One sad fact in our capitalistic world is that funding for many worthwhile efforts is often difficult to obtain if there is not a direct profit opportunity to be had. Non-profit’s and local community leaders need special assistance, especially in developing countries, to gain access to appropriate resources of capital devoted to their respective purposes.
Attempting to improve the health, education, and welfare of the impoverished by starting a business designed to support the local need is admirable, but your typical banker is not the one to be approached for a business loan. Most people that follow this route are too often met with the reality of bank lending practices. Loans cannot be made without collateral, and the security of this collateral must meet high standards set by each individual bank. If the project fails, the bank wants something to salvage to recover its money. It also will not lend unless there are “visible” flows of cash to pay back the loan over the loan’s term
If banks will only make a business loan under these conditions, how is a local effort to get funded in the first place? Most often, if the initiative is not driven by an organization that already has funding, then the effort will require more effort than with a normal startup venture. There are philanthropic institutions, both charitable and faith based, which are devoted to this purpose. The difficulty involves approaching the right organization and applying for a grant in the appropriate manner, not an easy task when language and cultural barriers stand in the way.
Local development agencies should be approached first since their reason for being is to assist with projects of a non-profit nature for the good of the regional community. These groups should also have information and contacts at larger organizations that may not be in the local area. There are an enormous number of philanthropic groups around the globe that network through many smaller organizations. If you do not meet success at the first one contacted, they may connect you with a group that will be eager to help. Here are a few examples of these larger groups:
- The Africa Grantmakers’ Affinity Group (AGAG) is a membership organization of foundations that either fund or are interested in funding in Africa. AGAG has its roots in the South Africa. These influential managers are instrumental in sharing and learning the most effective ways to support development efforts in Africa.
- The African Women’s Development Fund (AWDF) is a fund-raising and grant-making initiative, which aims to support the work of the African Women’s movement. AWDF, the first Africa-wide fund-raising and grant-making fund, was established in June 2000.
- The U.S. Agency for International Development (USAID) promotes peace and stability by fostering economic growth, protecting human health, providing emergency humanitarian assistance, and enhancing democracy in developing countries. USAID has working relationships, through contracts and grant agreements, with more than 3,500 companies and over 300 U.S.-based private voluntary organizations.
Tom Cleveland is a writer for SmallBusinessLoansDirect.com. He has over 30 years of experience in executive management, corporate governance and business development. Tom served as CFO for various Visa International entities from 1980 until his retirement in 1999 and was instrumental in expanding the global reach of the Visa system. Tom’s writing on business issues has appeared in the NY Daily News and BusinessInsider among others.