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Basic financial education guide for grassroots organizations​​​​​​​

Here you will find a basic glossary, tips for finding funds, and other useful information!

Basic Concepts

1. Budget:

    • Definition: An estimation of income and expenses over a specific period.
    • Importance: Allows for planning and resource control.
    • Example: In Chile, the NGO “Techo” uses monthly budgets to plan its housing construction activities.

2. Cash Flow:

    • Definition: Tracking the inflow and outflow of money within the organization.
    • Importance: Helps avoid deficits and ensures funds are available for essential operations.
    • Example: In Guatemala, the cooperative “Maya” monitors its cash flow weekly to ensure the necessary liquidity for purchasing craft materials.

3. Savings:

    • Definition: Part of the income set aside for unforeseen future expenses or investments.
    • Importance: Provides a financial cushion to face emergencies.
    • Example: In Argentina, the foundation “Huella” reserves 10% of its monthly donations for an emergency fund.

4. Investments:

    • Definition: Using money to generate additional income or improve operational capacity.
    • Importance: Facilitates growth and long-term sustainability.
    • Example: The Chilean NGO “Patagonia Verde” invests in renewable energy to reduce long-term operating costs.

5. Accounting:

    • Definition: Systematic recording of financial transactions.
    • Importance: Allows understanding the real financial situation and complying with legal obligations.
    • Example: The association “Mujeres Unidas” in Guatemala uses accounting software to keep detailed control of its income and expenses.

6. Transparency:

    • Definition: Maintaining open and communicative practices about financial management.
    • Importance: Fosters trust among donors and the community.
    • Example: In Argentina, the organization “Manos Abiertas” publishes annual reports detailing the use of received funds.

Tools and Resources

  1. Financial Management Software: Tools like QuickBooks, Wave, and Xero can help maintain organized accounting.
  2. Continuous Training: Participate in financial education workshops and courses offered by universities and specialized organizations.
  3. Support Networks: Collaborate with other organizations to share knowledge and resources, strengthening collective capacity.

 

Key Tips for Grassroots Organizations/Groups

  1. Diversify Income Sources: Avoid relying on a single funding source. Seek donations, grants, fundraising events, and partnerships.
  2. Develop a Communication Strategy: Maintain transparent and consistent communication with donors and the community. Use social media, newsletters, and events to keep everyone informed.
  3. Implement Good Governance Practices: Ensure the organization has clear policies and an active, committed board of directors.
  4. Staff Training: Invest in the ongoing training of staff in financial management, human rights, and project administration.
  5. Monitoring and Evaluation: Implement systems for monitoring and evaluation to measure project impact and adjust strategies as needed.
  6. Encourage Community Participation: Involve the community in decision-making and project execution, ensuring activities meet their needs and priorities.
  7. Develop a Sustainability Plan: Create a plan that considers the long-term continuity of projects, including generational transitions and activity diversification.
  8. Strengthen Strategic Partnerships: Establish alliances with other organizations, local governments, and the private sector to maximize resources and broaden the reach of actions.
  9. Transparency and Accountability: Publish regular financial and activity reports, demonstrating efficient and transparent use of resources.

 

International Funds

  1. International Foundations:
    • Ford Foundation: Provides financial support to organizations working on human rights and social justice.
    • Open Society Foundations: Offers grants for projects promoting democracy, human rights, and justice.
    • MacArthur Foundation: Funds initiatives in human rights and social change.
  2. Foreign Government Agencies:
    • USAID: Offers grants and technical assistance to human rights projects in various countries.
    • UK Department for International Development (DFID): Funds development and human rights projects.
    • Spanish Agency for International Development Cooperation (AECID): Supports human rights and sustainable development projects.
  3. International Organizations:
    • United Nations: Through specific funds and programs, such as the United Nations Population Fund (UNFPA) and the United Nations Democracy Fund (UNDEF).
    • European Union: Through initiatives like the European Instrument for Democracy and Human Rights (EIDHR).

  1. Crowdfunding:
    • GoFundMe: A fundraising platform where human rights projects can be presented.
    • GlobalGiving: Allows grassroots organizations and projects to raise funds through small individual donations.
  2. Solidarity Networks:
    • Collaborate with recognized international organizations like Amnesty International or Human Rights Watch, which can act as intermediaries to receive and manage funds.
  3. Small Grants Programs:
    • Some international funds are designed to support grassroots organizations without legal personality. Examples include the small grants programs of the Canadian Embassy in various countries and the Australian Embassies Fund.

 

Places to Seek Information

  1. Avina Foundation: Offers information on funding opportunities for sustainable development and human rights projects in Latin America.
  2. Charity Navigator: A platform that evaluates charitable organizations and provides information on funding opportunities and transparency practices.
  3. GrantStation: An online database providing information on funding opportunities for nonprofit organizations.
  4. Pro Bono Australia: Publishes funding opportunities and resources for nonprofit organizations, including those working on human rights.
  5. Opportunities for Youth: Especially recommended for finding opportunities and funds for young people and youth organizations.

This summary was developed by Allyson Castillo.

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