RESOURCE MOBILISATION and

SUSTAINABILITY

The best way to predict the future is to create it

-Peter Drucker

K. Shivakumar, Chartered Accountant

Gandhigram 624 3029443737837

vkshiva@sancharnet.in

•ORGANISATIONAL

CHART

ProgrammeHuman and Institutional

Development

Support activities

Resource Mobilisation

and sustainability

Livelihood, Governance, Development

Admin, Legal,

Finance

Uncertainty over Future fundingUncertainty over Future funding

•Will donors keep paying program costs Will donors keep paying program costs adinfinitum?( forever)adinfinitum?( forever)

•Will donors shift to Will donors shift to more needymore needy

more popular causesmore popular causes

other poor countriesother poor countries

Will social or political problem – cut offWill social or political problem – cut off

RESOURCE MOBILISATION

NATIONAL OWN RESOURCES

WORLD BANK

GOVERNMENT INSTITUTIONS

CAPART / NABARD

INSTITUTIONS FORM

CORPUS/ ENDOWMENTS

MULILATERAL AGREEMENTS

INTERNATIONALDONORS - MNC &

COMPANIES

CSR-TATA / BAJAJ / TVS

RELIGIOUS INSTITUTIONS

INTERNATIONAL

INDIVIDUAL DONORS

INCOME GENERATING PROGRAMS

COST SAVINGS

Income from CAPACITY BUILDING TRAINING

UN Organizations

Unicef

ASIAN DEVELOPMENT

BANK

GOVERNMENT DEPARTMENTS

TRIBAL WELFARE/ RURAL DEVELOPMENT

EMBASSIES

Resource MobilizationResource Mobilization• Preparing for fund raising• Leadership responsibilities cultivate

potential supporters Strengthening the staff

• Conduct a market Analysis Potential market Identification Trends

• Develop a financial and Mechanism

operating plan Resource Provider

Action Plan

Analysis of Current Available Resources and identifying Resources Corpus

AgreementsNegotiation

NeedNeed

Prepare plan

Proposed budget

EvaluationAchievements

Starting and follow-up

Marketrequirement

Plan of action

ResourcesResources

Yesterday To day Tomorrow

Deficit Expenses Corpus /

Asset Endowment

Action plan for Resource mobilization

Concept Note

Kit: Vision/ Mission / Reports/ Details about FC/ IT /Societies

Activity Who When Resources needed

Priority Based Resource Mobilisation Action Priority Based Resource Mobilisation Action

PlanPlan

Resource Gap

Specific needs

Resource Provider

Mechanism Deadline –

Who / When/ where

Types of Fund RaisingTypes of Fund Raising

• Individual Contacts

• Group Contacts

• Traditional Fund Raising:– Dinner– Marathan– Events– Stalls

Cont..dCont..d

CorporatesIn Kind

• Bricks/ Sand• Rice / Dhal• Dresses

Tele Fund RaisingOnline Fund Raising

Using Blogs/ websiteFund raising online

Process of Fund RaisingProcess of Fund Raising• Identify Potential Donors

• Impress them with good work and proposal

• Develop a Relationship

• Build Communication- pamphlets- Fact Sheets – News letters- Annual reports- website

• Thank them professionally by utilizing the fund for the purpose for which it was received.

Good Fund RaisingGood Fund Raising

Assess your strength.Learn Skills – Imagination and creativity (CRY,

Help age India, UNICEF, Mother Theresa) Contacts and ability to make contacts Organizational skills – files -

information’s- communicationsFind ways- compensation weaknessResponds to, and accountable to a

constituency

Appeal to FaceAppeal to GroupAppeal Communication

Letter, Telephone, SMS, E mail

Video / Photographs / PamphletsNewsletter/Annual report/ Special

appealMedia / Advertisements/ Website

• Catch the Eye• Warm the Heart• Strive the mind

“Charity is not a matter of wealth but of heart”.

Online Fund RaisingOnline Fund Raising

• Through Internet / Groups – Karmayog

• Social Media

• Legal Sanction to be obtained/ kit details

• Choose the alternatives / policies

• Website – Procedure for online donation

• www.civicus.org

• www.ngosupport.org

• www.foundationcentre.org

• www.resourcealliance.org

• www.propoor.org.

• www.giveindia.org

• www.globalliving.org

Resource ProvidersResource Providers• Educate NPOs need for Resource

Mobilization.• Build their capacities in Resource

Mobilization.• Information they need and their

expectations.Vision, Mission of the Organization.Culture, HRD, OD, Policies, Credibility,

Visibility.

Resource Providers Resource Providers requirementrequirement

Proposal Vs Mission of the Organisation.Need – gap in Macro and Micro level,

Necessity Clear Goal – Feasibility and Sustainability.

Programme Cost / participation – Community

- NGO- Government and others.

Desired Result/ Evaluation – internal- externalSustainability /Scaling up the impact.

Information about Resource Provider

The main area of specialization/ purpose for which they provide resources

Their area of OperationFunding Cycles and PoliciesKey person to contact

Choose a Resource ProviderChoose a Resource Provider• Website

• Government Department

• FICCI

• ASSCHAM

• Embassies, Libraries

• News papers and Magazines

• Networks

Resource Provider - InternationalResource Provider - International

UN . Unicef

World Bank – Permission from Government

Bi/Multilateral agencies – Permission from Government – Govt approves only certain countries

Other Country Govt. Grants

International donors – Foundations

International donors – MNCs, CSR

National Support ConditionalitiesNational Support Conditionalities

SEPARATE BANK ACCOUNT TO BE OPENED

INTEREST EARNED TO BE ADDED TO THE

ACCOUNT

PARTICIPATION – COMMUNITY/ NGO

IN KIND

BY CASH

CORPORATES SOCIAL RESPONSIBILITYCORPORATES SOCIAL RESPONSIBILITY

• Gaining Momentum Now

• Corporate Wants to collaborate with NGOs for developmental activities.

• They create their own charities:Eg: INFOYSYS, TATA

AZIM PREMJI FOUNDATION – Rs. 8,846 Cr.

HCL – SHIV NADAR

HCL – VINEET NAYAR Rs. 43. Cr.

SAMPARK

BILLGATE

SUSTAINABILITYSUSTAINABILITY

• Financial Sustainability: Requirement of Core Funds Define Core Expenses Even in the absence of external

funding it should run. Create a core fund so that interest at the

rate of 8 % will be equivalent to meet the core expenses.

Invest wisely and safely where we will get good interest return.

SUSTAINABILITYSUSTAINABILITY

Project Sustainability:• Purpose of the project

– Education – Medical

• Should continue even if funding is stopped

• Resource Mobilization• Fees Collection• CSR and others

SUSTAINABILITYSUSTAINABILITY

• Resources of the Organization

• Strong second line of Management

• Friends/ Consultant/supporters may be

involved in the activities

• Governance Pattern

RESOURCE MOBILISATION

• Group/ Department / Desk

• It should be continuous process

• Sustainability is the final vision

• Modify the MODELS to comply with the changes in the law of the country

Keep Resource ProvidersKeep Resource Providers

• Happy with acknowledgement

• With THANK YOU

• GOOD Work - Maximum utilization of funds for the projects

• Constant Reports with photos

• Request them to visit you – Take them tot the field

ProposalProposal RejectedRejected

• Not followed expected guidelines• Poor communication• Case not presented properly /

inadequate linkage• Not as per the priority of the Funder• Does not strike the reader as significant• Ambitious without ground level work

International Contribution FCRA International Contribution FCRA BILL 2010BILL 2010

• The intention is that the new law on the subject should facilitate rather than obstruct receipt and utilisation of foreign funds” – Home Minister

• Annual Foreign Contribution received by voluntary sector is Rs.11,336.97 Crores for the year 2006-07

• Out of 40,173 Organizations as on July 2010 one half does not report and file the returns.

Salient Features of FCRA Bill 2010Salient Features of FCRA Bill 2010 Deemed to be registered under the new Act for

already registered associations

Should apply for renewal within 6 months prior

to the expiry of 5 years period ( Sec 16)

Restriction on Administrative expenses not to

exceed 50% - Sec.8(1)(b)

Assets disposal – manner, procedure to be

indicated by the Govt – Sec.22

Banks to submit returns of FC – Sec.17(2)

Provisions beneficial to the Provisions beneficial to the NPO sectorNPO sector

Second Bank account maybe opened for utilising the F.C. – First proviso to Sec.17(1)

Appeals and revision

Reason for non registration to be

communicated to applicant – Sec.12

Provisions affecting NPO sector Provisions affecting NPO sector registrationregistration

Valid for five years only – will affect

donors long term agreement

Many conditions given for the registering

authority to enquire into before granting

registration such as:

The person making application has not

been prosecuted or convicted and many

others (Sec. 21)

Provisions affecting NPO sector Provisions affecting NPO sector Cancellation of certificate of registration –Cancellation of certificate of registration –Sec.14, Suspension of Certificate - Sec. 13Sec.14, Suspension of Certificate - Sec. 13

It can be suspended for a period upto 180 days – Sec.13

Cancellation of certificate can be done if:The holder has made incorrect or false

statements in application – Sec.14(1)(a)The holder has violated any terms and

conditions of certificate of renewal, provisions of act 14(i)(b)

In public interest – Sec.14(1)(c)

The certificate holder has violated any of the

provisions of this Act or rules or order –

Sec.14(i)(d)

No order of cancellation to be passed unless

the person is given an opportunity of being

heard – Sec.14(2)

Registration for 3 years not possible in

cancelled under this section

Continuation..

Restriction on Admin ExpensesRestriction on Admin Expenses

Administrative Expenses shall not exceed 50%

and any expenditure in excess of 50% shall be

defrayed with prior approval .

Direct Tax Code Bill 2010Direct Tax Code Bill 2010

• It is a welcome measure that the phrase “Charitable Purpose” will be continued.

• 100% utilisation expected and Receipt in the month of march may be excluded.

• 15% accumulation – provision is withdrawn

  Taxing non profit organisationsTaxing non profit organisations• A basic exemption limit will be provided

as surplus in excess of limit shall be taxed.

• The proposal indicates that “10% of the gross receipts or 15% of income will not be taxed provided it is spent in next three years”. This essentially means 90% of the gross receipts or 85% of the income has to be spent within the year and if not spent will be taxed.

Taxing non profit organisations Taxing non profit organisations contd contd

• NPOs have to follow the cash basis of accounting except section 25 companies

• Government has power to notify certain NPO as exempt entity

• But, both the current law as indicated above and the proposed code prohibit even incidental business activities, in the case of NPOs included in the category of “Advancement of any other general public utility “. The institutions involved in such activities are exempted upto Rs. 10 lakhs in the present act.

Taxing non profit organisations Taxing non profit organisations contdcontd

INCOME

Relief of Poor

EducationMedical

ReliefAny other object of

general public utility

Preservation of environment including watersheds, forests

and wild life

Preservation of monument places or object of artistic

or historical Interest

New amendment – other object of general public utility

Amended section 2(15)

• ‘advancement of any other object of general public utility’ shall not be a charitable purpose if it involves the carrying on of

• Any activity in the nature of trade, commerce or business or,

• Any activity of rendering of any services in relation to trade commerce or business.

Definition - I

Definition - II

• For a fee or cess or any other consideration, irrespective of the nature of use or application of the income from such entity

• The retention of such income, by the concerned entity.

New LawsNew Laws

• Andhra Pradesh Microfinance ordinance, 2010

• Microfinance bill

Thank you…

And now…And now…