As much as one may believe it shouldn’t be, making an impact on a shoestring is often the only impact option for the majority of NPOs.
Funding for interventions that could turn the tide of poverty, impact lives and break the scourge of sexual violence is lacking. It is also impacted by negative trends, such as donating things and not cash. Funders may be willing to pay for an equipped classroom, but not for the salary of the teacher, while it’s really not the classroom that impacts the child, but the teacher, and teachers need to be paid.
NPOs may find themselves installing new equipment, building facilities, distributing shoes, Christmas gifts and books while being unable to pay the staff performing these tasks. It is difficult for an outsider to grasp fully the pressure and risk that NPOs are exposed to by such funding trends.
The only option is to accept the reality of shoestring budgeting, prioritise interventions and creatively optimise the available budget:
1. Understand and manage funding ‘pain-thresholds’
If funders are only willing to provide things, NPOs should ensure they have a list of ‘things’ they need, that would have had to be purchased anyway. Approach different kinds of funders with different requests. Break down the cost drivers into smaller portions, particularly at times such as Christmas, when individual funders may be more active than corporate funders. It may be more difficult to get an individual to part with a small amount of their own money than to convince a CSI manager to allocate large amounts of company funding. Therefore, consider and present different levels of diverse funding opportunities.
2. Look at alternative ways to perform tasks
Although a group of volunteers is not as easily managed as an established team, it is a cost-saver. Tasks can be performed by willing hands that cost nothing, with the investment of effort from managers with the understanding of the potential of volunteers. Furthermore, a volunteer that has seen and appreciates an organisation’s impact, becomes a potential future funder, or a strong reference, linking a cause to a network of potential funders.
3. Educate existing and potential funders
It is important that funders understand how negative trends impact NPOs dramatically. Politely explain the hardship caused when facing irresponsible donor behaviour, as it is seldom intentional.
4. Eliminate unnecessary frills and ‘luxuries’
It is surprising how a time of need illuminates what is really necessary and what is merely a ‘nice-to-have’. Look at stock management, streamline and centralise ordering and let the team give input on austerity measures.
5. Build a team of like-minded individuals, whose skill set matches their responsibilities
It has been said that when a person believes their well-being is directly linked to their task or environment, they remain when difficulties come. This is mostly true of NPO practitioners, who see their involvement in social entrepreneurship as a calling. A team should be built of people who believe in their cause and who are happy because their talents are deployed meaningfully.
6. Consider alternative income sources to cover liabilities and cost-drivers that are difficult to get funded.
Sadly, alternative income activities will impact the value chain of an NPO with management focusing on support services instead of primary activities, but something as simple as VAT refunds on qualifying expenditures may come in useful, as well as limited sales and other business activities. Charity is a service industry and payroll liabilities linked to service-intensive activities, such as teaching, caregiving and human impact, therefore, if funders do not understand this, it is imperative that NPOs seek alternatives.
Meleney Berry-Kriel is a social activist and the co-founder of the Viva Foundation, when she serves as the chief executive. She is part of the Nation Builder collaborative network.