What happens when this money runs out?
Many funders are concerned about what you will do when the money they are providing runs out. The question they are really asking is if they fund the project will this result in a longer term sustained project or is it just a one off project. This is often called an Exit Strategy
You could opt for one of the following strategies:
Another organisation will take over the work
Having demonstrated the need and success of the project we will seek new resources to continue
It is a one-off piece of work and will end with the end of the funding
A gradual wind-down or downscaling of the project
The project will generate income and become self-sustaining
It is important to recognise that whatever your approach you can justify it. So if you see the project as a one-off time limited activity, you need to explain why this is the case and how you will make sure that the users or beneficiaries of the project are aware that this is the intention. There is nothing quite like building an expectation that you cannot meet.
On the other hand if you choose any of the other exit strategies you need to say something about how you are going to achieve this; what other funding will you seek, how will you negotiate to hand over the project or work. Critically if these activities have any financial implications this should also be made clear and included in the budget. According to a survey conducted in 2002 in relation to the Lottery's Community Fund, there are a number of key success factors for a successful exit strategy for project. These are…
Good business planning that communicates a clear vision of the project
A strong project champion
Continuity of staff and volunteers
An organisation which has several sources of funds rather than a reliance on one
Involvement of potential continuation funders at an early stage
Factors mitigating against project survival are…
Poor business planning - particularly plans that are just developed to satisfy the funder
Changes of staffing which can destabilise the project and lead to gaps in key staffing whilst new staff are recruited - though it is recognised that the short-term nature of many funding programmes contributes to this
Leaving consideration of continuation funding to the last year
A full copy of the report can be found at http://www.biglotteryfund.org.uk/research-uk click on latest documents, exit strategies UK.
You may also decide that it would be a good idea to have a long term approach to funding and want to develop a Funding Strategy and Plan that together with a Business Plan sets out your overall approach to securing the resources that you need. This may demonstrate to a funder that you have a considered approach to fundraising and have thought through how to sustain your organisation as well as well as the projects that you undertake.
