Operational Issues In Partnerships: Funding

Author: Phill Butler | visionSynergy

 
This article is part of a series on major issues that leaders may encounter in the lifecycle of mission networks and partnerships. This article covers the issue of funding and outlines 4 major categories of costs in typical partnerships as well as a 5-step process for developing a funding strategy. More articles in this series coming soon.

 

Operational Issues In Partnership: Funding

 
All mission networks and partnerships need resources to accomplish their shared goals. In many surveys we have done with network and partnership facilitators, one of the issues that always rises to the top is funding.

The issue of funding can energize a group and help participants see that they can do things together they could never do separately, or it can be a major obstacle – yet another chance for pessimists to say: “I don’t see how this is going to work.” How you approach the issue can make all the difference.

Working together in effective partnership is an experience where you learn new ways of doing things, envisioning outcomes beyond your own capacity. By sharing the load with other ministries instead of just doing what you can do alone, you will make decisions involving people who may share your vision but not your history or organizational culture. Together, you will have to deal creatively with funding the joint effort. Looking at the issue of funding as an opportunity rather than an obstacle can transform your collective spirit and the success of your work.

 

Keeping funding in perspective:

 
Without a doubt, funding is an important issue. Partnership takes time. Partnership takes commitment. And partnership takes money. Everyone involved in a partnership must understand that partnerships do not come free. At the same time, it’s important to emphasize that there are many valuable benefits of being involved in partnership, and the financial investment a partner makes will often bring a better return than going it alone. It is true that being in partnership costs every participant something, but it is also true that everyone gains something from the partnership as well. It is the role of a partnership Facilitator to acknowledge what people put into the partnership, and to help participants see the benefits of the investments they make – whether in prayer, time, funds, or other resources.

Having said that, it is very important to keep the funding issue in perspective. Many people become nervous or edgy when money comes into the conversation. Unfortunately, the funding issue has caused far more trouble than many other issues that – in the end – are probably MUCH more important. Of course, money issues will always be an element of partnership, so it is better that you and your team actively work to make dealing with money a good experience rather than the bad experience that many people expect. Thinking creatively, trusting God to do good things in people’s hearts, and putting the money issues in their proper perspective will go a long way toward stabilizing your partnership and making it effective.

 

Grassroots concern:

 
In the bigger picture, partnership means that we have come together around a goal that is too big for any one organization or ministry to achieve on its own. People must join hands and hearts to realize the vision. Naturally, it follows that the funding for such projects will also be a joint effort.

While there may be the occasional funding “angel” with a special interest in your project, the most likely sources for funding are those people, agencies, and ministries that understand the challenge and the potential in your collaborative effort and who also have the long-term commitment required to make a real difference.

Experience has shown that the most effective, lasting partnerships or networks emerge from a grassroots concern. They are led by people who feel strongly about effecting change. People like this are committed to doing “whatever it takes” to see the goals realized. That includes contributing resources like money.

While a number of collaborative initiatives have been formed around high-visibility issues and funded by foundation grants, governmental support, and so on, the sense of ownership and commitment to success is rarely the same as with initiatives that are funded from the grassroots – by those most closely connected to and concerned about the vision.

Frequently, in the early Exploration and Formation stages of the partnership, costs are comparatively low. There may be salary and/or out-of-pocket costs for a Facilitator working behind the scenes. This person is often “loaned” to the partnership by his or her own organization because of the organization’s commitment to both the vision and the potential for collaboration. There may also be communications, travel, and other incidental costs. Often some person or organization covers these by loaning office facilities or part-time support staff.

As the group moves toward the Formation stage, costs may be incurred for meeting places, food/hospitality, supplies, etc. These things are also often donated by interested or participating organizations. If cash is needed and there is no immediate source, often the group committed to the vision will, in these early stages, agree on a modest contribution by each that will allow the group to move to the critical go/no-go stage of Formation.

Dozens of partnerships are operating very successfully in various parts of the world with minimal, consensus-based, organizational structures and informal memberships with donations that pay for central out-of-pocket costs. Some of those same partnerships may have operating budgets of millions of dollars. The point is that there are creative, durable, highly-effective models of collaboration that can avoid many of the traditional problems associated with issues like “constitutional” structures, required “dues and fees,” the “rights & responsibilities” of members, and so on.

One of the challenging aspects of the funding issue is that many people have a tendency to think that whenever money is involved there must by some kind of “central control” around the money – which usually translates to the suggestion that the partnership form some type of formal organization. However, this is not always necessary. Many effective partnerships work very well through “decentralized” cooperation around financial issues. For example, a highly-respected participant organization (usually one that is well established) may provide the core accounting service for the partnership (receiving & disbursing funds), with other participants providing the decision-making and oversight for the actual funds. Some of the largest partnerships in the world continue to operate this way even after many years of working together.

 

Key questions & costs:

 
As you move into the Operational stage of your partnership’s journey, you will need to think through issues of structure, funding, and defined roles (who is responsible for what) – all of which become increasingly important. Here are a few key questions you will need to address along the way:

  • How will you demonstrate transparency & openness in financial dealings?
  • Who will handle the money?
  • Who will ask for money (on behalf of the partnership)?
  • How will you set and document your budget?
  • What happens if all the money isn’t used?
  • How will you deal with equity issues (when not everyone can contribute equally)?
  • Who will apply for funds? Hold funds? Use funds?

Now, let’s consider the actual costs involved in an ongoing partnership or network. Here are some major categories and suggestions for dealing with these issues:

 

Facilitation Costs

Someone has to serve the whole group. This may be a single individual or a small, dedicated team that plays various roles. If the initiative has an individual who plays that “prophet/servant” role of the Facilitator, he or she has to be supported financially. How does that work? Here are some of the typical models:

  • A partnership that is smaller and/or more localized can be facilitated very well by a volunteer. This is the ultimate low-cost approach.
  • In larger efforts, the Facilitator can be loaned to the partnership by an agency or ministry that is committed to both the vision and the process of partnership. The organization understands the critical nature of having this sort of person serve as the glue, helping the group stay on focus and in effective relationship. This may be an open-ended commitment or for a specific term. Sometimes at the outset it is a trial arrangement for a year or two.

    Note: As we have observed more than once, continuity of leadership is vital, both in facilitation and in the general oversight of the partnership’s vision and their practical work together. Continuity can be provided by a steering committee, facilitation team, or individual facilitator. The wider the ownership, of course, the greater the likelihood of achieving continuity. When leadership is heavily dependent on a single individual, the effort is on shaky ground!

  • In some cases an outside third party, committed to the vision of collaboration, funds the Facilitator’s role. The funding party knows that the investment is likely to be multiplied many times over, as the partnership or network reduces duplication, increases effectiveness, and encourages new, creative initiatives.
  • The partnership grows to such size and complexity that the need for full-time facilitation is recognized by everyone, and the members are prepared to fund that role, along with its associated administrative costs. They develop a budget to cover these costs and share them – equally or by some other appropriate formula.
  • Members of the partnership can make non-cash, “in-kind” contributions, such as office space, secretarial or administrative support staff, or book-keeping, mailing, or computer services.

 

Administrative Costs

Out-of-pocket costs are needed to cover a wide range of issues in a partnership initiative: travel for the Facilitator, communications costs, office space and equipment, supplies, and so on. For a proactive facilitator giving serious, regular attention to the participants and the overall partnership, these costs add up. How does a partnership or network meet these costs? Partnerships can choose from several options or select a combination of these approaches:

  • Occasionally a Facilitator is able to fund his or her own out-of-pocket or general expenses. These may be provided by the Facilitator’s home agency or built into some type of personal support system. It’s rare, but it does happen.
  • As a partnership emerges, the group members see the need for the services that help them work together effectively. Through voluntary commitments, participants’ assessments, or some other agreed-upon means, the group funds those essential costs. This means, of course, that a team such as a steering committee or a finance working group needs, with the Facilitator or Facilitation Team, to develop an appropriate budget to recommend to the wider partnership. The recommendations need to include not only details of the costs, but ideas for how to share them.
  • More formally structured coalitions frequently have well-defined dues or membership fees, often based on the budget of the member agency or some other mutually accepted formula.

 

Meeting and Conference Costs

Asking questions about partnership finances or organization is much like asking, “How long is a piece of string?” You have to know specifically what kind of string and for what purpose. The same is true in partnerships and networks.

  • Early developmental meeting costs are usually covered by each ministry’s or participant’s own budget – the people or ministries most interested. Occasionally there will be a third party – a foundation, church, individual donor, or other institution for whom the idea of collaboration is a priority. When the vision is appropriately presented, they are prepared to help provide start-up funding. Frequently, funding is very decentralized and ad-hoc right through the Exploration and Formation phases. Facilities costs for these meetings are typically shared on some kind of equitable basis, with participants paying for lodging or food costs.
  • Once a partnership is underway, the Facilitation Team (Facilitator[s] and the steering committee or other leadership team) needs to develop an approach to funding the group’s ongoing work that suits the group. Costs for small committee or working meetings are usually covered by the participants. Administrative costs of larger meetings – particularly those that require advance work, printed materials, larger-scale communications, and on-site costs – are usually covered by a registration fee. Many partnerships and networks have participants who can’t afford the meeting expenses, so an amount is built into the general registration costs that can be used as a subsidy for those who can’t afford to attend otherwise.

 

Project Costs

Partnerships develop ideas that are only possible because the participants are working together. These projects frequently require new or specially allocated resources – time, personnel, facilities, and money. One of the great experiences in Kingdom collaboration is getting an idea that is “bigger than any of us,” then finding a way, together, to resource it and make it happen. What are the typical approaches to this challenge?

  • Often projects can be widely owned, with partner ministries contributing different key elements from their own resources. In other words, the project can be resourced from within the partnership.
  • Some projects are of such a scale that participating agencies agree to go back to their respective organizations and request that this collaborative project become a fund raising priority for their agency. Each agency actively works with its contacts to fund the joint project. A helpful variation on this approach is for the participating ministries to develop a common set of materials or write a proposal they can all use in their fund raising. It keeps the story consistent and makes it easier for individual ministries to present the project.
  • Another approach is for the ministries in the partnership or network to agree on a project purpose and plan, then develop a joint project proposal or presentation. On behalf of the whole group, they present the project for funding to an outside source—a church, denomination, foundation, or other funding resource.

In some partnership situations, for some projects, it makes sense to pursue specialized funding sources from outside the partnership. If you find yourself in the situation of needing to develop an outside funding strategy, here are some suggestions to help you in the process.

 

Five Stage Process of Developing a Funding Strategy:

 

Stage 1: Research

Ask… What are the needs? Who might be able to give? How much can they give? Do they have an interest in your people or in this type of ministry? How many people do we need to ask? Where does this information come from? (e.g. manuals, contacts, others in the partnership)

 

Stage 2: Cultivation

Build relationships. Meet people face-to-face. Envision people telling the Partnership Story. Send information about the partnership. Invite people to the field. Remember Fund-Raising is Friend-Raising.

 

Stage 3: Ask

Need to know the requirements of the donors.
Proposals will need to be prepared (may be written or verbal).
Proposals will need to be presented.

 

Stage 4: Follow-up & Re-Cultivation

Assuming the “Ask” is successful, then you need to follow-up with Receipts, Thanks, Reporting back, etc. This is all about RE-CULTIVATION – remember that Fund-Raising is also Friend-Maintaining.

 

Stage 5: Ask again!

For each of these 5 stages of a Fund-Raising Strategy it is possible to set positive and reasonable goals. As you begin to develop resources for your specific partnership – think about the research you might need to do. One thing to remember as you send out proposals is that 100 proposals are likely to get about 10 responses. And the better and stronger the relationship, the better chance of a response.

 

Things to keep in mind:

  • Build on long-term relationships
  • Know your potential donor
    Their interests
    Their procedures, formats, timing, and what they can give to
  • Match your “story” to the donor’s interests
    Meet the donor’s needs as you meet your objectives
  • Make a clear & compelling presentation
    Use appropriate language
    Give realistic expectations
    Provide relevant outcomes
  • Commit to thorough follow-up, evaluation, and reporting
    Gives credibility
    Enhances likelihood of future funding grants

Remember: those who support the partnership are part of the partnership!

 

Basic Elements in a Funding Proposal:

  • Why the project is needed
  • Who will be involved
  • Description of project in detail
  • That this is being done in Partnership
  • Clear explanation of relevance to funding agency
  • Why are we writing to/approaching you
  • How your help will make a difference
  • Where else we are looking for funding
  • How we plan to report back
  • Detailed budget plan
  • What has been raised/promised so far and by whom
  • Summary on one page at beginning (do they need to read on?)

 

Things to keep in mind:

  • The best proposals are short- 2 to 3 pages
  • Start with a strong vision / Kingdom impact statement. What is the dream? What is going to be the impact of this ministry?
  • Follow the impact statement with a clear and brief rundown of the activities and action steps you plan to engage in to accomplish that impact
  • Follow the action steps with a clear “costing” of those action steps
  • Follow the costing of the action steps with a re-stating of the Kingdom impact!

 
In all these things, it’s important to remember that God is the Fundraiser, not us. Does God want His people to work together? If we are in God’s will, do we believe He will meet our needs – particularly when the initiative we’re working on is pointing people to Jesus? The funding for our partnership is a great opportunity to see God confirming what He has put in our hearts to do!

 

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