, and prepare the proposal for the client specifically. This demands a study of the entity's capabilities; otherwise they will not trust us.

http://www.tese.org.pt/



There are no perfect methods. It is the people, and their knowledge, that puts quality in the projects.

International Funds The process is very similar to the Government Funds. They value partnerships and audit rigor.

Public Donations We have two ways of doing it. One is through our project called “Ser Humano”, in which a person can do a donation to support a person in Africa. The other is through a direct approach to people and asking money for a project. In those cases, we try to create a bond between the person and our project.

Events Companies ask for visibility in those events, and the insurance that the impact they want will happen. These events are just to support and create visibility to the projects/services that we are doing with the private/public entity.

Training Sometimes companies come meet us and do the training for free. Organization’s Financing Problems and Solutions 15) What are the main problems of getting financing from: a. Government Co-financing. Competition. Economical Crisis b. Companies/Foundations The project needs to have big visibility, and most of times companies only accept projects with organizations that already have big visibility. Quick and tangible returns are demanded as well. Economic Crisis and competition. Social capital (contacts) c. Events To get the desired public d. Public Economic crisis provokes a decreasing of public donations. We have already stopped to allocate efforts to look for their funds. A competition is also a problem. Social capital (contacts) In short, we have to generate the same revenues, with less funding… We have to be very creative. 16) What is the governance role in the fundraising process? It is crucial, because we lead the fundraising process. We are the ones who transmit trust to the funder. We have to be continuously looking for them, and create the bridge between our organization and the other entity. 17) Order the following resources in the fundraising process, from the most to the least important.

Resource 1 - 7

v. To have a good service, a good project 2

w. Nature of the project 2

x. Good selling capacity (good human resources with fundraising skills) 2

y. Good connections 1

z. Good reputation 2

aa. Number of volunteers 6

bb. Transparency 2






Events X

Membership Fees X

Services for Private/Public entities

X


Foundations' Funds X

Companies' Funds X


Government Funds X

Public Donations X


19) In terms of transparency, do you have: a) Audit Reports? Yes (online). Yes. They are available on the website. We always present them to the

entities that work with us. Even when they do not ask for them, to show our professionalism. b) Videos? yes c) Department that takes care of the organization image? Yes d) Project Reports? Yes, we do. It is crucial to present the intended results before the project. And show

the results after the project, in order for our partners to understand what was achieved.

Engenho & Obra Interview with Alfredo Soares Ferreira, President

Organization’s profile and legal status 1) How did you have the idea of doing an NPO? In which year did you register?

2006; Own Initiative 2) Where are you founded? Under which legal code are you? Lisbon. We act in the CPLC. 3) How many staff people do you have and how many volunteers? About 100 people 4) What is the status of the Organization? NGOD 5) Why this status (what benefits would it bring against the other status)? When we decided to register the organization, we had many people that had worked in the cooperation and development area. Our mission is to contribute to the autonomy and development of the Portuguese and CPLC countries. Moreover, we had human relationships with people and entities in Angola and Mozambique. For all these reasons, NGOD was the most logical legal status to have. 6) Where was it registered? Lisbon, IPAD. 7) What are the advantages of being registered in IPAD? We have to be registered in IPAD. It allows us to act in countries of Portuguese expression and to be recognized as an international institution. It gives us the possibility to apply for their Portuguese funds that are announced by the Ministry of Foreign Affairs – Cooperation for the Development Fund, and Education for the Development Fund



8) Are you registered in Plataforma Portuguesa das ONGDs (Platform of Non Governmental Organizations for Development)?

Yes, we are. We have the benefits of being associated to a national network of NGODs, which makes the connection to CONCORD – a European platform that makes the connection with the European Union, which is the biggest international funder. The platform also makes the connection and represents NGODs in the Portuguese Government. Organization’s Activities 9) What is the Nature of the Activities you have?

Culture and Recreation


Social Services

Environment


Law, Advocacy, and Politics

International Activities

Business and Professional Associations, and Unions 10) What kind of services/activities do you do? Can you describe each one of them?

Training We have two types of training: internal and external. Internally we do non-paid training that focuses on the development of administrative functions (secretariat; accounting, human resource and others) and of specific technical skills (for project development). Externally, we tried to implement training about renewable energy but without success. In 2011 we intend to do training for teachers on sustainable development. This training is paid.

Services for Private/Public Entities We did a service for a public entity – municipal council – and for an NGOD. The intention behind is to help the entities to apply for funds or projects. The problem is that the competition is intense, and this is not our core business, we do not do this as a form of sustaining the organization.

Events We have some events to communicate E&O initiatives, and we participate in some conferences when we are invited. We do not receive revenues from these events. The only event we received revenues from was in Brussels - a conference on engineering. 11) Which are your main costs? Transportation costs. Daily costs when working outside. Costs with projects. 12) How do you register those activities in Audit terms (receipts) We have our auditing organized by an external auditing professional. We give receipts of all our revenues – fees, donations and services. Everything is transparent, and always tax exempt. Organization’s Sources of Financing 13) Which are your sources of fundraising? Can you describe each one of them?

Government 3 projects financed by IPAD

Public Donations We receive some donations, and they are significant. However, they are few.

Funds that support a company



Fenprof gives us a fund to subsidize a project managed by us in East Timor.

Membership fees We receive fees from some people that are associated us.

Events The only event we received revenues from was in Brussels - a conference on engineering.

Training Training externally is paid. We tried to implement a formation about renewable energy but without success. In 2011 we intend to do training for teachers on sustainable development.

International Funds No, we do not receive any international funds. We applied for 3 international funds from the POPH operation program, but never with success. 14) What was the process to get the funds from each source mentioned above like?

Government We receive 3 funds from IPAD. The best thing to do is to have a strategic well-defined plan, with the objective of being successful. In our strategy we have to define for each funds we can apply, and which projects we are able to develop. This has to be done every year. It is also positive to have a local partner that is able to identify what is needed in that specific location, and that is able to cooperate with us.

Services for Public/Private Entities We divulgate our organization in lots of banks, big companies and medium companies.

Foundations We applied for one fund from Calouste Gulbenkian, but it was not successful. Now we are waiting for a reply from Fundação EDP.

International Funds We have never applied to them, but we intend to do so.

Loans We have never considered them.

Public Donations In every event that we are present, we give people opportunity to donate. We also ask to our associates to donate if possible.

Own Activities o Training

Internally we do non-paid training that focuses on the development of administrative functions (secretariat; accounting, human resources and others) and on specific technical skills (for project development). Externally, we tried to implement training about renewable energy but without success. In 2011 we intend to do training for teachers on sustainable development. This training is paid.

o Events Through invitations to participate in other events, or events communicate our activities and increase the number of members.

o Fees We promote this possibility in the events we are present at, and every time we have the chance. Organization’s Financing Problems and Solutions 15) What are the main problems of getting financing from: a) Government



Big competition; the margin of success is low; it is necessary to have experience and to have a considerable number of projects done in order to succeed. b) Services for Public/Private Entities It is not a core activity in our organization, and we do not have the capacity to compete with other consultancy companies that do the same. Moreover, in Portugal there is indifference from the big companies and banks for these causes. However, in their reports of sustainability they show the opposite. c) Foundations Big competition; the margin of success is low; it is necessary to be experienced and to have a considerable number of projects done in order to succeed. d) International Funds Big competition; it is necessary to have experience and to have a considerable number of projects done in order to succeed. e) Loans Have never considered them f) Public Donations They are very few and hard to get. g) Own Activities

i. Training Competition

ii. Events It is difficult for us to carry out events because we have to cover the costs.

iii. Fees It is difficult to keep the group of associates. From one year to the other we lost 50% of our associates. 16) What is the governance role in the fundraising process? Our role is absolutely central. The president of the direction is present in all the initiatives that involve the promotion and future of the organization. Our executive team is composed of three people that are always related to these decisions. We are the face of the organization. 17) Order from the most to the least important the following resources in the fundraising process.

Resource 1 – 7

b. To have a good service, a good project 1

c. Nature of the project 2

d. Good selling capacity (good human resources with fundraising skills) 2

e. Good connections 1

f. Good reputation 2

g. Number of volunteers 5

h. Transparency 1 Scale: 1 – 2 (Very Important); 3 – 4 (Important); 5 – 6 (Helpful); 7 – Not Relevant



18) Score each fundraising source in terms, in a scale from 1 to 9, where 1 is a very good source of fundraising and 9 the worst source of fundraising.


Events X

Membership Fees X

Service for Private/Public Entities

X


Foundations’ Funds X

Companies’ Funds X


Government Funds X

Public Donations X


19) In terms of transparency, do you have: e) Audit Reports? Yes. f) Videos? No, not yet. But we will. g) Department that takes care of the organization image? Yes. h) Project Reports? Yes, we do. Physical Execution Report and Financial Execution Report.

CADIn Interview with Manuel Jerónimo, Member of the organization

Organization's profile and legal status 1) How did you have the idea of doing an NPOs? In which year did you register? This is a project that has a group of investors behind it. It is a council of patronages. 2) Where are you based? Under which legal code are you? Cascais, 2003. Portuguese. 3) How many effective people do you have and how many volunteers? Administrative: 10; Doing Services: 42; Doctors – 10; Total: 62 members 4) What is the status of the Organization? Legal Status: IPSS 5) Why this status (what benefits would it bring against the other status?): It gives us several benefits: Tax benefits (free of IVA; IRC). Because our services have a humanitarian and not for-profit purpose. It also facilitates protocols with the District Centers for Social Security. 6) Where was it registered? General-Directorate of Social Security; Diary of the Republic, etc. Organization's Activities and Business Model 7) What is the nature of the Activities you have?

Health 8) What kind of services/activities do you do? Can you describe each one of them?

Services for Private Entities We give medical treatment to children and adults with development problems in the psychiatric and neurological area.

National Volunteering We provide the same services for children and adults that cannot afford the price of the treatment through our “Bolsa Social”



9) Which are your main costs? Employees; Payments for services provided; Daily management; and costs of “Bolsa Social”, which are 20.000€ per month. 10) How do you register those activities in audit terms (receipts)? Our services are registered as services, and because they are humanitarian and not for profit services, they are tax free. Merchandising sales are registered as donations. We have a person that is trying to understand if we can register the merchandising sales as a sale, and still keep it free of tax. 11) How would you define your business model? Is it sustainable? It is a clinic that supports children and adults with development problems in the psychiatric and neurological area. At the moment I consider it sustainable, yes. Organization’s Sources of Financing 12) Which are your sources of fundraising? Can you describe each one of them?

Government (State) We did a protocol with the District Centers for Social Security. The Center gives us an amount of money and CADin provides services of “Bolsa Social”. We are also waiting for the reply to participate in the IRS consignation.

Private (Philanthropy) We have occasional donations

Companies (Services; Partnerships, sponsorships and support) We have some protocols/agreements with associations: Coração Delta; Banco de Portugal; Casa da Moeda. The associations pay the costs of having their employees and relatives in our institute.

Services It is our business: supporting children and adults with development problems in the psychiatric and neurological area. Our clients pay for the services, and with the profit we support those clients that cannot afford the service, through our “Bolsa Social”.

Foundations Are those that founded our center. They contribute with donations.

Training Training is in the psychiatry and neurology fields. Revenues pay the costs.

Fees The administration council has 33 associates, and any person can join. The cost is 10€ per year, and they make part of the social house.

Sales Annual calendar; International Congresses; and Dinners. All of them are to finance “Bolsa Social” 13) How did you go about the process to get the funds from each source that you mentioned above?

Philanthropy: The donation is made by the person/organization, and we give them a donation receipt that gives them a discount of 140% in the IRC.

Foundation Foundations are in the group that finances the project. They have been involved since the beginning

Government We did a protocol with the District Centers for Social Security. The Center gives us an amount of money and CADin provides services of “Bolsa Social”. We are also waiting for the reply to participate in the IRS consignation.