Fundraising for NGOs 101: Types of funding for an NGO

As you might know, Oxfam Novib is a non-governmental organization (NGO). NGOs are non-profit, citizen based groups that function independently of the government, organized on local, national and international levels to serve specific social or political purposes. They rely on money from a variety of sources, including individual donors, foundations, corporations and governments.

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Bangladesh Gender and Women’s Leadership Program. Photo credit: Peter Caton/Oxfam Australia

Currently, I am doing an internship on Fundraising and Women’s Rights at the Gender Justice department of Oxfam Novib, where I learn about fundraising, donor relations and donor mapping with a link to the gender projects of Oxfam Novib. What an NGO can and cannot do is tied to the amount of money the organization gets. Therefore, fundraising efforts are important for the NGO’s existence and success. Getting sufficient funding is a big challenge for most NGOs and the fundraising process is likewise challenging to understand. Funding can take many forms and it involves many parties. As it is always useful to understand the most common forms of donors for NGOS, here’s a short explainer:

Fundraising for NGOs 101
There are many different local and international sources for NGO funding. On the local level the most common ones are:

  • Governments: On a local level, there are government programs of the country the NGO is based that might be appealed to for NGO funding. Funding from the government can of course despite their independence from the government, however many NGOs rely heavily on government funding in order to function.
  • Local businesses: Local businesses might also be interested in having their names associated with development and community projects.
  • Community foundations: There may also be local foundations already established that share some of the goals of the NGO and are interested in collaborating by sharing funding as well as other kinds of resources.

On the international level, most common funding sources for NGOs are:

  • Official development assistance agencies of countries: These agencies are common in the governments of economically developed countries and serve to provide financial aid for developing economies. Sometimes these agencies give their money directly to a country’s government, to ensure ‘that the money goes to the right place’, a share of the funding can also be dedicated to NGOs and grassroots projects. The European Union can be seen as one of those agencies as well.
  • UN agencies: There are various agencies of the United Nations system that offer funding NGOs pursuing certain goals.
  • Multilateral developments banks: These banks, such as World Bank or the European Investment Bank, get funding from different governments aimed at developing particular regions and/or causes. The primary business of these banks is to provide loans to countries, but they can also provide grants to NGOs.
  • International foundations: These types of foundations are established for instance through endowments, either on the part of a wealthy individual or a large organization willing to donate a big amount of money to a NGO. These foundations only offer funding for a specified aspect of development or a particular region they are interested in.
  • Multinational corporations: Multinational corporations can be interested in supporting certain communities and/or international development projects. An example of this form of donor is.
  • Larger international NGOs: These INGOs sometimes provide support for smaller NGOs that act on a more local level but with a related focus.
  • Governmental funding: Sometimes an NGO gets money from other governments from different countries as well. This can be challenging because some governmental NGO funding may be viewed as controversial because of their norms and values and because the funding may support certain goals rather than a nation’s development goal.
Two members of Oxjam performing and fundraising.

Oxjam members performing and fundraising. Photo credit: Katie Richardson/Oxfam

These are just some of the most common types of funding. As I said, funding can take many forms of which a basic understanding is useful if you want to work for an NGO. In my internship, I learn a lot about how to approach these organizations and especially what organizations and donors are relevant for the Gender team of Oxfam Novib. For instance, if Oxfam Novib needs funding for their project that tackles violence against women in Vietnam, you look into the database of all these different layers of donors. In this search, you look at whether these donors have either a regional interest in this project or if they have an interest in the project topic. In short: if they are relevant to approach for fundraising. By understanding what donors and organizations might be interested in investing in your NGO can help to create better results for your projects and for the organization you are working for. Because, whether we like it or not; money makes the world go round. And with the money raised by an NGO, it can even make the world a better place.

This article was written by Laura de Lange, intern for the Gender Justice team.

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