Mobilization of Resources for Co-operative Development Aid (1994) - Part 1

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         September, 1994


          (Source:  Report of a Study Commissioned by ICA
          Europe - Co-operative Adjustment in a Changing
          Environment in Sub-Saharan Africa - pp.73-85)

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                    Mobilization of Resources
                 for Co-operative Development Aid
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4.1  Introduction
******************

For historical and commercial reasons it is natural that the
African Co-operators in the first hand look to Europe for
continued support in their development efforts. This poses a
new and great challenge to the co-operative movements in
Europe and ICA to take the lead in formulating and providing
the development aid in the new era of co-operative development
in Africa. This calls for visions and solidarity; a will to
mobilize the resources required to finance the support; and
knowledge about development in Third World countries in
general and co-operative development in Africa in particular.

In more practical terms it will entail the following basic
measures:

-    Informing the European co-operative members and their
     organizations about the current co-operative situation in
     Africa; and mobilize personnel and financial resources
     from within the European Co-operatives.

-    Informing national and international donors about the
     situation Co-operatives in Africa are facing today; and
     lobby for financial support for movement-to-movement
     development programmes, based on a new strategy for co-
     operative development and a revised donor strategy.

Providing development aid is nothing new for the Co-operatives
in
Europe, there are already 15 Co-operative Aid Agencies (CAA)
currently sponsoring development support to the Third World.
What is new is the changing environment in Africa and the
concomitant need for reform of the Co-operatives in Africa.
And this calls for additional resources, a new donor strategy
and a certain measure of urgency.

4.2  Role of and sources of capital
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Resources can be mobilized in several ways, and we can
differentiate between internal and external mobilization. We
define internal mobilization as that activity which takes
place within the co-operative organizations, in this case
within the African co-operative movements as well as within
the European Co-operatives through their donor organizations.
External mobilization is the enlisting of resources outside
the Co-operatives; grants from donors, others than the co-
operative ones, loans from banks, etc.

4.2.1     Internal mobilization:

In previous chapters we have pointed out the lack of capital
within the African Co-operatives and stressed the importance
of local resource mobilization, i.e. within the African Co-
operatives. This will not be further discussed in this
chapter, however, considering its role in the totality, a few
words on its importance are warranted.

Of the various manners to increase the flow of resources,
human as well as capital, the mobilization which takes place
within the African Co-operatives is by far the most important.
No self- sustained and genuine growth can take place unless
resources are mobilized from within. This is an aspect which
the African co-operative leaders are well aware of, although
there are great difficulties to achieve this, particularly
under prevailing circumstances. It should be stressed that
donor resources cannot replace the local mobilization.

Development programmes can however assist with techniques and
methods to bring about local resource mobilization, where
there is a preparedness and will to do so among the co-
operative members in the South. Donor resources must be
regarded as a supplement and of a temporary character. If not,
there is, as we have emphasized before in this report, a risk
for donor dependence.

The internal mobilization on the donor side expresses a will
among, in this case the European co-operators to contribute
resources for the betterment of the lives of co-operators on
another continent; it is an act of solidarity. As a rule, this
solidarity, expressed in financial contributions, is
prerequisite for obtaining the external, additional funds from
government donors and the European Union (EU).

The resources mobilized by the co-operators in Europe are
consequently a must, and they constitute the core in the
funding of most co-operative development programmes. Co-
operative funds can in most cases be multiplied by a national
or international donor, depending on the rules of the specific
donor agency.

4.2.2     External mobilization:

There are basically two different types of external resources
supplied by national and international donors; (a) those which
require an internal co-operative contribution, as indicated
above, and (b) those which do not. The latter can be part of a
larger programme (type rural development) initiated by the
funding donor, and where a co-operative component needs a co-
operative organization on the donor side (movement-to-movement
support model). Or a co-operative donor may, together with the
recipient co-operative, prepare and present a project proposal
for 100 percent funding with the national or international
donor.

We believe there are considerable external resources of.both
types available for co-operative development in Africa, and
both will need to be fully explored, in order to make use of
all funding possibilities. 

We are therefore proposing a two pronged approach; the CAAs to
concentrate on the government donors and the European Union
(EU), and ICA to focus on the international donor community. 

Since internal resources can only be mobilized by the European
Co-operatives and their aid agencies, funding from the
government donors and the European Union can only be sought by
the European Co-operative Aid Agencies (CAA). The first part
of this chapter will therefore discuss these possibilities and
also outline some guidelines for the mobilization of internal
resources. In order to be as effective as possible in securing
funds from the EU, it is also proposed that ICA assumes the
role of a facilitator in this work. 

The second approach entails a considerably revised and
extended role of ICA as a co-operative donor organization,
which was presented in the chapter on Donor Strategy.


4.3  Mobilization of internal resources from the Co-operatives
     in the North
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4.3.1 The European Co-operatives:


In the European countries, being members of the European
Union, there are approximately 100.000 co-operative
organizations, representing a wide range of business
interests. The majority  of these Co-operatives are to be
found in the agriculture, food and fishing sectors, which,
together with forestry, make up for some 43 percent of all Co-
operatives. Other important sectors are banking/credit,
manufacturing and construction. The greatest number of members
is however to be found within the banking and credit sector
(some 29 million), followed by the wholesale and retail
sectors (approximately 9 million).

In total, the co-operative movements within the EU organize
some 54 million members, although it should be recognized that
this figure represent a number of double memberships. If the
three Nordic countries, presently outside the EU, decide to
join the Union, these figures will increase.

Looking at these movements as the base for mobilization of
resources for co-operative development aid and comparing it
with the volumes of fund required for this aid, they are, by
any standard, very impressive. These figures are however
misleading in the sense that experience tells us  that it is
difficult to exploit this base, for a number of reasons we
will return to. Furthermore, these impressive figures reveal
nothing about the willingness  to give and the solidarity with
the Third World. But despite the difficulties, it is believed
that the prospects for increasing present levels of funding
for co-operative aid are there.

Since the Co-operatives in Europe, from a fund raising point
of view, do not constitute a homogenous group, conditions and
circumstances differ between and within the countries, it
would be futile to attempt to map out a common strategy for
mobilization of aid resources. Some basic considerations will
however be discussed as well as some practical guidelines for
the mobilization work.

4.3.2     Some basic considerations:

Constraints. There are inherent constraints as well as
advantages in having a co-operative movement as the base for
resource mobilization. The first of the constraints we would
like to mention here is connected to the character of co-
operative development assistance. 

The institution building character of co-operative development
programmes have in general a very low appeal as compared to
other types of development programmes. To mobilize resources
for a programme for supporting the development of a co-
operative audit unit for instance, is definitely much more
difficult than to do the same for an emergence relief
activity,  to take the other extreme. And there might be no
choice for the co-operative donor, responsible for the fund
raising, because supporting the audit unit may be the most
appropriate thing to do at that particular time. And yet, the
co-operative fund raiser has to compete for the attention of
the benefactors with many other development NGOs with more
appealing aid activities.

This is a factor which basically cannot be changed, the needs
of the co-operative receiving the support must be the
principal factor determining the character of the programme.
The low appeal of the co-operative support for the Third World
therefore puts extra demands on fund raising campaigns of the
Co-operatives, and we will later in this chapter discus how
the effects of this drawback can be reduced.

The second constraint is the low position co-operative
organizations have in the so called hierarchy of loyalty (or
solidarity). This hierarchy ranks organizations in the order
individuals are prepared to contribute to a common good,
charity, a particular cause or a project in the Third World.
The church, of which the individual is a member, is at the top
in the hierarchy of loyalty. Or, to put in other words,
individuals belonging to a church are those who are prepared
to contribute the most.

In the USA, some 47 percent of all voluntary contributions are
made by religious organizations. In the second group in the
hierarchy come fraternal and social groups and schools. In
third place we find the social and health care agencies,
helping disadvantaged people. The fourth group includes, among
others, the Red Cross.

We have no access to ranking for the Co-operatives, but we
must admit that the sense of "belonging" or "ownership" is
stronger in several of the above groups, than in Co-
operatives. And as indicated above, the appeal of co-operative
institution building is less than health care and similar
causes. We would as a consequence therefore place Co-
operatives rather low in this hierarchy of loyalty. We may
also note that as co-operative organizations tend to become
larger and larger, the sense ownership and belonging will grow
fainter.

We are not aware of any studies which can corroborate the
conclusions of the above paragraphs, but our experience of co-
operative fund raising do confirm them. We think that the
above constraints are the principal reasons for the
sluggishness and the difficulties we often experience in co-
operative resource mobilization, despite the many advantages
the co-operative network offers. We will now take a look at
the advantages.

Advantages. The advantages all stem from the simple fact that
the co-operative organizations form a large network with
access to many organizations  and individuals. The mandate and
the definition of the target groups are given, it is a matter
of prioritizing and how to make use of the network. One of the
foremost advantages is the great number of individuals, which
have the co-operative membership in common. The co-operative
organizations have a great number of entrances to the members,
such as sales points of various kinds, shops, internal
magazines and papers, etc. There are also the direct entrance
in the form of regular mailing to the members.

The number of employees is also respectable and access to
them, for the purpose of for instance pay roll deductions, is
even easier. 

There is also the elected leadership at all levels, which
together with the appointed management, form a cadre, from
which the important leadership for resource mobilization
campaigns can be recruited.

The democratic structure of Co-operatives will also allow
initiatives for solidarity with the co-operators in the Third
World by any member. The co-operative organizations is also a
suitable framework for the  formation of campaign support
groups. To have access to this network is the basic advantage
of the CAAs as compared to many other NGOs. The question is
how it is to be used in the most efficient manner for our
purposes. We will revert to this when discussing the
guidelines below.

Long term character. Co-operative development support is of a
long term character, and there is consequently a need for a
regular and continuous supply of contributions. Resource
mobilization efforts will therefore have to be designed in
such a manner that they can be sustained over a fairly long
period of time.

It must also be recognized that resource mobilization cannot
be undertaken unless the organization is prepared to make an
investment in terms of manpower and capital. Costing can for
good reasons not be indicated here, but efforts for resource
mobilization, aiming at regular supply of aid funds, will
require an investment proportionate to the funds required.

While co-operative organizations may put some of their
resources at disposal of fund raising organization, it is not
likely that they are prepared to incur direct expenses. Where
prospects for fund raising are recognized, the best investment
is probably to employ the services of a professional fund-
raiser-cum-publicity officer, on a full or part time basis.

Basic will. There must be a basic will and a commitment within
the organizations to make a contribution to the development of
Co-operatives in Africa. Closely associated with this is the
ideological conviction about the ability  or superiority of
the co-operative form to organize business, in the North as
well as in the South. The stronger this conviction is, the
greater is the willingness to make a contribution. The
situation differs obviously between and within the European
countries in this respect, but we are not convinced that this
will exist to the desired extent today.

The basic reason is of course that many Co-operatives in
Europe find themselves in a harsh economic climate, many
movements are restructuring so as to become more competitive
and some are fighting for their survival. In such an
environment it cannot be expected that solidarity with the
Third World is at the top of the agenda. On the other hand, we
know that during a period of growth and surplus, the
willingness to mobilize resources is much more evident.

When considering the will to make a contribution, we need to
distinguish between the co-operative organization and the
members. Although the individual members find themselves in
the same economic climate, it does not seem as if they are
reacting in the same manner. While the management cannot be
persuaded to allocate resources of the organization for
development aid in times of scarcity, the willingness among
the co-operative members could very well remain high. We have
no empirical data to back up such a statement, but there are
indications which clearly point in this direction. This will
obviously affect the strategy of the mobilization effort.

Information activities and the fund raising efforts cannot be
separated, they are both components of the same package;
resource mobilization. Without knowledge about the situation
of the co-operative in Africa, no individual or organization
will be prepared to contribute to development aid.

It is however also possible to look upon dissemination of
information about the Third World, including the Co-operatives
as having its own intrinsic value, without using it as a
prerequisite, or tool, for raising funds. This is obvious, but
we have in this report not considered this as being the
responsibility of the European Co-operatives, this is a task
of the government. In this report we therefore only regard
information on Africa and its Co-operatives as a vehicle for
the fund raising effort and will therefore not distinguish
between the two.

4.3.3     Practical guidelines:

Based on practical experience of fund raising in general and
within the co-operative sector, we are able to extract a
number of guidelines for planning and execution of co-
operative resource mobilization. We can start by defining the
various target groups.

Target groups. As done above, we can identify two main target
groups; the co-operative organizations and the individuals.
The latter can be split up into two subgroups, the members and
the employees. We will start by looking at the role of the
organizations in the mobilization work.

Organizations. As indicated above, we are sceptical about the
possibilities of raising funds from the organizations as such,
at least to the extent that substantial development programmes
can be financed. The organizations might however be convinced
to provide a regular contribution, which can finance a nucleus
administration for resource mobilization. The most important
role of the organizations is not that of a benefactor, acting
out of solidarity, but that of a channel to the individuals.
Or, to put it differently, to put the network at the disposal
of the mobilizing organization, normally the CAA, will be more
important than the funds the organization itself will allocate
for the development work in Africa. There is also a logic in
this, the solidarity with the African cooperators must not be
confined to the management or the board rooms. If co-operative
development support in the South is to rest on the solidarity
of the co-operative movements in Europe, the members in the
donor countries will have to be informed, mobilized and
involved in this work.

Substantial resources, or funds, can however be mobilized
within the co-operative organizations if the activity can be
linked up with their commercial activities and thus serve
their economic self-interests. We may formulate this as
follows: The activity must be of commercial interest to the
co-operative organizations, engage the members and provide
resources for the co-operative aid organization. 

Products and services of an organization  which are able to
bear the contribution to co-operative aid as a cost, and still
remain competitive, will have to be identified. These products
or services should be frequent and inexpensive; for instance,
the plastic bag, in which you bring home your groceries from
the Swedish co-operative consumer shop, has for a great number
of years constituted the most regular and reliable item from
which an aid contribution has been made.

They must furthermore be attractive in the sense that
producing and selling them, as well as buying them, are
regarded as acts of solidarity. It increases the image of the
organization, if it in this manner can be identified with
solidarity with the Third World. Considerable efforts and
resources are required to identify and to launch such
products, and this is where committed co-operative leaders are
required, to take the lead and push such issues within the co-
operative organizations. 

Individuals. Mobilization of funds from the members and the
employees has to be based on their solidarity and generosity.
There are a great number of methods to approach and recruit 
individual benefactors, and the efforts and the costs involved
vary greatly, depending on the method chosen. It would take us
too long to list all the methods, which can be applied when
approaching co-operative members and employees. But we need to
mention the most important principle in this respect, namely
"people give to people".

This principle indicates the most important way to solicit
voluntarily contributions; prospective benefactors should be
approached by another individual, preferably somebody known or
a friend. Other methods such as personal mail, distribution of
leaflets, advertisements, etc, give far less response. It
would indeed be costly, in most cases too costly, to approach
the co-operative members on an individual basis. But the
method can be applied when approaching the employees of the
co-operative organizations for fund raising purposes.

To apply this principle on the employees in the most efficient
manner would entail recruitment and training of solicitors
within the co-operative organizations. These solicitors would
then be able to inform their working colleagues about the need
for the co-operative development support, to recruit
benefactors and to report regularly on the use of their
contributions. A suitable way of collecting contributions are
through pay-roll deductions, which if properly "maintained",
will provide the fund raising organization with a very regular
supply of funds. These solicitors will obviously also try to
persuade the organization to match the contributions by the
employees.

Identification.  Given the inherent constraints, discussed
above, it is extremely important to enable the benefactors to
identify themselves with the project to be supported. The
sense of identity is an accepted and well-tested principle in
fund raising.

In order to provide for this important principle, the co-
operative development project has to be of a character, with
which the individual can identify himself/herself. A consumer
co-operative member is more likely to support the development
of consumer shops than a credit scheme for farmers, etc.

The sense of identity is further enhanced when the project is
well defined and small. This is important in the sense that
the contribution of the individual, or a group of individuals,
should be relatively easy related to the total project cost.
It is for instance difficult to mobilize a sense of identity
with a co-operative sector programme, covering a whole
country. Such a programme has to be split up into smaller,
identifiable components.

Well defined and small projects, or project components, enable
the fund raiser to be very specific when asking for a
contribution. To request for contributions for co-operative
development in general is not adequate in co-operative fund
raising.

Of importance is also to be precise when soliciting for a
contribution. It is difficult for the prospective benefactor
to know how much is expected. He or she should be assisted by
being given a number of alternatives when it comes to the
amount expected. These amounts should also be directly related
to their contribution in the project supported. 

In order to maintain a sense of identity and participation, it
is extremely important that benefactors receive regular
feedback. The feedback is simply reporting on progress and
success of projects and activities supported. No invitations
for continued or additional contributions should be forwarded
without a report on progress of previous contributions.

The message to put across to individuals, as well as to
organizations, about the need for co-operative development
aid, will have to be well articulated. This message must give
a clear and convincing answer to the question why co-operative
members in Europe should support cooperators in Africa. The
conviction of the fund raising organization will have to be
transmitted to the individual, regardless of the media
applied. The importance of this is obvious and cannot be
over-emphasized.