Part 3 - Getting the Partners You Want

funding npos organisational development financial management
Monday, 14 August, 2006 - 15:12

Part 3 - Partners help organisations get perfect!

An organisation strives to reach perfection in three areas - its income, its expenses, and its impact. These three areas cover the universe of a successful NGO and summarise the executive director concerns. The three are interlocking, since each one requires the other two. Partners can help in each area and get selected for doing so.

Why the Organisation has three needs:

  • Organisational Development;
  • NPOs;
  • Funding.

Financial Management:

An organisation is founded for impact. The impact is different between organisations. One may want to organise street vendors and promote their rights. Another might want to give a “cover of prayer” and home-based care to children orphaned by AIDS. A third might want to advertise events and bring tourists to Durban.  Each of them wants to change the world in their own way, and their success is defined by their impact, and measured as the difference between how the world looked and felt and was – the baseline – when they started, and how it looks and feels and is now.

Impact costs money. The larger the impact, the larger the expenses. Staff, premises, materials, assets, projects, products and services, and also insurance, maintenance, sick-leave, holidays, benefits, auditing systems etc all add up.

An organisation is funded for impact because expenses takes having income. The larger the impact, the larger the expenses. The larger the expenses, the larger the income. Income comes from three types of sources: project income (from sales of goods and services), operational income (for designing and delivering projects) and strategic income (for wanting to have the same impact that the donor wants).

How partners help:

There are three types of partners, one for each need – funding, savings and delivery partners. Good organisations want to have some comfortable number of each.

  • Funding partners increase income by bringing in money;
  • Support partners lower expenses by saving costs on your organisation’s work;
  • Delivery partners increase impact by adding to your product and service mix so that more people benefit more.

Where to find them:

Natural partners are found all over development sector’s “food chain”.  In the figure below, the seven steps of the development sector are shown, the work that gets done and the names we give them. The theme of the food chain is that money x work = impact. Money comes from donors (taxpayers and shareholders and individuals) and is collected by intermediaries (Government, USAID, DFID, Starfish), who focus that money on programmes (Education, Health, Entrepreneurship). Those programmes select NPO’s because they design the projects that deliver the benefits that have an impact on beneficiaries. If all goes well, their appreciation shows as respect for the NPO’s and trust in donors.

Take a moment to place yourself in this development cycle. If you are an NGO, you are the dead centre. Your funding partners will come from people before you in the cycle, your delivery partners will come from people after you, and your support partners will be your peers. The exception is your beneficiaries, who may want to help at any point

An example.

The Royal Dutch Embassy supports the SA Red Cross with capacity building for home-based care CBO’s in Gauteng etc. The Dutch taxpayer is the donor, the Embassy is the intermediary, its programmes are “Health” and “Institutional Development”, and they intersected in picking the SARCS to design a capacity-building project that delivered products and services (training, food, care kits etc.) that carried the benefits to the 40 beneficiary CBO’s.

  • Adding new donors to support this project gives SARCS more income. Funding partners supply money, so organisations on the left of the NPO are the source of funding partners;
  • The NGO’s work of conducting research, hiring staff, getting facilities, designing projects, delivering benefits, selecting beneficiaries, tracking and reporting results – they all cost money. Support partners –your peers at the same place in the cycle - lower these costs, by doing the work pro bono or at a discount;
  • Adding new products and services to complete this project gives SARCS more impact. Delivery partners add impact, so organisations to the right of the NPO are the source of delivery partners.

A test:

  • AVO wants to help you and gives you volunteers, or Toyota sponsors your ambulance. How have they helped? Extra impact? No – no products and services. Extra income? No – no money. Reduced expenses? Yes – the volunteer(s) should save you on hiring their skills. AVO is a – support partner;
  • Investec wants to help you and gives you a grant. How have they helped? Extra impact? No – no products and services. Extra income? Yes – more money. Reduced expenses? No. Your expenses stay the same. Investec is a - funding partner;
  • Heartbeat wants to help you and brings the orphans that you feed into their care centres. How have they helped? Extra impact? Yes –new products and services. Extra income? No – no money. Reduced expenses? No. Your expenses stay the same. Heartbeat is a - delivery partner.

PS If you have to pay people to do something, they are suppliers or staff, but not partners, for that. If they charge half-price, they are partners for the half they don’t charge for. Partnerships involve making a sacrifice for some greater good.

Tips for Directors:

  • Be aware. If you know what income, savings and impact your organisation needs, you will find the partner;
  • Be humble. Opening your organisation to partners invites their suggestions. Open your ears – they may be angels in disguise;
  • Be straightforward. The relationship is based on usefulness. Partners must not only be useful, they must be useful enough, and not only useful enough, more useful than the alternatives;
  • Be kind. Asking for help gives people the chance to help. South Africans are amongst the warmest most generous people in the world. Help them to be happy in giving;
  • Be clear. Say what you need, how much you need, how much you need it, when you need it, what you need it for. Your clarity is their forward planning.
  • Be fair. People give to get. Ask what they want in return. If you can give it, do it. If you can’t, at least know upfront;
  • Be adventurous. People are multi-skilled, flexible, and resourceful. Ask people for different things – ask donors for support, ask supporters if their projects and services can help your project, ask beneficiaries to give back in all the ways they can;
  • Be respectful. Write up agreements with all three types of partners as service level agreements. Show you take them seriously and regard their help as important for success;
  • Be appreciative. Have a thanks day. Take photographs. Send mails. Drop a note. Make a call. Invite their family;
  • Be smart. The rewarding partnerships take effort. Get a volunteer (a support partner) to run the volunteers. Get an accounting firm (as a support partner) to audit your projects. Get them (as a delivery partner) to design your impact tracking system.

More from Errol Goetsch at errol@xe4.org or www.xe4.org

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