The Abolishment of the PDAF and its Effect on NGOs

The abolishment of the Priority Development Assistance Fund (PDAF) in the 2014 Philippine budget certainly looks like a big loss to NGOs around the country, as they can no longer get funds from their political sponsors.

In the past years, around 70 million pesos was allocated each year for every member of the House of Representatives and around 200 million pesos for each senator and a lot of that money was up for grabs for different NGOs.

Now that the PDAF has been declared unconstitutional, the big question is what will happen to all the legitimate NGOs? Will the abolishment of the PDAF have a big effect on their fundraising efforts and where will they now get financial assistance? These are the things that we will attempt to answer with the help of Ms. Lea L. Las Piñas and Lourdes Marie D. Cortez, Senior Program Manager and Program Associate of Venture for Fund Raising* respectively.

Q: Was the PDAF a major part of the funding that NGOs received in the past years?

Venture:There are three main sources of funds that a non-profit organization may explore and these are Grants, Gifts and Earned Income. PDAF can be categorized under Grants, but it has a different characteristic from the usual grants that most NGOs are accustomed to. While grants from funding agencies are considered private funds, grants from PDAF are considered a public fund. An NGO may receive funding from PDAF, depending of course on its programs and expertise, through a public source, which more often than not are government line agencies.

However, in Venture’s experience, most of our partners’ sources of funding are from private sources.

Q: What constituted the main bulk of the funds that NGOs received? Can you give us the top three sectors?

Venture: In the Philippines, most NGOs are used to receiving Grants from foundations, both local and international. But in the recent years, more individuals have also become active supporters of social causes that also led to an increase in individual giving.

Based on our experience in our engagements with different clients and partners, the most common sources of funds are individuals, corporations and funding institutions.

Q: Will the abolishment change the way Venture helps its clients with their fundraising efforts?

Venture: The abolishment of the PDAF does not directly affect the way we assist NGOs in raising resources. But it teaches us—NGOs and donors alike—the importance of legitimacy, transparency and accountability. More than the loss of funding from the government, the main challenge that NGOs face at present is protecting and proving its credibility among its various publics. Here lies another key element in successful fund raising, which is communications. Regular communications aid in donor cultivation, which then results in a higher change of securing support.

Q: How will the NGOs who used to receive financial assistance from the PDAF be able to cope with the loss of funding from government?

Venture:

o NGOs will be able to cope by focusing more on their other sources of income like major gifts and grants.

o Since prospective donors are now skeptical and are asking more questions about the activities of the organizations, NGOs have to work harder to promote and protect their reputation and credibility as a legitimate organization.

o A legitimate NGO will be able to cope if it has:
1. Credibility – they must have transparency and accountability
2. Skills – they must have the knowledge and skills to properly manage their organization, specially their fund raising campaigns
3. Network – they must have the network that knows and believes in them and their good work (though they must also ensure their networks of their credibility)

o Non-profit organizations should not rely on a single source of funds.

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* Venture for Fund Raising is the first and only non-profit organization that serves the fund raising needs of other non-profits in the country and Asia through professional training, consulting, and research and public information services. (More information can be found in their website: http://www.venture-asia.org)

Posted 8 years ago on · Permalink