Trying to do good and helping people is not enough in the
non-profit sector. Effective individuals that work in this sector are aware
that they are not helping people just for “feeling good” or to satisfy the need
of giving something back to the society. They have to go over personal reasons
to make sure that their effort is a real contribution to the people around
them. This is probably one of the biggest change in this sector in the last few
years. We were used to the idea of philanthropist that one day decides to use
his money or time for other people paying more attention to the example given
than to the results. This is not the case anymore. People that work in the
social entrepreneurship sector are professionals with the responsibility of
ensuring that the money received is used in the most effective way in order to
produce results and maintain the credibility necessary to keep the flow of donations.
In this prospective, every organization involved in the non-profit sector has
to address 3 main elements:
Sustainability can be seen in different ways. First of
all, sustainability means being able to guarantee funds for longer periods.
This involve creating a strong relationship between the donors (individuals,
corporation, foundation,…) and the receiving organization. Sustainability
involves also the ability to rely less and less on donations and find
alternative ways of generating money. Sustainability also means that once the
organization finishes a project, the beneficiaries of the project have to be
able to continue without an external help. In a nutshell, sustainability means
having a long term prospective bearing in mind it is better to focus on small
projects on short terms than bigger projects on the long term when it is not
sure that the donations will keep coming until the project is finished.
Scaling up is a crucial element especially in India with
a population of over one billion of people. Big donors like foundations and
corporations are more willing to give money to organizations that are able to
create the biggest impact for the largest amount of people as possible. Small
organizations are asked to increase the reach of their activity in order to be
able to compete for bigger slices of donations. Scaling up is not always
possible because the activity of the organizations doesn`t allow it or because
the management is unable to move the organization to the next phase. Thinking big means changing model, hiring
new people, more expensive projects to manage etc . For this reason scaling up
can put in jeopardy the sustainability of an organization that can find itself
in a situation where it realise that it has bitten
off more than it could chew. Unfortunately
scaling up doesn’t mean automatically economy of scale as a lot of resources
can go wasted. Probably the donors should pay less attention on scale and more
on the efficiency making sure that on €100 donated a sum the most closed to
100% is used for projects and not wasted in administrative costs.
Last but not least, NGO needs to be accountable
for what they do. They need to produce reports and show results in order to
maintain their credibility and make sure that donors continue to send money. A
lot of successful organizations find it difficult to produce reports because
they don`t enough time or they don’t have the right technology (business
intelligence) or because the results of their activity is not easy to quantify.
The need of being accountable put a lot of pressure on several organizations
and their inability to be accountable for the money received makes difficult
for them to scale up.
All these challenges require professionals able
to manage these difficulties. Charity and social entrepreneurship are more and
more organised like corporations with staff experts in sales or marketing.
Fortunately the growing Indian economy means also a growing number of
professionals available in these fields and, as highlighted in my previous post,
a growing number of business people decide to get involved in the social entrepreneurship.
These people will be crucial to ensure sustainability, scale and accountability
for the Indian non- profit organizations.