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The Fundraising Enigma For Social Purpose Organizations
In times of crisis, fundraising may seem like the last effort to bolster within the development space, but is in fact essential to see social projects through.
In the ongoing crisis of the COVID-19 pandemic, the country has seen distress and damage at every level – social and economic. Those in precarious work and living situations bore the brunt of the lockdown – with a sharp and unprecedented halt in steady employment, housing, education, healthcare, and even basic nutrition. Nonprofits, who work for social impact and equality, have had to completely reorient their regular work to immediate relief efforts, as well as deal with dramatic budget cuts. At large, the social sector finds itself in a supremely challenging position where it is forced to be resilient; an effort nearly impossible without adequate funding.
In times of crisis, fundraising may seem like the last effort to bolster within the development space, but is in fact essential to see social projects through. In a recent study conducted on the country’s fundraising landscape in development, it was found that raising money, with all the skills and efforts it entails, ranks as the top challenge for social purpose organisations. Having interviewed over 70 non-profit leaders, donors, experts, and intermediaries, and 50plus informal conversations, the study identified the following key challenges faced by non-profits while fundraising:
A primary struggle for many social purpose organizations, many small and medium organizations address the difficulty in making strategic presentations to donors, with a strong problem statement and solution. While most organizations facilitate transformative projects with their communities, effective storytelling – an essential to convince corporates and foundations to donate – is a difficult skill to hone.
At a base level, organizations are generally unable or unwilling to spend on marketing and communications, as not many in the development sphereunderstand the benefits of brand-building as a part of organizational strategy. This prevents these nonprofits from establishing themselves as strong and trustworthy brands. Additionally, very few organizations make full use of technology, including social media, for brand-building and retail fundraising.
Networking is an ordeal especially for small, burgeoningorganizations as compared to established ones. In the absence of an evolved non-profit fundraising environment in the country, fundraising on many occasions is driven by personal connections and networks. Younger organizations often have very limited access to these networks, an advantage that larger organizations enjoy.
Recruiting, training, and retaining fundraising talent
According to the report, “Fifty-three percent of nonprofits report having difficulty finding qualified candidates to fill fundraising jobs”. While everyone in the sector understands the criticality of the fundraising, many professionals aren’t keen on joining the fundraising vertical of the organization, owing to the lack of economic incentives that the corporate world promises. There is also a dearth of funds channeled toward training and capacity building.
Maintaining Strong Relationships
Many organizations find it difficult to maintain strong relationships with donors. Social development is a slow and gradual process, and many times, it becomes difficult for the fundraisers to show results on a quarterly basis, something many donors ask for. Organizations also mention how the power dynamics with the donor makes building relationships a tough task.
Difficult regulatory framework
Navigating the plethora of complex laws, regulations, and reporting mechanisms that govern the Indian non-profit space, reduces bandwidth allocated to raising money. For instance, The Foreign Contribution (Regulation) Amendment (FCRA) Act, 2020 was recently put into law, sharply restricting nonprofits’ access to international funding. Keeping up with these laws, concerning both international and domestic funding, is a consuming and often confusing task.
Apart from a few large non-profits, most organizations have been unable to harness the power of Retail Fundraising, which is often seen as a cost and not as an investment. It is intriguing that while 61% of the social sector funds came from everyday giving in the US last year, this share was just 6% in India (Sattva Everyday Giving report, 2019).
Fear of rejection
Finally, the reluctance in asking and fear of rejection are among the biggest behavioral challenges for fundraisers. Many potential fund sources are left untapped due to hesitation in asking for funds. Social sector leaders must remember: If you don’t ask, the answer is always no.
If there is any hope for the development sector to make it through this global crisis stronger and more assured, it must be through changing the culture around fundraising as a skill – from a necessary evil, to an essential investment for nonprofit organizations. Ultimately, it is the ability of organizations, working toward social justice and sustainability, to raise and allocate money that will shape the strength of their impact for all citizens – the real measure of India’s development.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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