Page 34 - Sustainability and entrepreneurship for CSO's and CSO networks Cambodia 1 November 2018

CHAPTER 10: GENERATING MONEY
Entrepreneurs take the subject money very seriously (no money, no mission), and therefore engage in long term financial planning. These plans determine the sources of funding, the diversity of funds and how much money is exactly needed.
Entrepreneurs know that one funding source can be more sustainable than another. Furthermore, there is a difference between generating grants and earning income by selling products and services. The latter requires a different organisational capacity. What needs to be mentioned as well is that money is never for free. Generating money incurs costs on the organisation. These costs differ according to what source you're targeting.
This chapter is on earning money.
What do you take into consideration when choosing a funding model How can you mobilise money effectively
Money
Entrepreneurs make sure they have access to money, regardless of which funding sources they prefer. CSOs are mainly tapping from philanthropic resources, institutional and government grants and increasingly from commercial activities. There are only very few non-profit organisations that generate a substantial part of their budget from earned income. They take loans, seek investors or, sometimes, issue shares to finance commercial activities. To generate money, one needs to have a clear view on what the social capital market has to offer and what funding model matches the organisational capacity and mission best.
The money issue is a strategic one. So let’s start with a question:
• What income do you get from government grants and sponsors? How much money is earned? Did your funding model change over the last five years or did things remain the same?
No funding is for free; mobilising money incurs costs on the organisation. Think of time invested in grant applications, meeting administrative requirements, hiring staff and consultants. It’s important to list the costs and benefits of each funding source.
• Can you determine the costs and benefits of the funding sources your organisation used during the past three years?
Equal important is to determine what funding sources best fit your mission and create impact (leverage). When providing employment services to jobless people, it’s probably effective to provide real jobs and earn income by running a social enterprise. Which funding sources you choose also depend on other issues such as the development phase your organisation is going through and the specific purpose for which the funds is required.
Examples for budget purposes are:
• to develop your organisational capacity
• to develop services
• for overhead and other fixed costs •
• •
for research and innovation
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