Five common confusions on Fundraising vs. Partnerships

Pedro Eikelenboom

A lot is happening in the world of international development cooperation and the resources available for the coming years. There are public discussions in many countries regarding the (sustainable) impact of development aid. Many (governmental) donors are cutting back their funds and many foundations have less resources to spend and therefore engage more than ever in fundraising or partnership activities. Philanthropy advisory (fundraising) firms are probably making record breaking revenue by providing training, workshops, fundraising consultancies and recruitment activities for many nonprofits worldwide. Sometimes these firms paint the picture as bright as ever, using data from 2006 or 2008, hereby providing a list of top 50 foundations by expenditure, where at least five of the top ten foundation had lost 20-50 percent of their spending for 2011 onward.

With the scarcity of resources, new opportunities arise, topics such as Venture Philanthropy, Impact Investing and Social Investments. Funds are being developed that serve the BoP, however still demanding a minimum of 10% ROI. So, bottom line – for many nonprofits not a feasible option to pursue for their grassroots operations. Fundraising is more than ever key for many organizations in order to continue their activities and even so to survive. So, based on my experience, I selected five confusions organizations create while developing and implementing their fundraising or partnership strategy on attracting resources from other international players.

1. Two agenda’s principle.

The principle underlines my experience with fundraising strategy development of nonprofits in order to raise additional revenue for their programs. It is simple – develop a fundraising strategy, which to external stakeholders is presented as a partnership. Of course one can argue, whether organization really know the difference between partnership development and fundraising. I believe organizations understand the difference, however use the partnership definition to convince their fundraising target group to “partner-up”.

It all depends on your target group: Fundraising is feasible from corporate foundations or multilateral institutions and government programs regarding development cooperation. Multilateral institutions, (some) corporate foundations, as even the larger (international) foundations have annual tender application rounds where nonprofits (if eligible to the criteria) can submit a Letter of Inquiry. Others are directly invited to submit a concept note (based on the visibility in the media and results achieved in their programs).

2. Benefiting who?

But who benefits? If a strategy is based on fundraising for your own programs and partners, how does a partnership fit in? A partnership is based on openness, sharing knowledge and network in order to create more impact to joint (developed) programs or projects. Leveraging resources is not only financial, but also measured in dissemination of knowledge, visibility, develop new initiatives and attracting other donors to contribute (joint fundraising).

3. Deliverables – understanding what one expects from you and vice versa.

Fundraising is an one-way street, where the relationship has clear and set parameters. A nonprofit develops a letter of inquiry for funding and the grantor approves the proposal. The relationship is based on the outcomes of the funded project. A partnership for that matter is a two-way street – focused on deepening the relationship, creating added value to the collaboration and challenging each other on programmatic topics or strategic issues.

4. Start & End or Evolve the relationship?

Fundraising relationships have a agreed start and end (e.g. project end), new proposals have to follow the same principle of application, there are no exemptions. The role of the grantor is on macro level towards a project and/or program of the grantee. There is little sharing of knowledge or other joint activities. That said, a Partnership is based to evolve and grow the relationship. Hereby for instance, starting with leveraging resources in each other’s programs – to identify and develop new opportunities – to share expertise and disseminate knowledge to others – as to attract other investors to participate (alliance building).

5. Leave the work to outsiders – wise idea?

Fundraising can be done by a specialized bureau or agency, which through direct marketing attracts donors. This is very common in community and/or public fundraising. International nonprofits may hire expertise to assist in identifying the landscape of funds, as to develop the project proposals for submission. However, some organizations tend to hire external consultants to develop and execute the partnership strategy (read fundraising) and initial outreach. Hereby the consultant not only being involved for desk research and advice, but also being in the driver’s seat for external communication towards the identified target group.

For fundraising it does work, as the consultant acts and speaks in behalf of the organization. The relationship is “platonic”, based on raising additional revenue. If a grantor requires more in-depth information about the applicant (programs, projects etc.), the grantor will be transferred to a staff member of the nonprofit. Partnerships are based on trust and starts with a group of trustees from both organizations whom believe that collaboration will benefit each other and hereby seek leverage within their organization to develop the partnership and monitor the progress and results achieved.

What’s new?

If your organization is looking for funds to continue or expand your current programs, please continue the path of fundraising. Mind you that the resources are becoming less available and more competitors are active in your area of programs or topics.

However a partnership is an interesting opportunity to pursue. Hereby keeping in mind that leveraging current programs means that perhaps other topics need to be reduced or transformed (be flexible). Partnership is based on give and take, a two-way street which will enable your organization to continue the work, but it does not mean that sacrifices (cutbacks, new focus or strategy development) do not have to be made. Be careful not to engage in a partnership due to lack of funding for your programs (due to cutbacks donors or weak programs – outcomes). A partnership is based on equal respect and successful outcomes of the joint projects. By starting the partnership on a weak basis, it might turn sour and you lose the partner. Start the partnership with a successful formula, hereby challenging the partnership to other more risk full opportunities in a mature phase of the relationship is a more sustainable approach.

Important is not to confuse Fundraising with Partnership development. You will have a short term gain, but on the long term you might lose the partner due to the fact that expectations were not met. And gaining a partner is much easier than retrieving a lost partnership!

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One Response

  1. A very interesting post highlighting a common confusion.  A very clear way to highlight the difference between fund-raising and partnership, is the question of where profit fits in?  If a private company provides resources to an NGO, it is probably done as philanthropy or CSR by the company, and is fundraising for the NGO.  Noses might wrinkle if the company made a profit from such charity. Reputation gain may become reputational risk.   But if an NGO and company share skills to build a sustainable business solution that serves people at the base of the pyramid, then the whole venture requires commercial viabiilty.  In this scenario, lack of profit would be the problem.  The NGO gains a partner and a pro-poor business model, not a transfer of resources.

    This is a big difference, involving a different mindset.   It is explored further in a blog I posted on the Practitioner Hub (of the Business Innovation Facility and Innovations Against Poverty) recently after a meeting about Barclays’ Banking on Change.   See Corporate Partner Profits: a cause for NGO concern or celebration?