Fundraising in Emerging Markets: Challenges and Opportunities

In the last few years, I have conducted sessions on fundraising at about 20 workshops in 14 “developing” countries — in Latin America, Africa and Asia. I’ve met amazing people and come across many examples of successful local-resource mobilization.

There’s some very sophisticated fundraising happening in Latin America and Asia. Much of the cutting-edge work is being done by international NGOs like UNICEF and Greenpeace, but there’s also a growing band of indigenous nonprofits that are using professional fundraising techniques.

If you’re surprised reading this, that’s understandable. The environment for fundraising in these countries isn’t easy. Challenges include issues of credibility and culture, practical difficulties, unhelpful legal systems, and a shortage of people with the necessary skills. Yet despite this, a growing number of organisations across the world are demonstrating that fundraising in developing countries is possible.

One of the biggest challenges these fundraisers face is that the nonprofit sector suffers from a lack of credibility or, worse, is seen as unreliable and even corrupt. There’s good reason for this. For example, in India it seems to be established practice for retired government officials to set up dubious NGOs, which then attract state funds — one of the ways generous government spending on social programmes fails to reach the poor. There’s even a local saying, “NGO is good business.” (In case you missed it, that’s sarcasm.) Unscrupulous opportunists also take advantage of public generosity during times of disaster to solicit funds, which they then simply pocket.

With no effective regulation of the rapidly expanding nonprofit sector in these countries, opportunities for corruption are rife. Standards of transparency and accountability are poor, with few nonprofits disclosing information on funds received or how they were used. The media regularly carries stories of charity scams.

But despite the general public scepticism, nonprofits with solid reputations based on real track records are attracting support. Donors can tell the good nonprofits from the bad.

Overcoming obstacles
Traditions of philanthropy vary widely. In Latin America, there is no real culture of giving to social and environmental causes. In Asia, while almost everyone “gives,” they tend to do so to the extended family, poorer relatives or poor people in the neighbourhood. They also give to local temples and mosques. In Africa, strong patterns of kinship and community support also dominate over giving to nonprofits. In most of these countries, family and kinship still play major roles in people’s lives, and people personally know people in need — unlike the situation for many donors in the U.S. today. But this situation is changing with a growing middle class and increasingly smaller families. Improved levels of education also contribute to a rising number of people prepared to part with goods or cash to assist nonprofits they trust.

But nonprofit fundraisers can face serious, practical challenges. The postal system might not work, the banking system probably won’t facilitate regular giving, writing a cheque usually incurs bank charges and quality lists can be hard to acquire. But there are creative ways around most of the problems.

In Brazil and Colombia, for example, volunteers on motor scooters have been used to pick up donations from pledgers. In the Czech Republic, one nonprofit overcame the lack of mailing lists by volunteers delivering appeals door-to-door in middle-class neighbourhoods. Internet giving portals also are providing ways of making it easier for donors to give — and connecting communities across the globe. In the last few years, a number of giving platforms have been launched to encourage philanthropy in and toward specific countries — for example Conexión Colombia and Reconnect in the Philippines.

The rapid expansion of mobile phones in many developing countries, and, in particular, the ubiquitous use of text messaging, has created opportunities. In India, Greenpeace uses SMS to generate donor leads by asking people if they would like a tree seedling or house plant. Those who text back “yes” get the plant delivered by a Greenpeace representative who asks if they would consider supporting the charity.

The widespread use of the Internet amongst the young provides a way to reach a generation whose attitudes toward nonprofits are very different from their parents’. Korea is a good example where nonprofits are making effective use of the Internet to engage young people with their causes, laying the foundations of a relationship with a future generation of donors.

As with culture and banking systems, the degree to which governments tax nonprofits or offer any form of tax incentives to donors varies enormously. Even where progressive measures are in place, the procedures for gaining the necessary official certificates can be bureaucratic and might even involve a nonprofit being asked to pay a bribe.

But some countries do have tax regimes that are favourable to nonprofits. In Brazil, for example, any corporate donation to an organisation officially recognised as working for education and culture (a specific category of nonprofit) is 100 percent tax deductible. ume.org.br”>Expedition Firefly, which creates community libraries in the Amazon, has used this law very effectively to garner corporate support on a significant scale, including flights and other transport, books, publicity materials, and advertising spots. Along with the success stories, I have, of course, met a great many people from nonprofits in developing countries with little idea where to begin in fundraising — but eager to learn. Often their organisations essentially are project implementers living hand to mouth and engaging in activities as funds become available. Some lack any clear sense of independent identity and mission, and most do not have any kind of forward-looking financial plan. Used to communicating only with grant-making institutions, their literature is full of the most turgid development jargon. Some will fall by the wayside as donor funds are withdrawn to be focused on other needs. The need for education and training — based on real examples of what is working in these countries — is huge. FS