The Skills to Pay the Bills

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The Skills to Pay the Bills

Influencing funder practices appeared to be an attractive route for reform, as such changes should logically benefit many organizations at once. However, the SFM initiative's experience revealed several limitations to the approach. First, in order for new procedures to generate tangible benefits, organizations and funders must learn and use them. Second, changes must affect a substantial portion of organizations' funding to be valuable to them. From an organization's perspective, is not enough to influence a single funder, particularly if that funder is not the organization's major source of support. Third, as is often the case with advocacy, change is slow to materialize. For these reasons, those seeking quick results in the financial management arena may find it more effective to focus on building organizations' ability to manage their finances, helping them to withstand adverse funding practices. And in fact the SFM initiative demonstrated a feasible way to do this, albeit a labor-intensive one.

Nonetheless, there is a limit to how much an effectively managed organization can improve its financial stability, given the existing funding environment. Thus it is valuable to pursue changes in funder practices alongside direct capability building, even though achieving such change will be a long-term endeavor requiring significant resources. The following sequence of steps worked well for the Donors Forum in its efforts to improve contracting practices in Illinois:

  1. Convene key stakeholders, including organizations, multiple funding constituencies, politicians, and agency officials.
  2. Define the problem, garner support for change, and define common principles of good practice.
  3. Decide where to focus attention (for example, on specific issues or on types of funders), depending on what types of changes would benefit organizations most and on where change can be achieved.
  4. Provide concrete solutions that respond to funders' needs.
  5. When new legislation passes, provide support to help public agencies develop concrete plans to implement it.

While working in this way is useful, it may not lead to change in the highest-priority areas. Policy advocates need to find opportunities where change can be achieved.

Final Thoughts

Today organizations have to achieve more for less. Funders increasingly demand results but are not always prepared to cover the attendant core organizational costs. Given this climate, the Strengthening Financial Management initiative provides powerful and very encouraging evidence for organizations and funders alike. Organizations can strengthen their financial practices if they put in the time and make the needed investments. Funders who want to build the core capabilities of an organization or sector now have a blueprint for effective work.

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