Stella Lutalo and PELUM Uganda come back to Spring

Stella Lutalo is the Country Coordinator at Participatory Ecological Land Use Management (PELUM) Uganda. PELUM Uganda is affiliated to the PELUM Association, a network of over 250 Civil Society Organizations working to improve the livelihoods of small-scale farmers and sustainability of farming communities by fostering ecological land use management in 12 countries in East, Central and Southern Africa. PELUM Uganda specifically has a membership of 56 NGOs.

We caught up with Stella in Costa Rica at our Financial Innovation and Resilience Intensive (FIRE) in May 2019. This was her organization’s second time taking this training: she last attended with PELUM Uganda team members in 2013. We wanted to know the original impact of FIRE on her team, what brought her back to Spring to participate again and what this latest intensive means for her now.

Q: Let’s talk about the first time you enrolled in the Spring Financial Innovation and Resilience (FIRE) program. What was going on with your organization at that time?

Before I first attended Spring’s financial resilience training in 2013, we did not have as much money, and we were not at all confident about our finances and fundraising. We were very uncomfortable approaching donors. Frankly, it felt like begging.

Q: What happened as a result of this training? What changed?

I attribute PELUM Uganda's financial turnaround and health to the support we received from Spring. We have a completely different approach to finances and making sure we remain resilient.

It was one of those trainings where everything sticks. We learned many things and they all made perfect sense. Fundraising is so much more than completing proposals. Financial sustainability is holistic: everything is connected. We need foundational capacities, the engagement of the team, strong leadership and good governance. We need impact measurement. The financial health and the successes of the organization are interdependent.

Q: Who in your organization attended the first Financial Resilience training? What were your first takeaways?

Five years ago, 3 of us were trained: me as Country Coordinator, the head of Finance and head of Communications.

The first thing that changed for us was adopting the viewpoint that both finance and fundraising was everyone’s role. It is a strategy, and a collective responsibility, not just a task. A holistic view of financial resilience can lift up the whole organization and give everyone an opportunity to contribute, as well as taking on a shared responsibility. I understood immediately the opportunity that would come from building these capacities within our staff.

Almost immediately after we came back from the training, we shared the principles and all the tools: from pitching and case statements to the Financial Health Indicators and dashboards.

Q:  What else contributed to change?

There were other stakeholders to engage. Then we talked to the country board and provided recommendations about new reporting methods like the financial dashboard and the reserve policy. Immediately we began reporting the state of the reserve fund and using financial health indicators at quarterly country board meetings. We reviewed our fundraising strategy and developed annual financial sustainability plans. We have been consistently reporting and monitoring our progress in the 6 years since then. With the country board’s confidence in our stability, we have been able to build our reserves, allowing us to buy 10 hectares of land.

Then we spoke to our 56 NGO members within PELUM Uganda.  We had the tools to train them and we were able to help them strengthen their capacity. With the tools we got from Spring, we conducted 3 trainings for 10 member groups on financial sustainability, including helping them develop powerful communication messages and case statements. We also offered one-on-one training for them. Helping our members allows them to be stronger and more independent.

Q: Have case statements been a useful tool?

A case statement communicates an organization’s uniqueness and what makes them stand out. This is what informs a pitch to a donor. The whole team is involved. This serves as a document of purpose and to review annually, in the context of financial sustainability. They are statements of why we exist. It’s constantly updated as the organization evolves – we review it against the changing landscape.

I used this method to pitch to a bi-lateral donor. I only had three minutes, but I was able to make my case and pitch very well. We are now discussing a grant.

Q: What remain your biggest challenges and barriers to success?

We learned that an important aspect of financial resilience is diversification by donor type. But we found this hard to do. We are still 100% funded by international NGOs which creates issues managing overheads.  Since a good number of them use most of the overheads they raise for their own operations, only a  small percentage reaches organizations based in the Global South. We have yet to try private foundations, who would be more understanding about indirect costs. but have not yet been successful.

Q: What more did you want to solve by coming back to Financial Resilience six years later, in Costa Rica?

Our second biggest challenge is managing growth. How do we grow successfully? Each grant comes with a lot of grant administration: the work is hard. We are at the stage in our development where we need to consider whether we have the capacity to do all the administration the donor requires. This came up recently: we were offered a grant that came with very strict conditions around overheads. The donor terms were just too difficult, so we refused it. The donor had never had the experience of rejection – and it was hard for us too – but this expression earned respect, and they now understand what we need. Sometimes we need to have the courage to say no or negotiate for what is enough.

We are challenged with rapid growth. Then the money comes, and it demands so much. Often, I wish it didn’t come all at once or comes later. We don’t want to say no to money but we need to find a way of bringing it into the organization in a stabilizing way.

Q: What are the top 3 things you would advise for social justice organizations that are just beginning their Financial Resilience journey?

First, focus on diversification. There will be less stress in the organization if you have a lot of more financial options, and more than one donor type. Like us, it may take a while to achieve this, but it should definitely be a priority.

Second, create strategic budgets that recover all of your costs. Maintain good quality staff that maintain these budgets and create 3-year financial projections. Always look at the future: three years from now - do we have the funding? Strategic finance needs to inform the questions: who, how much and when.

Thirdly, I would suggest a strong resource mobilization effort within your teams. People come and go: roles and processes to bring in more money need to be there. The financial leader who trained with me is no longer with our organization, but the system and shared roles are in place to gather resources.

Q: So now that you have just completed your second Financial Resilience training, what resonates that’s new? Or clearer?

The tools have been updated, and I will have more to share with my staff. And while the themes for me are the same I am going home with many more new and  practical approaches to tackling our challenges.

Again, I’m reminded how much I need to focus on donor diversification. We haven’t made the headway we need on that yet and need to work on it urgently.  We need to connect to private foundations. The requirements of international NGOs are often restricting. We need to be more intentional: look at peer organizations – identify groups similar to us, learn who their donors are and how they have been diversifying their revenue base.

Second: We need to manage the work that comes from growth. The work we have to do to complete grant applications is overwhelming. It makes us lose focus. I need to share the required work amongst the whole team so that morale isn’t lost, and importantly, that we have the capacity to search for money that comes with less transaction costs.

Third: I’m clear that we have the power to negotiate our own terms. There are ways to negotiate with donors for core funding vs. project funding and create outcomes together for what works for us.

Q: How did it feel to do the training again? Was it worth it for your organization?

We have new team members. It’s completely worth it to bring new team members to help them understand and be inspired. I would recommend an organization doing this again. The sharing and experience always provide new perspectives. Leaders I’ve met in this training have offered real, specific solutions to issues we face. I’m going back home feeling less burdened.

As well, I am here amongst completely different groups that I have never met. It’s wonderful to do this in another part of the world, on a different continent. In the communication session, for example, I found this group approached these tasks in a completely different way. From 6 years ago, my memory is that communication is challenging – but for this group it appeared easy. It was good to see problems being tackled in completely different ways.