Funding – the top ten deadly sins!

In 30 years of working with donor-funded organisations, we have been witness to many practices and shortcomings in relation to funding that have had a negative effect on the organisation concerned. Based on these, we have compiled this list of the top ten “sins” that could shoot your organisation in the foot when it comes to funding!

1. Undervaluing your organisation’s work and the contributions to it (by staff and board members, volunteers from the community, etc.). This can lead to “begging” rather than “selling” the real impact and value of your work – this could come across to potential funders as weakness.
2. Promising something your organisation may be unable to actually deliver.   One example, may be offering a Section 18A receipt, when the organisation is not approved to issue such receipts.
3. Giving in to pressure and agreeing to take on “more for less” – resulting in inferior service delivery, under-recovery of actual costs and/or engaging in activities that are out of line with the organisation’s objectives and mission.
4. When drawing up programme budgets, omitting the costs of important functions that underpin successful service delivery/programmes, such as governance, general and financial management, infrastructure, administration, audit and staff development.
5. Losing funder contracts or ignoring their terms and conditions and, therefore, not following, and/or reporting on, the approved plans and budgets. When preparing funder reports, being unable to access notes of budget assumptions and calculations and so not being able to explain budget to actual variances.
6. Delaying submission of requests for tranches or the required narrative/financial reports; a funder should never have to remind the organisation to request funds and/or submits reports.
7. Covering up fraud or theft of organisational resources and not taking appropriate action against the perpetrators. [It is also worth mentioning that related party transactions and any potential for conflict of interest should always be fully disclosed.]
8. Providing insufficient communication about developments/changes in the organisation and programme, as well as failing to respond to emails and questions.
9. Misspending and mismanagement of funds by using earmarked funds for something other than those activities approved by the funder.
10. Using “creative accounting” when reporting and so failing to reflect the reality of spending; this includes financial reports that cannot be tracked through to the financial records (the underlying transactions and the supporting documentation).

Don’t let these sins related to funding become deadly to your organisation.

Please contact us for assistance or for more information, email ziyo@ziyo.co.za or call 021 797 6226.