HVFC Trends Research on Fundraising | Takeaway 1
outdoing your growing competition in the fundraising landscape
Competition in the fundraising sector is becoming increasingly challenging to manage. Related to this, most of you find it challenging to identify new potential donors. This is especially the case amongst organizations with a budget below one million euros.
Why is the competition for funding getting fiercer?
Governments are drawing back from development cooperation. This means that there is less bilateral funding available. The competition for the bilateral funding that remains is therefore increasing.
Another reason for why competition for funding is getting fiercer is that organizations do not always have the resources to address large donors. These resources can be both in terms of time and money, but also in terms of the specific knowledge that is sometimes required to fill in proposals. The challenge of not having enough resources to address large donors is one that is primarily affecting smaller organizations (budget below one million euros)..
It is difficult to get into contact with these [larger] donors. Some have changed their policies so that they invite organizations to send in an application. This has made it more difficult to be proactive.
On top of that, (large) donors not accepting unsolicited proposals have also made it more difficult for organizations to get funding. When calls for proposals have a relatively short deadline, it can be challenging to gather the time and resources to submit a convincing proposal in time. In other cases, donors do not have open calls for proposals at all and reach out to potential recipients themselves. As such, to be ahead of your competition it is essential for your fundraising team to be proactive.
Of course, we also see that COVID-19 has an impact on competition getting fiercer. Project implementation is stagnating, there are no fundraising events and there is no travel. Therefore, fundraisers are finding it more challenging to network.
How to tackle this competition issue?
Some of you pointed out the increasing importance of the private sector for fundraisers. Whereas governments are drawing back from development cooperation, the private sector is becoming an increasingly influential player in the development sector. Some private entities start projects or fund initiatives themselves, but public-private partnerships are also increasingly important and requested by large donors. This means that engaging with the private sector can play an important role for you in tackling the competition issue.
I find that working internationally, it is very hard to find donors that will support small organizations. Twenty years ago it was relatively easy as a one person-organization to get grants, whereas now it is expected that you have a team behind you. What works is teaming up with other NGOs and organizations for EU funding. The need for smaller organizations to engage in partnerships has definitely increased in the past years.
HVFC has different resources and e-learning opportunities to help you as well. With the fundraising toolkit and the proactive fundraising training we show you how to be more proactive in finding and approaching potential donors, also with little resources. Specifically addressing the challenges of smaller organizations, HVFC has an online training to (better) equip smaller organizations to engage in partnerships. The training includes information on how to work together, how to negotiate and where partnership opportunities are.
To fundraise successfully it is important to build relationships and to train the skill of converting a conversation in a transaction. HVFC has developed a relationship building tool which helps you in this process.
Since a few years, it has been Dutch government policy to work closely with the private sector so there is a shift in priorities, for example to skill development for youth to stimulate employment. In the future [10 to 15 years maybe], it is going to be important to have more work with the private sector in countries where we are present.
Graduating from the Radboud University in Cultural Anthropology and Development Studies and Philosophy, Politics and Society, Ilse has a multidisciplinary background, and supports HVFC by gathering insights. She led HVFC very first Trends Research on Fundraising.
About the research
HVFC has developed a new research initiative to track trends within the fundraising landscape. With the data collected we hope to analyze and explain the context of most of the challenges highlighted by our peers active in the fundraising sector. We then aim to further help you, and others, face current obstacles and anticipate future ones.
The pilot version of the research initiative was conducted throughout 2020 on fundraising professionals working across the world, from over 40 organizations, with diverse budgets ranging from less than a million to more than a million euros. In a series of 6 blog posts we share with you the main takeaways.
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