Funding strategy – getting it right

Good impact needs good funding.

Without the right funding, there is simply no way that an NGO can put their values into action. Therefore, a good funding strategy is the bridge between our values and ideas, and to carry out the action needed to turn them into reality.

Unfortunately, too many non-profits are stuck in the cycle of limited funds, and are therefore unable to innovate, invest, or respond to new challenges. This is a known and widely acknowledged problem in many NGO meetings. Yet, leaders often chase one grant after another and rarely have the time or mental space to think what a sustainable funding strategy would look like.

The pitfalls of sustainable funding

Very basically, such a strategy’s job is to deliver clarity on two points:

1. Financial sustainability: A robust funding strategy ensures your organisation can maintain and grow its operations over time, making it less vulnerable to financial instability occuring from the current environment.
2. Effective fundraising: With a clear funding strategy, your fundraising efforts become more targeted and efficient, helping you secure the necessary resources to achieve your mission from a healthy mix of sources

In our upcoming webinar, which is itself an extract from our funding research and work with donors, philanthropists and impact investors since 2011, we will explore and look at a handful of past and current MzN partners and their efforts to update their funding strategy.

We will look at what pitfalls to avoid and what success factors to repeat. We will dive into different cases, bringing the lessons learned to life and provide some context and a warning message around the key steps required to develop a funding strategy, which we’ve set out below. We will also provide ample time for questions, which you can pre-submit here. We look forward to having you there.

Key steps to develop a funding strategy

Note that these steps assume that your NGO has a working and well defined business model. Of course the sequencing and prioritisation of these steps must be tailored to your organisation and its mission. There might be other steps necessary, depending on your mission, mandate, funding ambition and landscape.

By and large, however, these steps have guided us in designing successful funding strategies as part of our funding partnerships with over 150 NGOs since 2011, so are worth strong consideration:

1. Analyse current funding. Evaluate the strengths and weaknesses of your current funding sources and capabilities.
2. Learn from peers. Investigate the funding strategies of peer organisations to gather insights.
3. Develop funding options. Identify and assess different funding models that align with your organisational needs.
4. Evaluate revenue potential. Determine how much revenue each funding model could realistically generate.
5. Assess costs. Consider the investments needed for each funding model, including staff and infrastructure.
6. Select funding models. Choose the most promising funding models to pursue.
7. Plan implementation. Develop a detailed plan to implement the selected funding models.
8. Build capacity. Ensure your organisation has the necessary resources and capabilities to support the new funding strategies.
9. Monitor progress. Regularly review the performance of the implemented funding models and make adjustments as needed.
10. Adapt and evolve. Stay flexible and be ready to adapt your funding strategy in response to changes in the funding landscape and organisational needs

We look forward to seeing you all on 18 July for our webinar, where we will go into more detail in how to perfect your funding strategy.

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