Starting an NGO: Funding and Fund-Raising

Funding and Fund raising:

Remember money does not grow on trees. Even if a 'donation' is made to a programme or activity, it is done with an objective in mind - sometimes simply to get good karma. This is critical to understand when we approach a potential sponsor - why is he donating? What advantages can they obtain? What PR milage can they receive from the act?

It is equally important to maintain professionalism, within the NGO, to build adequate trust with the poptential sponsor or donor. Transparancy, accountability, communication etc. should be an integral part of the NGO. A good strategy is to create a working advisory group for each project or activity. This group will have two types of members - strategic members, who will give weight and legitimacy, (and will also bring in key non-financial resources) to the activity, and financial members who will make the actual contribution, based on the strength of the strategic members!

Do not always depend on external or large sources of funding - sometimes, it can come from surprising sources in your own backyard.

Tax exemption: File for tax exemption with the national tax authority (where available). Now that you have formed your board, incorporated your organization, and developed your bylaws you are ready to file with the tax authorities for tax-exemption. The national tax authority may require a number of forms for this process. Be prepared to have the following information ready:
A description of the organizations purpose and programs, including: who the organization serves and why, constituency demographics, examples of training materials, workshops, and other services, etc.

Financial information: sources of funding; financial statements (revenue and expense statement and a balance sheet) for three prior or two projected years.
Source:http://www.gdrc.org/ngo/start-ngo/startngo-6.html