Diversifying Funding Sources – The Ghana Example
As the donor landscape continues to change and funding decreases, KANAVA strives to assist organizations to determine how best to face this uncertain future by providing them with ways to think outside the box to address funding stream and cash flow issues. One of the primary ways for organizations to work towards the sustainability of the good work that they contribute to their communities is to diversify their funding sources.
KANAVA International works with local organizations in West Africa and Cambodia to address these challenges. There is much that organizations can do to expand beyond current revenue streams, which are often reliant upon donor funds. For example, organizations can capture non-dues revenue, as well as increase the efficient use of resources and funding – but this may require a shift in thinking. Whether the organization is for- or non-profit, diversification of funding/revenue is critical to enhancing its sustainability.
To many within the international development community, diversification of funding sources means finding new donor funding. But a 2004 Johns Hopkins study[i] of civil society organizations (CSOs) worldwide shows that over half of funding worldwide is actually -from fee-for-services.
In July, Carol Yee, KANAVA’s COO, travelled to Accra, Ghana to present at the Borderless Alliance Executive and National Committees Retreat on Promoting Financial Sustainability by increasing dues payments, diversifying funding sources, and instituting fee-for-services activities. The retreat was a follow-on to Carol’s assignment in March when she worked with the Executive Secretariat on non-dues revenue. This visit was part of a broader discussion on diversifying funding sources for Borderless as it confronts sustainability within the context of organizational growth. The objective of the retreat was to discuss Borderless’ sustainability strategy and gain buy-in from the Executive and National Committees to move it forward, particularly regarding the fee-for-services proposal.
Borderless’ mission is to increase trade across the region by working towards the elimination of all non-tariff barriers to trade. It envisions a West Africa where a truck can move goods across the region quickly, efficiently and cheaply, whether from Abidjan to Lagos or from Cotonou to Timbuktu. More efficient transport means more trade, which in turn means stronger economic growth, higher profits for companies, greater income for national governments, increased investment, and more jobs. What if a truck carrying rice from a port in Ghana could arrive in Burkina Faso in three days instead of nine? What if people crossing from Togo into Benin could do so in ten minutes instead of one hour? What if an exporter could pay a trucking company just to cover the costs of labor and fuel to send a load of shea nuts to port –- without adding $250 to pay bribes at checkpoints along the way? In order to work towards these goals, Borderless must have a steady stream of revenues.
Carol presented and gained agreement on member benefits and fee-for-services activities for Borderless, and facilitated a discussion on the sustainability plan for Borderless. The presentations elicited a lively response from the 20 participants from the Executive Secretariat, Executive Committee, and the nine National Committees. While the discussions raised many important issues about the strategic direction of the Alliance, all participants agreed on the need to define member benefits and begin a fee-for-services program to attract more members, increase the amount of dues collected, and provide for more financial autonomy.
The main outcome of the retreat was that Borderless drafted an action plan, a prerequisite to implementing its sustainability plan. Follow-on discussions will continue to examine the roles and responsibilities of the National Committees vis-à-vis the Executive Committee and the Executive Secretariat. The participants all came away from the retreat reenergized and united in developing more benefits and services for their membership, and reaffirmed their commitment to the important work the Borderless Alliance is undertaking to improve trade with the West Africa region.
Whether we are working with domestic or international non-profits, we should think outside the box to determine what the best mix of funding is, and not just rely on donor funding to strengthen the sustainability of these organizations.
[i] Johns Hopkins University Center for Civil Society Studies, Comparative Data Tables, 2004