1 COURSE ON FUNDRAISING Jürgen Carls University for Peace P.O. Box: 138 – 6100 San José, Costa Rica Tel.: (00506) San José, Costa Rica

2 THE DECREASE IN DIRECT GOVERNMENT FUNDING Direct government donations to national organizations have been reduced in favour of indirect donations, competitive donation programs and donations to development programmes This tendency is often called privatization of the public sector This prevails in some of the industrialized countries, such as The United Kingdom, The Netherlands, New Zealand and Australia Little by little this tendency is spreading to other OECD and developing countries

3 THE NATIONAL BUDGET IS THE BASIS External sources can never replace basic funds of the national treasure With regard to the national treasure institutions need to promote the institutions reputation at national level pay attention to the preparation of the annual budget, and Maintain good personal relationships

4 TYPES OF DONORS National donors with public funds Bilateral donors Multilateral donors Donors with private funds

5 A BILATERAL DONOR Uses public funds to finance a development programme of another country; usually from government to government, but nowadays many bilateral donors also fund NGOs The majority of bilateral donors are governments of industrialized countries: f.e.: ACIAR - Australian Center for International Research DCA - Development Cooperation Agency (Belgium) DANIDA – Danish International Development Agency

6 A MULTILATERAL DONOR Is a donor agency receiving funds from member countries The funds come from contributions from each member country f.e.: ADB – African Development Bank AFESC- Arabic Fund for Economic and Social Development ADB – Asian Development Bank EC – European Commission IDB –Interamerican Development Bank WB – World Bank

7 THE UNITED NATIONS ORGANIZATIONS Have restricted budgets and make fewer donations than in the past Carry out research, training and development activities e.g.: FAO – Food and Agriculture Organization UNEP- United Nations Environment Program UNDP– United Nations Development Program

8 PRIVATE FUNDING SOURCES Those are foundations of societies financed with the profits of commercial companies or by a donation made by a rich individual or a group of individuals f.e.: Ford Foundation Rockefeller Foundation McArthur Foundation Toyota Foundation Packard Foundation

9 CGIAR – CONSULTATIVE GROUP ON INTERNATIONAL AGRICULTURAL RESEARCH Is not a donor agency Composed of a group of donor members (50) who finance 16 international centers: e.g.: CIAT IITA IFPRI CIMMYT

10 FUNDING TYPES Loans Donations: basic or non-restricted donations restricted, or donations for special projects

11 LOANS Are financial contributions that have to be payed back Loans are often bland – the interest rate is by far lower than the rate of commercial loans Often, a respite is given before amortization takes place

12 DONATIONS Are financial contributions that need NOT to be payed back It is expected that these donations have an impact on specific development projects

13 BASIC OR NON-RESTRICTED DONATIONS (CORE FUNDING) The beneficiaries (donor receivers) can dispose of the funds for any kind of research or development programme The beneficiaries can also use the basic donations for acquiring equipment, pay salaries or cover administration costs

14 RESTRICTED DONATIONS OR DONATIONS FOR SPECIAL PROJECTS These financial contributions have to be used for specific activities The donation agreement is based on a convincing project proposal

15 CALL FOR TENDERS Donors publish a call for proposals to carry out the project Competitive funding of development programmes/projects Are frequently made for the investment or development of a project (road construction, electrical energy plants, dams) Growing importance for rural development projects

16 COMPETITIVE DONOR PROGRAMS The donors like to chose from different proposals The donor can specify a determined subject (natural resources development, crop improvement) or a specific geographic area The donor establishes guidelines, for example with regard to the size of the donation and the prefered length of the project

17 DONORS ARE INVESTORS The word donor means giving away. Nowadays, people prefer the word investor. The word investor conveys the impression that the cooperation agency is making a business decision to assign funds for a programme An investor, by definition, awaits to obtain results of his investment

18 DO YOU KNOW YOUR DONORS? Donors have many options when it comes to considering on how to assign their donations You need to know as much as possible about the donor agency, including its personnel, its objectives, its interests, its policies and its budget You obtain the information from internet and by personal interaction. Through this interaction you learn about the donor and the donor learns about you