Funding - Style over substance, WHY?

[Mark Trotter]

I spend most of my working life creating access to funds for small and medium sized enterprises. Most struggle because the funding system seems to look for short term quick wins, a form of style over substance, but projects that may attract promises of large sums however this money never seem to get the funds to the grassroots of community.

I am interested in why people think this acceptable and if they don't what do you think can be done to create an alternative culture that non-mainstream funding sources will buy into.

The reason this interests me is that over the last twenty years some of the best designed products and services have recieved so little support at they remain unviable in all economies one instance is a simple provision of transport for a community in Southern Africa that would have created a local co-operative was blocked because the benefits would only have been fully felt after the second period of enhanced project development in all about 10 years.

ANother project that just provided some items that after a short time would be useless recieved sponsorship but just faded away as the funders were told in the first place.

What I am really interested in is your experience, how we identify the critical issues and then how we can collectively share an approach to attracting funding that will be the catalyst for change.

Thanks for reading this if you have questions you think I can help with just fire away.

[Mark Trotter]

There are three types of capital that need to be activited when seeking the establish something worth while and often the one you start with says where the funding will come from.

The first is of course financial
The Second is social capital
The third Political

Although the first two are where things are supposed to start the lobbyists in most countries will tell you that the third win's elections and keeps power and that is why money follows the political style over need and substance

I spend my days working out ways to attract one and two because ethically I know to sell out to political influence is to miss the purpose of the work we do.

So how can we create that policital style that will attract the decision makers?

[Mark Pepera]

Hello Mark, I read your blog with some interest. It is true that most financiers have a very short term view, that is possibly why philanthropy is a more sustained approach. By its very nature, "sustainable" implies long term thinking. In my fund raising exercises, I have been dealing with Net Present Values and Discounted Cash Flows. In the world of power generation and manufacturing, these questions are more easily answered. In order to overcome this deficiency of thinking when approaching sustainable community development, I came up with a model within which there were short term gains for financiers and long term community benefits.

I approached the view that sustainable referred to environmental, social and financial gains and not just environmental. I looked further at a model that drive the creation of resources that would enable easier entry for smaller and more diverse development. To cap it all, I broke the project down into a three stage benefit model. This enabled initial investors for US$1m a major multiplier (80 times) in two years, second stage (US$15m) to achieve 20 times in 10 months and third stage (US$80m - not yet processed but strong demand) to achieve sustained annual dividends for the long term. By making them "winners", I have been able to move forward to create a community with all the benefits of social and ecological sustainability.

As this sort of project appears to enable financing, perhaps the real issue is that when all the nice talk is done, financiers are looking for the money that covers their annual cost of living and pays for the annual conference in Bermuda.

[Mark Trotter]

Mark

I don't disagree with anything you have said here. A true model of sustainability is all about people and communities, the financiers can only look at what is important to them.

It does interest me that you think that state views of sustainability are aiming for the long term when my experience is the very opposite they are looking for media impact and real election winning soundbites.

For instance microgeneration is a sustainable goal and would cost less than the impact of Nuclear power in the long term but government knows it would take 15 to twenty years to get every home adequately resourced, those who don't get the microgeneration equipment early won't vote for them so they can't risk the effort, whereas only a vocal minority will stop voting for them on the nuclear principle.

Thanks for the comment it put an interesting flex on the question

Regards

Mark T

[Ochola Michael]

Dear Mark,

Sorry for the late entry, I have a few thoughth/solution the question.

1). The issue behihnd failure of funds reaching the grass roots is related to strings attached/nature of organisations to donors. iSome organisations spend alot of funds on adminstratihon/running costs other than the community suffering/ in need and this coupled with expertriate nature further reduces the amount to reach the community. I do appriciate that sending consultants in implementing organisations is good but the rate and frequency matters.

2) There are other projects that are never supportive to the community. for Northern Uganda for example after the 20 years war and support to women, men etc if you try to access the impact, you can not measure. this is becuase the community's coping mechanisim are not taken into consideration and also the capacities they possess. If we can only realise that suffering communities has capacities to decide what they need, when, how and what roles they have the better the utilisation of funds. for the conflict affected communities Community managed disaster risk reduction projects would best work for them. Tiis is a major challenge I thing Northern Uganda has faced as many projects have left the community not owning their activities as bore holes, goats, cows, schools, hospitals are associated with the NGO that made it and not for the community.

3) Implementing partners have always offered immediate solutions to communities. Have you had of a betterfly story? this would be applicable to your senario.

4) Donors have restrictions to NGOs who have always struggle to meet the demand of donors other than the beneficiaries. They thing if a project succees in meeting it's objective then the project is a success and this is what brings more funds.

All in all based on my experience in Northern Uganda with Caritas and also as a born of the place most projects have always been community based other than community Managed, also we NGOs have always struggled to offer solutions without analysing the potentials the communities possess and this kills the sense of ownership.

Thanks

Michael
Northern Uganda

[Mark Trotter]

Hi Michael

Thanks for the response, thought provoking.

It certainly argues that restrictions placed by people who are only interested in their outcomes or outputs can stifle any real ownership and benefit.

Regards

Mark