Corporate Social Review Magazine 1st Quarter 2013 | Page 32

to the bone and are therefore unrealistic in terms of what can be
achieved. At the same time there is a view in the corporate sector
that business methodology should be used by non-profits to
enhance their sustainability. With this refrain in mind, it becomes
difficult to explain why corporates and some philanthropic
entities limit their support to direct project costs only – there is
no business that does not have funds for personnel, marketing
and communications, for research and development, for staff
development, for good governance, for maintenance and for
computers. Yet, there is the expectation that this is where nonprofits do not require support. Even more confusing is the fact
that corporate donors expect the highest professional service
from non-profits with tough narrative and financial reporting,
logic frameworks, theories of change, evaluation reports, social
impact surveys etc. How can this be achieved without any
overhead support? How can an organisation envisage its future,
take risk, be innovative when the building blocks are prohibited?
A sustainable organisation should ensure that every project
pays its way in the organisation. This means that the concept of
overheads should actually disappears these costs should all be
fully absorbed in any project.

Creating sustainable
NPOs through a mixed
funding model
While there is surely a funding crisis in the NPO sector in South
Africa, the problem is not only about the lack of funds, but the
sector’s inability to attract resources and ensure diverse funding
sources.

Diversity of funding is a critical component in creating sustainable
NPOs. Besides a diversity of donor funding from philanthropic
foundations and trusts, corporate investment and individual
giving, NPOs should be exploring fee generating activities
through the provision of services or consultancies (as long as
this does not lead to mission drift); the growth of reserves or
endowments through such income generating activities and
careful money management that would ensure the best interest
rates are earned on available funds. A mixed funding model with
diverse support, coupled with good financial management and
engagement with donors regarding overheads, will go a long
way to ensuring sustainable organisations.
Shelagh Gastrow
Executive Director
Inyathelo: The South African Institute for Advancement

Most organisations in South Africa raise funds through proposal
writing. Inyathelo’s experience has shown that unless this is
paired with a relationship of trust with a potential donor, it is
unlikely to be successful. Attracting financial support involves
a more holistic view of what an organisation needs to have
in place to attract funds. This includes good governance; an
outward-facing leadership that is aware of the need to build
committed relationships with supporters; excellent financial
management with the capacity to plan for the longer term and
to provide financial reports as required; as well as effective
communications and marketing so that the public and potential
donors understand what the organisation does and what it stands
for. This has to be coupled with basic fundraising skills such as
undertaking useful research into potential donors; project and
programme development based on the organisation’s plans
and objectives; clear proposal writing that is donor specific;
and the capacity to ensure that the donor experience with the
organisation is trouble free.
A key area of non-profit funding that is a major weakness that of
operational costs. Many donors refuse to fund overheads and
this is something that simply has to change. As a result of this
position by many donors, organisational budgets are often cut

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CORPORATE SOCIAL REVIEW
2013/07/29 10:45 AM