Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
1 1
January 2023
Financing the Future:
A Primer on Sustainable
Funding Models for Civil
Society Organizations
Supporting the HIV Response
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
2
Suggested citation: EpiC. Financing the Future: A Primer on Sustainable Funding Models for Civil Society
Organizations Supporting the HIV Response. Durham (NC): FHI 360; 2023.
This work was made possible by the generous support of the American people through the United States
Agency for International Development (USAID) and the U.S. President’s Emergency Plan for AIDS Relief
(PEPFAR). The contents are the responsibility of the EpiC project and do not necessarily reflect the views
of USAID, PEPFAR, or the United States Government. EpiC is a global cooperative agreement
(7200AA19CA00002) led by FHI 360 with core partners Right to Care, Palladium International, and
Population Services International (PSI).
EpiC is a global cooperative agreement dedicated to achieving and maintaining HIV epidemic control.
It is led by FHI 360 with core partners Right to Care, Palladium International, and Population Services
International (PSI).
For more information about EpiC, including the areas in which we offer technical assistance, click here.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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Table of contents
Acknowledgments ................................................................................................................. 4
Background ........................................................................................................................... 5
Intended audience ............................................................................................................. 5
Why is sustainable financing for CSOs important? .............................................................. 5
Why diversify funding? ...................................................................................................... 7
How can this primer help? .................................................................................................. 8
Where to start when thinking of diversifying funding? ....................................................... 9
Categorizing funding types ............................................................................................... 11
An overview of funding models ........................................................................................... 12
Social enterprise .............................................................................................................. 14
Equity investment (impact investment) ............................................................................ 17
Loans and traditional bonds (impact investment) ............................................................. 19
Impact bonds ................................................................................................................... 21
Social contract ................................................................................................................. 23
Individual donations ........................................................................................................ 26
Crowdfunding .................................................................................................................. 28
Corporate funding ............................................................................................................ 30
Foundation funding .......................................................................................................... 32
Direct USAID funding ....................................................................................................... 34
Turning learning into strategy .............................................................................................. 36
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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Acknowledgments
This guide was written by Shikhank Sharma with assistance from Amita Mehrotra and additional
contributions by Stephanie Turpin and Stephen Mills. Its development was supervised by Amita
Mehrotra with technical review by Stephanie Turpin, David Wendt, Tom How, Michael Cassell, Sumita
Taneja, Ngonidzashe Madidi, Hue Nguyen, and Stephen Mills. It was edited by Maggie McCarten Gibbs
and Stevie Daniels and designed by Nattapong Piriyawongsawat and Warirat Hanparb.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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Background
Intended audience
This primer is intended for use by staff of
civil society organizations (CSOs) delivering
HIV programming in communities around
the world. The contents may be more
broadly applicable to CSO staff working on
health programming but was designed
with CSOs addressing HIV in mind. The
primer may also be of interest to donors,
policymakers, government stakeholders,
and advocates.
Why is sustainable financing for
CSOs important?
CSOs
1
play a critical role in the delivery of HIV prevention, care, and treatment services to vulnerable
communities globally. Their involvement has been instrumental in scaling up the global HIV response
2
and introducing innovations across the entire HIV cascade to reach groups previously unserved,
particularly key populations. Examples include increasing the reach of HIV testing to those who have
previously not tested in Vietnam,
3
increasing the likelihood of access to HIV treatment in Nigeria,
4
and
enabling effective interventions to reach scale.
5
The Joint United Nations Programme on HIV/AIDS
(UNAIDS) recently announced a new recommendation for the amount of service delivery that should
come from the CSO sector. The “30-60-80” targets are 30 percent of testing and treatment services, 60
percent of programs that support achievement of societal enablers, and 80 percent of HIV prevention
programs for key populations be delivered by community-led organizations. World Health Organization
(WHO), UNAIDS, PEPFAR, and the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund)
guidance documents all point to the essential role CSOs play in delivery of HIV services.
1
Civil society organizations here refer to noncorporate, private, voluntary organizations including but not limited
to community-based organizations, nonprofit organizations, nongovernmental organizations, networks or
associations of organizations, research institutions, etc.
2
Coutinho A, Roxo U, Epino H, Muganzi A, Dorward E, Pick B. The expanding role of civil society in the global
HIV/AIDS response: what has the President’s Emergency Program for AIDS Relief’s role been? J Acquir Immune
Defic Syndr. 2012;60(Suppl 3):S152-57. Available from:
http://bibliobase.sermais.pt:8008/BiblioNET/upload/PDF3/01953_The_Expanding_Role_of_Civil_Society_in_the_G
lobal.15.pdf.
3
Vu BN, Green KE, Phan HTT, Tran MH, Ngo HV, Vo SH, et al. Lay provider HIV testing: a promising strategy to
reach the undiagnosed key populations in Vietnam. PLoS ONE. 2018;13(12):e0210063.
4
Rodriguez-Garcia R, Bonnel R, Wilson D, N’Jie N. Investing in communities achieves results: findings from an
evaluation of community responses to HIV and AIDS. Washington: World Bank; 2013.
5
UNAIDS. Communities deliver: the crucial role of communities in reaching global targets to end the AIDS
epidemic. Geneva: UNAIDS; 2015. Available from:
https://www.unaids.org/sites/default/files/media_asset/UNAIDS_JC2725_CommunitiesDeliver_en.pdf.
Box 1: Decreasing international donor
funding for HIV/AIDS
Between 2009 and 2020, international donor funding
for HIV decreased by 30 percent. There is a
significant gap between the estimated funding
needed for the HIV response in 2025 and funding
currently available. In 2021, US$21.4 billion was
available globally for HIV. Yet an estimated US$29.3
billion will be needed in 2025 to end the AIDS
epidemic by 2030. This funding gap is especially wide
among low- and lower-middle income countries,
with 44 percent more funding needed by 2025.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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However, CSOs are often dependent on funding from international donors, often a single one, to
provide these vital services.
6
,
7
CSOs can and have adjusted to the changing funding environments, but
donor restrictions, legal challenges in country, and other barriers make identifying and implementing a
new model of funding challenging. CSOs in Ghana, for example, are needing to identify funding sources
outside of international donors but lack the skills and understanding of the funding landscape to
diversify.
8
Dependence on international donor funding causes instability in services available when
donors shift funding priorities and reduce funding for a particular country (or transition out entirely),
adapt priorities based on new and emerging threats, and reduce their financial commitments.
9
,
10
,
11
Changing socioeconomic conditions in many countries indicate there may be a market for preferential or
convenient services for a fee. A few studies found a market for informed clients to select differentiated
treatment suited to their needs.
12
Some CSOs have been able to leverage willingness to pay for
organizational revenue through offering differentiated services for a fee or establishing social
enterprises to sell a needed product or service. While this is a new and exciting opportunity, the same
willingness-to-pay studies caution that a need remains to ensure subsidized and/or free services are
available to clients who lack the ability to pay to ensure equity in service coverage, continued service
uptake,
13
and financial risk protection.
Given CSOs’ critical role in service delivery to communities and their vulnerability to fluctuations in
funding, identifying sustainable financing options is imperative. To do this, CSOs will have to strategically
assess their funding sources and models then gradually diversify them to drive even more resources —
monetary and otherwise.
6
Hecht R, Bennett S. Countries transitioning from donor health aid: we need a common research agenda and
mechanisms for action. Health Affairs blog [Internet]. 2016 Nov 4 [cited 2023 Jan 18]. Available
from: https://www.healthaffairs.org/do/10.1377/forefront.20161104.057399/full/.
7
Krivelyova A, Kakietek J, Connolly H, Bonnel R, Manteuffel B, Rodriguez-Garcia R, et al. Funding and expenditure
of a sample of community-based organizations in Kenya, Nigeria, and Zimbabwe. AIDS Care. 2013;25(Suppl 1):S20-
9.
8
Krawczyk KA. IUPUI Lilly Family School of Philanthropy blog [Internet]. Ghanaian civil society: West Africa’s
‘shining democratic star?’ 2020 Jul 17 [cited 2023 Jan 18]. Available from:
https://blog.philanthropy.iupui.edu/2020/07/17/ghanaian-civil-society-west-africas-shining-democratic-star/.
9
Pallas CL, Nguyen L. Donor withdrawal and local civil society organizations: an analysis of the HIV/AIDS sector in
Vietnam. Dev Policy Rev. 2017;36(1):131-51.
10
Friends of the Global Fight. Backing civil society to end the AIDS, tuberculosis, and malaria epidemics.
Washington: The Global Fight; 2019.
11
Wexler A, Kates J, Lief E. Donor government funding for HIV in low- and middle-income countries in 2021. Global
Health Policy. San Francisco: Kaiser Family Foundation (KFF); 2022. Available from: https://www.kff.org/report-
section/donor-government-funding-for-hiv-in-low-and-middle-income-countries-in-2021-report/
12
Durosinmi-Etti O, Nwala EK, Oki F, Ikpeazu A, Godwin E, Umoh P, et al. Willingness to pay for HIV prevention
commodities among key population groups in Nigeria. Glob Health Sci Pract. 2022;10(5):1-13. Available from:
https://www.ghspjournal.org/content/10/5/e2100303.
13
Lagarde M, Palmer N. The impact of user fees on health service utilization in low- and middle-income countries:
how strong is the evidence? Bull World Health Organ. 2008;86(11):839–48. doi:10.2471/blt.07.049197.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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Why diversify funding?
A diversity of funding sources reduces risks to an
organization’s operations and is one of the most
effective ways to improve their own sustainability.
14
In cases where one funding source falls through,
other sources help ensure continued services.
Diversifying funding can also support pursuit of new
technical or organizational goals, such as when a CSO
plans to pivot into new areas of work. However, it can
take time and substantial effort to achieve a healthy
mix of funding sources.
Operationally, a few different strategies may be used to diversify funding sources. One strategy would
be to approach multiple funding agencies. For example, working with two to three different foundations
for funding social marketing programs as opposed to a single foundation. A second strategy would be to
target different types of funders. For example, expanding beyond foundations to corporate donors or
crowdfunding. A third would be to explore funding from different sectors. For example, access funding
from education sector sources for a program on health-related education. While using these strategies
to seek new funding sources, CSOs should also identify sources of unrestricted funding. Unrestricted
funding is important to organizational innovation, flexibility, and sustainability.
15
Additionally,
unrestricted funding allows decision-making by organizational leadership, truly fostering locally driven
solutions and responsiveness to communities.
Figure 1. Diversified funding over time
14
Renoir M, Guttentag M. Facilitating financial sustainability: understanding the drivers of CSO financial
sustainability. Washington: LINC; 2018. Available from: https://linclocal.org/wp-
content/uploads/2020/04/CSOReport_Final.pdf.
15
Koob A, Ingulfsen I, Tolson B. Facilitating financial sustainability: funder approaches to facilitating CSO financial
sustainability. Washington: LINC; 2018. Available from: https://linclocal.org/wp-
content/uploads/2020/04/FunderReport_Final.pdf.
Box 2: Diversity of funding
sources
CSOs receiving funding from multiple,
varied sources rather than relying on a
single source have a diversity of funding.
This could include funding from
government grants, private foundations,
individual donors, corporate donors, and
others. This diversity helps ensure a CSO
is not dependent on any single source.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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Figure 2. Timeline for LoveYourself to diversify funding
How can this primer help?
The financial sustainability of CSOs delivering services to key and vulnerable populations is integral to
achieving and maintaining epidemic control globally. With the changing international donor landscape,
CSOs need to examine their funding and plan for the future. This resource can be used to support local
organizations to better understand the range of options available and how their current organizational
systems align to different funding models. This guide introduces alternative funding models and
Box 3. Example in practice: LoveYourself builds a diversified model
LoveYourself, a key-population-led CSO in the Philippines, was started in 2011 by a group of
friends who wanted to establish a wellness center for lesbian, gay, bisexual, transgender
(LGBT) youth. Initially, the founder financed the organization’s operations, and team
members had to raise funds to support each activity or event.
As the organization grew, funding sources were expanded through building partnerships. Through a
partnership with the Department of Health’s Research Institute, LoveYourself volunteers received
training to become HIV counselors at no cost. LoveYourself also partnered with the government,
taking over operations of a Department of Health (DOH) satellite clinic that was not attracting many
clients. The organization rebranded the clinic as a community center run by key-population-friendly
volunteers and trained counselors. Through their partnership with the government, LoveYourself
was connected to and began working with corporate foundations.
Through these partnerships, LoveYourself was able to expand the types of services they could
provide, and they adopted a “one-stop” HIV service model, diagnosing the third highest number of
HIV cases nationwide. These accomplishments caught the attention of international donors, and the
organization began working with the Global Fund and USAID.
In 2018, LoveYourself was accredited to receive social health insurance reimbursements, first as a
tuberculosis (TB) primary care facility, then HIV primary care facility, and finally for laboratory
services in 2020. During this time, loans from high-net-worth individuals were required to provide
working capital as they waited for reimbursement.
Over more than a decade of work, strategy, and relationship building, LoveYourself has created a
diversified funding model that is a foundation for sustainable service delivery.
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Supporting the HIV Response
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provides business planning and priority-setting strategies to adapt to changing financial and business
landscapes.
Where to start when thinking of diversifying funding?
Before embarking on a journey to diversify funding, a CSO should have a strong understanding of its
current funding, its future needs based on the end dates for current funding streams and strategic vision
for growth, and a sense of the minimum amount of funding needed to continue activities and services.
With this understanding, a CSO should consider the six questions outlined below to inform its goals.
Answering these questions is best done collectively, with key leaders reflecting on the organization’s
growth.
What do the CSO’s
clients need?
Think about the clients in the community and their current needs. How have those
needs changed over time? What services will need a few years from now? Are the
CSO’s current services and programs adequately addressing the client needs and
demands? What changes are needed to make service delivery and the program
model serve the client needs and demands in the future?
What is the funding
landscape in country?
Understanding the breadth and depth of donors in country is important when
assessing what options are available. The CSO should look at the organization’s
current funding mix (types of donors and amounts of funding) and the overall
funding landscape. Consider local, national, and international sources investing in
similar CSOs, topics, and regions. Check in with any associations of CSOs or
consultants who work in business development and use Google to explore if
another organization may have already compiled this type of information. Also,
consider the laws in country. Are there certain activities the organization can or
cannot pursue based on the type of registration in country? Are there threats to
the organization’s current funding? After reviewing the models for other types of
funding in this primer, reach out to organizations instituting these models to learn
from them.
Note that the funding landscape is not static! It changes over time and with new
and emerging priorities and can be influenced by civil society actors. Consider
speaking with funders about the type of funding mechanisms the CSO would like
to be able to access.
What is the
organizational
funding cycle?
Analyze the amount of funding the organization receives, the points in time when
it is received, and the ways in which it is utilized. This may correspond with
budgeting or proposal cycles for major donors or align with major donation
campaigns the organization establishes. Are there key times of the year when
there are gaps in funding? Are staff overstretched with responsibilities related to
current funding?
Pro tip: Make sure to compile basic information such as name,
website, types of funding available, model of funding for each
option in a usable format.
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Supporting the HIV Response
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What is the CSO’s
organizational vision?
Reflect on the vision or organizational strategy for the future of the CSO including
key strategic areas for expansion, core areas to maintain the business, and new
innovations to explore. Are there new strategies the organization is planning to
offer in coming years? Are there geographic regions where the organization would
like to start to deliver services? What is the strategic vision for growth of the
organization in the short and medium term?
What resources does
the CSO have to
devote to these
efforts?
Consider the resources the CSO has available to support this work. Any type of
resource mobilization requires initiative from the organization’s leadership, staff
time, and dedicated skills in marketing, finance, management, communications,
relationship-building, and technical areas. Depending on the funding sources
pursued, even more specialized skills may be needed. How much staff time and
effort can the organization commit to develop and implement a funding
diversification strategy? Can the organization commit resources to train staff or
hire new staff, so they have the skills to help the organization pursue different
funding models?
Also consider financial resources available to the organization to support business
development efforts such as travel to meet with new funders, time to develop
concepts and pitches, and working capital that can fund services while waiting for
payments or reimbursements. Finally, consider nonfinancial resources, such as
land, building, access to certain operating materials, that are a key part of existing
assets. When thinking about the CSO’s vision for future growth and impact, what
additional resources are needed to bridge the gap between the present and that
future vision?
What level of
autonomy would the
CSO like to have over
how funding is
spent?
Consider the amount of control the organization has over decision-making
regarding its program and service design and delivery. Often donor funding comes
with specific restrictions, responsibilities, or limitations on how the funding can be
spent. Funding may also be constrained to implement key activities rather than
allowing the organization to make decisions as to how costs can be allocated to
achieve a goal. What level of autonomy does the organization need to have?
After answering these questions, the organization’s ambitions for future funding and current resources
to support growth goals should be clear. The remainder of the primer will introduce various models of
financing and their features. The primer will help guide the organization in using its responses to the six
questions to help make decisions about which models for financing may be a good organizational fit.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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Categorizing funding types
Funding models may be categorized in various ways. One way is to look at the mechanisms used to
disperse funds, such as donations, grants, contract, or earned income, and the entities providing these
funds such as foundations, a corporation or business, or government (Figure 3).
Figure 3. Funding models categorized by funding source and funding mechanism
Donation
Grant
Contract
Results-based
finance
Investment
(equity)
Investment
(debt)
Earned
income
Individuals
Individual gift
Angel
investment
Revenue
from sale of
product or
service
Group of individuals
Crowdfunding
Crowd equity
Crowd
lending
Bulk
purchases
Foundation
Grant
Results-based contract
Impact
investment
(equity)
Impact
investment
(loan)
Fee-for-
service
Other CSOs and
INGOs
Sub-award
Fee-for-
service
Corporations and
businesses
Corporate
giving
Corporate
social
responsibility
Results-based contract
Equity
investment
Debt
investment
Fee-for-
service
Investor
Impact bond
Impact
investment
(equity)
Impact
investment
(loan)
Government
Social contract
Fee-for-
service
Multilateral funders
Grant
When developing a funding diversification strategy, two ways may be used to leverage current expertise
and relationships to diversify the funding pipeline:
1. Deepen expertise in a particular funding mechanism and diversify by tapping into different
sources.
For example, a CSO is a grantee with an international nongovernmental organization (NGO). They
have experience identifying grants, grant writing, and grant reporting. The CSO could further develop
those skills and identify additional sources, such as corporations and foundations, from which it
seeks and receives grants.
2. Build on a strong relationship with a specific funder and diversify the funding mechanisms through
which funding is received from them.
For example, a CSO decides to build a social enterprise. It has a very strong relationship with a
particular foundation through its grant-related work and convinces the foundation to partner
exploring impact investment as a funding mechanism for the social enterprise.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
Supporting the HIV Response
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An overview of funding models
The remainder of this document introduces and provides details on 10 funding models. The descriptions
will help CSO staff align their responses from the “where to start” section to various models and will
introduce potential next steps. These models highlight a mix of both the funding sources and
mechanisms outlined in Figure 3. The funding models include:
• Social enterprise and earned income
• Equity investment (impact investment)
• Loans and bonds (impact investment)
• Impact bonds (impact investment)
• Social contract (including social health
insurance reimbursement scheme)
• Individual donations
• Crowdfunding
• Corporate funding
• Foundation funding
• Direct USAID funding
The descriptions of each of the models is accompanied by a diagram and text explanation. Diagrams
depict the transactions of resources and services that occur in every funding model between the
different actors (i.e., CSO, funding source, and community/clients). Text explanations include:
• Brief description of funding model
• Business model adaptations a CSO might
make to use that funding model; in some
cases, adaptations are replaced by
organizational considerations
• Short examples in practice
• Key questions to guide a CSO on the first step
of applying the funding model to its context
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For every model, consider the following factors, as well as the responses to the “where to start”
questions, to understand whether the model is a good fit for the organization’s context.
The right team - The team and its capacity and expertise. To successfully implement these
models, a different cadre of staffing or skills may be needed. Consider what kind of expertise
is needed and the skills and availability of staff within the existing team.
Supportive policy and regulatory environment - The policies, rules, and laws in place, as well
as the political environment within the country or region. Is the regulatory and political
environment right to pursue this type of funding? Are there restrictions related to the type of
funding models that can be pursued in the current setting? Are there other types of
registrations or legal requirements to be fulfilled for a particular model?
Abundant market demand - The community or customer demand for products or services. Is
there demand in the market for the services? For earned income opportunities, are clients
willing to pay for the service or product? If there is a market available, how much has the
market been saturated by others already providing such a product or service?
Accessible funding supply - The availability of funding. Is the funding source for the model
available in the region/country? Are donors and investors looking to donate and invest their
money in the priority area of a CSO? Is the organization able to address any barriers to
accessing the funding?
Strong social capital - The network of supporters and stakeholders. Does the CSO have the
right network of supporters, experts, and stakeholders to pursue this model? Does the CSO
have the reputation or previous experience to give confidence that it will succeed?
Sufficient infrastructure and capacity - Technology, assets, and expertise to design and
provide services and programs. Does the CSO have the infrastructure, such as hardware,
software, or physical structures, needed to pursue this funding strategy and deliver the
programs accordingly? Will development of the required infrastructure be possible with
current resources?
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Supporting the HIV Response
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Social enterprise
Social enterprise is revenue generated from the sale of products, services, or any other work
performed.
16
This includes selling a product or a service for a fee, running a nonhealth business to create
profits that are used to provide a service at no cost to clients, or providing training and consulting
services at a fee to other organizations such as CSOs, businesses, and community groups.
A CSO can remain a nonprofit and use this revenue-based model. Although, if revenue becomes enough
to sustain the organization, the CSO could transition into a for-profit, impact-focused business.
Alternatively, a CSO can launch a separate for-profit subsidy or affiliated organization that is solely
focused on revenue generation to support the CSO mission.
16
Candid Learning [Internet]. Knowledge Base: What is earned income and how do I learn more about
it? 2023 [cited 2023 Jan 18]. Available from: https://learning.candid.org/resources/knowledge-base/earned-
income/.
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Example in practice:
Nonhealth business generates profits to support the CSO mission: Population and Community
Development Association in Thailand operates the popular restaurant Cabbages and Condoms. All the
profits support the association and its programs in primary health and HIV prevention among other
areas.
17
Over the years, Cabbages and Condoms has expanded into resorts and inns and has established
restaurants in Japan and England.
Providing a service to other organizations for a fee: CAREMAT, a key-population-led organization in
Thailand, recently established a social enterprise with support from USAID EpiC Thailand. CAREMAT staff
developed a web-based data app that supports improved client case management and quality
improvement across the health services workflow. CAREMAT formed Accelerate Community Technology
Limited (ACTSE), a private social enterprise, to market the app to hospitals, clinics, and other potential
client organizations.
18
Selling a product/service for a fee/cost: Blue Sky Social Enterprise (BSSE) grew out of a small
community-based organization (CBO) founded in 2008 with a focus on communications on HIV
prevention in Ho Chi Minh City, Vietnam. In 2017, BSSE was established with a vision of becoming a
leading organization in provision of HIV services. The same year, BSSE established the Nha Minh Clinic,
which provides fee-based services, including HIV and STI screening and treatment, counseling, and home
care for HIV patients. Profits from the clinic operation have enabled BSSE to set up “Helping Hands”
funds that aim to reach the wider community, including emergency support during epidemics.
Selling a product/service for a fee/cost: With financial and technical support from international
projects between 2011 and 2015, Glink transformed from a four-member self-help group in Vietnam
into a social enterprise chain of health clinics. The clinics provide a suite of testing and treatment
services for a fee to support men who have sex with men (MSM) and transgender women. In 2021, Glink
Foundation was established to invest in and fund business projects owned by MSM and transgender
women. In early 2022, Glink Academy was launched as a training and capacity building center for
community leaders who want to learn about social enterprises and community clinics.
This model is especially good for:
A CSO with a service and/or product that community members or other organizations would be willing
to pay for.
Key factors to consider:
Supportive policy and regulatory environment
Ability to identify and/or develop a product/service that can be legally sold with minimal or
reasonable change to organizational registration or legal structures
17
Cabbages and Condoms.net [Internet]. Bangkok: Population and Community Development Association. 2023
[cited 2023 Jan 18]. Available from: http://www.cabbagesandcondoms.net/.
18
EpiC blog [Internet]. Social enterprise: using market-driven approaches to meet the needs of key populations.
Durham (NC): FHI 360; 2021 Nov 8 [cited 2023 Jan 18]. Available from: https://epicproject.blog/social-enterprise-
using-market-driven-approaches-to-meet-the-needs-of-key-populations.
Financing the Future: A Primer on Sustainable Funding Models for Civil Society Organizations
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Abundant market demand
Sufficient demand in the market and ability of consumer to pay for product or service at a
price point that allows the organization to make a profit
The right team
Team with the knowledge and skills to market a product/service and manage the revenue
generation operations
Where to begin:
Is there a service/product the CSO can offer that a market is willing to pay for?
Additional resources:
• EpiC Webinar “Social enterprise: Using market-driven approaches to meet the needs of key
populations” – covers social enterprise examples with business models and challenges associated
with developing HIV-focused social enterprises. https://epicproject.blog/social-enterprise-using-
market-driven-approaches-to-meet-the-needs-of-key-populations/
• Social Entrepreneurship Guidebook for CSOs – explains different social enterprise business models
and initial planning steps to establish a social enterprise. https://ecohub.am/wp-
content/uploads/2020/07/Final_Social-Entrepreneurship-Guidebook-for-CSOs.pdf
• Developing a Social Enterprise Business Model – details the main features of a social enterprise
business model and how to think about product/service delivery and pricing.
https://socialinvestmenttoolkit.com/wp-content/uploads/2019/03/SIT_Module-3.pdf
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Equity investment (impact investment)
Equity investment is a form of impact investment.
19
An investor can make a monetary investment in
return for equity (a percentage ownership of the company) in a business. The investor expects to receive
a return on their investment within a few years by selling their stake in the business at a higher
valuation and/or through receiving dividends from the business. To receive this type of impact
investment, a CSO or its subsidiary/affiliated organization needs to be structured as a for-profit. A CSO
would also have to develop systems to track and report certain impact metrics required by impact
investors.
Example in practice:
Access Afya is an enterprise in Kenya that delivers high-quality, localized health care, designed
specifically to serve the needs of low-income markets around the world. In 2019, Access Afya received
an investment from FHI Ventures (an impact investment subsidiary of FHI 360) because of its ability to
deliver more reliable, higher quality care than private dispensaries and clinics or government-run health
centers, giving it the potential to expand high-quality health care to underserved populations. The early-
stage business model has proven that patients will pay for its services.
20
This model is especially good for:
A CSO with an existing revenue-generating service/product with potential for scaling OR that has a
strong business plan for a marketable service/product.
Key factors to consider:
The right team
Ability to identify and/or develop a product/service that can be legally sold with minimal or
reasonable change to organizational registration or legal structures
Abundant market demand
A market opportunity for a scalable business
19
Impact investment is a direct monetary investment made by an investor in an organization with the intention to
generate positive, measurable social and environmental impact alongside a financial return. Source: Global Impact
Investing Network.
20
FHI 360. Bold ideas for a better future: helping entrepreneurs transform their ideas into social impact (FHI
Ventures 2018‒19 impact report). Durham (NC): FHI 360; 2019. Available from: http://www.fhiventures.com/wp-
content/uploads/2020/01/FHIVentures_ImpactReport_External-1.pdf.
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Strong social capital
Connections and networks with individual investors and investment funds
Where to begin:
• Is there a service/product a CSO can offer that a market is willing to pay for?
• What is the landscape of investors who would be interested in investing in health care and HIV
response?
Additional resources:
• Social Investment Manual – explains the entire financing process (due diligence, working with
investors, etc.) for different funding models across the social investment spectrum.
https://www3.weforum.org/docs/WEF_Social_Investment_Manual_Final.pdf
• A Short Guide to Impact Investing – provides a brief summary of impact investing and a series of
short examples. https://casefoundation.org/wp-content/uploads/2014/09/Short-Guide-Oct2015-
Digital-FINAL.pdf
• A Guide on Monitoring and Evaluation for Impact Investing – an internet post that introduces key
characteristics for impact investing and outlines steps to consider when developing a monitoring
and evaluation framework. https://www.betterevaluation.org/en/themes/monitoring-and-
evaluation-impact-investing
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Loans and traditional bonds (impact investment)
Impact investment can also be leveraged by raising funds through debt mechanisms such as loans, i.e.,
borrowing money from bank or microfinance institutions. The principal amount of the loan has to be
returned over the course of time alongside additional interest. Loans can also be raised from
microfinance institutions (organizations that provide small loans) or via crowdlending platforms such as
Kiva through which a group of small lenders comes together to combine their capital and provide loans.
Loans and bonds can be used to raise funds for capital projects (buying a building, land, or expensive
equipment) or for operational expenses. The lenders generally like organizations to have a strong track
record of repayment of past debt and/or tangible collateral.
Example in practice:
Fundación para el desarollo integral ESPOIR, an organization based in Quito, Ecuador, is focused on
economic and social development of women entrepreneurs. The organization received a debt
investment of CAD $1.5 million from Desjardin International Development and is using that investment
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to provide more credit products and health and financial literacy services to nearly 550,000 clients, 68
percent of whom are women.
21
This model is especially good for:
A CSO with strong revenue projections in the foreseeable future and able to show ability to make the
regular loan and bond-related payments through its financial track record and/or existing assets and
collateral.
Key factors to consider:
Supportive policy and regulatory environment
The law allows for nonprofits/CSOs to receive loans or issue bonds
Accessible funding supply
Investors/funders are willing to give loans to or buy bonds from CSOs
Where to begin:
• Which bank and lending institutions provide loans to CSOs/nonprofits?
• Are CSOs/nonprofits able to issue bonds in the country?
Additional resources:
• Community Bonds ‒ an innovative finance mechanism that can be used by nonprofit organizations
to raise capital. https://tapestrycapital.ca/community-bonds/
• Loans – a resource on sound financial management, including building a budget, projecting cash
flow, and crafting the organization’s financial story. https://nff.org/learn/fundamentals-nonprofits
21
Desjardins International Development Projects [Internet]. "Ecuador: Debt Investment to help increase access to
credit and financial literacy and health services for women entrepreneurs." Click on “DID projects in the Americas”
and scroll to the title (sixth in the list). Quebec: Federation des caisses Desjardins du Quebec. 2023 [cited 2023 Jan
18]. Available from: https://www.desjardins.com/qc/en/about-us/community/international-
development/projects.html.
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Impact bonds
An impact bond brings together an investor, funder, and service provider to achieve clearly defined
outcomes. The investor fronts capital to a service provider, generally a CSO. Since the payment of
money to the investor is directly tied to the achievement of agreed-upon outcomes, the CSO is expected
to have a rigorous impact measurement and data reporting process. Once the service provider achieves
the agreed-upon outcomes—verified by an external evaluation agency—the funder pays back the
capital amount to the investor in addition to a return on investment.
Example in practice:
Zero HIV Social Impact Bond (SIB) was launched in the U.K. and funded by the Elton John Aids
Foundation (EJAF).
22
SIB estimates 10–15 percent of people living with HIV in the U.K. are not on
treatment. It addresses this problem by using the mechanism of an outcomes-based contract in which
providers are paid on outcomes achieved—rather than on providing services
23
—to drive detection of
HIV among these high-risk groups in areas where prevalence is highest.
This model is especially good for:
A CSO with an intervention that is backed by strong research and evidence regarding the intervention’s
success in achievement of outcomes.
22
Stanworth N. Zero HIV Social Impact Bond: commissioning better outcomes fund evaluation in depth review.
England: n.d. Available from: https://www.tnlcommunityfund.org.uk/media/insights/documents/EJAF-Zero-HIV-in-
depth-review_FINAL.pdf.
23
Dyer A. HIV Commission [Internet]. “The Zero HIV Social Impact Bond.” 2020 Dec 18 [cited 2023 Jan 18].
Available from: https://www.hivcommission.org.uk/2020/12/18/the-zero-hiv-social-impact-bond/.
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Key factors to consider:
Accessible funding supply
Investors/funders are willing to provide funding for an impact bond mechanism
Sufficient infrastructure and capacity
CSO already has the key infrastructure in place to provide services and the capacity to
measure and report data rigorously
Where to begin:
• Is there strong evidence and data to prove the high effectiveness of the CSO’s intervention
approach and outcomes?
Additional resources:
• A Technical Guide to Developing Social Impact Bonds – developed by Social Finance, the guide
provides the steps for designing an impact bond and lays out an impact bond feasibility assessment
process. https://missioninvestors.org/resources/technical-guide-developing-social-impact-bonds
• Zero HIV Social Impact Bond Review Report – focuses on stakeholder experiences and learning from
the design and development of the social impact bond.
https://www.tnlcommunityfund.org.uk/media/insights/documents/EJAF-Zero-HIV-in-depth-
review_FINAL.pdf
• Multi-Stakeholder Initiatives: A Strategic Guide for Civil Society Organizations – provides a
comprehensive overview of partnerships involving multiple stakeholders and various considerations
for CSOs to determine which partners and what type of multi-stakeholder relationships will work
best for any particular initiative. https://www.somo.nl/wp-content/uploads/2012/03/Multi-
stakeholder-initiatives.pdf
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Social contract
In the social contract model a government funds CSOs to provide social services that the government is
generally responsible for. These services may include direct health care, public sector health care worker
training, supply chain related, and health care information systems. A social contract includes a legally
binding agreement that stipulates the type and amount of health care services a CSO would need to
provide and how the government will pay for the costs of providing those services.
24
Social contracting
allows a CSO to tap into different government agencies/departments and access funding tied to
payment for services through competitive procurement, in addition to grants.
Financing through social contracting can happen in at least three different ways:
Results-based financing: The government pays money once the agreed-upon results of the service
provision have been achieved.
25
Procurement and contracting: The government makes payments at certain times based on a contract
outlining the level of service provision and timeline. Reimbursements from insurance schemes for
services provided may also fall under this type.
Grants: The government provides funds to a CSO to deliver services and report back to the funder on
activities undertaken.
24
United Nations Development Programme (UNDP). Guidance note for the analysis of NGO social contracting
mechanisms: the experience of Europe and Central Asia. New York: UNDP; 2019.
25
The World Bank [Internet]. Results-based financing (RBF) and results in education (REACH). 2023 [cited 2023 Jan
18]. Available from: https://www.worldbank.org/en/programs/reach.
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Additionally, social contracting may occur at the national and subnational levels, depending on how
authority for contracting has been decentralized within the country.
Example in practice:
Investments by the National Health Security Office (NHSO)—the health funding arm of the Thai
government—more than doubled to support recruit-to-test interventions from 2016 to 2020. Key-
population-led organizations were reimbursed for testing 40,000 clients in 2020, substantially
contributing to national HIV testing targets. These organizations are increasingly supported by domestic
financing, with NHSO funding providing almost half their operation budgets on average in 2021.
This model is especially good for:
CSOs that have a strong service-delivery infrastructure and reach populations that national health
systems have a hard time reaching.
Key factors to consider:
Supportive policy and regulatory environment
• Policies allow for government agencies to design contracts with CSOs for delivery of
health care services
• An enabling environment where community members do not hesitate to receive
health care services from CSOs
• Clear funding parameters and process to access funding provided by the government
• Clear accreditation standards (where required) for CSOs to be certified to provide the
necessary services
Sufficient infrastructure and capacity
• The CSO has key infrastructure in place to provide the services
• For results-based contracts, the CSO already has enough capital to provide services
to receive contract payment from government at a later time
Where to begin:
• Are there any government agencies or mechanisms that provide funding to CSOs to provide
essential health care or related services?
• Are there discussions between government agencies and community partners on the needs to
establish a mechanism for government funding for CSOs?
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Additional resources:
• Guidance Note on Social Contracting from UNDP ‒ provides help developing factsheets and
recommended actions for setting up or improving NGO social contracting mechanisms.
https://www.undp.org/eurasia/publications/guidance-ngo-social-contracting-mechanisms
• Report on Effective Social Contracting for HIV Service Delivery ‒ based on lessons from Thailand.
https://www.aidsdatahub.org/resource/report-effective-social-contracting-hiv-service-delivery-
thailand
• Social Contracting Capacity Building Needs Assessment (SCANA) Tool ‒ a self-assessment tool
developed for community-based organizations and social enterprises in Vietnam to gauge their
readiness and capacity for social contracting.
https://www.fhi360.org/sites/default/files/media/documents/resource-epic-vietnam-ladders-
scana-tool.pdf
• Government Readiness Checklist – a tool to assist provincial government health authorities in
Vietnam to assess if they are ready to implement social contracting and identifying gaps.
https://www.fhi360.org/sites/default/files/media/documents/resource-epic-vietnam-social-
contracting-monitoring-evaluation-framework.pdf
• Social Contracting Monitoring and Evaluation Framework – a tracking tool to measure the
functional development and implementation of social contracting in Vietnam and monitoring social
contracting’s contribution to epidemic control.
https://www.fhi360.org/sites/default/files/media/documents/resource-epic-vietnam-social-
contracting-government-checklist.pdf
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Individual donations
The individual donations model leverages funding from individual donors (community-at-large) as
opposed to institutional donors (such as international NGOs, foundations, etc.). This model is diverse
and can include strategies such as engaging individual donors annually, a specific fundraising campaign
or event, or engaging high-net-worth individuals.
A CSO can raise donations from individuals while having a status as a not-for-profit organization. In some
countries the CSO might have to be registered with the government under a special status, such as
charity or a similar structure, to allow it to accept individual donations. Such status would allow the CSO
to process donations in a way that allows donors to claim tax deductions.
Example in practice:
Founded in South Africa in 2001, m2m provides health care to families who need it most, delivered by
women who know them best. They have created nearly 12,000 jobs for women living with HIV as
frontline health workers and reached more than 15 million people in sub-Saharan Africa with life-
changing health services. m2m currently reaches around 1.6 million people a year and aims to reach 3
million annually by 2026. To achieve that goal, they need to grow their funding. While PEPFAR remains
an incredibly important partner for m2m, to ensure predictable multiyear funding, the organization has
focused on diversifying their sources. Their current mix is roughly 60 percent institutional donors, 25
percent trusts and foundations, 10 percent corporations, and 5 percent individuals. Although individual
donors make up the smallest proportion, this funding stream is essential. It allows m2m to gauge the
public’s awareness and buy-in of their mission and programs, as well as promotes deeper community
involvement and support. This funding also allows flexibility in spending, as it is usually unrestricted.
m2m may allocate these finds to overhead costs required to operate, such as hiring staff, purchasing
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equipment, and participating in trainings. The funds can also be used as surge support for country
programs during emergencies.
This model is especially good for:
A CSO with a wide reach and network of supporters.
Key factors to consider:
Sufficient infrastructure and capacity
• Comprehensive marketing strategy and plan
• Capacity to receive, process, and track individual donations (for example, having a
website with a payment system, being able to process tax receipts, etc.)
Strong social capital
Presence in media and marketing realm such as social media, website, and advertising
The right team
A team with strong skills in writing, marketing, and relationship building
Where to begin:
• What type of donors does the CSO want to engage? What do the donors care about?
• What are successful marketing and outreach tactics to engage those donors?
Additional resources:
• Capacity Building Series: Fundraising and Marketing for CSOs, A Resource Guide for Civil Society
Organisations in Botswana – provides guidance on designing a fundraising strategy and a
complementary marketing plan.
https://www.fhi360.org/sites/default/files/media/documents/Fundraising_and_Marketing_for_CS
Os.pdf
• 10 Principles of Good Practice for the Intelligent Funder – lays out 10 principles that donors and
CSOs should collectively align with in order to build sustainable funding partnerships.
https://civicus.org/view/media/10_Principles_of_Good_Practice_for_the_Intelligent_Funder.pdf
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Crowdfunding
Crowdfunding is raising funds for a specific project or cause online from many donors donating small
amounts in a specific time period. This can be done by reaching donors directly through one central
campaign or through enlisting individuals to create personal fundraisers that feed donations back to an
organization’s cause. CSOs generally manage crowdfunding campaigns through an online platform that
receives and processes the donations.
26
Crowdfunding can be used for a wide range of purposes, from helping individuals to projects focused on
an entire community. Campaigns can be hosted by community groups or CSOs, regardless of for-profit
or nonprofit status, although rules can vary from platform to platform and country to country. A best
practice of crowdfunding campaigns is to provide regular updates to donors for up to six to 12 months
after the campaign about how the funds are being used.
Example in practice:
Indiegogo is an online crowdfunding platform where an individual or group can launch a campaign.
Examples of HIV-related crowdfunding projects on Indiegogo can be found here:
https://www.shorturl.at/v0245.
This model is especially good for:
A CSO with a strong social media presence.
Key factors to consider:
Supportive policy and regulatory environment
Crowdfunding platforms are legal in the country
Sufficient infrastructure and capacity
• The capacity to accept funds from international funders if using an international
crowdfunding platform
• Ability and capacity to design specific projects for funding and launch fundraising
campaigns
26
Candid Learning [Internet]. Knowledge Base: What is crowdfunding? 2023 [cited 2023 Jan 18]. Available from:
https://learning.candid.org/resources/knowledge-base/what-is-crowdfunding/.
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The right team
A team with experience and background in social media
Strong social capital
A larger reach on social media (e.g., many followers or very active followers)
Where to begin:
• What crowdfunding platforms is a CSO able to use and receive funds from?
• Does the CSO have a compelling story that will convince individuals to donate?
Additional resources:
• Crowdfunding Toolkit ‒ an interactive toolkit developed for CSOs on the advantages of and how to
use crowdfunding. https://crowdfunding.knowledgesouk.org/
• Strengthening Citizen Action: Communication for Civil Society Organizations, Guidebook ‒ provides
information on the fundamentals of creating effective communication programs along with ideas
and examples on how to create useful and relevant communication materials for the web and social
media. https://www.civicus.org/index.php/media-resources/resources/toolkits/3633-
strengthening-citizen-action-communication-for-civil-society-organisations
• A Guide to Strengthening Civil Society through Social Media – describes how CSOs can integrate and
use social media to promote human rights and governance and strengthen mutual accountability
among CSOs, government institutions, and citizens by creating real-time and direct interaction and
organizing. https://2012-2017.usaid.gov/sites/default/files/documents/1866/SMGuide4CSO.pdf
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Corporate funding
Corporate funding is the donation of funds or resources by for-profit businesses to CSOs. Some
businesses allot a portion of their profits to fund organizations working on causes and issues that align
with the business’ interests. In return, a business might expect the CSO to report back on how the funds
were used and potentially collaborate on marketing materials related to the project. Corporate
donations can range widely in amount and time period. They may be a one-time donation (cash,
sponsorship, equipment or other physical resources) to long-term partnerships with support provided
on an ongoing basis. Where possible, having charity status so the donor may claim a tax exemption for
their donation helps a CSO attract corporate donors.
Corporate partnerships can be categorized as:
Corporate giving - Companies contribute funds or in-kind donations through employee-contribution
matching programs, sponsorships, or direct contributions
Corporate social responsibility - Companies taking actions, beyond what is required by law and the sole
interest of the firm, to further social good
Shared value - Companies focused on increasing their competitiveness while advancing the economic
and social conditions in the communities in which they operate
Example in practice:
Cheyutha Women CBO, meaning “helping hand” in Telugu, is a women-led community initiative ‘for’ and
‘by’ women living with HIV, which provides care and support services for women and children affected
by HIV. Established in 2005, Cheyutha received funding from LEPRA Society, an NGO in Hyderabad, to
pay staff salaries until 2018. In 2019, Cheyutha needed a new source of funding and responded to a call
for proposals from Azim Premji Philanthropic Initiative (APPI), as part of their corporate social
responsibility efforts. APPI staff made a series of visits to Cheyutha, interacted with community
members, and verified the systems at the organization level. In April 2020, Cheyutha was awarded a
four-year grant of about US$170,000 to support staff salaries through March 2024. APPI’s grant to
Cheyutha ensures sufficient processes, human resources, materials, and systems are in place to enable
the organization to achieve financial stability in generating funds and managing expenses, govern with
strong policies, and execute all programs effectively and independently.
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This model is especially good for:
A CSO with strong messaging and a partnership team.
Key factors to consider:
Sufficient infrastructure and capacity
• A clear ask and a strong partnership pitch, brochures, or presentation
• Charity status to process tax exemption receipts for donations
The right team
A team with strong skills in relationship building and a good understanding of the
corporate donor landscape
Strong social capital
An extensive network with corporations and businesses or means to connect with them
Where to begin:
• What type of businesses will be aligned with the mission of a CSO?
• What are successful marketing and outreach tactics in the region to engage corporations?
Additional resources:
• Guide to Pitching to Corporate Sponsors – covers different types of corporate sponsorships and
some best practices to consider when pitching to corporations. https://enactus.ca/wp-
content/uploads/2020/06/guide_pitching-corporate-sponsors-1.pdf
• HIV/AIDS and Business in Africa and Asia: A Guide to Partnerships – while geared toward
businesses, this guide has great insights for CSOs on how to approach businesses and make the
strategic case for their support.
https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/programs/cri/files/report_2_HIV_
AIDS_AGuidetoPartnerships.pdf
• 10 Principles of Good Practice for the Intelligent Funder – lays out 10 principles that donors and
CSOs should collectively align with in order to build sustainable funding partnerships.
https://civicus.org/view/media/10_Principles_of_Good_Practice_for_the_Intelligent_Funder.pdf
• Tip Sheets: Responding to Funding Opportunities – guidance on responding to funding
opportunities, covers the process of preparing for, reviewing, and responding to funding
opportunities released by donors.
https://www.advancingpartners.org/sites/default/files/sites/default/files/resources/apc_tip_sheet
_funding.pdf
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Foundation funding
Foundations are nonprofit organizations set up as a vehicle to donate or invest private wealth in social
causes. Foundations generally give grants to CSOs for a specific period to execute projects that achieve
certain outcomes for the community. Foundations expect CSOs to report back to them on how the funds
were used and share data on outcomes achieved. Depending on the foundation, the grant size could
range from one-time, smaller amounts to larger multiyear commitments.
Foundations providing grant funding may be based in the same country as the CSO or in a different
country (international foundations). They may also be involved in impact investing as an investor
providing loans, equity investments, or other financing mechanisms.
This model is especially good for:
A CSO with strong messaging and a partnerships team that can find alignment between the mission of
the CSO and the foundation.
Key factors to consider:
Sufficient infrastructure and capacity
• Proven expertise in the sector/field and high community reputation
• Strong data tracking and reporting processes
Supportive policy and regulatory environment
Presence of local foundations OR CSO has capacity to engage with international
foundations, and has processes to accept and process funding from them
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Where to begin:
• What is the landscape of foundations in a country? Which of these foundations are aligned with the
mission of a CSO?
• What are the requirements from the foundation to apply for funding?
Additional resources:
• Candid Learning website: “How do I approach a foundation and build a successful grantee-funder
relationship?” – provides suggestions for developing a relationship with a funder.
https://learning.candid.org/resources/knowledge-base/approaching-foundations/
• Better Evaluation website – resource on evaluation and data measurement tools and best practices.
https://www.betterevaluation.org/
• Better Evaluation website: Monitoring and Evaluation for Impact Investing ‒ introduces key
characteristics for impact investing and outlines steps to consider when developing a monitoring
and evaluation framework. https://www.betterevaluation.org/en/themes/monitoring-and-
evaluation-impact-investing
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Direct USAID funding
USAID is the U.S. Government’s international development funding agency. Traditionally, USAID
provides funding to international NGOs that in turn partner with local CSOs and provide funding to them
in the form of subawards. In recent years, USAID has increased direct funding to local CSOs to
strengthen the sustainability of national HIV and AIDS responses. Recently, USAID set a goal of
increasing its direct funding to local partners to 25 percent of USAID’s overall funding assistance.
27
As
with other big funders, managing USAID funding involves a high level of stakeholder communication and
engagement during the proposal process and project implementation. A CSO will be expected to provide
substantive reporting of data on project output and outcomes in addition to financial reporting.
Example in practice:
Pakachere Institute of Health and Development Communication is one of the leading organizations in
Malawi providing social and behavior change communication and HIV services. In 2019, Pakachere
began having discussions with USAID and FHI 360 regarding the possibility of receiving a direct award
from USAID because of its strong performance as an implementing partner under the Linkages across
the Continuum of HIV Services for Key Populations Affected by HIV (LINKAGES) project led by FHI 360.
28
It demonstrated an ability to achieve service delivery targets and had strong organizational systems.
Pakachere went through the non-U.S. pre-award survey (NUPAS) with USAID and was assessed as having
systems sufficiently strong enough to manage a direct award. Pakachere developed a draft proposal and
received assistance from FHI 360 in the review and finalization process. The proposal to USAID proved
successful, and Pakachere was awarded funding to implement the Local Endeavors for HIV/AIDS
Prevention and Treatment (LEAP) project.
This model is especially good for:
A CSO with strong organizational and financial systems with substantive reach in the community/region.
27
USAID. Speeches [Internet]. Administrator Samantha Power on a new vision for global development. 2021 Nov 4.
Available from: https://www.usaid.gov/news-information/speeches/nov-4-2021-administrator-samantha-power-
new-vision-global-development.
28
EpiC. The growth of Pakachere: local partner transitions to a USAID direct award with technical support from the
LINKAGES and EpiC projects in Malawi. Durham (NC): FHI 360; 2021. Available from:
https://www.fhi360.org/sites/default/files/media/documents/resource-epic-malawi-success-story-jan-21.pdf.
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Key factors to consider:
Sufficient infrastructure and capacity
• Proven expertise in the sector/field and high community reputation
• Has organizational, technical, and strategic information capacity to effectively
manage USAID funding as well as processes in place to report on outcomes
• Strong data tracking and reporting processes
Supportive policy and regulatory environment
Political environment allows CSOs to accept funding from USAID
Where to begin:
• Is USAID funding appropriate for the CSO given any restrictions or requirements that come with the
funding?
• Does the organization have the rigorous financial and monitoring and evaluation (M&E) systems
required to manage USAID funding?
Additional resources:
• Training series on how to work with USAID – provides 12 modules on the step-by-step process CSOs
need to undertake as well as the eligibility criteria to work directly with USAID.
https://www.usaid.gov/work-usaid/get-grant-or-contract/trainings-how-work-usaid
• Preparing for the Non-U.S. Organization Pre-Award Survey (NUPAS) – covers the specific process and
documentation required for the NUPAS survey. https://www.usaid.gov/work-usaid/get-grant-or-
contract/trainings-how-work-usaid/preparing-non-us-organization-nupas
• Implementation Tips for USAID Partners ‒ provides tips responding to specific, commonly asked
questions about how to strengthen an organization’s systems and processes and how to navigate
USAID rules and regulations.
https://www.fhi360.org/sites/default/files/media/documents/Implementation_Tips.pdf
• Essential NGO Guide to Managing Your USAID Award ‒ helps CSOs more effectively administer
resources from USAID; provides USAID awardees (also referred to as grantees or recipients) with
details to clarify specific requirements, regulations, and compliance issues mandated by their
agreements. https://www.fhi360.org/resource/essential-ngo-guide-managing-your-usaid-award
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Turning learning into strategy
It can be overwhelming to look at these options and consider which model(s) might be right for an
organization. This primer can serve as a guide for creating a funding diversification strategy by following
these three steps.
Begin by thinking broadly. Start with the questions in the “Where to start when thinking
of diversifying funding?” section on page 8. The six categories in this section are
excellent topics of discussion for staff meetings or can be used as an outline for a
productive retreat or workshop agenda. Answering them will yield clearer thinking on an
organization’s own unique pathway for diversifying funding.
Find a funding model fit. While going through the funding models in the primer,
categorize all the models into three main buckets – (1) funding models that the CSO has
experience with and expertise to pursue, (2) funding models that the CSO does not have
experience with but are interested to learn more about and pursue, and (3) funding
models that might not be a good fit for the organization’s context, vision, values, or the
policy environment within which it operates.
Develop a diversified funding plan. Talk with trusted partners and share the initial
funder landscaping and thought process behind funding diversification. Work with staff
to develop a funding diversification plan and discuss how to align capacity strengthening
efforts with that plan.
