Financial Sustainability Report
The Andean Alliance for Sustainable Development
Jamie Cook, Derek Polka, Kathryn Harrison, Lauren Marasco
Background
This report is the result of an action-research consultancy carried out as part of the
course requirements of the class “IPOL 8534—Organizational sustainability of social
change organizations”, at the Monterey Institute of International Studies (MIIS). The
broad purpose of this consultancy was to carry out a process to diagnose a specific
organizational sustainability ‘area of concern’ of a local organization and offer
recommendations on how to improve specific processes or systems within that
area of concern. An area of concern is simply any specific organizational sustainability
theme or process that an organization feels could benefit from deep analysis and action
to improve the problematic issues within.
Our consultancy team—Derek Polka, Jamie Cook, Kathryn Harrison and Lauren
Marasco—explored programmatic prioritization and funding diversification for the
Andean Alliance for Sustainable Development. This report presents the main findings
and recommendations from our action-research process.
Summary
Two MPA students, Adam Stieglitz and Aaron Ebner, formed Team Peru in 2009 at the
Monterey Institute for International Studies (MIIS) with an interest in sustainable agriculture in
the Sacred Valley of Peru. Adam and Aaron moved to Peru after graduating from MIIS in the
spring of 2011 and grew Team Peru into their own non-profit organization, the Andean Alliance
for Sustainable Development (AASD). The Andean Alliance is heavily supported by the work of
Team Peru at MIIS, and the two groups work together on many fronts. Several student groups,
including Team Peru at MIIS and various high school groups, have been volunteering with the
AASD during winter and summer breaks over this past year and serving as a core component of
the organization’s mission and programmatic model. The AASD works in three interlinked
program areas that include agricultural sustainability, health and wellness, and organizational
networking, which facilitate knowledge sharing and social enterprise amongst NGOs working in
the Sacred Valley. The organization has important relationships with the Monterey Institute, the
Becky Fund, and MESA, an American organization that trains International farmers in
sustainable agriculture practices.
After a growth-filled year AASD is looking to improve their financial stability, get a better picture
of their overall financial health and assess what it will take for their group to stay small and
value-driven, yet profitable enough to fund their existing programs and expand services to
surrounding communities in the area on an annual basis. Our consultancy group set out to
explore the core question: how can the Andean Alliance successfully diversify their
funding sources (i.e. create a sustainable funding strategy that responds to existing
program structure) while maintaining the integrity of their mission? The purpose of this
report is to present an analysis of the issues AASD management has underlined, and to
address this core question by sharing recommendations that will help the Andean Alliance to
become a viable and sustainable part of the non-profit community both at MIIS and in Peru’s
Sacred Valley.
Our consultancy team worked with both AASD and Team Peru over two months in the autumn
of 2011 and researched several key issues. We have determined the following
recommendations as most crucial for AASD’s achievement of financial sustainability:
AASD should:
 Create a sustainable funding strategy that supports current programmatic offerings and
includes marketing the organization to government agencies, development funds, and
interested students
 Include a formal and broad “volunteer program” in the programmatic model
 Promote the greenhouse project as the organization’s flagship program to donors
 Expand high school & college volunteer programs and define the potential roles that
each group could fill to contribute to AASD’s funding strategy, i.e. grant writing, donor
cultivation, and social capital generation
 Cultivate key relationships with government and other local and international
organizations on the ground in order to both develop partnerships for future
programming and diversify funding opportunities.
In the remainder of this report we unpack these issues by looking at the consultancy
area of focus, briefly sharing our methodology and presenting detailed findings and
recommendations.
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1. Consultancy Area of Focus
AASD has been able to deliver effective and sustainable greenhouses through community
participation and ownership of the process since its inception. Many organizations have
attempted similar projects in Peru, resulting in non-operational greenhouses due to flawed
program design and a lack of stakeholder investment. By providing their services in an
innovative way, AASD has begun to fill a gap in the region and provide a comprehensive
development program within their communities of operation. The organization’s greenhouses
serve as community learning centers, where families are exposed to trainings on nutrition,
farming techniques, and greenhouse construction. In addition to these activities, the AASD has
established an NGO network in Peru to synergize organizational missions and objectives, and
to develop strategic partnerships. To assist in building these programs, the organization has
received groups of student volunteers at the high school and graduate school level. These
students typically work in the field, helping the organization to implement their programs while at
the same time gaining valuable cultural knowledge and work experience. Through program fees
and considerable hours of in-kind labor, volunteer students represent a significant source of
revenue and resources for the organization.
As a fledgling organization without a comprehensive funding strategy or diverse set of donors,
AASD has very few programs that generate significant revenue. AASD’s greenhouse-building
program, for example, has demonstrated success through greenhouses built in several
communities in the Sacred Valley such as Choquecancha, Cacchin, and Pampacorral. Despite
this success, the greenhouse project currently relies heavily on funding from MESA and in-kind
volunteer hours that go into constructing and administering the greenhouses. To become more
sustainable, AASD must consider alternatives to these two resources that are not indefinitely
guaranteed.
The organization’s other programs also generate very little revenue. AASD currently relies upon
small grants, donations, and volunteer hours to maintain operations, but current funding sources
are unreliable and provide just enough to cover basic expenses such as staff salaries,
administrative overhead, and programmatic maintenance costs. AASD directors work as
volunteers and the ability to expand on programmatic gains thus far in the Sacred Valley is in
jeopardy. For these reasons, our consultancy team in consultation with AASD identified financial
sustainability as the main area of concern for the organization. More specifically our team
addressed the challenge of maintaining the organization’s small-scale model and moral
integrity, while continuing to develop their funding base.
During our initial conversation with the AASD, its directors expressed their hopes to diversify
funding while maintaining the local focus of their programs. They had researched possible grant
opportunities, but explained that most donors wished to fund projects of large-scale, conflicting
with AASD’s mission and goals. The directors expressed their concern that the pursuit of these
types of grants may compromise the essence of what has made AASD’s programmatic model
successful: a commitment to maintaining community involvement and ownership. Furthermore,
AASD has only three full-time staff on board: Adam, Aaron, and Ruben. Ruben is from Peru and
studied agroecology in the United States through MESA. Ruben’s primary responsibility involves
working as the on-the-ground greenhouse expert.
Between Adam and Aaron, there has not been enough time to perform financial development
activities while successfully managing the organization’s projects and administration. Sourcing
new donors and applying for grants requires significant time commitments including research,
marketing and canvassing activities. A main concern for AASD directors is that their absence in
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the field could diminish program impact if they were to overly focus their efforts on securing
funding from outside of the region.
2. Rich Picture
After assessing our initial conversation, we developed a rich picture depicting our understanding
of AASD’s area of concern and how those problems should be addressed (see Figure 1). We
chose to represent AASD’s main partners as the peaks of the Andes Mountains. The first peak,
which Adam and Aaron are climbing up, represents their relationship with the Becky Fund,
which set the organization in motion, and MESA, their current local partner that has assisted in
the construction of the greenhouses. Our team put dollar signs and a depiction of a greenhouse
because we believe that AASD’s goal to open a demonstration farm will help the organization to
garner funds and further solidify
their unique presence in the
development community within
Peru.
The second peak represents
AASD’s relationship with MIIS.
We placed a large magnifying
glass on that particular peak
because we believe they
AASD’s directors need to
evaluate the large benefits they
receive through their informal
relationship with MIIS. At the top
of the peak, there is a llama and
a seal in love, representing a
strong and loving relationship
between MIIS and the Andean
Alliance. Specifically, we believe
that their relationship with MIIS
Figure 1: Rich picture
has contributed greatly to their
ability to receive volunteers
within the MIIS community, and
that without Team Peru the organization would lose significant resources.
The third peak represents the Andean Alliance’s relationship with their volunteers overall. The
volunteers are going upstream on sailboats that have dollars as their sails. Once up at the top,
they have formed a community that is able to cooperate well and which provides the
organization with the strength to pull in even more volunteers. Team Peru plays a crucial role in
this, but what must also be taken into consideration is the amount of work and funding that they
have been able to receive through their Carmel High School volunteers in particular. We believe
that the indirect and direct value that all of their volunteers bring to the organization should be
critically evaluated.
At the center of the picture, beyond the mountains, we placed the Sacred Valley, or the area of
operation for AASD. By reaching the top of these peaks, or investigating just how much impact
each of these relationships produce, the Andean Alliance will have a better perception of where
they need to go in order to be able to better provide the resources that best meet the needs of
Andean communities’ needs, and their own organization.
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3. Methodology used in the study
As stated prior, our team’s primary area of concern was the fundraising potential and financial
sustainability of AASD. However, before addressing the organization’s revenue generating
potential, we researched their website and pored over previous analyses of the organization
done by a systems thinking class. The website conveyed that AASD is first and foremost an
organization dedicated to the people living in the communities of the region of Lares, Peru.
AASD is committed to partnering and collaborating with them to both improve their communities’
health and nutrition and spur micro-enterprise while preserving their culture. This philosophy of
equality and mutual respect was well illustrated in AASD’s theory of change model, mission and
vision, each of which contributed to the framework of our approach.
After doing our initial research, we had a few conversations and exchanged informationgathering emails with Adam and Aaron. We then drew a rich picture illustrating how we viewed
both their financial situation and the ramifications of an unreliable, non-sustained revenue
stream.
Next, our team began our programmatic analysis by constructing a Matrix Map. The Matrix Map,
as explained in Nonprofit Sustainability (Jeanne Bell, et al), creates a comprehensive picture of
an organization’s programs in terms of community impact and profitability. By obtaining a better
idea of which programs have the most impact as well as the most potential for generating
revenue, a more informed fundraising strategy can be devised which leverages the strengths
and opportunities already available to an organization. It also allows the organization to see
where it may need to curb or stop the flow of resources to programs that lose too much money
and/or have too little impact. Programmatic impact data was collected through a series of Skype
interviews, emails and then one in-person meeting with Adam and Aaron. Adam and Aaron
were asked to list their programs--both revenue generating and non-revenue generating--and
rate how impactful each program is on a level of 1-4. The following criteria were used to
determine program impact:







Depth- Does the program have a high impact on the people involved
Scale- Does the program reach a large number of people?
Excellence in Execution- Is the program delivered in superior or outstanding way?
Alignment with Core Mission- How well does each program contribute to mission
impact?
Filling an important Gap- Is the program providing a unique service/product?
Community Building- Does the program help build the community around the
organization?
Leverage- What is the degree to which this program increases the impact of other
programs?
Adam and Aaron then “weighted” each criterion by choosing which criterion or group of criteria
were the most important for each program. Upon submitting criteria ratings, each program’s
weighted average impact was determined. Similar impact ratings were obtained from Team
Peru members through a separate focus group facilitated as a casual conversation about their
experience in Peru and how they felt about each of AASD’s programs.
Programmatic profitability was then determined. AASD submitted cost and revenue data for
each of its programs. Salary costs, common costs (i.e. supplies and materials), and
administrative costs were also allocated to each program to determine an accurate
representation of not only the cost but also the net profit or loss of each program. At this point,
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our team has assembled a Matrix Map and has begun to analyze it to determine the most
appropriate business strategies for the AASD to adopt to raise revenue. It should be noted here
that any advice concerning business strategy based on the findings of this tool would have to
keep in mind AASD’s organizational philosophy.
The Matrix Map (see Figure 2) was an appropriate addition to our framework because it
prevents decisions regarding program cutting and expansion from relying on strictly financial
data or strictly programmatic data. By including program impact in the map, the organization
can take into account its role and effect in the community and determine how to leverage these
to reach a more financially sustainable position.
In summary, our methodology consisted of document review of previous group project reports
on AASD, review of their website and review of background material supplied to us by Adam
and Aaron. We then carried out a series of interviews with Adam and Aaron to ask clarifying
questions about the organization and to obtain in-depth financial information. Interviews with
Team Peru members and International Business Plan members were also held to ask about the
impact of each AASD program. Additional tools that were used include drawing rich pictures
and construction of a Matrix Map.
Figure 2: The Matrix Map visually
presents the profitability and impact of each
program offered by an organization. These
programs range from services provided to
the community to revenue generating
programs. Each quadrant represents a
different programmatic category, each of
which are associated with a specific action
that should be taken to properly leverage a
program to improve overall organizational
financial sustainability. The upper left
quadrant are Heart programs, which have
high-impact and low profitability. It is
recommended that an organization should
continue Hearts but prevent their
expansion so as to contain the net loss
they accrue. Star programs are found in the
upper-right quadrant and are high-impact
and highly profitable. Thus, these programs
should be grown and expanded. Money
Trees, which are found in the lower right
quadrant, are low-impact but highly
profitable. Organizations should continue
carrying out Money Trees and
simultaneously increase their impact.
Finally, Stop Sign programs, which are found in the lower left quadrant, should be discontinued,
as they are both low-impact and low-profit.
4. Findings and Recommendations
Key issues identified through the matrix map
After developing the matrix map, we were able to establish a clearer vision of AASD’s current
financial landscape. We found that AASD contained very few Stars but no Stop Signs. Most
programs broke even, regardless of whether or not they were of high or low impact. In order to
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better sustain their high-impact but low-profit programs, AASD needs to balance out their matrix
map with more highly-profitable programs.
We found that AASD’s most valuable program is volunteer utilization. Not only do their
volunteers bring in revenue, but in the case of Team Peru, they also add valuable skills, which
sustain AASD’s programs by increasing their impact. The volunteers help build the
greenhouses, which we consider to be a semi-Star, semi-Heart program. This means that it is
neither losing nor gaining money, but nonetheless has a very high impact. In fact, the
greenhouse project received the highest impact rating among AASD programs. The NGO
Network is also rated highly, but does not bring revenue into the organization. Thus, AASD
needs to invest more in its Money-Tree projects.
These Money-Tree programs include the revenue-generating programs such as AASD’s
financial support from the Becky Fund, which also happens to be highly impactful. Another
funds-generator is the Inka Case project, which may not be very impactful but is a good source
of revenue for the organization. Based upon our analysis of the matrix map in conjunction with
our discussions with AASD, we have established the fact that simply expanding revenuegenerating programs may not be a feasible option. We have assessed several alternatives to
simple expansion strategies and present them in the following sections.
Finding #1: Considering it is a flagship program, the greenhouse project is inadequately
leveraged for marketing and fundraising purposes.
In speaking with AASD founders and reading over all existing promotional and informational
documents, it is clear that the greenhouse project is the organization’s current flagship program.
This program has been well received by the communities it has benefitted, and is currently the
most developed of AASD’s programs. Greenhouse project-related activities occupy the vast
majority of Adam and Aaron’s time, and most widely serve their beneficiary base. Despite its
high level of impact, the project currently generates no funding (only in-kind resources from local
government). This presents an interesting dilemma in that AASD’s image and what they are
most known for in fact does not generate any funding for their organization.
Recommendation #1: Promote the greenhouse project, emphasizing the success of their
programmatic model.
Although the greenhouses do not currently generate funding, it is clear that their existence is
central to the mission and brand of AASD. We recommend that AASD promote the green house
project, emphasizing the success of their programmatic model. Proper marketing of this concept
could generate press coverage, or grab the attention of donors who support greenhouse
farming and are familiar with how other development organizations have failed in this area. In
addition, AASD should provide consulting services to other organizations looking to tap into the
success of their greenhouse projects. This type of activity would solidify AASD’s expertise in this
area, build legitimacy amongst the donor community through program testimonials, and fortify
the unique brand of the organization in its marketing strategy.
Within Peru, specific promotional activities could include offering tours of the greenhouses to
local nonprofits based in and around Cusco and the Sacred Valley. Another promotional activity
could be the distribution of both program and organizational information at local markets when
families go to sell their extra produce. Outside of Peru, AASD’s partners and advocates, such as
Team Peru, must leverage all available opportunities to talk about AASD’s innovative and
sustainable greenhouse model. These opportunities could be conferences held throughout the
region, presentations given at nearby universities or meetings held with similar-minded
nonprofits. Additionally, the donors of these similar nonprofits could be identified and invited to
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attend formal presentations on AASD and its greenhouse model.
Clearly AASD must choose its most appropriate promotion activities, and it must be said that if
AASD chooses to implement this recommendation, it must be certain of the true innovativeness
and competitive advantage of its greenhouse model. Thus, as part of this recommendation, we
suggest that now would be the most opportune time for AASD to consider applying for a grant to
study its own model and compare it to other existing alternatives. This action research project
would result in better documentation of the model and improvement of any problematic areas
within the greenhouse program. Such evaluation and informed improvement of its flagship
program would increase AASD’s legitimacy and professional expertise, which could help attract
donors.
Finding #2: The programmatic and economic value of volunteer time is extremely high,
yet not adequately leveraged for development and marketing purposes.
Volunteer hours have contributed heavily to both the programmatic and financial success of the
Andean Alliance since its inception in 2009. Several distinct groups including MIIS students,
Peruvian community members and American high school students provided approximately
11,000 volunteer hours to the Andean Alliance in 2011 through various activities and in-kind
donations. Volunteers undertook coursework related to the growth and sustainability of both the
Andean Alliance and Team Peru, built and donated bricks for the greenhouse project, and
helped fundraise for the organization. According to their most recent 2010 reporting,
Independent Sector states that volunteer time in California is valued at USD 21.36 per hour,
bringing the total value of time donated to the Andean Alliance in California in 2011 to
$99,238.56. The Peru-based volunteer activities have been valued by the Andean Alliance at
approximately USD 10.00 per hour, and with a total number of hours computed to 9,610 for
2011, the Peruvian based time value is $96,100, bringing the approximate value of donated
volunteer hours thus far for 2011 to $195,338. These numbers serve to show the great
importance of volunteer hours to the AASD, however the given hourly values may not be
entirely accurate; for example, Peruvian community members volunteer time spent making
bricks should be valued more conservatively than at USD 10.00 per hour. Regardless, the
message is the same. Volunteers are contributing massively to the AASD.
According to our interviews with AASD, they are spending approximately 30 percent of their
time supervising volunteer programs, with both high school students and Peruvian community
members. We find this to be a significant enough amount of time to warrant a place for the
volunteers with their programmatic model.
Furthermore, it is necessary to stress the worth of volunteer hours and in-kind donations as a
part of the AASD’s programmatic model. All of the programmatic offerings require volunteer
work, but more than that we would argue that one of the strongest aspects of the model is its
usage of volunteers, expanding the capacity of the organization and ensuring impactful
programs via passionate volunteers. This is good for many reasons, but especially because
AASD puts a great deal of emphasis on impactful programs and the benefits derived both for
the participants and the organization. It is important to Adam and Aaron that volunteers are not
simply in the picture to pay program fees, but that they are truly contributing to the mission of
the AASD. With such programmatic, developmental and marketing potential, it can be said that
the volunteers and the power that they hold within the organization have not yet been effectively
leveraged.
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Recommendation #2: Include volunteer hours in financial reports and update the
programmatic model to include a formal “volunteer program”.
The volunteer time value data has not yet been factored into the financial materials compiled by
the AASD for 2011. We recommend that Adam and Aaron quantify all volunteer hours and
similar in-kind donations into their budget as soon as possible, in order to give a clear and
complete picture of the value of their programs and to enable the founders to make several key
decisions regarding next year’s programmatic offerings, as well as fundraising options and goalsetting. Furthermore, Adam and Aaron should ensure careful calculations and recording of
volunteer hours in the future; they should re-calculate the worth of volunteer time in Peru and
conservatively assign hourly values based on specific tasks. This will help to both give a realistic
snapshot of the volunteer worth and also aid in preparations for grant applications.
We also recommend that the Andean Alliance include a broad “volunteer program” within their
programmatic model. In other words, even though volunteers are assigned to work on other
AASD programs, the sheer number of volunteers makes their management a program in and of
itself—i.e. the volunteer program (a better name can be developed for marketing purposes).
Since the volunteer programs are providing significant revenue for the organization, AASD
should devote the appropriate time and resources to bolstering volunteer programs such as
MIIS’s winter term trip as well as with Team Peru’s volunteer activities on the MIIS campus.
However, they should also scale up volunteer opportunities for student groups from universities
and/or high schools. It is important to remember that these volunteer programs, even for young
high school students, are adding value to both the communities where AASD is operating and
the communities in the United States where AASD volunteers live, study and work. As such,
these student programs hold their own financial “weight”.
These student volunteer programs also enable the founders to leverage the program funds
received from participants to contribute to their operational costs as well as allows them the
opportunity to devote sufficient time and energy into other programmatic activities such as the
building of greenhouses and the NGO network. AASD should market such benefits of the
volunteer program by using testimonials and statistics, which would both help bring in new
potential volunteers or donors and display the strength of these programs to outsiders.
Finally, whenever possible, AASD should focus on recruiting student volunteers from university
agricultural programs, such as those students planned to arrive during 2012 from the University
of California. However, they should also decide whether or not they are willing to work with both
their existing and potential contacts to allow energetic high school students to volunteer their
time in the Sacred Valley as well. We would recommend that AASD continue to use high school
student volunteer programs for the next few years in order to continue generating substantial
revenue until they reach a point at which the directors may be able to delegate program
oversight to an additional staff member and focus their attention on other projects.
Creating a Funding Strategy
Currently, AASD does not receive any monetary funding from institutional donors including
government aid agencies and departments, large NGOs, or foundations (with the exception of
the Becky Fund and in kind donations from the local government for green house construction).
We believe that securing grants from these types of sources will help to build the legitimacy of
AASD’s work within the donor community, and will provide the level of funding needed to
appropriately expand the organization to reach its full potential in terms of staff and material
resources for programmatic work. As of now, AASD relies on high school volunteer fees,
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fundraisers, personal donations, and grants from the organization’s “seed fund”, the Becky
Fund, to sustain itself. In order to bolster AASD’s funding resources and ensure their
sustainability, diversifying and increasing funding resources should be AASD’s primary target
goal. To meet this goal we suggest that AA consider the following recommendations in regards
to adhering to a marketing strategy that includes the identification of appropriate partners and
donors.
Finding #3: Strong sense of mission limits their marketing strategy to aid them in
approaching different types of potential donors.
AASD occupies a specific niche in the development sector within their area of operation, setting
it apart from other organizations that have worked in Andean communities in the past. AASD
has created a unique development model, in which community participation and capacity
building serve as the central pillars of the organization’s mission and goals. Management at
AASD is highly sensitive and attuned to the fact that their successes have been based on a
small scale program model that prioritizes beneficiary and community needs, and offers
participating communities real ownership over their own projects.
One of the most important goals in developing a sound financial framework for AASD is striking
a balance between generating funding and maintaining the “soul” of the organization. AASD
management has expressed concerns regarding mission creep and the devaluing of its
“customer care” for beneficiaries in the field. While this strict attention to maintaining the
integrity of the organization is admirable and necessary, our consultancy team finds that Adam
and Aaron have not yet developed a model by which to appeal to specific donor needs &
interests. Considering this, our consultancy team provides recommendations below that we
believe will support AASD in soliciting funding that will grow the organization responsibly, and to
a level that will equip management staff with the ability to be selective regarding donor
affiliations and planned programs and activities.
Recommendation #3: For a successful marketing strategy AASD needs to create
separate marketing Identities.
While an organization has a mission and core set of values that should define its actions and
direction, it may also express its identity and purpose differently to varying stakeholders (or
segments), for good reason. The success of grant applications is largely determined by the
ability of an organizational candidate’s ability to speak the ‘language’ of the donor. In order map
out a marketing strategy we recommend that AASD address the following issues related to both
broad-based marketing and specific/niche marketing for identified donors:



Overall Marketing Purpose
o Why are we doing this?
o What do we hope to achieve through our marketing efforts?
Our Competitive Advantage
o What do we have to offer that no one else does?
o What is our core essence?
o What is our unique program approach?
Target Audience
o Who is our target audience and why?
o What initial specific goals do we have? (establishment of model farm)
o Explain how this marketing approach will cater to this particular ‘donor’ or
audience, and how it will help you to accomplish your set goals.
 Specifically what are we selling?
o What marketing tools are we using and why?
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We recommend that AASD look at grant guidelines and requirements not as boundaries but as
opportunities to sell different parts of their organization to different institutions in a way that is
relevant to the grant in question as well as the organization’s needs and values. Many donors
cater their grants to issue areas or development processes. Keeping this in mind, we believe
AASD should consider the following elements in answering the questions above in terms of
soliciting grants that emphasize specific types of development processes, or issue areas.
Regarding development processes AASD should be packaged as:
 A unique entity with an original program strategy and thorough theory of change
 An organization that can operate well within a partnership or set of partnerships due to
its specialized area of expertise and set of goals
 An organization that is based in the community with a participatory programmatic model
that delivers sustainable results.
AASD should programmatically be marketed as:
 Specializing in projects regarding green house construction, community engagement
and capacity building, NGO network construction, and nutrition programs that can fit into
larger health strategies, women empowerment initiatives, or economic
development/livelihood programs as emphasized by the donor
 A knowledge sharing organization that intends to connect rural Andean communities to
one another through civil society groups, and has the capacity to connect these groups
to national and global markets and ideas.
o The idea of value-chain programming for economic development through
agricultural programs is highly relevant to USAID currently. An initiative such as
the agency’s ‘Farmer to Farmer’ program looks to tie in entrepreneurial training
and incentives to agricultural projects, and seeks to connect rural providers to
larger markets.
Finding #4: AASD currently has not developed a sufficient network for funding
opportunities.
Seeking appropriate and viable grant opportunities is one of the most crucial and difficult
aspects of achieving financial sustainability. The time taken to build relationships with donors
and author proposals often competes for time spent on program management. To make matters
more difficult, for a fledgling NGO, most grant applications are rendered unsuccessful, meaning
that few returns are to be had on considerable hours spent by limited staff on development
activities. In speaking with the AASD founders, we discovered three key elements that have
hindered their financial development process: 1) time management, 2) pressure to scale, and 3)
a lack of strong relationships with other development actors in Peru.
Time Management
Please see Finding and Recommendation #6 for further details.
Pressure to Scale
AASD management has continually expressed concern that by seeking larger grants they may
subject their organization to expansion outside the boundaries of their mission, dilute their
product, and may potentially change the scope of the organization’s objectives. Given these
concerns, Adam and Aaron expressed interest in receiving grant monies from alternative
donors who understand and respect their programmatic model but communicated an
awareness of the time and opportunity costs of researching these types of grants. As a start to
their search for appropriate grants, Adam and Aaron have begun to identify fellowships that
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would be awarded to individuals with proposals for start up NGOs. Adam and Aaron believe that
these types of fellowships, awarded to the individual rather than to the organization, may fill in
their funding gap for the immediate future, and help them to strengthen their organizational
structure.
Lack of Relationships with Local Development Actors
One of AASD’s primary goals is to establish a network for development organizations within the
Cusco area. Currently this objective is underway as Adam and Aaron work to build relationships
beyond their partnership with MESA with the greater non-profit community. Thus far, Adam and
Aaron have attended various conferences wherein they have pitched their ideas for the network
and have collected NGO contact information. However, at the present date, AASD’s only
formalized organizational relationship is with MESA.
Recommendation #4: AASD should identify quick-wins and partner for organizational
growth.
To mitigate the challenges stated above, we believe that AASD’s identification of potential quick
wins amongst their donor base is key. Personal relationships, inside information, and new
relevant initiatives favorable to the organization within the donor sector are all necessary in
building an effective grants strategy. We recommend that AASD map out key potential
stakeholders and the network of their potential donor base both in Peru and in the U.S. These
activities will help them to visualize a prioritized development strategy, and will serve as an
important document for future interns who are tasked with grant applications. We recommend
that AASD create a funding ‘asset’ map attached to a ‘plan of action’ calendar. The funding
asset map would consist of all known, relevant funding opportunities based out of the US and
Peru. Each contact or opportunity should be assigned a contact deadline so AASD can be sure
to cultivate at least three new donors and/or organizational relationships per month to grow its
potential funding base.
A huge aspect of the asset map will be identifying key partnerships for the organization. In order
for AASD to grow, it is essential that the organization begin to partner to receive grant funding.
Partnering will allow the organization to work on larger grants that will provide sustained funds
without requiring AASD to scale disproportionately. In order to partner effectively we suggest
that AASD define six to ten core questions that will serve as indicators for an appropriate
partnership, and that seek to define the question of what ‘good’ growth consists of for AASD.
Indicator questions should include content regarding financial impact, core purpose,
organization identity, and development process. A key question for any AASD partnership will
also undoubtedly address whether or not AASD will be able to maintain its close relationship
with communities by participating in a development project with the partnering organization in
question.
.
Finding #5: Nascent relationships with national & international government actors show
promise for future collaborations.
The reduction of rural poverty in Peru is a national government priority, offering possible funding
opportunities for AASD. AASD has already taken steps towards formalizing their relationship
with the national government and has taken partial advantage of its partnership with the local
government who provide some of the materials needed for the organization’s greenhouse
construction. As a result of the relationship built through the greenhouse project, the AASD has
also undergone a series of talks with local government officials in the area wherein the
government has expressed interest in funding more than ten model farms. AASD has proposed
to build a model farm to share their techniques with other communities and community
organizations, in order to replicate this successful model throughout the Andean region.
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AASD has also met with representatives of USAID’s economic development and agricultural
programs to discuss the possibility of a grant from the agency’s small grants program,
particularly geared towards agricultural development projects. In the same vein as their
conversations with Peruvian government officials, Adam and Aaron have expressed concern
that USAID would require the program to scale up beyond their desired capacity. The deadline
has now passed for the small grants program, and will become available again in 2012.
Recommendation #5: Strengthen government relationships to increase funding
opportunities.
We believe that strengthening both local and international government relations and creating a
specific government marketing strategy are essential in ensuring the financial stability of the
AASD. We suggest that AA invest in strengthening their personal relationship with the
government to explore what funds can be tapped from Peru’s current national initiative that can
be used to carry out their mission and support their skills offered. We recommend that AASD
weigh out the pros and cons of scaling up, and assess whether or not their small scale is
sustainable, given existing funding opportunities. If AASD chooses not to pursue greater
government funding, alternative donors will have to be sourced instead. By cautiously
considering larger grant opportunities especially as part of a partnership or organizational
coalition, AASD may be able to effectively train and share their knowledge and programmatic
model with new local staff and community members, build capacity in communities beyond their
reach, and in doing so raise the overall value and impact of their organization.
Findings #6: The time required to carry out, manage and oversee programs prevents
AASD directors from writing urgently needed grant proposals and connecting with
potential donors.
Currently Adam and Aaron spend the majority of their time on programmatic activities, including
managing volunteers and overseeing greenhouse construction. They also perform the
organization’s administrative work, including all efforts spent in obtaining 501c3 status, filing,
and tracking financials. The opportunity cost of such a level of direct involvement is the loss of
time to write grants, build social capital and cultivate donors in the United States in person.
However, in choosing to devote more time to program oversight, the financial sustainability of
AASD is being threatened. In adhering to their model, Adam and Aaron have been involved in
each aspect of the organization, which has been necessary to build trust and legitimacy in the
communities in which they work. However, this has detracted from the time needed to develop
stable sources of revenue. Currently, Adam and Aaron are at an important crossroads, in which
they must decide how to better allocate their time in order to devote necessary efforts towards
effective grant writing and other fundraising initiatives.
Recommendations #6: Hire a local staff person to partner with Team Peru students to
conduct a much more significant portion of monitoring and evaluation activities of
AASD’s programs.
First, in order to find more time to write grants and cultivate urgently needed donors, our team
recommends hiring a local staff person who would coordinate with Team Peru volunteers to
facilitate a large portion of the program oversight, which is currently done by Adam and Aaron.
Clearly Adam and Aaron cannot be completely removed from this process, but it is hoped that
assigning someone else with appropriate expertise to monitor and evaluate programs will both
free up time for the directors as well as result in more accurate assessment of program impact,
efficiency and effectiveness. Adam and Aaron can be sure that whomever they hire shares their
philosophy and can be trusted to carry out their mission and vision. In relation to this issue of
finding more time, our team also recommends finding creative ways to work around such
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obstacles as the lack of road infrastructure in Peru. Can Adam and Aaron pay for community
members to come to them and report on project progress? Can Adam and Aaron meet these
community representatives all on the same day in a central location? For example, if a
community’s farmers or artisans need to travel to Cusco anyway for market days, could Adam
and Aaron schedule evaluation and debriefing meetings for these same days? Additionally, we
recommend finding one or two people amongst their incredibly diverse and skilled group of
volunteers, to help Adam and Aaron cut down the time they spend on administration and
logistics.
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5. Annex
Annex 1: Conceptual Map Explanation
Our conceptual map consists of this course’s five themes of organizational sustainability drawn
out in a series of ever expanding concentric circles. This represents how each theme not only
builds on the one(s) before it (as is represented in the smaller circles), but that each theme
encompasses aspects of the other(s) at all times. According to our group’s logic, the first circle
should be “Compelling Value Proposition” because an organization always starts with a vision.
This vision, which is often described as the fulfillment of a need, must have value to the
community that is being served. One of our key assumptions about this theme is that value of a
proposed program or project will not be embraced by a community unless a space is created in
which that community sees a clearly defined role for them to contribute to and to help design the
program/project. This involvement enables the community to bring itself closer to the shared
vision. Another key assumption is that this community buy-in is both obtained from the very
beginning of any program/project and constantly reinforced throughout the life of the
program/project.
The next circle is “Constituency and Relevancy” because once a community has decided that a
proposed program idea has value, program leaders and staff are responsible for constantly
ensuring that the program remains relevant to the ever-changing needs of the community. They
are also responsible for the creation and maintenance of reliable channels of communication
with their constituency, or main benefactors of the program, which promote honest feedback
and function within that constituency’s cultural norms. For example, the ability of AASD’s staff to
speak, read, write and understand Spanish has been key to breaking down initial
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communication barriers between program creators and program benefactors (who may decide
to become program staff and eventually program leaders). Adam and Aaron’s on-site presence
also demonstrates their sincere commitment to not only the community’s future but to engaging
the community in process of moving towards that future together. Our final assumption is that to
increase the chance of community buy-in and ownership, a program must operate with respect
and in harmony with a community’s culture. Value judgments by an outside development team
must be surfaced and then set aside to prevent the project from having an alienating or foreign
atmosphere in the home of the project’s benefactors.
The third largest circle is “Programmatic Offering”. As a community sees that a program not
only has value but also depends on the input and buy-in from them as the benefactors, more
programs are created to meet different community needs. Our group’s main assumption about
programmatic offering is that no one program is a silver bullet for meeting a community’s needs.
A web of programs better address development issues such as poverty, health, nutrition and
education with more complex, multi-pronged, encompassing solutions. Furthermore, in
reference to the diagram, these programs must maintain relevancy by encouraging constant
feedback from involved constituency and stakeholders. If they cease to be relevant, they will
cease to exist.
The fourth circle is an organization’s “Business Model”, and our group sees a program’s
business model as being constructed after an organization’s core programs have been
determined as having value and consistently being affirmed as relevant to the community.
However, the location of “business model” in this circle does not mean that an organization
starts to think about their funding strategies once programs have been proven successful and
lasting. Actually, one of our key assumptions is that an organization must be brainstorming
about funding sources even before a project/program begins. Furthermore, an organization
must be courting possible donors at all times and never miss an opportunity to promote the
good work it is doing. Moreover, since the reality of development work is that it moves slowly
and is wrought with challenge, we assume that having more than one year’s worth of funding
before a program even begins is advantageous to a development organization. Program staff
will need at least this much time to collect data on their program’s impact, research grant
opportunities and cultivate donors. However, we also assume that an organization’s fundraising
strategies will change as their programs and organizational needs develop organically. Thus
any fundraising strategy should include a variety of general fund sources to which the
organization can apply but should also be flexible to become focused on a particularly
promising money source or revenue generating method.
Finally, from our observations of AASD, our group has concluded that when thinking about
one’s fundraising strategy, an organization should, from the beginning, think about acceptable
fund sources and unacceptable fund sources or those which would compromise the philosophy
or integrity of the organization. This foresight may help an organization be creative from the
very beginning about how to get necessary funds for their programs if more mainstream, larger
donors are considered taboo.
The final circle in our diagram is creation of a “Learning Model” within your program and
organization. This is the largest circle because all previous themes of organizational
sustainability need to constantly be reexamined, reevaluated and optimized as community
needs, and program relevance and staff change and develop. Our only assumption about the
learning model is that time must be carved out in which all stakeholders involved take the
opportunity to step back from their day to day activities and examine their organization. Time
must be taken evaluate the direction in which an organization and programming is moving
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(towards or away from the vision), and the effectiveness and appropriateness of the methods
that are being used to get to that vision.
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