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PROJECT FORMULATION

Formation of NGO

Project Formulation

Funding



PROJECT FORMULATION

The process of project formulation involves –
(a) project planning keeping in view the project ‘idea’
(b) comparative appraisal for determining priority the project should receive, for allocation of resources within the financial constraints.
The exercise of project formulation is necessary to ensure that the project is economic objectives of the donor/sponsoring body.

Following steps should be followed in project formulation process:

Step I - Conceptualization
  1. Identifying the Problem:

    Conceptualising the problem is first step as it has a direct bearing upon the nature of program activities. Program activities are the conscious efforts to reduce or eliminate problems.
    Different tools and sources may be used to have realistic interpretation of problem. Individual contacts, group meetings, focused interaction; surveys, secondary data, research studies, records available with different groups, organisations or departments, etc. are the most common ways of data collection.
  2. Finding Solutions to the Problem:

    Program activities are the possible solutions to the problem. This requires a logical understanding and analysis of the problem. The problem may be dealt in two ways –

    (i) Remedial approach provides an immediate solution and is generally of short term nature.
    (ii) Developmental approach envisages on providing a permanent solution to the problem and has generally a long-term effect.

The solutions can be evolved through team work by involving other like minded people, staff and outside experts in the field.

     3.   Listing the Activities

Possible activities to achieve the envisaged solution should be enlisted. Program activities need not necessarily reduce the effect of hindering factors only, but also take care of the promotive activities.
Step II – Planning

The basic principles of planning are:

(a) Participation at all levels: Planning involves discussions with all concerned departments and individuals. It should not just come from the top. Planning ensures participation of all levels instead of one man at the top deciding everything on his own thinking.

(b) Continuity: Planning is a continuous process. Consistent review and introspection is required, so that any pitfalls in the plan are removed if the plan is not achieving the targets. Planning thus has to be done on a continuous basis.

(c) Objectivity: In order to make a plan effective, its objectives must be stated in advance, in clear and unambiguous terms.

(d) Evaluation: Effective methods of evaluation should be used to ensure the effectiveness of planning

Objectives are statements of what an organisation intends to accomplish. The general purpose of NGOs is to render service to humanity. However, each NGO has a particular goal which should be stated in a clear statement, for example, to provide education to poor children, to provide vocational training to school dropouts, to extend soft-loans to farmers, to tackle dowry deaths, etc. the objectives should always be stated in positive terms.

The objectives of the organisation should preferably be stated as early targets, either in advance or on a year-to-year basis. The targets may or may not be achieved but the targets should be realistic and not impracticable.

The yearly targets will then transform into yearly action plans and budgets.

Step IV – Organising

Orgaising involves –

(i) drawing an activity plan based on the targets set;
(ii) seeking volunteers for delivering the services;
(iii) staffing of paid employees, to the extent necessary;
(iv) arranging necessary supplies by way of donations in kind or by procuring from the market;
(v) arranging finance for the activities of the organisation which are not being supported by donations, and for the administration and overheads.
Once the resources have been acquired, they need to be coordinated and controlled in such a manner that they do not work in conflict to the other and they achieve the desired goals in the most cost-effective manner.


A budget is an important document for assessing the financial requirements of an NGO. A budget should normally be prepared for a period of 12 months, which may be financial year or calendar year.

If the activities are being carried out by various sections or branches, each branch should prepare a budget for its operations which should then be consolidated at the central level.

The income (sources of funds) and expenditure (application of funds) sides should always be balanced showing deficit or surplus. If there is a deficit then the sources from which it shall be met or the measures to reduce expenditure should be indicated.



 
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