Why shouldn't charity organizations count (only) on donations?

Every time I conduct a fundraising workshop I get the question about "why should we get extra funds, if we have donations?"

In order to answer this question it is really more interesting to think about fund sources and categorize them as many as we can. Mostly donations get classified into:

• Restricted fund/donations: tied to certain projects, sponsoring a certain beneficiary, or under certain term/condition
• Unrestricted fund/donations: not tied to any projects in particular, and funds can be spent for the institution in general whether supporting certain project or for running costs (like salaries, office logistics, outings and internal events). It's also named as "institutional fund", as it is supporting the institution unconditionally. Institutional funds might be restricted undercover, so organizations should keep an eye on donor's agenda and causes to support the institution, so as not to expose the organization to a critical financial situation upon conflict at some point later over the execution.
• Bridge funds/donations: It's urgent funds raised in the time of disasters, whether a natural disaster or a war/clashes consequences. Funds raised to Red Cross and Humanitarian convoys to the disaster areas are all bridge funds.

In order to answer the question I started this article with (Why should NGOs get funds from resources other than donations), and according to the information I just mentioned above, we can figure out some (not all) reasons for striving to get other funds:

• It's better to get double the fund you get, it means that you will raise more funds so you will be capable of initiating new projects or expanding existing ones. (Ok. this is obvious, so let's skip it)
• "Don't put all your eggs in one basket". NGO board strategy should not be tied to the funds, NGOs and non-profits usually are there to support people, to help community solve a problem or communicate better. It's not relevant to have only one resource while you are capable of getting (even the same amount of funds) from various resources. Imagine you are getting all the fund from one donor!! .. Yeah this is a disaster, some NGOs do the same, it's just not that obvious or abstract to notice.
• "What doesn't challenge you, doesn't change you". NGOs and non-profits always rely on the man power factor, their passion towards the cause/purpose of the organization is what makes them willing to sacrifice their time and effort working for it, even in the worst times or difficult times which need much more effort and time. For that helping people beat new challenges and discover new boundaries for their capabilities, is crucial, not only for the fundraising process success, but also it's for the whole team of the organization. Discovering new lands, new resources, new solutions: will help your organization definitely on both short an long runs.
• It's better to look into your wallet before you pay, some NGOs fall in the trap of being very interested and enthusiastic in helping people, so they initiate many projects, with poor estimation of the consequences, without evaluating which projects should be initiated and what can be delayed according to the funds they have, sometimes they think that having "huge fund" will make them do every suggestion on the white board.
• Specialization Vs. Generalization: One of the great mistakes that charity organizations in specific make, that they are -mostly- emotionally driven, which makes them want to help all people including seasonal clothing, educational problems, unemployment, severe medical cases, disasters, drinkable water ....etc. This, makes them great in helping a great number of people, but not as much great as every specialized organization in each cause solely. My advice (if I can give advice) to the organizations which believe in "helping people", is not to focus on quantity, to focus on quality, and to pick a specialty they can easily master, this will be helping people more effectively.
• Resource management, resource management, resource management: Even the well-known capable NGOs fall into this trap, so don't feel sorry if your organization has problems with resource management. Actually it is a great topic to sum up in just one point, but to get to the point, it is crucial to give the job to the right person. Being available doesn't refer to a fit, being willing doesn't refer to a fit. If you are going to sell yogurt cups, you should get consultation from the best yogurt guy in town, about how much milk should be poured in the bowl.

Regardless the other fundraising resources and activities, but donations are not enough for NGOs to rely on. There are other funding resources they can rely on (in parallel to the donation process). On that issue it's great to address some successful case studies that deserve to be mentioned:

• 57357 Hospital: The hospital has a famous case study for the public fund call "????? ??? ????? .. ????? ????? ???? ????". I even remember when I was at school and we all paid for the hospital with donations that varies from 25 piasters to 5 LE, which all resulted into a successful funding campaign.
• Mersal Foundation: Although the young age of this organization (founded in feb. 2014), they manage their funds very well. They are very aware of their capabilities, so the founder Heba Rashed uses her wide network and previous experience and links to raise funds through a paid service to the public. If you are a trainer and you have a very good material to conduct a workshop or a course, you can donate your time, effort and knowledge to Mersal Foundation, as all the income of the workshop hosted by Mersal goes to Mersal institutional funds, so they can pay bills, salaries and office supplies without spending a penny out of the donations they get from sponsors.

If you have experienced any other reasons, please comment below..

If you are interested in more case studies for the successful fundraising campaigns and want to know how to raise funds, contact me: [email protected]

Interested? .. Enroll in my next workshop.