Initiative for social action and renewal in eurasia third sector news information bulletin

NGO SECTOR DEVELOPMENT

Private Support as a Possible Source of Funding for NGOs

By Alekper Guliev

ISAR-Azerbaijan

Throughout the world today, and especially in the United States, where people are well-

accustomed to giving charitable donations, charitable donations can account for up to 80% of the

income of non-governmental organizations – this supports totals of about $100 billion per year.

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As charitable donations play such an important role in allowing non-governmental organizations

in the US to carry out their activities, NGOs there spend most of their fundraising energies on

seeking this type of support.

In Azerbaijan, the situation is quite the opposite.  The majority of funding for NGOs here in

Azerbaijan comes from international foundations and donor organizations, as well as foreign

embassies and multinational companies working in the country.

It is not uncommon to hear the opinion that receiving grants is the easiest and most convenient

form of financing.  However, this is far from the truth.  In fact, this form of financing has a

number of drawbacks.  First, at the present time, grants are extremely competitive and grant

funding is becoming more competitive year by year.   Grant giving organizations often have to

turn down grant applications that are well-written and well-prepared, simply because the

foundation does not have enough funding to support every project that it would like to fund.

Competition amongst NGOs is tight, and often only one in ten projects is supported.  Thus, nine

out of ten projects go unfunded, and most of them are never actually carried out.  Additionally,

due to the importance of grant funding in Azerbaijan, many NGOs spend their time trying to

write and perfect grant applications to please donors, rather than concentrating on carrying out the

work that would best benefit society.  Additionally, NGOs’ work often becomes regulated by the

timeframes of the donor organizations and NGOs live project to project.  Most importantly,

worthwhile projects that fall outside the focus of the foreign donor organizations working in

Azerbaijan often have little chance of being carried out, and NGOs find their activity restricted.

In the US and other countries where private donations provide the lifeblood for NGOs, the

situation is quite different.  First, an organization can decide on its own how and when to hold a

fundraising event, without being concerned about the schedules and regulations of grant giving

organizations.  Second, the organizations have more control over how they allocate such funds to

various parts of their organization’s activities.  And third, fundraising activities serve not only to

raise funds, but also to raise public awareness and interest in the activities of the organization and

help create a positive image for the organization.

While NGOs in Azerbaijan are aware that private fundraising activities are used by some NGOs,

the vast majority chooses to ignore this means of financing.

Why is this the case?  In my opinion, there are several reasons— NGOs’ fear that in Azerbaijan it

isn’t possible to hold successful fundraising events due to the lack of a tradition of charitable

giving in Azerbaijan and the lack of knowledge and experience about how to conduct fundraising

campaigns.  It must be noted that in Azerbaijan, most NGOs view their activity on a project-to-

project basis—that is, as short-term activity with a start date and end date, which should bring a

concrete result by the end date;  fundraising from individuals is a long-term process, involving

upfront costs and commitment, and, as a rule, makes more sense when long-term commitment is

sought.

Let’s take the example of the Russian Greenpeace organization, which decided to undertake

fundraising from private sources.  First they identified their target group and began to develop the

fundraising program, first looking at their financial situation.  They worked out a system for

receiving payments from individuals.  Then they prepared and distributed several thousand letters

to the people in their target group.  When they received replies to their letters, they analyzed the

responses, and followed up with the senders.  Of course, it took some financial resources as well

as human resources and time to carry out this fundraising effort.  Only after a full year of

continuous work on this fundraising campaign did Greenpeace Russia break even.  That is, one

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year after they began this fundraising effort, Greanpeace staff and volunteers saw their efforts

begin to pay off—the full costs of their campaign began to be exceeded by the amount of the

donations they had received.

 It might seem that this type of fundraising is ineffective.   For surely the efforts that were spent

on raising these funds could have helped the organization to win several grants during the same

one-year period.  However, the results for Greenpeace go far beyond the money they received.

The campaign enabled Greenpeace to cultivate a certain group of people who are helping the

organization today and will continue to help it in the future.  And the number of such people will

continue to grow.  The basis for future funding for the organization has been established, and in

turn,  Greenpeace Russia has taken the first steps toward formation of a truly financially stable and

sustainable organization.

What lessons does this example hold for Azerbaijan’s local NGOs?  First, fundraising takes effort

and study and time.  It takes looking at examples abroad, and reading literature about fundraising,

and trying to adapt these methods to the local situation, and not being afraid to experiment.  Only

by using your full potential can you realize the financial sustainability of your organization.