Institutional Funding in tough times
A practitioner’s guide
Lysa Ralph, Head of High Value Giving, British Red Cross
Phili...
Session overview
>
>
>
>
>
>
>
>
>

Clarification and definition
Outlook for general fundraising
Institutional donor trend...
Point of clarification…

Money is not a dirty word!!
Fundraising, funding co-ordination,
resource mobilisation…
…essential...
Definition of Institutional Funding
Funding from governmental donors plus those whose assessment
methodology / priorities ...
Outlook for general fundraising
> Supplier capacity
> Increased competition

> Demands for donor engagement
> Social media...
Trends – Institutional income
State Funding of Voluntary Sector (£bn)
14

£ bn

13

12.8

12

12.8

11.9

11.9

11.8

Publ...
Trends – IF features
> Shift away from grants to contracts:
> 2001 grants worth £4.6 billion, contracts £3.8 billion
> By ...
Donor trends / savvy INGO’s
> Decentralised operations / decision making
> Preference to reduce admin costs / deal with co...
Return on investment, success rates
> High return on investment: IoF Fundraising Index
2012 - £16:1
> BRCS success rates:
...
INGO’s ranked by institutional income (2012)
Rank

Total income

Institutional funding

1

Oxfam

367.90

162.10

2

Save ...
Total income and IF income, 15 INGO’s 2008-12
1800

1,694.56

Income (£millions)

1600
1400
1200

1,544.79
1299.776

1,544...
IF income of charities (2008 - 2012)
200.00

180.00

160.00

Income (£millions)

140.00

120.00

2008
2009

100.00

2010
2...
Institutional funding as a proportion of total income
400.00

350.00

Total income (£millions)

300.00

250.00

Other inco...
Tree Aid - Key Principles
Key Principles for Institutional
Fundraising
Building Capacity to Attract Funding
1.
2.
3.
4.
5.

Building strategic relationships
Understanding the "market"
Building ...
1. Building strategic relationships
Strategic Partners

TREE AID

•Technical
•Technical insights
knowledge
•Field knowledge
•Policy insight and
•Impact on the...
2. Understanding the market
3. Building credibility
4. Increasing visibility & evidence of
impact
5. Resources / tools to pursue funding
> Fundraisers = highly valuable assets = not cheap
> Interpretation – EC, DFID, Lot...
Last thoughts
> Match - European Commission: co-financing – from
15% International to 50% domestic - can include
cash and ...
Useful sites
EuropeAid / Search – ‘calls for proposals’
http://ec.europa.eu/europeaid/index_en.htm

Local, regional, natio...
Questions

Philip Goodwin

Lysa Ralph

Philip.goodwin@treeaid.org.uk

lralph@redcross.org.uk

0117 9166 442

0207 877 7094
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Lysa Ralph and Philip Goodwin: Institutional Funding

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  • Both introduce ourselves…..
  • Lysato cover slides – Phil answering a consortia question when we get to it -increase in PBR Q. Helen / BBC -  How medium sized organisations, with v limited / no unrestricted funding can work within the new DFID (and probably soon to be others) preference for a payment by results mechanism.  Any thoughts from you on what payment by results will look like in practice, and to what extent (if at all) it is likely to move to being linked to outcome level results as opposed to output level results would be useful to know.Lysa - WASH –rejected a full outcomes PBR as it would be too difficult to design /; NGO’s not take risk and wanted delivery quicker – all experiments for them-polarisation of the sector. Large INGO’s on the one side with ability to act as Int’l org & to pre finance work & the smaller INGO’s who are forming consortiaQ. Julie Hurst/ practicalaction    Strategies for building consortia A. Phil - BRACED Q. Helen / BBC Q.  How medium sized organisations with no unrestricted funding can compete against the big players when the large orgs can use their unrestricted income to make their budgets more competitive and more value for money?  Smaller orgs need to recoup a high proportion of running costs from project budgets and this can make budgets look admin heavy, yet it is the only way to cover actual costs.  Any tips on how this can be done in an innovative way would be most helpful.And Q. Robin Stafford. How can the large institutions be persuaded to adopt more consistent, transparent and realistic approaches to full cost recovery so that NGO’s can reduce or eliminate their dependency on subsidies from increasingly scarce unrestricted funding?Phil - no clever answer about full cost recovery except ensuring you include all eligible costs, have a standard fee for situs where you can charge it that is FCR. Otherwise it’s about really effective planning & going into that a bit later in terms of portfolio planning-evidencing outcomes & impact / language may differ but-hugely competitive / new landscape with private sector alongside us
  • LysaResearch carried out by BRCS, October 2013, reviewed by annual accounts
  • LysaBRCS growth was in International Institutional, UK - including contracts was flat
  • LysaSave will overtake Oxfam this year with Merlin merger
  • LysaHence why it is a good idea not to become over reliant on govt income – Merlin
  • Lysa Ralph and Philip Goodwin: Institutional Funding

    1. 1. Institutional Funding in tough times A practitioner’s guide Lysa Ralph, Head of High Value Giving, British Red Cross Philip Goodwin, Chief Executive, Tree Aid
    2. 2. Session overview > > > > > > > > > Clarification and definition Outlook for general fundraising Institutional donor trends / features Savvy INGO’s – commonalities & success rates INGO growth 2008-12 Tree Aid’s approach Last thoughts Useful sites / resources Questions
    3. 3. Point of clarification… Money is not a dirty word!! Fundraising, funding co-ordination, resource mobilisation… …essentials and disciplines are the same
    4. 4. Definition of Institutional Funding Funding from governmental donors plus those whose assessment methodology / priorities share the characteristics and requirements i.e. project cycle management - of governmental donors:  UK government streams – e.g. DFID, Island donors eg Jersey Overseas Aid, Scottish Government International Funds  European Commission – ECHO / DEVCO  Other countries government funding streams e.g. USAID  ‘Foundations’ sharing those behaviours - Comic Relief, Big Lottery
    5. 5. Outlook for general fundraising > Supplier capacity > Increased competition > Demands for donor engagement > Social media creating closer relationships > Potential to flatline ??
    6. 6. Trends – Institutional income State Funding of Voluntary Sector (£bn) 14 £ bn 13 12.8 12 12.8 11.9 11.9 11.8 Public Funding of Voluntary Sector 11.3 11 10 2006 2007 2008 2009 2010 2011 > Between 2006-11, despite the economic outlook, increase in state funding to the voluntary sector of 4%, plus ringfenced Int’l Aid > EC budget reduced for first time, down 1.5% for 2014-2020 €960bn, from €975 bn 2007-2013 > DFID’s ringfencing / commitment to 0.7 GDP may not last beyond 2015
    7. 7. Trends – IF features > Shift away from grants to contracts: > 2001 grants worth £4.6 billion, contracts £3.8 billion > By 2008, grants worth £3.7 billion, £9.1 billion worth of contracts > Full cost recovery principles widely accepted, set margins > Increase in ‘payment by results’; Social Return on Investment / Social Impact Bonds > Polarisation of the sector, consortia development > Need to evidence outcomes / impact > Increase in competition > Introduction of private sector, new landscape
    8. 8. Donor trends / savvy INGO’s > Decentralised operations / decision making > Preference to reduce admin costs / deal with consortia lead / Int’l orgs / input to central funds eg Global Fund > Assessment via programme cycle management methodology: ‘theory of change’ > Ownership by local actors > Shared policy environment / MDG’s etc > Value for Money / having policies around this
    9. 9. Return on investment, success rates > High return on investment: IoF Fundraising Index 2012 - £16:1 > BRCS success rates: – EC 1:5 rising to 1:3 where closest to core mission = ECHO. – Lottery 85% against a sector average of 15% > Tree Aid: 1:3 success rate by number of submissions, 1:4 by project value
    10. 10. INGO’s ranked by institutional income (2012) Rank Total income Institutional funding 1 Oxfam 367.90 162.10 2 Save the Children 283.75 150.66 3 Merlin 60.86 54.88 4 CARE International 43.68 31.98 5 Christian Aid 95.45 27.44 6 British Red Cross 200.10 21.40 7 World Vision 68.79 21.06 8 Plan 54.25 20.06 9 Islamic Relief 100.37 19.47 10 Tearfund 60.05 18.56 11 Action Aid 59.45 15.33 12 CAFOD 48.80 11.11 13 Concern Worldwide 14.62 6.79 14 UNICEF 62.33 3.99 15 MSF 23.89 0.00
    11. 11. Total income and IF income, 15 INGO’s 2008-12 1800 1,694.56 Income (£millions) 1600 1400 1200 1,544.79 1299.776 1,544.28 1,337.97 1000 Total income 800 IF income 600 400 409.25 425.57 535.47 638.18 564.84 200 0 2008 2009 2010 2011 2012 > Many grew their Institutional income quite dramatically, avg +38% - British Red Cross, + 570% 2008-11 - Tree Aid, £195k to £1.1m and growing, doubled since 2011
    12. 12. IF income of charities (2008 - 2012) 200.00 180.00 160.00 Income (£millions) 140.00 120.00 2008 2009 100.00 2010 2011 80.00 2012 60.00 40.00 20.00 0.00 British Red Cross CARE International Christian Aid Merlin Oxfam Plan Save the Children World Vision
    13. 13. Institutional funding as a proportion of total income 400.00 350.00 Total income (£millions) 300.00 250.00 Other income 200.00 Inst. Funding 150.00 100.00 50.00 0.00 British Red Cross CARE Christian Aid International Merlin Oxfam Plan Save the Children World Vision
    14. 14. Tree Aid - Key Principles
    15. 15. Key Principles for Institutional Fundraising
    16. 16. Building Capacity to Attract Funding 1. 2. 3. 4. 5. Building strategic relationships Understanding the "market" Building credibility and track record Increasing visibility and evidence of impact Resources
    17. 17. 1. Building strategic relationships
    18. 18. Strategic Partners TREE AID •Technical •Technical insights knowledge •Field knowledge •Policy insight and •Impact on the influence ground •Intelligence on •Policy influence funding opportunities Influence •Networks Networks Scale Credibility IMPACT
    19. 19. 2. Understanding the market
    20. 20. 3. Building credibility
    21. 21. 4. Increasing visibility & evidence of impact
    22. 22. 5. Resources / tools to pursue funding > Fundraisers = highly valuable assets = not cheap > Interpretation – EC, DFID, Lottery – Experience: programme management, track record fundraising success, building / monitoring complex budgets – Knowledge : technical donor knowledge (<ECHO / DEVCO) – Skills: relationship building; communication; negotiation, financial, creativity, research, statistical analysis – Characteristics: resilience, patience and ….Zen! > Investment of staff time – In-house teams – How they are constructed – Use of external support
    23. 23. Last thoughts > Match - European Commission: co-financing – from 15% International to 50% domestic - can include cash and / or in kind match > Stewardship – Trusts approach to Inst Funding > Know your place / added value in your sphere > Be nimble, react to trends / corporate dfid wash > Understand risks / resources needed & investment / don’t just follow the money > Know your theory / story of change …can you hook them emotionally?
    24. 24. Useful sites EuropeAid / Search – ‘calls for proposals’ http://ec.europa.eu/europeaid/index_en.htm Local, regional, national and European sources http://www.governmentfunding.org.uk/default.aspx fundsforngos.org http://www.inprogressweb.com/ http://www.trustfunding.org.uk/default.aspx http://www.biglotteryfund.org.uk/funding
    25. 25. Questions Philip Goodwin Lysa Ralph Philip.goodwin@treeaid.org.uk lralph@redcross.org.uk 0117 9166 442 0207 877 7094

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