In a previous blog, I explained that Amref Health Africa is an example of the NGOs which implement projects and gets its fund from various institutional, corporate and individual donors. There are two types of these funds: first the ‘Unrestricted’ funds where the NGO can use the money in any of the projects or to cover the internal overhead costs. The other type which is the most common is the ‘Restricted’ fund, where the money can be used only for specific projects and according to the terms and conditions of the agreement between the donor and the NGO. Usually the donor will allow a specific percentage of the donated amount to be used by the NGO to cover the overhead expenses associated with the project, which usually ranges between 7-25%. It is important that the expenses don’t exceed the overhead % because the donor will not fund that, and the NGO has to spend from it is own budget to cover the excess amount.
The NGO usually measures its efficiency in spending the fund while implementing the projects by tracking the ‘Burning rate’; which is one of the project management tools that helps to compare what has been achieved with the amount that has been spent, i.e. if 30% of a project has been completed at certain time, 100% burning rate means that 30% of the funds related to that project have been spent.
The NGO build their internal budget mainly from the unrestricted funds and the overhead % in the restricted funds. It is important that the NGO keeps 100% burning rate, because lower % means that they will get less funds from the donor and accordingly there will be a deficit in the budget.
In the last year Amref faced challenges. The burning rate was less than 100%, and higher than the targeted overhead spent. Accordingly Amref was spending from its own budget to keep the projects running. Historically this is used to happen in several NGOs, and they usually compensated the deficit from the unrestricted funds. Yet, the unrestricted funds have decreased dramatically because of the recent global economical and political challenges.
During the discussion with the fundraising team at Amref, I realized that although there is great focus and effort put to enhance the organisation’s efficiency and improve the overhead and burning rates but the gap is big and still there is a great need for the unrestricted funds. So I started to think of ideas to support Amref in generating these funds.
Influenced by my passion for football, the idea of organizing a signature annual event where the donors, corporate and other NGOs donate some money for a good cause and participate in a football tournament came. At the same time it is an opportunity for them to meet, get engaged and deepen their relationship away from their offices. From here Play for Africa was born.
The fundraising team and I worked on the idea and identified the earliest possible date to do it, taking into consideration the time needed to do the planning, choosing the venue and sending the invitations. We considered also having a family zone where kids can play and enjoy in the company of their parents. Then we contacted some vendors to provide food and beverages at discounted prices so that Amref can generate some funds in addition to the tournament registration fees.
We are aiming to raise 1 million Kenyan shillings (Around 100,000 $) from this tournament, and to set a standard that can help the fund raising team at Amref to repeat it in other countries or to organize similar events, and this will help Amref to have different resources of unrestricted funds.
GSK Kenya is willing to participate in the tournament; but it is subject to the approval of the grants & donations committee who will review it at the end of this month, fingers crossed. It will be great to see both GSK and Amref at the final match 🙂