Non-Governmental Organisations (NGOs) depend mainly on donor grant funding in addition to internally generated funds to fund their operations. It is therefore very common to find many startup NGOs seeking for international grant funding to execute their projects. It is however disappointing to note that many of these NGOs in need of funding do not have the efficient governance and financial management systems in place.
The major fear of donors is fiduciary risk, thus the fear that funds may not be used for its intended purpose efficiently. To avert this risk, donors require NGO to have proper systems in place that will possibly guarantee accountability and transparency.
Unfortunately, many NGOs do not have the right governance, administrative and financial management systems in place that will make them credible to receive donor grant funding when the opportunity presents itself. Many NGO founders have approached me for help to secure grant funding. When I asked questions to assess their readiness for grants, it was evident that even if grants were available for disbursement, their organisations were not credible and accountable enough to deserve grants.
Those types of NGOs have peculiar characteristics. They are oftentimes run by one person, usually the founder/director, who is not accountable to any board of trustees. The founder has full control of decision making for the organisation; and is the only signatory to the organisation’s bank account. These NGOs also lack proper record keeping and accounting systems. Money spent over the year can hardly be accounted for no matter how small the amount, even if the money spent was donated by the founder.
Donors want to see NGO’s small beginning of stewardship and accountability. If they cannot account for their own internally generated small amount of money, how can they account for donor grants?
The next time you want to spend time asking and writing proposal for grant, ask yourself if you have credible and accountable systems in place. If not, you may not want to waste your precious time seeking for grants. Spend that time to build systems whilst operational with your own small internally generated fund. If you have enough experience, evidence and reputation as a trustworthy NGO, you will have better chances of getting donor grant funding than others.