Posted by Steve Waddell in Funding on March 2, 2010
I was leading discussion by a half dozen executive directors of Global Action Networks on the topic of competencies critical to success when we turned to the question of resource mobilization. I was surprised that none of the leaders thought of financing as a major issue for them, in comparison to the other competencies.
“But what if you think about barriers to your network really flourishing and realizing its goals?” I asked. That moved the issue of financing to the top of the list of challenges.
The question of financing is wrapped up with stage of development discussed last week and featured in a webinar March 3. At early stages, less money is required and the question is about finding a venture investor to explore possibilities. Later stages require more funds and a sustainable business model.
Gathering finance information is very complicated for a network, since it requires defining what part of the network the data cover. As networks develop, most increasingly depend upon sub-parts (regional, particular program) raising their own funds. In May last year I surveyed 11 networks ranging from 8 to 15 years of age with the initial question:
What was the total income (revenue) that came to/through the Secretariat for the most recent fiscal year including funds that may have gone to other parts of the network?
The response ranged from $500,000 to $11.4 million, with the average of $3.6 million.
Sources of Income
But the finance question is also wrapped up in strategy. Being multi-stakeholder, the networks could be expected to have tax-based contributions from government, civil society-based funding from foundations and revenue generation from services and fees. Table 1 gives responses to the question:
Please indicate the approximate percent of funds that flow to/through the Secretariat that come from the following sources.
Most networks perceived potential conflicts of interest with business revenue generation. One way the Global Compact addresses this is with a foundation to receive business donations; the foundation does not fund core Secretariat costs, but only the broader network.
Reasons for Funding
Strategy also raises Secretariat-network relationship questions. For example, Transparency International Secretariat’s role in putting together up to 30 National Chapters for joint funding proposals has recently increased dramatically from less than €1 million a year to more than €5 million. Table 2 gives responses to the question:
Please indicate the approximate percent of the types of funding/reasons for funding.
These global networks are all really producing “global public goods”…something funded at the national level through taxes. Substantial global network funding comes through taxes with funding from donor agencies like DFID and multilaterals like the World Bank. However, as Ernest Ligteringen who heads up the Global Reporting Initiative commented to me, it is fitting a round peg in a square hole. A much more robust solution must be found to do the important work of global public good financing with categorical national tax transfers or a global tax.
What are your experiences with financing? What sort of more robust solutions should we strive for?
We depend on networks to voluntarily provide information like this, for on-going development. If your network is not listed below as a participant in the survey, please have someone fill out the survey by clicking here. Data is for the 2008 fiscal year, and individual responses remain confidential. The survey takes only an hour.