MEANING OF DONOR
A donor in general is a person, organization or government which donates something
A person or institution who gives assets to another person or institution, either directly or through a trust. Under most circumstances, donors can deduct the value (or depreciated value) of the assets given from their taxable income. While many donors give out of the goodness of their hearts, many do so in order to avoid taxes, especially when donating through a trust.
MEANING AND NATURE OF DONOR SUPPORT
As set out in the Paris Declaration on Aid Effectiveness (OECD, 2005b), effective aid requires the mutual commitment that partner countries exercise leadership in developing and implementing national development strategies through broad-based consultative processes and that donors respect country leadership and help strengthen their capacity to exercise it. In promoting the pro-poor growth agenda, donors should focus on assisting partner countries to develop and implement nationally owned poverty reduction strategies suited to the local context through processes that strengthen the social contract in favour of pro-poor growth. Donors may help support the policy making process at various levels and by building capacity to:
i) Identify the binding constraints to pro-poor growth;
ii) Undertake broad based dialogue;
iii) Innovate to find context-specific solutions;
iv) Make informed and evidence-based policy choices such as by carrying out ex ante poverty impact assessments;
v) Manage for development results and ensure accountability.
To successfully build and maintain relationships with donors, it is very important to get into their shoes and understand their perspective.
Donors are human. Donors just like you and me, have their own ideas, their own lives as well as their own likes and dislikes. Donors typically respond best to people who share their interest in changing the world rather than people who clearly have their own agenda.
Donors give money for a reason. Donors are not required to give, but do so of their own volition. Donors want to accomplish something with their funding. Understanding what motivates each donor and what they want to accomplish is key in structuring your approach.
Donors often have their own goals and you need to make sure your goals and the goals of the donor align.
Donors are busy. Donors sometimes have hundreds or even thousands of people asking for support, and as such they cannot give their full attention to all of them.
Donors have their own way of doing things. Donors typically manage multiple grants at once and so like to have some consistency in the way applications are submitted, how accounts are kept, how monitoring and evaluation is run. Donors have requirements to meet.
Donors may have to make reports to their government, tax authority, accountants, board members, the public etc. Donors are often expected to be transparent, show improvement and maintain a good public image. Because of this, many donors are very risk-adverse, maintain high due diligence requirements and set high reporting standards. While this can make donors very bureaucratic, slow and at times difficult to work with, it is important to understand why these steps are in place and try to be as honest and helpful as possible.
Donors can give more than just money. Funding is only a part of what good donors can offer you. Many donors are field experts and
can advise you on current trends as well as on the technical aspects of running a project.
Donors care about the results.
Donors care about making a change or improving the lives of the beneficiaries, and your organisation is just the vehicle for these results.
IDENTIFICATION OF DONORS
Criteria as you identify your potential supporters
1. Does the call for proposals fit within the strategic plans? This question guides organisations in determining whether potential funders’ priorities are aligned with the areas of programmatic work.
2. What is the time period for the funding? While perusing a call for proposals the staff member needs to familiarise himself/herself with the potential donor’s funding time frames and funding cycle.
3. What percentage of the project budget would the grant cover? This entails identifying the proportion of the total project cost that might be acquired through the grant.
4. What is the level of complexity of the grant application and administration procedures, and what are the implications for the organisation? This includes becoming acquainted
with the reporting systems of the potential donor, and whether the grant is worthwhile relative to the burden of administering it.
5. What is the future sustainability of the project beyond the proposed funding period? This requires the organisation to assess the viability of the project in the immediate, medium and long terms.
6. Is there a value fit between the donor and the organisation? This is linked closely to whether the donors’ priorities and values align with the vision and mission of the organisation.
IMPORTANCE OF DONOR SUPPORT
Helping organizations strengthen their financial management and use funds effectively
Donor support reduces inequality and poverty Aid is far more effective for poor people – and cost effective too
Donor support empowers poor women and men to realise their rights, and reduces poverty and inequality
Donor support has helped empower citizens to improve the development process in their own countries
PHILANTHROPY AND DONOR PSYCHOLOGY
A philanthropist is a person who donates time, money, experience, skills or talent to help create a better world. Anyone can be a philanthropist, regardless of status or net worth. Philanthropy is the giving of money to people who need it, without wanting anything in
return. Philanthropy involves charitable giving to worthy causes on a large scale. Philanthropy must be more than just a charitable donation. It is an effort an individual or organization undertakes based on an altruistic desire to improve human welfare. Wealthy individuals sometimes establish foundations to facilitate their philanthropic efforts.
Philanthropy refers to charitable acts or other good works that help others or society as a whole.
Philanthropy can include donating money to a worthy cause, or volunteering time, effort, or other forms of altruism.
In modern times, philanthropy is often undertaken by those seeking tax breaks, in addition to feeling good and helping others.
Grabbing a donor’s attention is the very first psychological step that a supporter takes during a potentially lifelong journey that they take with a charity. This is the step where donors become aware of the existence of a giving opportunity. To give money, people need to then be satisfied with the ways that organizations treat them as supporters. They need to trust the organization to best achieve what they would like to achieve with their limited funds. They need to commit to supporting the organizations in such a way that the commitment itself is meaningful to them as individuals. The psychological transformation from paying attention to giving money is the process of integrating that cause from the external world into one’s most inner sense of who they are.
Common motivations among philanthropists.
Believing in the mission
Unsurprisingly, people who have a vested interest in an organisation’s work will donate because they share the same mission and values. According to a “believing in the mission of the organization” as a primary motivation for donating. Donors who are passionate about an
organisation’s mission can be some of its most consistent supporters because they feel devoted to the organization’s work and success.
Making a difference
Believing that their gift can make a difference is a principal motivating factor for giving to a organisations donors often desire a sense of connection and purpose in life. Therefore, giving money, time, and energy are ways individuals strive to find meaning.
Feeling personal satisfaction
“Experiencing personal satisfaction, enjoyment, or fulfilment” as a central motivation for donating. Altruism is selflessness, whereas experiencing fulfilment after donating involves a degree of self-interest. Many human beings naturally want to be connected and helpful, so warm-glow motivations should not be written off as selfish.
Being asked to donate
In fact, researchers have found that around 85 percent of charitable donations come after donors are directly asked to give. This effect does not necessarily stem from peer pressure. Instead, it reinforces the fundraising principle that donor asks should be as direct and
personalized as possible. Direct asks for support ensure that individuals feel personally invited to contribute and that their donation is needed.
The narrative that individuals give because they need a tax break is widely believed. However, while limiting taxes is a consideration in wealth management, one “cannot legally structure a charitable gift so that the donor receives a net increase in their wealth.” Donors will still have less wealth after a donation than if they had forgone the donation and resulting tax deduction.
Volunteering and having a personal connection
Volunteers are more likely to become personally invested in the organization’s mission and, thus, more interested in seeing it succeed.
Example philanthropists Kenya
1. Manilal Premchand Chandaria
2. Alibhai Mulla Jeevanjee
3. Sarah Onyango Obama
KEY DONOR REQUIREMENTS
a. Legitimacy: Different countries have different terms and requirements for recognizing the legal existence of organisations. But however diverse these requirements are across the
region; each state still exercises a degree of control over the incorporation of non-profit organisations. Only those that have been established according to their country’s civil laws and traditions are considered to be legitimate. Such organisations are more likely to gain
donor support because they have achieved some level of compliance with government standards, and are less likely to be suspected of being fronts for underground political movements or “fly-by-night” operations.
b. Transparency: This refers to open communication with internal and external stakeholders regarding an organisation’s financial and management health, and is a characteristic of organisations that disclose information about their programs, activities, and even financial transactions and investments to stakeholders and anyone who wishes to know more about the organisation. It is a criterion that is highly regarded by prospective donors and partners, as transparency assures them of an organisation’s trustworthiness and commitment to its constituents.
c. Accountability: This refers to an organisation’s ability to stand up for its mission, and to be guided by sound management and financial principles. An accountable organisation is one that responsibly services its community, properly manages its resources, and is able to report back to donors regarding the use of donated funds. Such organisations are also likely to gain public support, as quite a number of donors now expect to be updated on how their funds have been used by their beneficiary organisations. Moreover, it is not uncommon for donors to request visits to project sites to be sure that their monies are being used in the best way possible. If there is only one message to take home from this chapter it is this: In building a base of donors, the focus is less on resource mobilization, more on friend raising. The funds come as a by-product of the relationship, and not so much as an end in itself.
IMPLICATION OF DONOR DEPENDENCY
Whilst aid is succeeding in contributing to human development, dependency on foreign aid can be more problematic. This is not, as is sometimes argued, because aid dependency inhibits economic development or mobilisation of domestic resources. But it undercuts countries’ ability to chart their own development strategies, which is what is needed if development is to really take root. It does this by reducing developing countries policy autonomy, undermining recipient governments’ accountability to their own citizens, and making it harder for them to plan development programmes due to its unpredictability. So it is good news that, over the last
decade, even while aid has increased, aid dependency has fallen by a third in the poorest countries.
Loss of policy autonomy
Aid dependent governments can lose the space to design and implement their own homegrown development policies. This can occur as a direct consequence of aid, because donors insist, for instance, on recipient countries implementing the donors’ policy priorities. Or, an
indirect consequence, because countries are so busy engaging with donors that they fail to develop their own alternative policies, or because aid distorts government spending towards a particular sector.
Undermining accountability and responsiveness to national citizens
When services are funded in considerable part by aid, this undermines the normal relationship whereby citizens hold their own governments accountable for delivering “Aid is only a means to an end. Indeed, if aid is truly effective, it will progressively do itself out of a job.
Undermining delivery of services by government
This is because governments focus their attention on relations with aid donors rather than with their own people, and citizens focus attention on provision of services by donors or organisations . As a result, there may be less pressure for budgets to be transparent and accountable. Undermining predictability of government spending and therefore long-term planning
The volatility of aid flows (which is much greater than that of domestically-generated budget revenue, but less volatile than foreign direct investment), persistent large shortfalls compared to pledges, and the lack of transparent reporting on them by donors to government, can make it impossible for governments and their citizens to plan long-term and sustainable spending.
MEANING OF DONOR