C Masters Development Services Tenders & Contracts Cathy Masters B.Com (Hons) CA(SA) Lisa Thompson-Smeddle Mphil; Bphil; BA Tenders & Contracts Cathy Masters B.Com (Hons) CA(SA) Lisa Thompson-Smeddle Mphil; Bphil; BA

Strategies for financial sustainability for NPOs 1.Diversification of income sources 2.Reducing donor dependence - contracts for services or outputs – focus is shifting from input to output & impact so too the financing model!! 3.Building, investing, & protecting reserves – necessary to support new models of financing! 4.Building relationships with government and the private sector Strategies for financial sustainability for NPOs 1.Diversification of income sources 2.Reducing donor dependence - contracts for services or outputs – focus is shifting from input to output & impact so too the financing model!! 3.Building, investing, & protecting reserves – necessary to support new models of financing! 4.Building relationships with government and the private sector

Tenders & trade contracts 1.A tender is an offer to do work or supply goods at a fixed price. Once accepted, a tender is a binding contract. 2.A contract between parties to deliver particular activities (services) or outcomes (products) for a fee or price. Direct exchange of value - direct to the customer/beneficiary and paid for by them Indirect delivery of value to others - Contracted/paid by one party and delivered to a different party/beneficiary Tenders & trade contracts 1.A tender is an offer to do work or supply goods at a fixed price. Once accepted, a tender is a binding contract. 2.A contract between parties to deliver particular activities (services) or outcomes (products) for a fee or price. Direct exchange of value - direct to the customer/beneficiary and paid for by them Indirect delivery of value to others - Contracted/paid by one party and delivered to a different party/beneficiary

Tenders & contracts for NPOs 1.For sale of core activities and outcomes directly related to objectives, e.g. NICRO, Trauma Centre, JET Education Services 2.For sale of unrelated (or partly related) activities and outcomes. Business on the side e.g. CWD bookshop, 2 nd hand goods Beneficiaries in trading activities, e.g. Wola Nani, Oasis Consulting fees – selling expertise e.g. Tenders & contracts for NPOs 1.For sale of core activities and outcomes directly related to objectives, e.g. NICRO, Trauma Centre, JET Education Services 2.For sale of unrelated (or partly related) activities and outcomes. Business on the side e.g. CWD bookshop, 2 nd hand goods Beneficiaries in trading activities, e.g. Wola Nani, Oasis Consulting fees – selling expertise e.g.

The Possibilities Large donor funds are shifting to support government services Government needs NGOs to assist with service delivery Once you have completed a successful tender with government your likelihood of winning further bids increases Government and private sector institutions allow for long term contracts The Possibilities Large donor funds are shifting to support government services Government needs NGOs to assist with service delivery Once you have completed a successful tender with government your likelihood of winning further bids increases Government and private sector institutions allow for long term contracts

Research and Planning Scan tender sites and/or subscribe to tender services for relevant opportunities – examples (Tenderscan, Tradeworld, GCIS tender bulletin, Government Gazette, relevant websites, newsletters) Understand the procurement systems (MFMA,PFMA) B-BBEE status Conflict of interest Understand relevant policies Quality and competitive pricing Research and Planning Scan tender sites and/or subscribe to tender services for relevant opportunities – examples (Tenderscan, Tradeworld, GCIS tender bulletin, Government Gazette, relevant websites, newsletters) Understand the procurement systems (MFMA,PFMA) B-BBEE status Conflict of interest Understand relevant policies Quality and competitive pricing

Before you Begin: Register on Supplier Databases City – Metro/municipality Provincial National – Treasury Government departments SETAs Before you Begin: Register on Supplier Databases City – Metro/municipality Provincial National – Treasury Government departments SETAs

The Challenges Registrations & compliance Specific terms of reference Alignment of objectives Scope of delivery (often wider than local community) Capacity issues Lengthy tender/contract process Cash flow – delayed payments Cost competitive but must be financially viable The Challenges Registrations & compliance Specific terms of reference Alignment of objectives Scope of delivery (often wider than local community) Capacity issues Lengthy tender/contract process Cash flow – delayed payments Cost competitive but must be financially viable

Get your ducks in a row!! Registrations and Compliance Legal structure – basics Governance NPO Act SARS -Valid tax clearance certificate B-BBEE - certificate Financial – audited AFS Company profile/CVs Get your ducks in a row!! Registrations and Compliance Legal structure – basics Governance NPO Act SARS -Valid tax clearance certificate B-BBEE - certificate Financial – audited AFS Company profile/CVs

Finances Reserves or seed money - cash flow Full costing– not just direct delivery cost, but also underlying support/infrastructure costs, but still competitive! Profit margin and risks VAT & other tax implications Finances Reserves or seed money - cash flow Full costing– not just direct delivery cost, but also underlying support/infrastructure costs, but still competitive! Profit margin and risks VAT & other tax implications

Meeting the challenges Collaborations Consortiums Business partnerships Government Donors Meeting the challenges Collaborations Consortiums Business partnerships Government Donors

Shift Thinking!! Think Big! Social Enterprise Sell social outcomes not problems or activities Think innovation, opportunity, and successful change Think bigger – scale- ability Think brand value Be adaptable Not too precious Brave heart Shift Thinking!! Think Big! Social Enterprise Sell social outcomes not problems or activities Think innovation, opportunity, and successful change Think bigger – scale- ability Think brand value Be adaptable Not too precious Brave heart

Thank You Cathy Masters Executive Director CMDS Lisa Thompson-Smeddle Director Sustainable Development Network

Factors that affect organisational sustainability