Diversity of Organizations' Funding

Outcome

number of target CSOs that increased the number of their funding sources by at least [specify number] donors while not decreasing the overall financial volume of their operations

This indicator assesses the number of civil society organisations (CSOs) that managed to diversify their funding sources (while not decreasing the overall financial volume of their operations), an essential pre-condition for their long-term ability to represent the civil society’s priorities. The indicator is suitable for interventions that build the fundraising capacities of CSOs, that are dependent on a low number of funding sources.

Determine the indicator’s value by using the following methodology:

1) Define the reference period. Use a clearly defined period that reflects the duration of your project’s fundraising capacity-building support (e.g., the past 24 months). Apply the same period at baseline and endline to ensure comparability.

2) Define what counts as a “funding source”. Examples may include donations, government funding, international donors, membership fees, earned income (e.g., services, sales), private sector contributions, sub-grants from other NGOs etc.

3) Collect data on funding sources and overall financial volume using proportionate and context-appropriate methods. Through key informant interviews and, where feasible, review of relevant documentation (budgets, contracts, annual reports, grant agreements, CSOs’ narrative reports etc.), record for each target CSO:

• the range of funding sources during the reference period;

• the approximate amount received from each source (or the proportion of total funding if detailed figures cannot be shared); and

• the overall financial volume of the organisation during the same period.

Recognising that CSOs may face confidentiality constraints when sharing detailed financial information, data collection may rely on high-level summaries or self-reported data (such as aggregated figures or broad funding categories, including information already publicly available) where appropriate. This approach should balance data quality with proportionality and the need to maintain trust with participating CSOs.

4) Repeat the data collection at the end of your intervention. Use the same reference period length, data source, and classification categories to ensure accurate comparison over time.

5) Calculate the indicator’s value by counting the number of CSOs that 1) increased the number of existing funding sources by at least the pre-defined minimum and 2) at the same time did not decrease the overall financial volume of their operations.

The data can be disaggregated by CSO type (e.g., community-based organisation, network, NGO), size, or thematic area (e.g., governance, youth, environment); or geographic level (local, regional, national), as relevant and appropriate.

1) It is important that you assess both the number of donors as well as the overall financial volume - otherwise, you risk a situation where the indicator will be ‘met’ even if the CSOs gain more donors but only gain significantly smaller amounts of funding.

2) When interpreting results, consider the scale and relevance of newly acquired funding sources. Without a proportionality consideration, a CSO may appear to meet the indicator by adding very small or one-off funding sources that do not meaningfully reduce dependency on existing sources. Where feasible, apply a simple proportionality criterion to improve the validity of the findings. This can include requiring new funding sources to represent a minimum share of total funding (e.g. 5–10%) or ensuring that at least one new source is recurring or multi-year.

3) Select data collection methods carefully to ensure proportionality, respect confidentiality, and maintain trust with CSOs. Where detailed financial data cannot be shared, high-level or self-reported information may be used as appropriate.

4) Complement quantitative data with qualitative insights. To understand why some CSOs expanded their funding sources while others did not, ask open-ended questions such as: “What do you think explains the changes in the types and number of funding sources your organisation accessed during this period?” Use findings to interpret the quantitative results and guide both project capacity-development efforts and CSOs’ own financial planning.

• Clarify the project’s contribution and the role of external factors - for example, whether increased diversification was linked to project activities (e.g., donor mapping support, proposal-writing guidance, partnership facilitation) or to external influences such as shifts in donor landscapes, new funding opportunities, changes in eligibility criteria, or tighter competition for grants.

• Analyse which funding types are available, underutilised, or overly relied upon, and use these insights to refine fundraising training, donor mapping, or partnership-building support.

• Encourage participating CSOs to apply the results to strengthen their own financial planning, risk management, and fundraising strategies.

5) Consider complementing this indicator with another indicator assessing the number of target CSOs that increased the financial volume of their operations - in this case, your M&E system will capture both the diversity as well as the volume of CSO funding.