Good compliance for institutional fundraising

In recent years, raising funds for causes has become increasingly difficult for social development organisations not least because of the new regulations brought in by the government. Among many reasons besides the government intervention that one may often eavesdrop in the development sector, challenges like decreasing revenues and profits of many listed companies, and an overall environment of controlled spending by individuals are chief. A sleepless fundraiser, struggling to meet her targets is not an uncommon sight.

In this atmosphere of uncertainty, one avenue that everyone is looking toward is international and domestic funding agencies. Given that many NGOs are hiring Institutional Fundraisers by the dozen is a key indicator of growing interest in this space.

When dealing with institutional funders, international or domestic, two things become of paramount importance viz;

a) a deep understanding of impact creation and
b) watertight compliance.

While NGOs know what they are doing in general and have clarity over their theory of change and have clear LFAs, many new and small NGOs are yet to come to terms with the kind of compliance that impresses these agencies. With this in mind, I have attempted to put together useful information about the kind of compliance required for success on this front. But first, a few quick disclaimers.

The following checklist of compliance is collated from my interactions with fellow fundraisers, a special mention to Mr Jatin Tiwari from Sightsavers India, and my own experience. However, this is by no means an exhaustive or official list. There may be organisations that need more or less from what I have listed here and may change on a case-to-case basis. This list, though, is an attempt to get the basics right and should put your organisation on a path to raising money from institutional funders.
With that out of the way, here is a list with details where needed:

Basic Compliance Related

Compliance ParameterComments
OrganisationTrust, Society, or Social Enterprise
FCRAHaving an FCRA is a plus even when pitching for a domestic funder as it can add to your credibility.
Board Member list Including their history and affiliationsIt is useful to have Board Members with a good verifiable track record and devoid of religious or political affiliations.
Type of trustMust be executive and not family trust.

Social Change Related

Compliance ParameterComments
Theory of Change 
Trust Charter 
LFA for each projectThis should include, problem-statement, activities (inputs), outputs, outcomes and impact.

Credibility Related

Compliance ParameterComments
List of large donorsHaving been supported by CSR or Institution can add to credibility.
Government MOUs 
Certificate from Credibility AllianceThis is a vetting process and the certificate carries immense value.
Audited by any big 4?If under a grant the program has been audited for financial and impact processes by a reputed external agency, the credibility stands to gain.
Civil, Criminal cases, Organisation and Trustees.Zero cases are best.

Systems and Processes

Compliance ParameterComments
Objectives in Trust Deed 
Work and Deed alignmentA funder may seek to check if the work being done is in alignment with the stated objective and goals.
Financial Policy and PracticesGood fiscal prudence and systems with checks and balances in place are desired by the funding agencies.
Child Protection PolicyIf your work entails dealing with minors in any capacity.
Safeguarding PolicyOverall safe environment for staff and beneficiaries.
POSH CommitteeFor Staff
Overall Admin ExpensesWhat percentage of your total income is spent on overheads? This is seen as a sign of fiscal prudence.
Board Meetings and whether minutes are maintained. 
Procurement PolicyFor checks and balances. A 3 tender policy is advisable for high-value purchases. The definition of the same can be in the financial policy.
Whether EPF, Gratuity followed? 
Brand Guidelines 
Communication Policy 
Fundraising StrategyFunders want to understand if the NGO is dependent on them or has a long-term sustainability goal.
Employee acceptance of policiesHaving these policies is a must but having all the employees sign off and adhere to them is even better.

People Related

Compliance ParameterComments
Recruitment PolicyNo negative discrimination. Positive may be encouraged. Affirmative action and inclusion are recommended.
Teams – M&E, Program ImplementationProfiles of team members in implantation and monitoring add value to overall program credibility.
Senior Management Committee 
Gender Ratio – Staff and beneficiariesMany organisations seek a balanced gender ratio in both.

It must be stated that there is no guarantee of raising money from agencies even after having these compliances in place. However, it is a certainty that without some of these, the chance of receiving the support of donor agencies goes begging. I must also note, that for new NGOs, not all of these are required from day 1. But at the same time, the 3-year timeline that you get before you are eligible to receive institutional grants may be invested in creating systems to comply with these. Of course, what to do to raise money in these 3 years is an entire article by itself, but you may get a glimpse of that in my fundraising class at IICSR.

Happy fundraising!

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