"MODULE 4MDP 1403: FUND RAISING AND RESOURCE MOBILIZATIONCOMPREHENSIVE ASSIGNMENTQuestion one What are the key strategic options in fund raising?Fund raising strategy is very important for any organization wishing to gain support for itsactivities. Strategy helps the organization to focus on a target to work towards and identify theresources available to pursue that target. The aim of strategy is to look at the work being donewithin the organization in the context of its other activities and national and national and localpriorityFor an MFI, there are a number of strategic choices available for mobilizing funds namely:mobilizing shares. A share is a unit of ownership in the MFI. The ownership of a shareholder inthe MFI is measured by the monetary value of the units one has purchased. The ability tomobilize shares depends on the forms of registration of the MFI. MFIs registered as limitedcompanies; including banks, saving and credit cooperatives societies and financial serviceassociation can mobilize shares. SACCOs and FASs mobilize shares on a continues basis.Shareholders of a SACCO or FSA are also the beneficiaries of its financial services. Usually themaximum amount of loan that a member can borrow depends on the value of one’s shares andcontribution. This encourages the members to contribute more shares model and approachSaving mobilization is another strategic option; the ability to mobilize savings as a resource forMFI depends on its legal form and the credit that it uses for instance, commercial banksundertaking microfinance bill are allowed by the law to mobilize savings (deposits) from theclients and uses them in creating and expanding the loan fund. While SACCO, FSA, ROSCAsand ASCAS receive savings as shares contributions and thus make up the shares capital. Savingsalso act as partial or full security for loans lent out to clients. Whereas MFIs using solidaritygroup lending, they use saving as one of the conditions for joining the institution. Savingsmobilization can help MFIs to expand and deepen their outreach and to succeed in it MFI shouldconsider trust factor, liquidity of savings, Transaction costs and the real interest. Another strategic option which can be used is mobilizing of deposits. This is generally similar tomobilizing savings. A slight variation occurs with regards to fixed term deposits, which areactually savings accounts that are locked in for a specific time. Term deposits are generally astable source of funding for the MFI and pay a higher return to saver. Mobilizing deposit enablethe MFIs to manage its liquidity and gap more easily because the funds are available for aspecific period of time. Deposit can be mobilized as special products alongside the ordinarysavings.Mobilizing from subsidies sources is another strategy which normally occurs during initial yearsof the MFI operations. As time goes by, it becomes necessary for it to tend towards financialself-sufficiency by gradually reducing its subsidy dependence. For example K-Rep Bank whichhas evolved from a wholly donor-funded NGO project into a self-sustaining Micro financesBank. This is common among MFIs especially at the conception and rapid expansion stage. These subsidies include; donations in kind, concessional loans, donated equity among othersubsidies.Debt refinancing means that the MFIs borrow either for on lending or to meet operationalexpenses. This debt has a cost in the form of interest charged. Debt financing is where MFIborrow money at subsidized interest rate for on lending to the clients. Debt financing mayinclude borrowing from central bank, commercial and development banks, client deposits andsaving-these are not treated as client shareholding.Question twoWhat are the key question (both silent & loud asked by donors / supporters/ investorsbefore they commit to / release their funds/contribution (resources) to the organization?Show the extent to which these questions are internal or external to be organizationPlenty of nonprofit groups can show financial success. But donors need to ask the probingquestions that will make sure that dollars flow only to organizations that turn financial resourcesinto program results.On what research or evidence did the organization design its programs? Whether you areevaluating a local after-school tutoring program or a global disaster-relief program, a high- performing nonprofit should be able to speak about the evidence and research that shaped itsprograms. While many organizations have not conducted extensive evaluations of theirprograms’ results, all programs should at least be based on knowledge about what works. When a nonprofit is exploring an unproven approach, it is critical that the program is treated as aresearch project to test an idea—and those donors are told that.What information does the nonprofit collect about the results of its programs? For-profitorganizations can track their revenue and expenses to determine exactly how much profit theyare producing. Nonprofits need to track not only their financial transactions but also the socialresults that their programs achieve. The relevant information will vary at different organizations.However, all high-performing nonprofits should be making a consistent effort to collect theinformation that they believe is most relevant to measuring progress toward their goals.How does the organization systematically analyze the information it collects? It is notenough simply to collect information; the whole point of gathering data is to better understand asituation. Whether information analysis takes the form of sophisticated statistical analysis orsimply regularly scheduled reviews and discussion among the board and staff members, high- performing nonprofits should diligently attempt to understand the meaning of the informationthey collect.How has the nonprofit adjusted its activities in response to new information? Unfortunately,knowing what should be done is not enough to spur every organization to action, just as knowingthat eating less and exercising more are the keys to losing weight does not guarantee a successfuldiet. Nonprofits must be ready and able to adjust their activities as needed. High-performingnonprofits should be able to discuss specific instances in which they responded to newinformation by stopping or significantly altering their activities. Does the organization have an absolute focus on producing results? In the business world,the intended result—a profit—is also the fuel that sustains the organization. In the nonprofitworld, program results don’t usually pay the rent. That means that nonprofits are at risk of givinghigher priority to fund raising and other revenue-generating activities than producing programresults. Producing the revenue needed to run an organization is critical, but it is a means to anend. Sustaining an organization is useful only to the extent that it enables the delivery of programresults. High-performing nonprofits should be able to speak convincingly to their absolute focuson results.Is this an organization I can trust? Donors look at the appeal carefully; some charities’ namessound the same. Don't be fooled by names that look impressive or that closely resemble the nameof a well-known organization. Check with your appropriate state government authorities (this isusually a division of the state’s office of the attorney general) to verify the charity is registered tosolicit in your state. How will the organization use my donation? Ask questions about how the donation will beused. Beware of appeals that bring tears to your eyes but tell you little about what the charity isdoing about the problem it describes so well. For example, if the charity says it’s helping thehomeless, do they explain how (shelter, food, medical care) and where this is taking place? Thestatements such as "all proceeds will go to the charity." This can mean that only the money leftafter expenses, such as the cost of written materials and fund raising efforts, will go to thecharity. These expenses can be high, so check carefully. Is my donation tax deductible? If you want to take a charitable deduction for federal incometax purposes, make sure the organization is tax exempt as a charity under section 501(c)(3) of theInternal Revenue Code. A charity appeal will usually include a reference to this. Can the charity actually use what I’m donating? All charities welcome the receipt ofmonetary donations, but some also solicit in-kind donations such as clothing, food, and toys. Ifyou’re planning to donate items to a worthy cause, make sure you know the in-kind contributionsyour charity prefers. For example, a food bank may prefer food items that are not perishable suchas canned goods, and a toy drive may be seeking new and not used toys. Am I feeling pressured to give? Don't succumb to pressure to give money on the spot, eitherimmediately over the phone via credit card or by allowing a "runner" to pick up a contribution.Take the time to research the charity fully; the charity that needs your money today will welcomeit just as much tomorrow.Question threeUsing relevant examples discuss key principle of resources mobilizationResource mobilization is giving people the opportunity to give. It is not an end in itself but ratherthe process whereby resources are transferred from those who are able to give to those who havethe need to receive. Resource mobilization facilitates this process. It is the enabler of an activitythat not only satisfies the need, but also satisfies the giver that the resources have been wiselyand effectively used. Resource mobilization has the following principles. 1. Successful fundraising is all about building relationships with donors - whether they beindividuals or major corporations. It has nothing to do with begging for money. “Friend- raisingand fundraising go hand-in-hand”2. More than 60% of all giving comes from individuals in many countries, and this is even higherin developed countries like the USA and Australia, so you have to pay serious attention todevelop funding from individuals.3. Leadership in fundraising starts with your governing body. If the governing body does nottake an active interest in the planning and implementation of fundraising activities, it has lostcontrol of the organisation and its resources.4. Effective long-term fundraising has to be planned. Every non-profit organisation that isserious about its funding future has to have an organisation plan and a fundraising strategy.You cannot raise money or non-financial support if you are not confident and enthusiastic aboutthe organisation and its future.5. Resource development and fundraising is an emerging profession. No longer can you afford tobe casual about this activity. Those organisations that apply a planned, businesslike approach tothe task will succeed, and they will develop the capacity and skills of staff and volunteers to getthe job done effectively and efficiently.6. Resource mobilization is as important to the structure of a non-profit organisation as itsservice programme or its administration and finance. Up to now fundraising has been seen aseither "someone else's responsibility", or loaded onto an already overburdened chief executiveofficer or co-coordinator, or handed down to some junior clerical position. Question fourUsing relevant example in MFI, discuss the 4 cardinal conditions you would use to assesswhether a fund raising event is morally correct or not.One of the cardinal conditions you would use to assess whether a fund raising event is morallycorrect or not is that the action in itself is good or indifferent. It the action in itself is contrary tovirtues, and then is considered intrinsically evil. There is no need to consider its consequences.The good effect be the immediate effect that is, the good effect is not obtained through an evilmeans. This second condition is necessary so that one can speak of an action with an indirecteffect. If the negative effect is the cause or means to obtain the positive one, then the negativeeffect is wanted directly as a means: and that which is contrary to virtues can never be wanteddirectly neither as a means nor an end.The intention of the agent must be good this can be understood by the negative effects is notintended; this is necessary for an effect to be wanted indirectly; or the action in itself is notcarried out with a bad intention; in this case this condition is necessary for an action to beconsidered good regardless of the indirect negative effectsThere should be a cause or need that is proportionately serious to carry out the action. The fourthcondition demands the existence of a proportionate need for an action with a serious negativeeffect to be carried out. In many cases, it is difficult to evaluate it there is a proportionatelyserious reason to carry out an action with an equally serious negative effect. If the negative effectwill produce serious harm to others, it would be the more necessary to evaluate if such aproportion really exists. "