Page 35 - Sustainability and entrepreneurship for CSO's and CSO networks Cambodia 1 November 2018

The legal entity of your organisation is imporatn. A foundation can’t issue shares and a limited liability (Ltd) is normally not suited to raise charity funds. Of importance is the risk you can take. Getting a loan brings financial risks, using government or charity grants normally only requires organisational capacity, deliverables and budget control.
It is worthwhile to assess the competencies and capacity within your organisation and to determine whether your organisation is suited for a philanthropic or social enterprise model. Or maybe both if you can separate social from commercial issues and minimise risks by creating different entities.
Funding models
The degree to which an organisation can be entrepreneurial is determined by its competencies. In their article Ten non-profit funding models Christiansen, Foster, and Kim describe 10 different funding models used by non-profit organisations, ranging from the heartfelt connector, to the member motivator and public provider. (Christiansen, Foster, Kim, 2009)
The research conducted by Christiansen, Foster and Kim ((Christiansen, Foster, Kim, 2009), indicates organisations that were able to upscale their activities and budgets by focusing on one specific funding model, and not by diversification. It also pointed out that each business model requires specific organisational competencies and skills.
The heartfelt connector model for example, requires that the organisation reaches and mobilises the general public. This means that the organisation has to invest in brand awareness and develop strategies to target the right populations. The member motivator model necessitates the organisation to succeed in fulfilling the members’ needs and wants, otherwise there won’t be any income.
• Task
What is your revenue (funding) model? Is your model focused on one or two sources of income? Do you want to make changes in the way your organisation is funded? If so, what model do you prefer? What does it take to make changes?
Mobilising money
Obtaining funding for an organisation requires matching (Handford, 2005). When mobilising money, one has to provide insight to the funder what social or financial return will be made on their investment. And one has to make clear why it is beneficial to the funder that he or she makes a contribution. Once potential funders are mapped they have to be attracted and convinced that the organisation or project is a worthwhile and trustworthy opportunity to invest in. In many ways it does not really matter whether you want to raise philanthropic, mixed or commercial capital. Applying for grants or donations is in many ways similar to raising a loan or private equity for a business startup.
In all cases a good reputation, a good track record, a sound project or business plan are important, together with a good and short presentation in which the project or business plan is clearly explained. Preparing a separate brief presentation, of some minutes (an elevator pitch) forces you to be concise, straight, direct and clear. If you can’t explain in two minutes what you are aiming for and to attract attention, you will also not be able to this in one hour.
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