Where is my money!!? – A question that NGOs need to find a solution for!

Posted: February 9, 2010 in Innovation, Internet, Management, Strategy, The_Entrepreneur_in_Me, Think_Business

Where is my money?
Figures say that for 1 USD we donate to NGOs, on an average only 70 cents goes to the actual cause.
Rest 30 cents are wasted as fundraising and administration cost.
As per global trend people are increasingly willing to donate today,, but they want each cent of their money to be utilized for the real Purpose. Whereas, in the wake of such facts people end up asking “Where is my money!!?”

This high administration and fund raising cost severely affects NGOs Productivity and Efficiency. 
NGO Productivity   α Total Funds Raised for the cause.

NGO Efficiency (%) = Funds Used for Cause
                     Total Funds Raised
Fund Raising Efficiency = Total Funds Raised
                           Fund Raising Cost
Problem defined:
‘How can NGOs increase their Productivity and Efficiency?’
Reasons explored:
If we assume that all the funds finally available (after deducting fund raising and admin cost) to the NGO are being used completely for the cause then there are two clear factors that affect Productivity and Efficiency of NGOs.
1.  Total Funds Raised
2.  Cost of Fund Raising
So, what are the reasons that are holding back NGOs on these parameters?
1.  Total Funds Raised
a)  Limited Geographical Reach – Fund raising activity is limited to area of operation.
b)  Limited Penetration/Awareness – Even in the area of operation not everyone is aware of the NGOs.
c)  Lack of Credibility – I don’t know if my funds will be completely used for the cause.
d)  Lack of Tangibility/Transparency – I want to see where my funds are being used.
e)  Limited Resources – Limited volunteers and resources.
f)  Poor supporting technology infrastructure – Not using adequate technology and infrastructure because of limited funds.
2.  Cost of Fund Raising
a)  High fund development cost – Capturing new private and corporate donors is costly.
b)  High Marketing Cost – High cost of marketing, road shows, awareness campaigns, etc.
There is a need for an efficient fund raising channel for NGOs.
Solution Proposed:
A web based ecosystem for NGOs
An Internet portal to provide a one stop website solution to connect global donors and various (participating) NGOs.
However, it is not simple as it seems to fill the gaps by simply building a portal.
The portal should be designed to fully exploit the potential of Web 2.0 (Interactive web, social networking, facebook, twitter, etc.) to reach millions of users.
Some of the desirable features of such portal could be:
·         A large user base.
·         Integration with social networking sites like Facebook, Twitter, etc.
·         One Stop Solution for various NGOs.
·         Country, NGO and Project level Transparency.
·         Making donation a fun process.
Potential Benefits:
Contact me at rahulsingh.mail@gmail.com

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