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Better funding models through & beyond the Covid-19 crises

- Better funding - Self-test: do you have the right funding? - Donor’s funding policies now - Practical steps to build a sustainable income stream.

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Better funding models through & beyond
the Covid-19 crises
Using the crises to put non-profits on a more
sustainable footing.
Christian Meyer zu Natrup
Managing Director
chris@mzninternational.com
Joseph Nelson
Consultant Finance & Funding
joseph@mzninternational.com
Talking points & Speakers
Better funding
Self-test: do you have the right
funding?
Donor’s funding policies now
Practical steps to build a
sustainable income stream.
Robustly funded
Robustly funded?
Funding Raised
(campaigns, crowdfunded, members, sponsorship)
This is a sample text.
Insert your desired text here.
This is a
sample text.
sample
text.
Unrestricted funding
(Hight net worth giving, e-campaign)
Inst. Donors
(USAID, EU, Gates, DANIDA, DFID)
Other
80%
16%
The problem
EU based NGO,
development & advocacy
mandate
Not enough funding overall
Siloed, static management
structure structured to
meet donor demands
Critical lack of unrestricted
funding
Robustly funded
Robustly funded?
The problem
EU based NGO, 7 countries,
development & advocacy
mandate, $15m annual
spend
Not enough funding
Siloed, static management
structure organized to
meet donor needs
Critical lack of unrestricted
funding
The Actions
Zero-based analysis of funding type & amount
needed for strategy realization (4 months)
• What type of funding do we really need?
• What amount of funding do we really need?
• What reach & scale do we really need?
• What overheads do we need to cover for that?
Funding projection where and by when to obtain
this funding and investments needed (1.5
months)
• How can we get the type and amount of funding
needed?
• What investments do we need to make?
• What time-scale is realistic?
Structural changes & investments committed (6
months)
75% of new funding mix changes attained after
18 months, scale increase is on track
Robustly funded
Robustly funded
Funding Raised
(campaigns, crowdfunded, members, sponsorship)
This is a sample text.
Insert your desired text here.
This is a
sample text.
sample
text.
Unrestricted funding
(campaign, membership, sponsorship, etc)
Income earned
(charity business, contract services, etc)
Inst. Donors
Other
“We are shock-proofing our ability to
generate income.”
S. Weber, President
Robustly funded
Funding Raised
(campaigns, crowdfunded, members, sponsorship)
This is a sample text.
Insert your desired text here.
This is a
sample text.
sample
text.
Unrestricted funding
(campaign, membership, sponsorship, etc)
Income earned
(charity business, contract services, etc)
Inst. Donors
Other
Flexibilit
y of use
Surplus
over
costs
Cost of
acquisitio
n
Cost of
manageme
nt
Repeat &
scale
Funding attributes
We can change the funding we have.
What funding suits my mandate & business
Government
GRANTS
Service
CONTRACTS
Income
Generatin
g
BUSINESS
Fundraising
CAMPAIGNS
Inter-
govermental
GRANTS
Foundation FUNDING
Flexibility of fund
usage
Cost-Recovery &
Profitability
Level of Effort –
Securing funding
Level of Effort –
Managing funding
Longevity &
Sustainability
Recurring &
Repeatability
Self test: Do you have the right funding?
Amount: Are all key activities &
investments you need over the time of
your strategy (ideally beyond) sufficiently
funded?
Time: Is the duration of your
funding/capital the same as the time you
need the funding for?
Type: Is the range of key activities &
investments needed permitted use of the
funding/capital projected?
COVID-19 Funding opportunities did not change (a lot)
Health
55%
Inclusive
Development
19%
other
26%
WHAT
Bi-lateral
Government
Notices
22%
World-Bank
18%
Private Sector
15%
Foundations
13%
EU
11%
US
8%
other
13%
WHO
East Asia &
Pacific
16%
West Africa
14%
South Asia
10%
North
Africa
Middle
East
10%
Other
50%
WHERE
Source: UK Dev-tracker, IATA and Word Bank, analysis by MzN International
SO WHAT FUNDING MODEL IS BEST FOR YOU?
Single reliance on small number of donors and type
of funding.
Is an NGO funded almost exclusively by one
governmental donor still an NGO?
Avoid the chase:
Search Grant – Run Grant – Panic – REPEAT
How NOT do fund your mission
Top line looks at funders during & beyond Covid-19
Institutional donors
Increase in Funding – 2700 New COVID Initiatives worldwide, from health to economic
inclusion
Flexibility and Re-assignment – 20-40% of existing Funding Can Be Repurposed
Overall we recommend to widen the pipeline as the recession will cut into the development
budgets of donors differently.
Philanthropic value propositions
Over the past decade philanthropy has become more institutionalised and therefore funds
have become easier to access.
Going forward philanthropic partners are increasingly going to be part of a diversified
funding mix.
Top line looks at funders during & beyond Covid-19
Fundraising strategies
Private donations have declined since the start of the COVID 19 crisis. Roughly 80% of
charities* have suffered a decline of varying degrees whilst 20% (predominantly health
focused) have seen a significant increase.
Increasing focus on social media and personal calls for tailored approach during social
distancing.
Income generating Business, incl Service Contracts
Procurement Contracts have rapidly increased – NGOs with distribution networks have
opportunities to facilitate the supply chains
Increasingly we are seeing funding channeled through service contracts not grants, this is
likely to be accelerated by the crisis. Accessing commercial contracts whilst seems
daunting at first requires only limited change to operations
* Source: CCS Fundraising Report
1. Diversification of funding and revenue streams
2. Set minimum funding level
3. Define minimum management fee to be
recovered or gross margin
4. Set the parameters and stick to them!
5. Have a system to find and assess opportunities
10 Practical Steps in building a stable income stream
6. Match the funding streams you choose to your
mission, not the other way around
7. Be prepared to participate flexibly - from lead to sub
to associate all options can add value
8. Find an EU partner now
9. Add surge capacity to your proposal writing team
10.Understand income development as a key part of
business as usual not something to be done ad hoc
10 Practical Steps in building a stable income stream
STAY IN TOUCH!
CHRISTIAN MEYER ZU NATRUP
chris@mzninternational.com
Joseph Nelson
jospeh@mzninternational.com
SARAH FERNANDES
sarah@mzninternational.com
Insight blog & free events every month under
www.mzninternational.com
WEBINAR:
The future NGO is agile
April 21st
Get insight about the NGO of the
future here.
1. Non-profit mergers (Jan 21)
2. Agile NGO (Mar 21)
3. Leadership (Mar 21)

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Better funding models through & beyond the Covid-19 crises

  • 1. Better funding models through & beyond the Covid-19 crises Using the crises to put non-profits on a more sustainable footing.
  • 2. Christian Meyer zu Natrup Managing Director chris@mzninternational.com Joseph Nelson Consultant Finance & Funding joseph@mzninternational.com Talking points & Speakers Better funding Self-test: do you have the right funding? Donor’s funding policies now Practical steps to build a sustainable income stream.
  • 3. Robustly funded Robustly funded? Funding Raised (campaigns, crowdfunded, members, sponsorship) This is a sample text. Insert your desired text here. This is a sample text. sample text. Unrestricted funding (Hight net worth giving, e-campaign) Inst. Donors (USAID, EU, Gates, DANIDA, DFID) Other 80% 16% The problem EU based NGO, development & advocacy mandate Not enough funding overall Siloed, static management structure structured to meet donor demands Critical lack of unrestricted funding
  • 4. Robustly funded Robustly funded? The problem EU based NGO, 7 countries, development & advocacy mandate, $15m annual spend Not enough funding Siloed, static management structure organized to meet donor needs Critical lack of unrestricted funding The Actions Zero-based analysis of funding type & amount needed for strategy realization (4 months) • What type of funding do we really need? • What amount of funding do we really need? • What reach & scale do we really need? • What overheads do we need to cover for that? Funding projection where and by when to obtain this funding and investments needed (1.5 months) • How can we get the type and amount of funding needed? • What investments do we need to make? • What time-scale is realistic? Structural changes & investments committed (6 months) 75% of new funding mix changes attained after 18 months, scale increase is on track
  • 5. Robustly funded Robustly funded Funding Raised (campaigns, crowdfunded, members, sponsorship) This is a sample text. Insert your desired text here. This is a sample text. sample text. Unrestricted funding (campaign, membership, sponsorship, etc) Income earned (charity business, contract services, etc) Inst. Donors Other “We are shock-proofing our ability to generate income.” S. Weber, President
  • 6. Robustly funded Funding Raised (campaigns, crowdfunded, members, sponsorship) This is a sample text. Insert your desired text here. This is a sample text. sample text. Unrestricted funding (campaign, membership, sponsorship, etc) Income earned (charity business, contract services, etc) Inst. Donors Other Flexibilit y of use Surplus over costs Cost of acquisitio n Cost of manageme nt Repeat & scale Funding attributes We can change the funding we have.
  • 7. What funding suits my mandate & business Government GRANTS Service CONTRACTS Income Generatin g BUSINESS Fundraising CAMPAIGNS Inter- govermental GRANTS Foundation FUNDING Flexibility of fund usage Cost-Recovery & Profitability Level of Effort – Securing funding Level of Effort – Managing funding Longevity & Sustainability Recurring & Repeatability
  • 8. Self test: Do you have the right funding? Amount: Are all key activities & investments you need over the time of your strategy (ideally beyond) sufficiently funded? Time: Is the duration of your funding/capital the same as the time you need the funding for? Type: Is the range of key activities & investments needed permitted use of the funding/capital projected?
  • 9. COVID-19 Funding opportunities did not change (a lot) Health 55% Inclusive Development 19% other 26% WHAT Bi-lateral Government Notices 22% World-Bank 18% Private Sector 15% Foundations 13% EU 11% US 8% other 13% WHO East Asia & Pacific 16% West Africa 14% South Asia 10% North Africa Middle East 10% Other 50% WHERE Source: UK Dev-tracker, IATA and Word Bank, analysis by MzN International SO WHAT FUNDING MODEL IS BEST FOR YOU?
  • 10. Single reliance on small number of donors and type of funding. Is an NGO funded almost exclusively by one governmental donor still an NGO? Avoid the chase: Search Grant – Run Grant – Panic – REPEAT How NOT do fund your mission
  • 11. Top line looks at funders during & beyond Covid-19 Institutional donors Increase in Funding – 2700 New COVID Initiatives worldwide, from health to economic inclusion Flexibility and Re-assignment – 20-40% of existing Funding Can Be Repurposed Overall we recommend to widen the pipeline as the recession will cut into the development budgets of donors differently. Philanthropic value propositions Over the past decade philanthropy has become more institutionalised and therefore funds have become easier to access. Going forward philanthropic partners are increasingly going to be part of a diversified funding mix.
  • 12. Top line looks at funders during & beyond Covid-19 Fundraising strategies Private donations have declined since the start of the COVID 19 crisis. Roughly 80% of charities* have suffered a decline of varying degrees whilst 20% (predominantly health focused) have seen a significant increase. Increasing focus on social media and personal calls for tailored approach during social distancing. Income generating Business, incl Service Contracts Procurement Contracts have rapidly increased – NGOs with distribution networks have opportunities to facilitate the supply chains Increasingly we are seeing funding channeled through service contracts not grants, this is likely to be accelerated by the crisis. Accessing commercial contracts whilst seems daunting at first requires only limited change to operations * Source: CCS Fundraising Report
  • 13. 1. Diversification of funding and revenue streams 2. Set minimum funding level 3. Define minimum management fee to be recovered or gross margin 4. Set the parameters and stick to them! 5. Have a system to find and assess opportunities 10 Practical Steps in building a stable income stream
  • 14. 6. Match the funding streams you choose to your mission, not the other way around 7. Be prepared to participate flexibly - from lead to sub to associate all options can add value 8. Find an EU partner now 9. Add surge capacity to your proposal writing team 10.Understand income development as a key part of business as usual not something to be done ad hoc 10 Practical Steps in building a stable income stream
  • 15. STAY IN TOUCH! CHRISTIAN MEYER ZU NATRUP chris@mzninternational.com Joseph Nelson jospeh@mzninternational.com SARAH FERNANDES sarah@mzninternational.com Insight blog & free events every month under www.mzninternational.com WEBINAR: The future NGO is agile April 21st Get insight about the NGO of the future here. 1. Non-profit mergers (Jan 21) 2. Agile NGO (Mar 21) 3. Leadership (Mar 21)