Developing a Funding Strategy
Developing and implementing a funding strategy is crucial to the sustainability of your organisation. It helps organisations raise funds to continue or increase their services.
A funding strategy is an integral part of your core functions. It should be linked to your vision, mission, and strategic goals. Funding strategies should cover a three to five year period. Do not file it away after it has been developed. Treat it as a living, action-orientated document and continuously evaluate and review your targets and efforts.
A funding strategy identifies:
- Your funding needs
- Potential sources of income or support
- How relationships with current funders will be nurtured and maintained
- Team roles in fund development
- How the strategy will be implemented, monitored, and evaluated
- How the outcomes will be reported.
For more information about developing a team to formulate a funding strategy see Funding Development Team.
Your Funding Strategy
A funding development strategy is in part a business plan. When developing a funding strategy, you need to:
- Assess all funding opportunities
- Consider the type of funding needed (e.g., project support, general funds, in-kind contributions)
- Identify the type of organisation or funding arrangement which will meet your need
- Plan long-, medium-, and short-term goals to maximise opportunities
- Recognise and promote your organisation's assets and strengths.
Keep your funding strategy short. The basic information required in every funding strategy is:
- What funding is needed – how much, for what types of activities, when?
- Where funds will come from?
- What activities are needed to raise funds, when do they need to happen, and who will undertake them?
Funding bodies want to minimise duplication. To avoid duplicating services, conduct an environmental scan of:
- Similar services in your area
- Services in other areas which may be suitable for your community and consumer group
- New research and modes of working to ensure the services you are offering reflect best practice.
Consider how your activities:
- Complement, but do not duplicate, the work of others
- May be improved by incorporating new ideas and service delivery options.
Review and Evaluate
Your funding strategy needs to have the flexibility to react to new opportunities or to limit activities that are not practical or profitable. It should be:
- Monitored and evaluated throughout the year (at least once a quarter)
- Reviewed on a yearly basis.
At the end of each year, review what you said you would do and compare it to what was done. Hold an evaluation session so everyone can contribute. Ask yourself:
If we are not hitting our targets, what can we do to improve the situation?
Why Develop a Funding Strategy?
A funding strategy helps organisations to:
- Focus, prioritise and plan their objectives
- Incorporate funding activities as part of routine activities
- Identify additional help from Board members, volunteers, or external stakeholders
- Plan the team involved in developing proposals and writing applications
- Identify the strengths and weaknesses that team members bring to the fund development process
- Work towards achieving concrete funding strategy targets.
An Ask Letter
An Ask Letter is an unsolicited letter written to a funding body to request their support.
When writing an Ask Letter, it is important to:
- Keep your letter formal and to the point
- Communicate how the funding body's contribution will help the identified problem
- Personalise the letter
- Conclude by thanking the funding body for their time and consideration.
The letter should contain three simple paragraphs:
- Introduce yourself and your organisation’s mission
- Outline your request to the funding body and indicate what they will get in return
- Thank the funding body for their time and invite them to contact you with any questions.
A good Ask Letter may be used again. However, ALWAYS adapt it to reflect each specific funding body and their priorities.
Anatomy of An Ask highlights the components of an Ask Letter.
Why Do Alcohol & Drug Organisations Need To Apply For Funding?
Funds are distributed through competitive grant, tender, and procurement arrangements because funders:
- Are accountable to stakeholders
- Must demonstrate the work funded was worthwhile
- Have limited financial resources
- Receive more applications for assistance than they can fund
- Assess which bids offer best value and community benefit
- Are required to be transparent in their decision-making
- Establish criteria upon which to base their decisions.
Government bodies, in particular, must:
- Follow formal public procurement, tendering, and grant rules when distributing public funds
- Act on an objective, fair and transparent basis.
For further information about government funding opportunities and procedures, see the table below. Please note that information was not available for all states and territories. Check with your relevant state and territory if you require further information.
TIPS: Developing a Funding Strategy
- Try to otain funds from a variety of sources.
- Develop a funding calendar that lists funding opportunities awarded on a cyclical or advertised basis.
- Identify the types of activities your organisation wants to undertake, why these activities will benefit the community, and the kind of funding required.
- Create a file to store relevant grants, procurements, and tender processes; policy documents; names of key contacts.
- Think creatively and laterally about funding sources. Consider alternative fundraising strategies if you fail to secure funding through the usual streams.
- The larger your organisation or the more you do, the more you may need to diversify your funding sources.
- Understand your organisation’s tax status before you start exploring funding options. This will affect the type of funding you are eligible to receive. See Organisational Compliance and the Australian Tax Office (ATO) website for more information.
The Benefits of Developing a Funding Strategy
- Enhances the organisation's reputation
- Responds to challenges
- Capitalises on opportunities
- Engages stakeholders
- Increases understanding of what works and why
- Uses meaningful criteria to measure success
- Attracts more loyal funders and money.
Watch the You Tube videos below for information about how to develop a funding strategy.
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