NGO Tips: Develop Good Relationship with Funders

Whether the funder of the non-profit service is a government agency or a charitable foundation, there are the same key elements of a successful relationship. Here are some of the reasons to work at this relationship and how to achieve success.

Reasons for Non-Profit Developing a Good Relationship with Funders

Many non-profit service organizations do not understand the importance of having a good relationship with their funders. They accept the money, deliver the service, and believe that’s all there is to it.

Boards and management of all organizations that depend on government or foundation funding might want to consider the following.

Each funder will be a reference for applications to other funders. Except in very large cities, these people usually all know each other. In some regions, there are even regular meetings of funders in certain sectors such as childcare, or homeless services.

Even a one-time grant might lead to more sustainable funding if the non-profit service agency develops a good relationship with the funder. For this to happen, both sides should fully understand the scope of the services and the possibilities for funding. Funders might even be able to let non-profits know of upcoming opportunities.

Funders are usually very aware of the needs of the community, often doing their own research, and more than willing to share the information.

Funders are often the decision makers or they have access to the people who make the decisions around policies, service mandates, and funding that affect the clients of the non-profit. For example, if a city government funds community social services, a different department of that same government, and ultimately the politicians will determine policies and funding allocation processes. Even a United Way grant comes from an agency that has access to these decision makers.

How Non-Profit Can Develop a Successful Relationship with Funders

Following are points to consider when planning how to develop, maintain, or improve a non-profit’s relationship with its funders.

Understand the letter and the intent of the funding contract. Whether it is a one-time grant for a pilot project or ongoing funding for service delivery, there is a piece of paper that outlines the expectations on both sides. This is not something to be taken lightly. The board is accountable for making sure all commitments are honored. Management is responsible for carrying out those commitments.

Be accountable. Ensure that all necessary information is submitted in a timely, accurate, and complete manner. This might include statistical, financial, and narrative reports that demonstrate the money is being spent the way it was intended. Some funders conduct regular financial and/or service audits. If the non-profit operates in an accountable manner all the time, these audits should not be a problem.

Add value to reporting. Most funders appreciate value-added reporting. This is the extra information that could help funders with their strategic planning. Make sure it is pertinent and succinct. This could include data that indicate emerging issues with the client population, or changes in the service landscape in the community.

Discuss any changes in non-profit services. Even if the board and management agree that it is necessary to refocus service delivery, it is imperative that discussions are held with funders before any changes are made. This could mean changes in the wording of a contract, or a change in funding. This is important even if the funder in question provides only part of the budget for that service.

Watch the attitude. It is surprising the number of non-profit organizations that take an adversarial stance with their government funders. A much more productive attitude is a recognition that everyone is working at finding solutions to community issues such as poverty, homelessness, or substance abuse. It is always more effective for the non-profit to be an ally, not an adversary.

Demonstrate community collaboration. Most funders have an appreciation for agencies that work well with service partners in the community. This is usually an indicator of openness and flexibility in service delivery. Working well with other service agencies also maximizes limited resources which goes back to a larger view of accountability.