Topic 2: Types of donors and types of funding

Topic 2: Types of donors and types of funding

Maximising funding opportunities through grant-seeking strategies is essential for organisations striving to fulfil their missions effectively. A straightforward approach to achieving this goal involves categorising potential funding sources based on two critical factors: the type of donor and the type of funding they offer. By employing this method, organisations can refine their grant-seeking efforts, identifying the most suitable funders and funding types to align with their specific needs and objectives. This introduction sets the stage for a systematic exploration of grant-seeking optimisation, offering organisations a clear pathway to securing the financial support necessary for their endeavours.

Types of donors

  • Public Sector: This category includes government agencies, both at the national and local levels. These funders often have larger budgets and can provide substantial grants.
  • Private Sector: Private sector funders encompass businesses corporations, and foundations. They may offer grants or corporate social responsibility (CSR) partnerships.
  • Individuals: This category involves individual donors, philanthropists, and crowd-funding sources. They can provide smaller, individual donations.

Types of funding

  • Core Funding: This type of funding is usually flexible and can be used for the NGO’s general operations and organisational development. Often referred to as unrestricted funding.
  • Project Funding: Project-specific funding is earmarked for a particular initiative, program, or project. It’s often more restricted and tied to specific goals.
  • Capacity Building: Capacity building grants support an NGO in improving its internal capacity, infrastructure, and skills.
  • Emergency Funding: This funding is meant for addressing immediate and unforeseen crises or emergencies.

A great way to simply categorise funding sources based on these two factors is to use a funding grid. This funding grid also becomes important later, when you manage several grants and other types of income simultaneously.  See an example of one in the image below:

How to use the funding grid to optimise grants

  • Identify your needs: Determine your NGO’s specific funding needs, whether it’s for general operations, specific projects, capacity building, or emergency situations.
  • Research funders: Research potential funders within each category (public sector, private sector, individuals) who align with your organisation’s mission and goals.
  • Tailor proposals: Create tailored grant proposals for each funder and funding type based on their priorities and requirements.
  • Diversify sources: Strive to diversify your funding sources by seeking grants from multiple categories to reduce dependence on any single funder.
  • Stay flexible: Adapt your funding strategy as your organisation’s needs and circumstances evolve.

The NGO funding grid serves as a valuable resource for organisations seeking to navigate the complexities of grant-seeking strategies. By categorising potential funding sources based on the type of funder and the type of funding, this framework offers clarity and direction in the pursuit of financial support.