Unit-12 Fund Raising

8/13/2019 Unit-12 Fund Raising

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UNIT 12 FUND RAISING

Objectives

After going through this unit, you will be able to understand:

Methods suitable for fundraising efforts;

Techniques need to be analyzed and adopted for a specific situation;

Ones vision and purpose in fund raising efforts;

How to write a project proposal and improve the writing skills?

Structure

12.1 Introduction

12.2 Legal Issues in Fund Raising

12.3 Techniques of Fund Raising

12.4 Methods of Fund Raising

12.5 Fundraising Campaigns

12.6 Methods of Income Generation

12.7 Internal Income Generation

12.8 Summary

12.9 Self-Assessment Questions

12.10 Further Readings

Appendix A: Examples of effective campaign materials

AppendixB : illustr tion

of some successful income generators

12.1 INTRODUCTION

The BRIC countries (Brazil, Russia, India and China) are the fast developingeconomies of the world. Their GDP growth has improved and the income

level of at least the middle class is rising. Some of the erstwhile traditional

countries in the west's support to NGOs in the developing countries are

declining. Some overseas donors feel that countries like Africa need financial

support rather than fast developing countries like India. There is also pride in

standing on our own legs. Till recently NGO s were managed by peoplewithout much professional background. But the scenario has changed. Now,increasingly more and more professionals are joining or starting NGOs.

Some of the NGOs with expertise in some niche areas were able to generate

income in order to support the development works undertaken by them. Some

other NGOs bridge their deficit by undertaking income generating projects.

Under the present context, there is a need to generate income internally to self

support and to carry on the.development work with dignity.12.2 LEGAL ISSUES IN-FUND RAISING

Once we have decided to fund raise, it is better to check the legal situation tosee whether the legal provisions in the country allows you to raise funds. It is


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Resource Mobilisation also better to understand, the existing tax situation in the country to take

advantage. Generally amount donated to charitable causes becomes eligible

far tax concessions. Before starting the exercise, it is better to thoroughlyinvestigate all avenues that are available to raise funds in India. If need be it is

better to consult a consultant on this.Irt somie of the western countries fund raising is an important paqt of nationaldevelopment process. The NGOs development work is still in the nascent

stage in communistic countries. In most developing countries NGOs depende:ctensively from overseas contribution to fund their projects. In Indiahowever, we have a well established voluntary sector, with laws governing

their fi)rm,ation and functioning. Voluntary organizations are allowed to raisefilnds in India. The foreign contribution receipt and accounting is governedunder Foreign Contribution Regulation Act of 1974 (FCRA).

3;special permission required to raise funds in India?Unlike in many countries you do not require any permission to raise funds in

Irtdia.

Dloes your organization's constitution permit you to fundraise?You must make sure that your constitution permits you to raise funds.

Are th~eNGOs allowed to generate income internally?A 11 voluntary organizations are encouraged to raise income by way of doingsome gainful activities. Some NGOs sell Greeting Cards, while some others

ntanufacture useful items such as handicrafts or candles etc.What about tax relief's on charitable donations made by individuals andccarporate?L nder sections, 10, 11,35AC and 80 G) of Income Tax Act, the rules are laiddlown For registering, claiming and the quantum of relief that are available forirldivitluals and other entities.

TECHNIOUES OF FUND RAISING

Fund raising is a valuable part of the strengthening of NGOs and

communities. The contribution in the form of cash and in kind is needed by

them to carry out their desired and planned activities. The obtaining of

resources is therefore a desired and honourable task; fund raisers should be

ac:knowledged and praised. Fund raising is a job to which all shouldcontril~ute,and for which all should be responsible. Many of the techniquesaind skills of fund raising can be or have been adapted from the commercialprofession of "marketing". While marketing and sales skills can be valuable,they must always be applied in an ethical manner. Every fund raiser must firstand foremost be completely convinced of the value, integrity and benefits of ,,the organization, and the activities for which the raised funds will be used.

These guidelines must be modified in each community so as to be adapted to

the differences that characterize every community and context.


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1) Principles of Fund Raising:

There is a difference between principles of fund raising and techniques of fundraising. This document discusses both. This section concentrates on thzprinciples.

Many of the skills and techniques of fund raising used by NGOs have beendeveloped by, and adapted from the commercial profession of marketing.Some people see this as a cynical and insincere activity. Maybe that is so as itis practiced by some, but it does not have to be, and ofien is not. If a sales ormarketing professional sincerely believes in the value of the product, sales can

be effected honestly and ethically.

The principles of sincerity and ethical integrity especially apply to fund rising.

Fund raising should be the responsibility of all members of the organization,

although they may participate in different ways. It should not be simply left tothe professionals. All of uslyou therefore, should know about principles aswell as techniques of fund raising. The fund raiser, first and foremost, must behonestly convinced in the integrity of the organization, and in the benefit and

value of the activity or project of the organization. Potential and past donors

very quickly spot insincerity, dishonesty, and diversion of "their donated

FundRaising

resources.

2) Acknowledgement of Donations

Acknowledgement is a must. Many donors use their donations to gain prestige

and honour in their communities. It is a small price to praise every donor.

Ensure that communities we assist are aware of ~rieneed to acknowledge alldonations, and praise the donors for their loyalty to the community and their

much needed and appreciated donation.

3) Thank You! .

The most important two words in obtaining funds, and running a successful

NGO, or community project, are the words, "Thankyou!" ...

Many NGO staff has wondered why enthusiasm for their activities has driedup, and funds cease to roll in; and the simple cause is often found to be that

the NGO forget to acknowledge and thank the donors.

4) Progress Reports

Further to a simple "'thank you, donors want to know what was achievedwith their donated money. Themost effective form of thank you is a progress

report. Donors are less interested in your activities; they are more interested in

the results of your activities; have you reached, or partially reached, the

objectives you stated when you asked for the donation? Fund raising andreport writing are not independent activities.

A high level of integrity must be maintained at all times. This applies to the set

up and activities of the organization in general, and specifically to its fundraisingactivities. An important aspect of that integrity is full accountability.23


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Resource Mobilisation All actions must be accountable; all funds must be accountable. This means

accurate, complete, understandable and honest narrative reports and financial

reports, available at any time to any member of the public.

Along with accountability is transparency.The group must not have anysecret agenda, and must be public and honest about all its activities and all its

expenditures. Account records must be open that is available to any member

of the public to inspect at any time. Honesty can not be compromised.

1) Those people responsible for implementing the activities of the group,including the activity of obtaining funds, must be honestly and totally

convinced of the goodness of the group and its objectives, and the worthwhile values and benefits of the project. This level of integrity is essential

for the sustainability of the project, the completion of the project, and thebenefit of the community.

6) The Importance of a Positive Attitude

Not everybody is a donor. Some of the people, agencies or groups can or will

not give to your community or organization if you do not recognize that

failure to obtain a donation from one source does not imply that you or your

organization is a failure, you may be tempted to be discouraged and give up.

Do not give up. You cannot allow yourself to be discouraged; it is a luxurythat YOU, your organization and your community cannot afford. You may

expeirienoe eight rejections; do not give up because the ninth and tenth maybring the needed donation.

7) alcillatingand Recording Project InputsIt is i:mportant to maintain accurate records of all resources used in acomnlunity project.Too often some donationsare forgotten or under-valued, and the correct

amount of the community contribution is higher than what is recorded and

reporled This under valuation is detrimental for several reasons. These are:The community members have a lower estimate of self worth and this

lowers confidence,

The outside donors have a lower estimate of community contribution and

will be more reluctant to contribute more or

Will not recognize the worth of the community inputs.

We must erlsure that the executive committee of the organization that isplanning to undertake a community based project, recognizes the value of

hidden corrununity resources.An accurate estimate of the cash value ofdonated resources in kind like, labour for construction, donated skilled labour,

time spent by community members and leaders in meetings for planning, or

non cash physical donations must be made by the community. We should

encourage the community to identify and record these. These financial

estimates should be included in the cost estimates of the project proposal, andshould be recorded during the actual construction activities.


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When ihe total costs of a community based project are calculated, they should FundRaisingtherefore:include the actual cash contributions of donors, international andlocal, dovernmental and non-Governmental, and others, plus the costestimates of all non-monetary donations, whether in the form of non-cashphysical items or services, or human time and energy.

12.4 METHODS OF FUND RAISING,

The following are some of the time tested methods by which the NGOs worldover raise funds for their projects. They are as followa1) Individual donors

2) Fundraising events

3) Corporate donors

4) Trusts, foundations and other grant-making agencies;

5) Overseas non-resident communities;

6) Tourists and Visitors7) Government sources

1) INDIVIDUALDONORS

Who are the Individual Donors?

There is a wide range of potential donors for any worthy cause. Each donor

has different reasons to give. While giving, each person has a vision/purposeto fulfill. The h d r a i s e r must have definite plan of approachlmode. It isimportant to use effective communication to attract the support. Potentialdonors include the following:

The rich and the upper middleclass; the young and the old;

Men and Women.

Those who have understood the cause.

Professionals such as lawyers, Doctors, IT Professionals and so on.

Family and Friends.

Students and Members of Charitable Organizations.

Test different audiences to see what the response is. You will almost certainly

find that a wider range of people want to support you than you thought and fordifferent reasons fiom what you imagined. Go out and meet people; talk atmeetings about your work; organize a reception and give presentation topeople who have expressed some interest.

A) Finding Supporters: Some Simple Ways of Getting People to Give

If you are starting out in fundraising, you are probably not even aware of whoyour supporters are, and you have no experience of asking. The first step is tofind a few people who might be interested in helping you, and to work outways of asking them for support. You have to ask them for something.Thinking about what to ask for and how much to ask for can be really good .

opportunity to begin to create a fundraising message'.25


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Resource Mobilisation Finding a few supporters is a first step to finding more people to support you,which can be a step in building up a supporter base. Here are some first stepsto lake:

Ask; all those who are already connected with the organization. Often youmay be surprised to find that your support base is already available.Ask everyone who has given to you to suggest some names of people whomight be interested in the work of the organization. The persons suggestedmust be followed up with letters, telephone calls and other communicativemodes.

a) ST RT KEEPING A MAILING LIST.

In order to keep communication with your donor, fiame an appeal, be specificabout the targeted amount. The efforts must be in place to produce appropriateliterature.

Once you have a mailing list of 100, it is much simpler to expand further. YouL will find that you are slowly beginning to build up a s u c c e s s ~ lmembershipscheme or direct mail fundraising Programme. Once your list begins todevelop, this will require proper management (to add new'names, to updatethe information on each donor, to ensure that amendments are made when acllange of address is notified to you, and to remove names of people who seemno longer interested).

b) M KE CONTACT WITH YOUR LOCAL COMMUNITYMost organizations fail to take advantage of the fact that they are part of alocal community, and that some local people might be interested in what is

Make a note of this and ask them if they would like to receive anoccasional newsletter about your work.

Think about having an open day, and asking local people to come and seeyou.

h4ake sure you give out literature about your work.A variation on this is exhibiting at a fair or mela.

Thinlc about having a local person as a Board Member. This is dways good for(anylocally-based organization, as it will provide a link with the localcommunity.

C ORGANISE A HOUSE-TO-HOUSE COLLECTIONThis requires a lot of volunteers. Training the volunteers, orienting them to theneeds of the cause and purposes is the next step.

2) ORG NISING A FUNDR ISING EVENTOrganizinganevent can be a wonderful way of raising money for a goodcause. The events attract a wide spectrumof people in the socie6 a d it is the


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perfect place to present your cause for fund raising. There is an enormousrange of events you can organize. These include:

Fund Raising

Sporting events and tournaments; !Musical and cultural events;

Events involving schools;

Dances and cultural events;

Participation Events like walks, human chain formation etc.,

Auction of donated goods and Raffles, lotteries etc.,

a) Management ofEvents

The ability to run an event well is crucial. It will almost certainly take muchlonger and involve much more effort than you think. There are three main

approaches to organizing an event:

- Do it yourself. But you need to make sure that you have the time and the

skills.- Get a professional to do it. You can organize for a fee or fiee- Find some volunteers to do it.

3) CORPORATEDONORS

It is a well known fact that corporates want to pass on a portion of theirprofits, which they have earned to give back to the society. The Microsoft,Tatasand Birlas for example, earmarkevery year considerable portion forcharity causes. Here are some reasons why they give:

To create goodwill in the local community;

To create goodwill amongst employees;

To be associated with certain good causes;

Because cert h honest leaders approached for a cause;Because the Chairman or his wife is personally interested in the project;

Publicity for their products and for their 'corporate image';

There are tax reliefs on giving.

Remember the following:It is the shareholders' money which is beiig given away; they have tojustify and present reasons for supporting;Giving for charity is secondary;

Corporate wants to be a good corporate citizen often they would like toidentify with local projects;

Sometimes an employee couldbe a catalyst in corporate charity;Theymay have an eye on business opportunity while giving;

Sometimes companyieswant to give their products as gifts;Companies appreciate acknowledgement, recognition and good publicity.


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tesourceMobilisation What colnpanies can give?Cash donation;Spo~~soran event; ISponsor promotional and educational materials;Engage in joint promotion;

Make company facilities available and provide expertise and advice;

They would like to be a Board Member.

It i:s clear from what is said above that company's can extend their support toyour cause in diverse ways. So think carefully about the best way in which thecornpanymight help you. It is often easier for them to support you in someway other than cash donations.

4) TF USTS AND FOUNDATIONSTrusts and foundations are grant making bodies set up specifically to givemoney for charitable purposes. They are usually endowed with corpus, anddistribute the income earned on this each year in grants. Here are some activefoiundai;ionsin India.1) Fo:rd Foundation, Aga Khan Foundation which are International

foundations with offices in New Delhi.

2) The National ~o dationfor India, Delhi3) Rajiv Gandhi Foundation, Delhi4 1 Thie Indian Foundation for the Arts, Bangalore5 Child Relief and You (CRY)6: Concern India Foundation7:) Sir Ratan Tata Trust8') Infosys FoundationWhat Foundations Support?L,ocalfoundations support local projects, which address the problems of thecity or region where they are based. National and International Foundationsu~suallysupport national programme and they also support projects that areinnovative and of national significance. They usually confine their support toone-off grants or recurrent grants made for a p e ~ o dof up-to three years.I'rivalie foundations support those projects that are of interest to the family~zmningthe foundation. Under income tax rules, foundations are usuallyexempt from tax on the basis that they apply their money to charitablel~urposes.'fie larger foundations have brochures that set out their giving policy andapplication procedure, with examples of the kind of projects they have beensupplorting. For example, Rajiv Gandhi Foundation in India extends itssupport for the following causes:

Literacy: Supporting various non-formal education projects,


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Women and children: Street children pro~ectand vermin culture project.SdecialProjects: Those who are interact to assist children who have lostparents in terrorist violence.

Project to support Disabled Persons

Health support schemes forAIDSIHIVICANCERpatients.5) RAISING MONEY THROUGH OVERSEAS CONTACTSNRI SThere is a large chunk of Indian population spread throughout the world. They

could be your contact for raising money for your projects. Most of them retain

strong family links with their home country and culture. With increasing

globalization of business and as people migrate for economic or political

reasons or seek educational opportunities away from India, there are more andmore non-resident Indians (NRI s) living abroad.But how do you reach them, and what do you ask them to do?

There are a number of possible approaches. One is to market your cause to thenon-resident community at large. This can be done through publicity in

overseas Indian newspapers, by using networks in the country where they are

now living, sucn as a Confederation of Indian Organizations, Or throughpersonal visits to develop your own contacts. You can also use direct

marketing. For example, Help Age India used direct-mail fundraising (sending

letters to address lists) to mobilize NRIs support in the Gulf States, and ChildRelief and You has-arranged with Banks to include n appeal with bankstatements being sent to NRIs who hold rupee accounts with the bank.

6) VISITORSANDTOURISTS

Visitors can be people passing through, who have heard about your work, or

people coming on a tour organized by a donor agency for its committedsupporters to see some of the projects they are helping, or if yourun a

conference or training center, there are the people attending events ru at thecenter. These people are clearly interested in what you are doing, which is agood starting point. You have a chance to show them your work, and to ask

them to support you. Make sure you have a visitor's book (where they can

write their name, address, and e-mail), give them publicity material about your

work, ask them if they are interested in doing something for you when they

return home. You can even ask them to make a donation then and there.

Attracting Tourists

You can try to attract tourists to visit you by arranging events and activities atyour project (with transport laid on if required', Some tourists would like to

do something 'out of the ordinary' during their stay, which brings them closer

to the life of the country they are visiting. Visiting local crdtsmen at work(and perhaps buying what they produce), seeing a rural development project,

being shown round a museum with a talk from an expert. The opportunitiesare endless!

What you might try to do is to arrange to have a leaflet or even display a panelabout your organization and its work in local hotels. This could give details of

FundRaising


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the events and activities you are organizing, as well as explain your work andencourage: people to visit you. You could even design special events such as a

cycle: tour of the city, or visit to see an important mela which is in progress.Your proj1:ct could be an important educational visit.In many c.ountries tourism represents an extremely important contributor tothe national economy. Some tourists are on tightly organized schedules andnever stray fiom their group, while others are more adventurous and may wellbe tempted to share some interesting experience, which you can devise for

them.

7) GOV RNM NT SOURCESApart ficlm the foreign donors who have been providing much of the fundingfor tlevelopment work, there will also be government sources at national and

state level (and local government sources at district or panchayat level) that

are available for your work. The process of getting support is very similar to

getting support fiom an international donor agency. Some suggestions toapproach government sources are:

Research to find out what's available, the policies, procedures andtime:table for distributing the money of any likely grants scheme.Remember that funds may be available at all levels of government.Iderltifj.the department/person whichlwho will be responsible forreceiving applications and making a decision on your proposal. Personal

contact should be used if possible, as this enables you to make much morepovqerful case, as well as build a rapport with them. You need people whocan lobby government effectively and who are able to develop good

releltionshipswith the civil servants who will be processing your proposal.It i:s advisable to understand the need of the government and how it willbe ;ableto meet that need.

a) lhy Government Funds for Voluntary Organisations?There are a number of reasons why government might fund a voluntaryorganization.Progressive Governments dedicate budgetary allocations forcertain projects to be implemented by non-Governmental Organizations.

Over the years the government has realized that NGOs are effective in certainareas.

There is a possibility of creating a working partnership. Many of the joint

Forestry management programme, use voluntary organizations for extensionwork and to run training programme for forest communities in partnershipwith the Forest Department. A voluntary organization can bring additionalfimds into the programme through its own fundraising efforts. A voluntaryorganization may be able to offer an innovative approach to dealing with thepsob1e:m. The government wants to carryout important socio-economicprogrrunrne; it uses voluntary organizationsas implementing agency becauseof its expertise and experience and also of its ability to respond quickly.


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b) Where to find out about Government support? Fund Raising

The Government of India has a large number of schemes to support social anddevelopment needs. Each scheme has its own focus and criteria forapplication. One important scheme is Jawahar Rozgar Yojana (JRY), which

aims at (a) improving and expanding employment opportunities for the rural

landless, (b) creating durable assets for the poor, and (c) improving the qualityof life in rural areas especially through social forestry, water harvesting andland development.

A comprehensive source of information on government schemes in India may

be found in their publication"Development Programme and NGOs"which is

a guide to central government programme for NGOs in India.

12.5 FUND RAISING CAMPAIGNS

Success of your fund raising campaign largely depends on proper planning and

systematic implementation of the methods. As some of these activities are

specialized in nature, it may be entrusted to right people. The following pointsmay be considered:

Publicity Materials: Entrust all activities such as preparation ofcampaign materials such as leaflets, brochures, reports and audio-video

materials to people who are best in the filed.

Organizing events: Organizing events require specialist inputs. It isbetter to engage people who are specialized in the field.

Select and train a band of dedicated volunteers and campaign leaders.

Put in place a good system of accountingto

receive, acknowledge and tosend 'Thank You' cards.

Prepare booklet containing possible donors, trusts and foundations, their

addresses, telephone numbers and key contact persons.

For an effective campaign a thoughtful and well prepared mission

statement is must. Therefore spend considerable time to prepare one.

Your 'VISION' statement must reflect in all your campaign materials and

2) Use of Electronic MediaIn these days th Electronic Media is used very effectively. The Radio,Television and Internet are being used extensively to articulate their vision and

development work in focused way. The visual media is being used to bring

in the beneficiary's story effectively. The prospective donors get the actual

information of the field work and are moved to give more donations.

3) Focus on your vision and cause

The first and foremost way to prepare your campaign is to determine,

understand and to be confident of your cause for which you are approaching

the public for support. Make sure your cause is relevant, universally appealing 3


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Resource Mobilisation and real. After identifying and deciding on the cause find out the ways andmeans of appealing to people, who will be interested in your cause. Your

appeal must include why your organization had undertaken the particularactivity and how the h n d s will be utilized. The campaign must impress uponthe people, how you are going to change the lives of a particular section of thesociety or a particular society problem or injustice. The focus should be on:

Your Vision and commitment to society.Efictive communication.Your beneficiaries.

Project the unique identity of your organization and why you deserve

support fiom individuals and donor agencies.Explain the need for funds.

Make known that it is a people centric programme.

Display complete transparency and honesty.

ctivity 1 IDevelop a fundraising campaing for a HIVIAIDS project keeping in mind theprerequ:isitesdiscussed in section 12.5.

METHODS OF INCOME GENERATION

Non Governmental organizations have excelled themselves by providing

various quality services at a reasonable price. The schools and Hospitalsesti2blished by them offer quality education and healthcare at affordable price.Income generated from these services can part finance for other charitabledevelopment work. Some NGOs have specialized in environment issues. Thecorlsultzlncy services offered in such areas can be priced in order to generateinternal income.

1) killledWorkThe Cornrnunities living in a particular region are specialized in a particularskill. For example, in some parts of Karnataka like Mysore and Bidar, they areskilled in handicrafts and metal work. Elsewhere in Kashmir and Sivakasiforexample, the people are skilled in Papier michC work and matchstick andagarbathies preparations. The unemployed and the rural poor in these areas


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can be profitably employed. The articles prepared out of them can be sold at

reasonable prices to augment the deficit in the development projects. Some of.these products have patronage in the overseas too.

2) Agriculture and other Allied Activities

Many NGO s are successful in taking up agricultural activities like vegetablegardening. Some have taken up Dairy farming and Poultry farms in a big way.

These activities can be undertaken with the help of people in the p;oject area,where they have taken up development work. Besides it is food items for the

people involved, it-will also be sold to augment income.

3) Micro Enterprises

The Micro financing through voluntary organizations has gained good ground

in developing countries. The Micro Finance vehicle can be profitably used to

encourage starting small business models in the project area. The capacity

built, in these micro finance activities will generate income for development

work elsewhere. Therefore small business activities like book shop, Internet

cafd s and Xerox centers may be undertaken by voluntary organizations to partfinance their activities.Many Voluntary Organizations are also interested in documentation and

dissemination of information. For example, the Environmental issues can be

documented and the message spread in the form of small booklets at a price.

All of these activities can be undertaken to generate income, which can then

be used to fund other work of the organization. This form of incomegeneration has the advantage that it promotes the objectives of the

organization and at the same time raisesmoney for it.There are a number of i ues th t should be addressed: What are theseissues?

Does your organization have the legal power to trade? This will normally be

included as a power in the constitution. Sometimes organizations are not sure.

Sometimes they are cautious, believing that there might be legalltaximplications if they were to sell their services. For example, Youth for Unityand Voluntary Action (YUVA),which workswith vulnerable children inMumbai, has a publishing programme, but instead of giving a price for itspublications, it indicates a 'suggested contribution'. Note also that under

foreign contributions Regulation Act (FCRA) rules, voluntary organizations inreceipt of foreign funds are not allowed to publish and sell periodical

publications (so their periodicals are usually designated 'for private circulationonly').

Is your organization happy with the idea of 'trading'? Some organizations

come from a strong anti-capitalist tradition, and instinctively dislike the idea

of selling anything for gain. Others are so used to the idealhat publicationsand training should be provided and obtained free, that they have neverconsidered the idea of charging or paying.

There are, however, many advantages of selling expertise or a service. Thseare:

33


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IResource Mobilisation It l?~rcesyou to do your costing. You have to know how much it costs Y U

to provide the service, before you can decide how much to charge for it.

This in turn helps you manage the activity better.

It forces the purchase to make a positive decision to make a purchase..

This means that they will read the publication or attend the conference. I

Many publications are discarded wead Many people do not turn up atIcoiiferenceswhere they have been booked for free !

It forces the provider to provide what the participant or purchaser wants or Ineeds.

There is a link between price charged and perceived value. If it's

expensive, many people believe it will be good. If it's free, they may feel

it has no value.

You can always have differential pricing to allow for the differentpurchasing power of different purchasers (for a publication, you might

have different rates for overseas selling and for sale in India; or differentrakes for commercial, government and voluntary organizations).Ybu can always make a positive decision to give free places or send freecopies. But this then becomes part of y o u marketing or disseminationslxategy

.-

2.7 INTERNAL INCOME GENERATION.[t has become necessary to generate income internally. Why? The followingare the reasions for the same.1) Decline in Overseas IncomeIn recent times, the overseas income is declining and drying up. Some of the

developed countries and foundations are reluctant to fund the developing

countries. A few International organizations have expressed that they wouldlike to fund only underdeveloped and poor countries. Therefore VoluntaryOrganizations in countries like India, which is one of the fast developingcourltries of the Asian Continent, is facing funds scarcity. At times like this, itis better for the NGOs to start thinking in terms of internal fund generation.

2) Some times it could be matter of dignity

The Voluntary Organizations forever, cannot depend upon others donations.Besides they become parasites, they may tend to lose their dignity and honor.It is better as far as possible to go in for building capital for eventual income

generation. This will put them in better image.

. 3) Some Donors tend to be arrogant and draconian

Sorne donor agencies, try to be too stiff, and difficult to handle. They setimpossible targets and milestones. Sometimes they may not understand thecontext in which the voluntary organizations are placed and are working. Insuch situations it is better for the NGOs concerned to look for alternate

method of fund raising.34


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Alan Fowler in his article, NGO Futures-Beyond Aid says:"Vulnerability to aid trends, reduced autonomy, pathological contamination

by association, lossof public trust and civic roots, creeping self-censorshipand the erosionof comparative advantages all add up to substantive reasonsfor Non-Government Development Organizations NGDO'S)to look atconceptual andfinancialalternatives. Hence the question posed to conferencepanelists: what options are there for NGDO'S in a theory andpractice beyondaid"?

4) Interference of the donor agenciesmay be a bottleneck

It is sometimes the experience of the voluntary organizations that donor

agencies do not allow them to work freely. At every stage the donors would

like to interfere and that comes in the way of NGOs vision demonstration. It

could even mean political risk too.

Therefore it is better to generate income locally wherever feasible.

5) Sometimes it will not m t their entire operationEach donor agencies have some limitations or rules under which, they may noth d the entire operations. In order to meet the shortfall, it is better for thevolukltary organizations, to look for bridging this gap through internal income

6) Optimum use of local Resources

Sometimes it is better, that the voluntary organizations involve local people to

participate in development work. For example, the able men and women can

offer their services for development activities. Skilled personnel can offer their

services for generating income and so on. Some NGOs are blessed with landand buildings can lease or rent it out if possible for raising income.

7) Premature closure of NGOs

Not many voluntary organizations survive for a longer duration. Many of them

face closure on account of various reasons. One of the reasons is low capital

base and mismatch in cash flows. The staff attrition is also high on account of

poor salary structure. It is time the NGOs devise ways to generate income to

take care of regular cash flaws and to strengthen their capital base. As a long

These are some of the reasons why voluntary organizations need to look forincome generation. Refer to appendix for illustration related to some

successful income generators.

12.8 SUMMARY

This unit deals with different aspects related to hdraising. It tries to highlightthe prerequisites of generating income externallyaswell as internally and thelegal issues involved in generating these funds. Some illustrations are

incorporated to give a better understanding of the topic.The unit also deals


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Resource Mobilisation with ~diffel-entmethods and techniques of raising funds, which will definitelyhelp our learners in developing a proper understanding of the 'concept ofbdraising.12. ) SELF-ASSESSMENT QUESTIONS--

Ql. What are the legal issues, which need to be taken care of before raising

funds?

4 2 Discuss the different techniques of raising funds.4 3 Dis8cussthe role of trusts and foundations in raising funds.44 What are the different methods of income generation?Q5. Explain the needs for Gnerating the income internally.

12.10 FURTHER READINGS

Michael Norton and Murray Culshaw, 2001. 'Getting started in Fundraising,

Sage Pul>lications ,New Delhi.Stel?hen.T.S.2002. 'Fundraising skills and Techniques', P.D.C-Network,Bhiibaneshwar.Michael Edwards Alan Fowler,2003. 'NGO Management', EarthscanIndia', New Delhi.

Internet Resources:

wwrw cry ccmMichael Norton and Murray Culshaw, 2001. 'Getting Started in xndraising',Sage Pt~blicationsNew Delhi.Stephen,T.S., 2002. Fundraising skills and techniques ,People'sDc:velojpmentcommunication network, Bhubaneswar,


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~p en h Fund Raising

MATERIALS- -

A) World Vision on Child Sponsorship

World Vision isan NGO

engaged in community development organizationworking among the poorest of the poor. Their campaign material to raise funds

for the child sponsorship is well prepared and presented with all details. Pleasehave a look.

Child Sponsorship is a unique relationship between you and your sponsoredchild. When you become a World Vision Child Sponsor, you will help a childbreak fiee fiom the clutches of povefly and gift the child a future full of hope.It is also a relationship that extends to the child's family and the community.

For Rs.6001 a month, you can make a lasting impact.When You Sponsor...Your sponsorship will provide a needy child, life'sessentials like education, safe drinking water, basic healthcare, food and

immunization against killer diseases.

Easy Steps to Sponsor...

Step 1:

SelectAChild

Select a child fiom the photographs displayed on this pageor

Call Toll Free on 1 800 425 4550 and speak to our Donor RelationsExecutive to select a child based on your preferences.

st p :MakeACommitment

Make a commitment to change the life of a needy child and community.

Remember, your commitment would require your regular contribution-

ofRs.6001 every monthCommit to transform the society and be transformed in turn.

Step 3:

Send Your Contribition

You may send your contribution through any of the following modes: .Online: Credit Cards: Visa, Diners Club Card, Citibank E-card,American Express

Online: Bank Transfer: Punjab National Bank Internet Banking,Oriental Bank of Commerce Ipay Netbanking, ICICI Bank, IDBI iNet


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usourceMobilisation Ebanking Citibank Bank Account Online, Citibank NRI Rupee CheckingCitibank Suvidha Online Account, Centurion Bank ePay, Federal BankFednet, HDFC Direct Pay, IndusInd Bank, Kotak Mahindra Bank, UTIiconnect Net Banking.

Offline: Cheque / Demand Draft drawn in favour of: WORLD ISIONINDIA and mail to "World Vision India, 16. VOC Main Road,

E:odambakkam, Chennai-

600 024. India."

ECS:Authorize your bank to send the contribution from your accountregularly on your behalf.

Step 4:Enjoy the RelationshipChild Sponsorship transforms the life of your sponsored child, your

child's family and community... and, it transforms you.'Your sponsorship will provide a needy child, life's essentials like

(:ducation, safe drinking water, basic healthcare. food and immunizationagainst killer diseases.

'Together we can build a nation free of poverty and give India's children a

better future. You'll have the satisfaction of making a difference in manyl ~ e c i o u slives.You will also receive tax exemption under Sec 80G of Income Tax Act.

B) Arya Samaj Gandhidham Charitable Trust

Arya Samaj Gandhidham Charitable trust situated in Kutch-Gujarat. Theorganization is involved in Education, Health, and relief work and communitydevelopment. Their fimdraising material on Child Sponsorship gives details ofchild sponsorship program.

Sponsor Child - Get Back Their Childhood

The historical earthquake of 2001 has left a permanent destructive mark onKutch-Gujarat. The Social, Economical and Emotional wounds have still nothealed. The worst to suffer have been the children as they have lost everythingincluding their most precious treasure-Piuents.Arya Samaj Gandhidham took initiative to take care of the kids who lost their

parents. On the 2 acre land provided by Kandla Port Trust we have establishedJeevan Prabhat - A child charity. The then Prime Minister Shri Atal BihariVajpayee donated Rs. 56 Lacs from the Prime Ministers National Relief Fundfor I he construction of the Girls' wing. India Development Relief Fund-United - Statesof America have graciously donated Rs; 80 Lacs for theBoys w ing. We have taken every care to make the complex earthquake proofas per the International standards. We are providing Boarding, Loadging,

Education, Games and other all possible assistance to 162 children of whom87are boys and 75 are girls. We need your help for this great humanitariancause and request you to please sponsor a child.


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Let's Bring The smile by Sponsor a Child (The children of Jeevan Prabhatwho want your love and affection, please sponsor a child). Whenever you visitIndia please pay visit to Jeevan Prabhat and share your Love Affection with

the children. Can you please spare some money a day to sponsor a child and

thus make the lives of these children? You can sponsor a child with 160 USfor one year. This includes all the basic requirements like good Nutritious food

with milk, Fruits, butter, ghee and other nutritional supplements, clothes,

education, medical ct

It is our humble I cc luc .4~ you all noble persons to contribute this nominalamount for one child cach year for the child's better care and get thesatisfaction of making some child's life.

Alternatively we also request you to donate 50 USDI Rs. 2000 for one time

meal to the children on your auspicious occasions and thereby share your

happiness with them. We now request you to please help us in this endeavorby sponsoring one child and also by contributing for one time meal to the

children. Please select the childlchildren from the children's profile section ofour web site www.aryagan.org to sponsor a child.

Please draw your cheques/DD in favour of Arya Samaj GandhidhamCharitable Trust"

All donations are exempt from Income-tax under section80G of the Income-tax act. We once again request you to sponsor a child and thereby give yourAhuti in this HumanityHavan which we have started.C. ACTS

Acts a Charitable Trust registered under Karnataka Society's Registration Actis involved in numerous projects working particularly among the poor anddowntrodden. Their publicity material is worth noting.

ACTS collaborates with various groups in a variety of educational andenvironmental projects

PEAS

PEAS, the Programme forEnvironmentalAwarenessin Schools is anational network of schools committed to environmental change in ourcountry. Operating in Bangalore, Baroda, Hyderabad, Mumbai, Delhi,Kolkata, Shillong and Vihakapatnam PEAS is bringing together childrenin a variety of education oriented activities aimed at integratingenvironmental values into education and l i f .Hundreds of schools areenrolled in some of its activities which include...

Partnering with the Indian Council for Plastics and Environment in aunique study and evaluation of actions and attitudes of school children

towards waste Delhi.

Fund Raising

Cosponsored a national conference with Forest Department,

Government of Meghalaya


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Resource Mobilisation ACTS In.~titute,started in 1979 in Bangalore, was the first experiment inintegrateadlearning programs. Rural cr&ches,primary schools and regularsecondary schools are a major part of ACTS wide ranged educational

activities, Incorporating the principles of integrated learning and multiple

inter'lige irces,the primary schools give children an opportunit y to exploretheir God-given gij.. within an atmosphere where learning is encouraged inapp~opri~otesettings. Two such schools are being established in theNagapatiinam region and others already functioning.

ACTS also runs regular formal schools affiliated to CBSE and ICSE.

Ecological Engineering

AC;TSpartnerswith an international network of environmental scientistswho hav'ebeen engaged in research and development of organicagrrculture,water and sanitation projects for the poor. Waste water recovery

for .rmal,lscale organic agricultural projects for fruit, vegetable andmedicintzlplant production, ecological sanitation system, composting,biogas a,ndsolar energy options, and other projects are being implementedall over the world.

Eco..technology parks are being designed in Kolkata and tsunami hitNagapattinam and available for students to research into variousecok9gicalsolutions to resource utilization.

University and University Partnerships

ACTS has strong national and international links with universities and hasinitiated appropriate programmes to influence individual as well asconzmuirity change.

parznered with Indira GandhiNational Open University in formulatinga Ct rt@cateprogram in Health and Environmentcoll~aboratedwith Kalyani University, West Bengal in designing a PGDin E'nvironmentalManagementhas vital links with ManipalITEducation for IT degreesdesrgned a MBA for Non-profit management for the InternationalCouncil for Higher Educationlaurrched ACTS College affiliated to Bangalore University.is setting up a private university for professional education aud buildingstrategic links with other educational institutions as well as business


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\

Appendix Fund Raising

.

ILLUSTRATIONS OF SOME SUCCESSFULINCOME GENERATORS

CHILD RELIEF AND YOU

(Income Generation by sellingGreeting cards)

Child Relief and You (CRY) wasstarted by Mr.Rippan Kumar aflight purser and six of his friends.They raise a sum of Rs 50andregistered a charitable trust in theyear 1979 to work among theunderprivileged children in Bombay.

Rippan Kapur, the airline purser who founded CRY, was an ordinary persondriven by an extraordinary dream - the dream that no Indian child would be

deprived of rights as basic as survival, participation, protection and

development.

Like all of us, Rippan got upset to see the disparities that exist betweenprivileged and underprivileged children. He hated to see children begging and

working as servants. Unlike most of us, though, he did something about it. In

his case, the action started young.

He joined his school's social service club and read to the blind, visited

children in hospitals, held reading and writing classes for street children, and

started a free dispensary at a slum the Club adopted. To raise funds for these

activities, the Club sold milk. It even won a shield for the best Interact club.

These qualities of resourcefulness and

determination were to come in handy whenRippan and 6 of his friends started CRY with Rs.501 around Rippan s mother's dining table. Thatwas 28 years ago, in 1979. They felt that

something needed to be done to improve the situation of the underprivileged

Indian child.

Uncharacteristically, given their backgrounds arid motivations, they chose not

to found a grassroots-level implementing organisation working directly with

and for underprivileged children. They opted instead to make CRY a link

between the millions of Indians who could provide resources and thousands of

dedicated people and organisations at the grassroots-level who are struggling

to function for lack of them.

This link or enabling position has determined CRY S strategic choices atevery juncture - from the fundhising methods it employs, to the nature of itsrelationship with the NGOs it partners.


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Resource Mobilisation All through the early, difficult years, it was Rippan's passion and convictionthit droveCRY. He was finnly convinced that each of us can, in our ownsniall way, be agents of change, and when enough of us are moved to this, theimpact is a lasting change for the better. All he asked of people was that theyhelp CRY by doing what they were good at. As he put it, "What I can do, 1must do."Rippan.died in 1994, at 40. CRY continues to grow.A:s part of their fund raising efforts, they started printing and selling greetingcards in the year 1980. In the year 2005 CRY achieved sales revenue of Rs.41lalcs. Their total fund raising efforts surpassed 25 crores in the year 2005.In almost three decades, CRY has enabled more than 2500 communities across

18 statlcs in India to work towards addressing the root causes of issues likedepriviition, adult unemployment, exploitation and abuse - that constrain therights of children.

By mobilising these communities CRY along dith its NO0 partners (morethan 500) have ensured over 1,500,000 children across India withopportunities they could not dream of. None of these micro-miracles wouldhiivebeen possible without the active involvement and support CRYe:cperienced from more than 150,000 individuals like you and organizations inIndia and overseas.As part of their fund raising efforts, they started printing and selling greeting

cilrds in the year 1980. In the year 2005 CRY achieved sales revenue of Rs.41lacs.Their toul fund raising efforts surpassed 25 crores in the year 2005.Bl A.CTSINSTITUTE OF SUSTAINABLE DEVELOPMENT

ACTS Integrated Solid Waste Management Program

Income Generation from Garbage

ACTS is an NGO founded by Dr.KenGnanakan a noted educationist, issituated at Bangalore, involved in

various developmental, environhental,health and educational programs in

India from the last two decades. They

have a strong team of well qualified

engineers and researchers with allrequired facilities to carry out their

projects and research activities. They- are also associated with various

universities and Government agencies

for different projects.

IJnde r the Environmental division,they are now working on a solid waste

,as a part of this program, they have. I


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composting facilities and biogas plants to take care of the organic wastes. The

wastes collected separately from source are stocked in respective containers1

plastic bags in the vehicle. The recyclable wastes like plastics, metals, glass

etc, are sold to the scrap dealers. The organic material is taken for various

processing methods at their campus, and the non recyclable materials are

stocked in separate areas for disposal in Bangalore Corporation landfills.

Fund Raising

As a part of their Ecosan project, they had successfully tried feeding the.biogas plant with human fecal matter mixed with 25% of cow dung. they are

loading the plant with about 250 liters of food wastes per day and are getting

much more biogas more than that is required for all their cooking activities in

their canteen whichserves about 50 people daily. Since they are gettingsurplus quantity of gas and also waste food material (about 1000 liters per day,

of which almost 750 liters are used in piggery), they are implementing a 12KW biogas based electricity generator, with which they expect to meet 50% of

their campus electricity requirement.

Revenuegeneratio*

fromISWM

programduridg 200647

Total quantity of waste collected 15 m3 I day

(One truck load in TATA 706 vehicle)

Investments in Garbage truck, Biogas plant, Biogas generator..Rs,11,00,000/-

Rs.in lacs)Total revenue generated as collection fees 2.05

Savings from using Biogas in the canteen .72

instead of LPG

Average amount obtained from selling the recyclables 1.20(Variable)

Revenue expected from compost 84(About 2 T /month@ Rs 3 51 Kg)Total revenue collected 4.81

Savings expected from electricity generation Rs.25,000 pm

Documents

Unit-12 Fund Raising