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The Fundraising Function : how do you organise it and why?

Courtesy of anankkml at www.freedigitalphotos.net

Courtesy of anankkml at www.freedigitalphotos.net

[Editor’s note: This post is part of a series that will look at think tank funding models. It is based on an online course that is currently being offered to think tanks in CEE and Nepal under the Think Tank Fund´s support, led by Vanesa Weyrauch and Tomás Garzón de la Roza]

There are several different names for the processes that an organisation has devised and implemented in relation to its funding. Business development, institutional development, fundraising and resource mobilisation, just to name a few of them. Differences stem  because there are several ways to structure these processes. Crucially, they can be contained within a specific team or unit that performs these functions for the benefit of the entire organisation, or they can be spread across people who have other main roles and responsibilities (e.g. the Executive Director, senior researchers). And, not surprisingly, between the fully centralised and decentralised fundraising schemes we just mentioned, there are a multitude of intermediate options, and most of the think tanks we interviewed for the course present hybrid models. Each of these arrangements has implications to be borne in mind.

The starting point

If we go back in most think tanks’ histories to its initial steps, we are likely to find two scenarios regarding the fundraising function. In both of them there is a group of policy researchers/entrepreneurs that set up the organisation, often around one or a couple of leaders. In one scenario, incoming projects are found and managed by the leader or main partners in the nascent think tank. The organisation’s funding fate is tied to their connections and initiative. In the other scenario, the same group is supported by an endowment or core grant from a single donor. In consequence, ‘fundraising’ is restricted to managing the practicalities of the grant and the relationship with the donor more generally (based on Telgarsky 2002).

Some organisations can preserve such schemes for a number of years without any strong incentive to change. As long as the think tank keeps its founders, partners or key members, approaching funders and deciding how to use funds can remain manageable for this small group. If the organisation grows substantially, however, the fundraising function will probably look different: more formal staffing arrangements, more substantial fixed costs related to facilities and administration (e.g. office space, accounting, and legal procedures), and greater costs for business development: the organisation increasingly spends time and resources to collect information, write proposals and raise funds. Table 1 compares the funding arrangements that are more likely to emerge.

Table 1 – Comparing funding arrangements.

Dimension

Arrangement

Centralised

Decentralised

Skills / Professionalism Higher Lower
Cost Higher Lower
Administrative Burden On fundraising team (sometimes shared with the Administration Department) On senior researchers or programme leaders (sometimes shared with the Administration Department)
Research Consistency Lower. The fundraising unit has some degree of autonomy to assign funding opportunities Higher. Researchers control their funds and their agenda.
Funding Balance (across programmes / topics) Higher Lower (senior researchers who are more skilled as fundraisers or have better connections manage larger teams, frequently with higher salaries, etc.)
Coordination with Administration, Communications, and other general units Higher and easier Lower and more random

 

Centralized fundraising

Larger and more established organisations tend to have a group of people (or at least one person) devoted to fundraising tasks. This most formalised option can provide balance and high-quality fundraising, but at a higher cost:

  • Professionalized services: Appointing one or more ‘specialists’ should guarantee that fundraising activities are planned carefully and executed effectively, thanks to their experience and skills. At the very least, the fundraising team will not have to spare time that should be devoted to research or other activities.
  • Organisational balance: In organisations with various programmes of work (permanent or temporary), it can be challenging to ensure that all are properly funded. This is not just a sales contest: different issues can be generally or at least temporarily more difficult to fund (e.g. electoral systems is never as popular as poverty alleviation). A centralized fundraising arrangement can keep this in line and reach out to less ‘profitable’ programmes.
  • Organisational consistency: a central unit ensures effective coordination when reaching out to diverse donors, as well as identifying which funding schemes and sources are wiser to tap into for the diverse research areas according to their profiles, attractiveness to different funders, etc.
  • Burden: Researchers are preserved from at least some of the burden of fundraising. Monitoring existing calls, identifying donors or clients, filling out applications and other related procedures can be very time consuming. Not having to deal with these tasks helps researchers to focus on their work.
  • Costly structure: The fundraising unit itself needs to be funded. These costs can be difficult to allocate from project overheads. Although technically it can be a self-sustaining structure after the initial investment of setting up, it is still true that having a centralised fundraising unit entails a bigger organisation with higher expenses.

Decentralized fundraising

Many mature and relatively large organisations also distribute fundraising tasks and activities across a number of staff with additional responsibilities without creating a particular fundraising unit. It is often senior researchers or programme leaders that take on fundraising duties, although in some cases junior researchers are also required to bring in funds or to become largely involved in developing proposals, meeting with potential donors, etc.

    • Flexible structure: When fundraising is a collective effort without a specific department in charge of it, the organisation remains lighter, with research programmes or teams (or individuals!) taking care of their own work. There are lower costs and no need to coordinate with fundraisers through internal procedures.
    • Research consistency: The funding remains 100% ‘true’ to the researchers. They only work on those projects that they decide to apply for, which presumably match their interests and expertise.
    • Burdensome for researchers: While centralised fundraising teams absorb the bulk of the burden, decentralised schemes entail a lot more team from the researchers or think tankers in charge of them. This is an uncomfortable situation for many of them.
    • A learning curve: Presumably, many ‘fundraising researchers’ are not a priori fully equipped to do this kind of tasks. It takes time for them to learn new skills, and some of them may never feel as comfortable as fundraising professionals doing them.

As a final reflection, we believe that there is no ideal model to organise this key structure. Each organisation needs to find what suits better its current needs, priorities and capabilities as well as how incentives should be aligned for staff contribution to this ongoing challenge. The important thing is that each think tank is aware of the implications and consequences of its current and/or desired model so that it makes the right decisions -of course, among the viable ones.


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