Designing CSI exit strategies - Serious Social Investing 2011

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Presented during Tshikululu Social Investments' second annual Serious Social Investing workshop, which took place on 17 and 18 March 2011.

Claire Hugo (Client relationship manager: Tshikululu) unpacks the whys, whens and hows of designing exit strategies for grantmakers, focusing on the importance of a transparent, balanced relationship with NGO partners.

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Designing CSI exit strategies - Serious Social Investing 2011

  1. 1. Affairs are easier of entrance than of exit; and it is but common prudenceto see our way out before we venture in. ~ Aesop
  2. 2. Grantmakers saying goodbye – designing exit strategies Claire Hugo 17 March 2011
  3. 3. Grantmaking process simplified… Plan: EXIT Keep coming back to EXIT STRATEGYDevelop Call for Award Monitor Measure Refine …strategy applications grants progress impact strategy
  4. 4. Underlying principles Complex and deep-rooted challenges Always be a disappointment Certain element of reputational risk Defining sustainability
  5. 5. Unpacking the “WHY” Why fund an organisation for more than one year? Advantages DisadvantagesPromotes sustainability Dependency and sustainabilityPartnerships Limited flexibility to engage in new funding relationshipsMonitoring, evaluation and Financial obligation of the donorreportingOrganic development and theemergence of innovative models
  6. 6. Unpacking the “WHY” Why would you want to exit? Changes in the market Declining assets Changes in thinking Changes in composition of leadership Changes in project officer Desire to keep strategy fresh and flexible
  7. 7. Unpacking the “WHY” Why do we want to plan for exiting? Ensure clarity Healthy discipline More specific around capacity-building efforts and needs Closer working relationship between the donor and grantee Cohesion between funders
  8. 8. Unpacking the “WHAT” What makes up an effective exit strategy? Good business planning A passionate champion Continuity of staff and volunteers An organisation that has several sources of funding Involvement of potential continuation funders at an early stage Agreed outcomes Transparent ongoing communication Realistic time frames Realistic objectives
  9. 9. Grantmaking process simplified… Plan: Plan: EXIT EXIT Keep coming back to EXIT STRATEGYDevelop …strategy  What are you hoping to achieve?  What impact are you trying to make?  What resources do you have available to you?  Do you consult organisations working in the sector in developing your strategy?
  10. 10. Grantmaking process simplified… Keep coming back to EXIT STRATEGY Call for … applications Have you clearly stated what you are trying to achieve in your application forms? Have you stated the time frames you are working on?
  11. 11. Grantmaking process simplified… Keep coming back to EXIT STRATEGY Award grants Do you ask organisations to sign a contract? Do you fund programme and operational costs?
  12. 12. Grantmaking process simplified… Keep coming back to EXIT STRATEGY Monitor … progress Do you frequently meet with partner organisations to monitor progress, assess challenges and acknowledge success? Do you frequently assess progress with the targets laid out in the proposals and contracts (including due diligence)?
  13. 13. Grantmaking process simplified… Keep coming back to EXIT STRATEGY Measure … impact Are you frequently checking your impact against your targets? Are you mobilising resources to reach your targets e.g. leveraging funding, enhancing network opportunities, supporting advocacy, providing capacity- building?
  14. 14. Grantmaking process simplified… Keep coming back to EXIT STRATEGY Refine … strategy Are you asking for advice? Have you assisted in developing capacity in your partner organisations? Have you reached your targets?
  15. 15. There’s a trick to the Graceful Exit. Itbegins with the vision to recognise whena job, a life stage, a relationship is over – and to let go. It means leaving whats over without denying its value. ~ Ellen Goodman
  16. 16. For discussionYou are currently funding seven organisations throughout the country: support forbursaries for eight students in their undergraduate studies (through two bursaryservice providers), one residential facility for children with special needs, and fourHIV/Aids prevention programmes. Your available budget is R8 million, of whichyou have already committed R6 million to the operational costs of these projects.There has been a change in leadership within your organisation, and you need torefine your strategy to focus exclusively on HIV/Aids prevention programmes. Youhave one year to refine your strategy, and you are given permission to utilise theR2 million surplus to manage reputational risks.In groups, please define the following: Prepare a budget on how you will invest the R2 million. How will you communicate the change in strategy to your current partners?
  17. 17. Every exit is an entrance somewhere else. ~Tom Stoppard

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