Whilst technically the Board is responsible for ensuring adequate resources are required for organisational sustainability, the leader is generally mandated to undertake this role.
The key components of Advancement will assist in attracting funds, including good governance, good financial management, human capacity to ensure delivery, voice and visibility, effective strategy and planning, monitoring and evaluation that promotes learning, fundraising and strong leadership. However, the leader is also required to take a proactive role, especially in relation to the financial position of the organisation. This entails:
- Ensuring that on-going relationships are being built and maintained with existing and potential donors; that effective stewardship systems are in place to ensure reporting is never late and that communications with donors about the programmes they support are sustained. Donor commitment is critical to ensuring long term sustainability.
- Ensuring donor diversity so that there is less dependence on one donor.
- Development of accurate budgets to ensure that all costs are included, including indirect costs. If donors are not willing to support indirect costs such as rental and utilities, or even the cost of staff and oversight, then it becomes necessary to find additional donors or to delay the start of the project until it is fully funded. The key concept here is that every project or programme has to pay its way in the organisation and this includes personnel costs, indirect costs and administrative costs. Proceeding with a project on the premise that the organisation will manage without the full budget is a recipe for a financial crisis.
- Monitoring of budgets to ensure no overspend and also to query underspends which are sometimes a signal that work has not been complete.
- Keeping an eye on the future and understanding what the funding shortfalls are in the future that need to be included in multi-year budgets.
- Implementation of a plan to build a reserve fund through careful financial management and by ensuring that all income generation projects and consultancies as well as interest earned make a contribution to that fund.
Author: Shelagh Gastrow , Executive Director – Inyathelo: The South African Institute for Advancement