NGO: From Charity to Social Enterprise

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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.

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NGOs, Project Management & Serendipity

NGOs play an essential and integral role in the sustainability and growth of our communities and environment. They deal with a wide spectrum of topics including but not limited to orphans, elderly, recycling, global warming, advocating rights, economic development, education, awareness…etc.

For more than 12 years, I’ve been passionately involved in NGOs and along the road I managed to create some, or be on the Board or advice & consult others. Throughout the years, most of the NGOs I’ve known have been managing projects and programs. They design projects, write proposals & budgets, implement projects, evaluate them and so on and so forth. Yet I long to see some common project management terminology, standards or methodology on how to do all this.

Years ago, the private sector has identified certain standards for project management, best practices, processes, tools, techniques..etc. These standards are helping corporations in all shapes and sizes, from the multi-nationals to the small local enterprises, in achieving their projects on time, within budget and fulfilling the necessary scope. Yet, surprisingly, and in-spite of the fact that most NGOs work on projects; we somehow missed the idea of having an agreed on, industry-wide standard, best practices and methodology . So you might ask yourself and what if we don’t have a standard, what does it really matter? The fact is, many NGOs miss essential project milestones, have projects that go over budget, short of scope and delivered their outputs behind schedule, if delivered at all. Time, effort and money spent to lead to a positive impact on the society sometimes are lost do to lack of proper project management (from planning to implementation to monitoring & evaluation)…but the question is why?

Lebanon alone hosts thousands of registered NGOs as per the Ministry of Interior. Majority of those NGOs are project and program based and depend on ongoing grants and funding to secure resources for their projects. With grants and funding summing up to millions annually, the amounts being lost on failed projects, unmet objectives and re-work is counting up to hundreds of thousands of dollars. That’s if we’re only talking about the monetary value of things. On the other side, consider how many lives could’ve been saved with the same amount of money that has been lost or re-budgeted, how many schools could’ve been built, how many trainings would’ve been developed, campaigns launched…etc.

Many leaders of NGOs consider this as a reasonable and un-escapable price to pay due to the fact that it is a volatile and ever changing industry that becomes active in disasters and emergencies, rather than in times of peace and order. Thus adequate time for planning and assessments isn’t always available. Moreover, I’ve heard several times from people working in the NGOs industry, that it is hard to recruit enough qualified project and program managers. Mainly it is due to the short period of engagement in temporary projects, low wages with respect to private sector and lack of well-identified project management standards, training, tools and techniques.

Yet what many don’t realize is that things are much simpler than that. In most cases, there is no need to recruit highly qualified project managers, if you can build the capacity and empower those that are already there. As for the standards, trainings, tools and techniques, they do exist! The same standards that apply for the private sector, governmental sector, army and others…apply for NGOs, with minor customization. There are two internationally known standards for project management: Prince & PMP. Both of which are very popular, with the second being of a bigger base of certified professionals worldwide.

With thousands of program and project managers/coordinators and teams in NGOs… there is a considerable gap to be filled for both the organizations and the individuals working in them.

We, those passionate about NGOs and the community, should not keep on managing our projects based on serendipity. It’s about time we get our Project and Program leaders trained and certified to live up to their responsibilities and get that impact we are so passionately working for!

We owe it to ourselves, our donors & supporters and most importantly to the community we are serving…so what are we waiting for?!

 

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