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Fundamentals for Fundraising from Institutional Donors

Md. Humayun Kabir

Institutional donors like private foundations, public trusts, aid agencies, and government entities provide consistent grants with over 250,000 global foundations and trusts. They prioritize project details, offering technical support to NGOs while having strict criteria for proposals, budgets, and reporting. Obtaining a grant enhances an NGO’s reputation, but it is a time-consuming and challenging process as donors conduct thorough due diligence before releasing funds. Raising funds from institutional donors requires a strategic and systematic approach.  There are two approaches  for fund raising from Institution donors i,e, Bid Proposal Submission and Direct Approach to Institutional Donors.  Here are the fundamental steps for successful fundraising from these sources.

Fundraising through Bid Proposal Submission

Bilateral and international donors and grant makers develop country cooperation programs based on government funding policies within the country’s geographic jurisdiction. Donors also have access to international committed funds. Donors follow a three-step process to secure funding: 1) expressing interest, 2) submitting a concept note, and 3) providing a full proposal covering program planning, implementation, management, and evaluation. NGOs enhance their capacity by complying with donors’ policies and guidelines through team building, skills development support, program research, utilizing past experiences, and developing high-quality technical proposals.

The bid proposal review involves assessing eligibility, relevance, experience, and readiness to participate. As a partner, you should be able to contribute to project development by checking various criteria. This includes past experience related to the issue, research or studies in the local context, case studies, documented lessons learned, data on the target area and population, familiarity with the agency’s program approach, identification of risk factors, experienced staff, monitoring and evaluation reports, and organizational capacity. If most of your answers are affirmative, you can participate in joint planning by contributing resource materials and information. This checklist serves as a guide for partners to ensure they are well-equipped to participate in the bid proposal and contribute effectively to the project’s development. The following step needs to be followed for  Bid Proposal Preparation:

  • Prior to developing the bid proposal, obtain comprehensive and unambiguous information and comprehension of the guidelines, instructions, and specific issue pertaining to the bid proposal.
  • Evaluate your organization to ascertain its suitability and eligibility for submitting a bid proposal.
  • Research quickly using secondary sources of information to analyze the context and situation of pertinent issues in the nation; In-house consultation based on research findings; Consultation with peer organizations with comparable experiences.
  • Assess the SDG’s and its target’s relevancy.
  • Relevant historical data and experience from your organization
  • Customize your profile while concentrating on the pertinent project issue causes.
  • Determine a possible or workable response to the issues’ stated causes.
  • Establish the project’s goals, objectives, and expected outcome that can be attained in the allotted time. Results may peak at the outcome level rather than the effect level for a brief period of time ( during one year project)
  • Choose a strategy and technique that aligns with the policy and goals of the contributors.
Fundraising through Direct Approach to Institutional Donors

In order to directly contact donors with unsolicited or unconstrained funds worldwide for development program funding, NGO will be assisted by grant market research for donors’ mapping. The majority of these development organizations are foundations, trust funds, corporate entities, and some grant makers. They are receptive to direct applications or correspondence from NGOs worldwide. Some of them, nevertheless, are committed to specific theme areas in addition to having a preference for their country or region. As a result, NGO must conduct a thorough investigation to discover their committed funds, resources, and methods for contacting or applying directly. 

Preparation for direct engagement includes gathering necessary information and materials. Fundraisers must also understand the culture and behavior of potential donors to tailor fundraising strategies. A communication package tailored to the donor’s needs and priorities will be prepared based on the identified committed funds and funding methods. Contact information for relevant personnel or departmental desks will be identified during donor mapping for direct communication.

Communicate directly with donors by sending a tailored communication package via electronic media to introduce the NGO and its programs for potential funding. If the package aligns with the donor’s interests, they will respond promptly; if not, further communication will be initiated by the NGO’s fundraising team through emails and voice calls to establish rapport. This direct communication, utilizing different technologies, allows for discussions about funding opportunities and program concepts to ensure mutual understanding and build a strong relationship between the NGO and the donor agency.  The Following Steps needs to be taken succeed in direct approach:

  • Submission of concept note/paper relevant to donor’s interest: Once such communication and discussion is done, The NGO needs to develop a customized concept paper in line with donor’s thematic areas and funding priorities and submit electronically within the agreed time frame.
  • Presentation in donor’s meeting: NGO needs to make virtual meeting with overseas donor or meeting with physical presence if donor is present in the country. NGO needs to prepare a power point presentation along with a program synopsis to make presentation during such meeting and further facilitate discussion to understand donor’s insights and expectation.
  • Facilitation of donor’s visit the program: In case of physical presence of the donor agency in the country, the best way to build rapport and confidence of donor is to organize visit at NGO office and program areas. Otherwise, for overseas donor, a video film and link of NGO website should be able to make further visual presentation about the NGO and its program.
  • Submission of full proposal: At certain point of time following series of discussion and communication, NGO needs to gain full understanding about the project thus write full proposal and submit to the donor following donor’s guideline or template if available.
  • Finalization of full proposal in consultation with donor: Securing funds successfully through a direct approach requires holding consultation meetings with donors and stakeholders to align their expectations with the program proposal. Strong facilitation is key in matching donor expectations with the designed program. The full proposal should be thoroughly analyzed and amended to ensure it meets the desired outcomes.
  • Negotiation for award of contract: In the last phase of the direct approach, negotiations with donors are held to finalize contract terms, focusing on non-negotiable clauses regarding finances, administration, and legal matters. NGOs can negotiate on staff, program monitoring, and reporting clauses before signing the contract. A formal ceremony should mark the signing, with media coverage to showcase the partnership between the donor and program.

By following these steps and maintaining a strategic approach, you can effectively secure and manage funds from institutional donors to support your organization’s mission and projects.

The article was written by Md. Humayun Kabir, an Independent Consultant, and Director, Creative Services Limited. Email: humayun@cslbd71.com

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