About Michelle Davidson

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So far Michelle Davidson has created 25 blog entries.

Let’s Talk About Core Funding

In Michelle’s recent blog, she spoke about key sources of unrestricted income and the ultimate ‘unicorn’ donation – unallocated funding. Unallocated funding is not pinned to any one programme or expense. Unallocated funding can be used wherever the NPO wishes, including covering general operating expenses, salaries, once-off expenses or ongoing commitments.

Every NPO dreams of unallocated funding.

I’m guessing you are already thinking of your list… so how would you choose to use a marvellous gift of unallocated funding?

Let’s be real, all NPOs always have “holes” which swallow any extra funding swiftly. Unexpected programme costs, a leaking roof, staff meals, the list is endless. That’s why it’s important to respond, not react.

The next time your organisation receives unallocated funding, put it into an investment account while you decide where and how you want to use it.

Get your team together and ask:

1. Can we invest this gift in strategic initiatives that set us up for future and/or more unrestricted income?
2. Have we thought about buying a building or asset that can be used to generate income?
3. Do we have a strategic plan to use this money in initiatives that will attract donors to support them?
4. How can we multiply this money?

You may choose to plug a hole which desperately needs to be plugged, or perhaps you’ll find a future funds growth investment that will be a blessing in the future.

Whatever you do, save some seed to plant and harvest in the days ahead.

13 August 2025

By |2026-03-11T11:52:14+02:00August 13th, 2025|Financial Management|0 Comments

Leave Pay Provision

Annual leave in South Africa is governed by the Basic Conditions of Employment Act, which states that every employee is entitled to 1 day for every 17 days worked, or 1 hour for every 17 hours, or 21 consecutive days of paid annual leave per 12-month cycle.

What does this mean for you as an employer?

– Annual leave accrues as the employee works, and it must be granted in the cycle in which it accrues.
– If an employee’s contract is terminated for any reason, they must be paid for any unused annual leave that has accrued up to that date.
– The employee must take leave: By law, they may not receive a leave payout (unless their contract is terminated).
– Statutory annual leave carried over must be taken within 6 months of the end of the leave cycle, or it will be forfeited, and the employer is not obligated to pay out or extend leave.

As NPOs, leave is paid as part of a salary contribution and often covered by donor contributions. However, if there is unpaid leave when someone resigns, that leave is often not paid by the donor, but by the organisation.

How can you limit your NPOs liability when it comes to leave?

1. Set up a leave policy and ensure your staff are familiar with it.
2. Keep accurate leave records during the year and keep your staff informed as to how much annual leave they have used.
3. At the end of each year, calculate the cost of unspent leave days and include that in your budget for the following year (leave days unspent at year end x daily salary rate).
4. Encourage staff to take leave regularly, for their own mental and physical health.
5. Set up a policy to limit extension of leave (for example, your organisation can choose to have a policy that states that all leave carried over should be used up within 3 months, not 6 months).

 

Don’t get caught unawares by leave pay – make provision up front.

14 July 2025

By |2026-03-11T11:52:25+02:00July 14th, 2025|Financial Management, Strategy|0 Comments

Retrenchment Provision

Every NPO, at some time, will have to restructure and possibly retrench a staff member.  It’s vital that you hold enough funds to meet the legal requirements for retrenchment. Here’s a quick summary of the key things you need to know.

In South Africa, retrenchment packages (sometimes called severance packages) are governed by the Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA).

Under Section 41 of the BCEA, an employer must pay retrenched employees:

– At least 1 week’s remuneration (salary or wages, allowances, benefits and any other regular payments) for every completed year of service
– Accrued leave pay i.e. payment for any outstanding annual leave they have not taken

Employees are also entitled to notice of termination. If retrenchment is immediate, he/she is entitled to payment in lieu of notice as per their contract or the BCEA:

– 1 week if employed for 6 months or less
– 2 weeks if employed more than 6 months but less than 1 year
– 4 weeks if employed for 1 year or more

Lastly, employees are entitled to payment of any other contractual benefits as per their contract (medical aid contributions, pension or provident fund payouts, pro-rata bonus entitlements, other perks).

What does this look like in practice?

Let’s say John receives a monthly salary of R12,000 and has worked for your organisation for 5 full years. He has 10 days of outstanding leave. Here’s the calculation:

John’s minimum statutory benefits = R31,383.55

Severance pay (1 week per completed year) = R13,846.15

Notice pay (4 weeks) = R12,000

Accrued leave (10 days) = R5,537.40

Planning ahead

A wise NPO ensures it has funds in reserve should the worst happen. It’s best practice to put this money into an investment account that earns more than inflation. Every year, when salaries are increased, the calculations need to be updated to stay current.

Retrenchment is not nice, but preparing for the possibility mitigates disaster and turns it into a more positive outcome for both your employee and your organisation.

7 July 2025

By |2026-03-11T11:52:33+02:00July 7th, 2025|Financial Management, Uncategorized|0 Comments

Building Relationships with Donors

In the world of fundraising, it’s tempting to think of applications and proposals as purely transactional. But the truth is, relationships matter just as much as numbers. When you’re building partnerships with donors, remember: real, lasting support is rooted in trust and mutual understanding.

Donors aren’t faceless funding machines. Behind every grant, there’s a real person who cares about making a difference. They want to know who you are, what drives your mission, and why they should believe in your cause.

Start by doing your homework. Ask yourself: What does the donor gain by funding you? How do their values align with your organisation’s? Do they prefer in-kind donations or multi-year commitments? Understanding their priorities helps you tailor your approach and show how your work directly speaks to their mission.

Equally important is letting them get to know you. Don’t just introduce your projects — introduce your people, your community impact, and your passion. Attend networking events, conferences, or even informal meetups. A warm introduction or friendly chat can go a long way in making your application stand out from the stack.

Finally, don’t wait until you’re ready to hit “submit” to start connecting. Proactively reach out and share your story. Building genuine relationships over time sets the stage for more meaningful collaborations and turns your proposal from a faceless piece of paper into a true partnership.

19 June 2025

By |2026-03-11T11:52:41+02:00June 19th, 2025|Donors, Financial Management|0 Comments

The Real People Behind Donor Organisations

It’s easy to think of donors as large institutions, with rigid guidelines and layers of bureaucracy. But at the end of the day, donors are real people who care about creating impact. They’re just like you: driven by passion, motivated by purpose, and eager to see real change.

When preparing your proposals, remember that the person reading your application isn’t just ticking boxes. They’re looking for projects and partners who inspire them — initiatives that align with their own hopes and beliefs. They want to see the heart behind the work.

So, before you send that final proposal, take a moment to consider who’s on the other end. Can you connect with them directly, perhaps through a phone call, an email, or even a brief meeting at an event? Can you show them your story, your team’s commitment, and the human impact of your work?

Don’t underestimate the power of a personal connection.

Knowing the decision-makers, understanding their backgrounds and motivations, and engaging with them authentically can turn a standard application into a conversation. It transforms your project from an abstract idea to a relatable, human story that resonates deeply.

This approach takes effort, but it’s worth it. Because when you build relationships with the real people behind donor organisations, you’re not just chasing funds — you’re building partnerships grounded in shared vision and lasting impact.

And that’s how you move from faceless paper to funding that changes lives.

By |2026-03-11T11:52:54+02:00June 10th, 2025|Donors, Financial Management|0 Comments
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