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NGO: From Charity to Social Enterprise
With the dwindling funds and grants that are available, many NGOs are struggling to survive. They are either shutting down their operations or moving into new fields that have nothing to do with their mission but rather are chasing the money.
Majority of the people I meet, when I tell them “NGO” the first thing that comes to their mind is “Charity”. Now the fact that most NGOs depend on donations, grants and fundraising activities to sustain make it reasonable enough to have people link the word NGO to charity. Nevertheless, new innovative ways in income generation have been making their way to the NGO world.
In this context, and for the past few years, I’ve been advising and consulting NGOs on how to adopt a business model into their operations and projects, to create a shift in how they think about their work in an NGO not only as a way to generate enough income to sustain and grow but also a whole new mindset in what an NGO.
The point I focus on is to transform the NGO from a charity to a social enterprise. This happens when the NGO integrates into its work an income generation model that allows it to make money while leaving the positive impact it hopes for. It’s not just a matter of selling something, but rather a mind shift in how the NGO perceives itself in the community.
So here are few tips I usually share with the NGO leaders on how to go through this transformation:
- Consider diversifying your income sources; not only donations and grants, but rather start considering fundraising activities, sponsorship, membership fees, services, products and income generating activities that are aligned with your mission.
- Income generating activities can be the same exact service you give to your beneficiaries, but include in it a small fee that goes as a donation to your organization. This is step one into becoming a social enterprise. Definitely more complex models can be considered on what services or products are offered for free and which are billable.
- Invest in R&D to better understand what are the other players is in community, what services do they offer, where can you add value, what does the community really need and what is the best way to package your services/products. Utilize Design Thinking throughout the process, consider empathy and your community, really try to understand what their needs are and how can you package your work in a way that they would be willing to pa for the value they are getting.
- Invest in Marketing to have a better outreach to your users/beneficiaries, potential partners, donors, sponsors and supporters.
- Consider that your users/beneficiaries will be willing to pay for a service that fulfills their need, as long as it’s conceived value outweighs its costs. At its core, this is a social business transaction where you are trying to merge social value with the business value. Moreover, it’s important to clarify that the fees they pay will be considered as a donation for the NGO to ensure its sustainability, so that you can serve more people for a longer period of time. This transforms the relationship with your beneficiaries to become service users and partners in the community, a win-win situation for both of you.
- Develop a Volunteer System into your organization to make it an integral part of its daily work and projects, this in turn gets you more community support, helps you get a better understanding of what the community really needs as the volunteers are most probably going to be from the community itself and it can held reduce running costs on human capital.
The above are just a starting point, but usually are enough to start building on them to transform the NGO from a “Charity” to a “Social Enterprise”. With good analyses, research and hard work, usually NGOs start seeing the impact within a year and will reap its benefits both on the short and long term.
So my advice to all NGO leaders, activists and good-doers, change starts with us. It’s about time we start utilizing some of the lessons learned and best practices in the business world and use them to better serve our communities. So start thinking of how are you going to help your organizations sustain, grow and become more self-dependent on securing its finances rather than having to constantly chase funds, grants and following donor agendas, not for your sake or your staff’s sake, but for the community itself to keep on benefiting.
Other interesting posts:
Guest Writer: “#1 Business Startup Killer” by Roger Khater
Dear Reader,
I’m glad and proud to present to you my third Guest Writer on the blog, Mr. Roger Khater.
Roger Khater is a Serial Entrepreneur with an Electrical Engineering degree from USJ/ESIB; in addition to his responsibilities as the Managing Director at IP Engineering Pro, he has main board roles and major managerial functions in Caliber Workforce (Human Resources Services) as a Partner and Maktabi (Virtual Office Services) as the Owner. Roger also serves as the President of the PMI Lebanon Chapter.
To know more about Roger, check his LinkedIn Profile or email him at i@rogerkhater.info
Enjoy the read!
Afif
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Many entrepreneurs whom I often meet have great business ideas, very few though have a good business plan, and the worst are the ones who only have a fancy website, a distinguished business card but no or not enough clients.
Call me old fashioned but the truth remains, starting a business is all about selling, assuming the business idea is viable. The act of selling involves customers, who are real people after all. So bet on people and invest in relationships.
What is the #1 business startup killer nowadays?
It is the course of actions that is driving our young entrepreneurs into having all the necessary business vehicles, from business identity, to website, to social media, etc… But they forget the key business aspect that is to sell their products or services to real people.
I never recall selling anything to a sheep.
If you have a business idea, don’t waste your time, just sell it. Get your first few customers and leverage on them. Capitalizing on your personal relation, enhance the trust quickly and stay close when needed.
Forget about the shiny stuff, they will eventually come at a later stage.
After a few successful deals, reassess your market in $ value, know your competitors, they exist in one form or another, and only now you can decide if the market size is enough or suitable for you. Embrace this market, make it your target, position your portfolio, have a value proposition and again go sell for more.
If after 2 years you are still stuck with few customers that do not generate enough income, drop the idea, change business line and redo the exercise better. Always ask for help, you need that, secure as many mentors, they will make a difference.
The key to success is gaining customers by selling to people.
The accessories are merely a plus.
Project Management for Entrepreneurs
I have been doing some enthusiastic research on the topic, and I have come to realize that most of the current corporations and governments are not being able to provide enough jobs for the hundreds of thousands of young Arabs who graduate every year. Besides, those amongst them that were planning on emigrating lost their chance to travel to the US or Europe for dream jobs due to the economic downturn.
With 60% of the Arab nation being under 30 years old, the number of educated individuals is rising, and yet the supply of jobs is inadequate. In this context, numerous institutions, banks, and government agencies are focusing on fostering entrepreneurship among youth.
Consequently, hundreds of startup projects and initiatives are being launched annually by young entrepreneurs who have the education, the idea, the drive, but lack the experience and the systematic approach to enhance their chances to succeed in their ventures.
This gap has certainly led to numerous failed initiatives, shattered dreams, and lost investments. Imagine all those young aspiring youth, full of enthusiasm and creativity, but crushed by their own inability to drive their business enterprises to success.
The fact is, good ideas are a dime a dozen. The true value is in the ability to transform those ideas into reality…and rare are those that have the intrinsic knowledge to go through the process. In this context, I have realized that project management skills, knowledge and tools come in very nicely to fill a gap for the aspiring entrepreneurs and empower them to be able to transform their ideas into a reality.
So after some well-thought of analysis, I have pinpointed 5 project management mantras from which entrepreneurs can surely benefit from:
- Ability to clearly define the scope of their startups, products, services and communicate it clearly.
- Knowledge of how to break down the scope of work into clear and comprehensive work packages, schedule the work packages, and work on a budget accordingly.
- Skills in recruiting the right people, engaging them, and motivating them to work synergically.
- Communication skills with main focus on unifying terminology used, choosing the proper communication channels, and disseminating the right information.
- Expertise in understanding possible risks that are inherent to new ventures and ways to manage them. This usually becomes better with time…trial and error being the best tutor.
That’s what I have in mind so far, I hope it helps. Knock them out!
Other articles that might be of interest:
Arab Spring, the Economy & Social Entrepreneurship
My dear reader, for a while now we’ve been hearing endless analysis, campaigns and strategies about each one of the above topics individually..from the Arab Spring to the Economy in the Arab world and last but not least “the” topic in town: Social Entrepreneurship.
What I’ll be doing in this article is drawing on the inter-connectivity of the 3…specifically to shed light on the big picture of the current Arab world and how things are heading.
The whole discourse is based on readings, observations, analysis and discussions I had with people across the Arab world from opinion leaders, to CEOs and senior management of companies, activists, governmental officials and so on. Here it comes…
The so called “Arab Spring” started from Tunisia, where Boazizi put himself on fire to revolt in the face of injustice, lack of work opportunities and his sense of hopelessness… he just gave up on his life and on going anywhere but downhill. Yet, Boazizi was not an ignorant man nor a weak person, he was a man of modest education, hard worker and a lot of perseverance. Yet what he lacked was a job, a sustainable and decent income for himself and his family. His story isn’t an “island” but rather a story shared by so many across the Arab world, from illiterates to PhD holders, who are facing difficulties in finding a job…and the unemployment rates are soaring higher than ever.
With the youth bulge in the region, which the World Bank estimated in 2010 that 60% of the Arab world are people under 30 years old, the market is becoming a highly competitive place for job seekers. Millions of Arab youth are working hard on getting their education, graduating and then…the rest is unknown. The funny/sad matter is that the higher the degrees the youth are getting, the harder it is to find a job in their hometown. One asks himself the question of why? How come? …but the answer is simple..there aren’t enough jobs out there…the infrastructure and companies aren’t equipped well enough nor are they growing fast enough to accommodate for this influx of highly educated workforce…and the list can go on.
Consequently, most of those youth who are jobless and are not being heard…have no where to go but the streets…to demand change..to demand jobs..to demand their dignity to be safe-guarded…and when you have thousands and millions of educated people either in low-paying jobs or jobless …they will revolt…they will seek to make things better…one way or another.
Now the case is that many Arab countries, the economic status they have is different, the social behaviors are different, norms and cultures may also be different…yet what all of the revolutions have in common is demanding change..a change in governance…a change to the better…a change to put up leaders who care for the nation more than they care for power…a change that will bring about economic growth, jobs, resources, dignity for the people and a sense of equality and justice.
Now if we take a bird’s eye view on this whole matter, and with some research into past revolutions across the centuries from the French revolution until today…one can simply realize that after every revolution..there comes some chaos before order is restored…and things will look better hereafter, much better.
Moreover, how things will look in the future…is not much of a mystery either…history repeats itself, with minor modifications. The issue in the Arab world is not the lack of money or resources, there are billions of it in cash yet it’s how we’re making use it(or the lack of).
In this context, the future of the Arab World in the coming 10 years will include the following general guidelines:
- Educated youth will start seeking to create jobs for themselves, rather than seeking jobs. They will starting making some start-ups, capitalize on the entrepreneurial/innovative skills and become more willing to take risks rather than seeking a stable governmental/corporate jobs.
- Numerous capital ventures, angel investors and impact investors will start popping up to support Social & Impact Entrepreneurs who not only seek making profit but also leaving a positive impact on the society along the way.
- Arab nations will realize that each country will not be able to sustain and grow on its own … thus cross border/pan-Arab economic and infrastructure projects will be launched. From unifying electric grids, to opening borders for trade and travel, to creating joint ventures, to mega infrastructure improvements to lure more investments and build a ripe ground for further corporate growth. This will look something similar to the Marshall Plan set by the US to aid Europe rebuild itself and prosper post World War II, yet its Arab based for Arab’s benefit.
- Family based businesses will nourish and especially those that are gulf based, state supported, and/or “royal”. With the rich getting richer, we can expect some major growth in family based conglomerates.
- Educational systems will start shifting into more specialized degrees, informal learning, on-the-job learning, and major involvement of technology in the whole learning process.
- Real-estate business will no longer be the major industry in many countries, to be replaced with other industries like ICT, manufacturing , agriculture, telecom, consultancy, tourism, research/think-tanks amongst others as well. Thus requiring a more diverse workforce.
The above 5 general headlines will start taking place naturally, one step at a time, to accommodate for the political/governmental changes as well as the expected chaos in some of the countries. These new opportunities and systems will encompass creating jobs for almost 100 million youth that will be joining the Arab workforce by 2020.
If jobs are not created in the thousands every month across the Arab world…the economies will not grow nor sustain, governments/dictators/leaders will tumble one after the other…until the wealth is more evenly distributed, dignity and financial-independence is secured for the millions who are graduating annually.
Until then…the Arab Spring will continue, chaos and instability in many countries will prevail until the void is filled and nations start rebuilding themselves, one brick at a time.
Other posts worth reading:
Global & Local Trends…
I was skimming through some of my research material and notes from the past few months and I noticed some trends and themes that are either widespread or are emerging, both on the local and the global level.
This is no way comprehensive but I felt it is worth sharing with you so here is a selection of 7 global and 7 local trends and themes… enjoy!
Globally:
1. General widespread of trends of non-structured, non-standardized approach to education and training. The recent trends focus more on one of the following rather than on the material: Personal Relations, Arts, Sports, Values(religious, cultural, social…etc).
2. General decrease in globalization trend and a major outburst of interest in entrepreneurship, local corporations, social enterprises, SMEs and local based initiatives. This is especially true in countries that were dominated by western products/services/companies.
3. General decrease in the age group of politicians, gov officials, international organisations’ managers..etc with respect to past years. That is, we are seeing younger people take lead in positions and places that previously were solely based on seniority or are in one way or another given to senior citizens.
4. Sharp increase in promoting and empowering women in technology, governmental positions, education, and basic human rights.
5. General increase in the support of the Arab & Palestinian rights towards Israel and the understanding of the dynamics and history of the Arab-Israeli conflict. This has been seen in the dwindling financial support of some countries and corporations to Israel as well as closing,in Europe and Australia, of some media outlets and PR companies that were strong supporters/followers of the Israeli State.
6. Sharp increase in Chinese and Japanese civil society activeness. This is in number of CSOs(includes NGOs, Clubs, Parties, Media Outlets…etc), the type of projects and the size of projects being initiated.
7. General increase in Chinese, Russian, Korean, Turkish, Iranian initiatives to voice out their interests and culture to their neighbouring countries and major zones of interests in the world (including Levant, MENA and GCC region)
Locally:
1. General increase in the public understanding for the need of less politicised discussions, campaigns, and talk-shows. This reflects in the major shift of many TV to start putting comedy/joke/social shows, less political talk-shows/documentaries, and thinner political sections in daily newspapers.
2. Sharp increase in the interest to go back to the mother language(Arabic). This reflects in the number of NGOs, academic institutes and media outlets that are using more Arabic, promoting Arabic or solely have started to teach/spread Arabic.
3. Sharp increase in the investments and inbound capital put in Lebanon from Lebanese diaspora, Arab states and some international companies.
4. Sharp increase in the interest and pricing of real estate in Lebanon and Beirut in specific, especially that the country has been calm on the “security” level.
5. Sharp increase in interest on banning smoking and drugs. This has been reflected in Laws that the parliament have passed, in the police/army investigations being held and the endless CSO campaigns and initiatives on the above mentioned 2 issues.
6. General increase in the interest towards being “Green” and the environmental impact of our day to day actions on the environment. Soon I expect some major campaigns to be launched on environmental awareness targeting governments,NGOs and the general public. The campaigns will probably be both local and on the Arab region.
7. Sharp increase in the number of cars sold in Lebanon in the past year and still going up. The impact reflects very negatively on the traffic jams in all over Lebanon and Beirut in specific, the pollution bill we’re paying and the deterioration of many roads faster than expected due to the volume of daily cars/buses/trucks passing on it.
I would like you to consider those themes, try to see how are they affecting your life or what is your stance on them and perhaps launch this online-discussion starting from this post….
I’m looking forward for your additions/suggestions/questions/comments.. 
