Formulating Strategies to Mobilize Resources (Foundation Building Best Practice Study Excerpt)

How Are Strategies to Mobilize Resources Developed?

The foundations in this chapter share a common objective to mobilize resources in support of communities and organizations within their societies. Beyond a fundraising activity, they conceive of resource mobilization as one of the fundamental roles they play. The choice between different strategies is quite often the result of experimentation and consultation on the part of a committed individual or group.

Strategies are often relatively straight forward and flexible enough to allow for evolution and new approaches over time. They are often shared quite openly and explicitly. The agreement and involvement of various constituents of the foundation -- board, staff, partners and donors -- is often a component of successful strategies.

Example 1: Raising Support to Strengthen Local Action and Philanthropy
Foundation for Community Development (Mozambique)
Example 2: Creating New Assets for NGOs through a Market Approach
Foundation for Higher Education (Colombia)
Example 3: Building a Bridge Between Businesses and Environmental Groups
Dana Mitra Lingkungan (Indonesia)

What Should be Assessed?

Summary Points

It takes resources to raise resources. It is easy to underestimate the time, resources and skills involved not only in fundraising but in maintaining good communications and relations with donors. The FDC, for example, learned that it needed good strategies to reduce this cost and increase its communications capacity.
Having a diversified resource base can help prevent problems caused by the loss of any single source. The saying warns not to put all eggs in one basket. Likewise, a single source of funding may produce significant income for a time but its loss could cripple the foundation. The DML began to shift more of its efforts into endowment building and raising funds from overseas development agencies, when its primary source of funding, corporate philanthropy, was endangered.
How resources are mobilized is linked to the success of the foundation's programs in more ways than the money raised. The resources a foundation raises represent a growing commitment on the part of society to take action. Thus, having a track record, strong partners and a good communications program has been essential for the foundations in this chapter. In the case of FES, the financial services it offered to NGOs both increased its capacity to earn income and assisted its partners to manage and grow their own resources.
Foundations raise resources for three functional purposes: program, operations and endowment. Foundations raise funds to use toward the social impact they plan to make. As grantmakers, they intend and promise to get this funding to a target community or to solve a problem. They must cover their expenses and invest in raising new resources if they are to effectively play this role. Over the long-term an endowment will ensure the sustainability of their efforts.

Having a clear notion of where to focus effort depends on an assessment of the operating environment. To a large extent, the cases described here have started by asking many of the same questions:

What resources are needed?
What resources are already committed to the foundation? How much money and time can the foundation invest in mobilizing resources?
What are the local philanthropic traditions (individuals and businesses)?
What are the trends in international assistance (official development assistance, private foundations and NGOs)?
In many countries, fundraising is a relatively new activity. Where can the foundation find fundraising skills and experience?
How will the larger environment -- for example, laws and regulations affecting the nonprofit sector -- affect its efforts?

What are the Strengths of the Foundation?

The foundations discussed below have attempted to formulate strategies that will build upon their comparative advantages. These foundations carved out niches for themselves that take advantage of their unique missions and their relationships with individuals and organizations. Some advantages of foundations emerging from the cases are:

Strong relationships with local communities and organizations
Capacity to relate to business and government
A focus on mobilizing resources more broadly than for themselves
Access to an endowment or some other form of secure financing
Cogent missions and objectives that can be widely shared
Accounting systems to ensure that resources get to where they are intended

What are Some Resource Mobilization Strategies?

The strategies presented in this chapter have been effective in the particular context in which they arose. The list is by no means comprehensive.

Develop contributions and involvement of businesses as a way for them to improve their image and be a part of the solution to environmental problems (Dana Mitra Lingkungan -- DML)
Use the foundation's skill and experience in financial management to create a profit-making credit institution (Foundation for Higher Education -- FES)
Partner with international donors to raise support for strengthening civil society and building local philanthropic traditions (Foundation for Community Development -- FDC)
Build an endowment from corporate and individual contributions (all three organizations), a debt for development swap (FDC) and/or earned income (FES).