Increasingly, corporate and other funders are choosing to support NGOs that are striving to be self-sustaining by focusing on income generation as a core strategy, and not just an aside to their other activities. The reasons for this are complex, reflecting both the state of the world economy and a mindset shift amongst especially corporate funders, in which corporate social investment (CSI) is seen as just that – an investment, one which needs to deliver returns in the medium-to-long term.
In our experience as business developers with a special focus on working with NGOs, community-based and emerging organisations, we recognise that many NGOs struggle to compete in the commercial domain. This is due to a number of factors, including lack of resources, limited access to finance for growth and the absence of the necessary business systems, savvy and skills in-house. However, some NGOs and community-based organisations (CBOs) do manage to transcend these challenges and become successful and sustainable in their own right. How do they do it?
We have come to realise that there are four actions or steps that need to be in place if an emerging business, whether a close corporation or a NGO, Section 21 company or Pty (Ltd), is to thrive in today’s economy. While these four actions are not the only determinants of NGO success, it is well documented that those organisations that pay heed to these crucial areas stand a far higher chance of success in the long-term.
1. Build a strong vision of success (organisational, individual)
Without a strong and decisive vision, an organisation (and an individual) is like a rudderless ship. A clear and heartfelt vision statement is a rallying cry for an organisation, something that everyone from the tea lady to the CEO can understand and believe in. Moreover, a strong vision acts as a guiding star for important strategic decisions, and when it resonates with the heart of the organisation and its people, also supports daily management and clearer long-term thinking.
A vision can encompass different elements of an organisation’s operations, such as social, commercial, etc, or an organisation can have a separate vision for each area of operations.
2. Plan for a long organisational life (100 years)
Many NGOs are founded by a core group of passionate people in response to a need in the community in which they operate or reside. However, the founders often do not plan beyond the immediate rush of needs or place value in strategic planning for long-term growth and sustainability. Planning an organisation beyond the life of the current founder/director is a powerful tool to stimulate thought, and a ‘100-year plan’ is a breathtaking way to eliminate ego and encourage the building of management depth.
Whilst such an extreme long-term plan is not essential, without a strategic framework the organisation will not know where it is going or how to get there. Planning must encompass all the main areas of your organisational operations and should be reviewed regularly.
Amongst other benefits, it serves the following three critical functions:
- Helps management to retain confidence in the organisation and to see today’s downturns as just a bump in the road.
- Encourages leaders to see the organisation as bigger than themselves. This supports seamless leadership change – an essential part of organisational longevity and value.
- Offers a benchmark against which performance can be measured and reviewed.
3. Prepare for growth (replicable systems)
A major shortcoming of many NGOs and community-based business models is that the success or failure of the entity is dependent on one or two strong individuals. When that person is incapacitated, leaves or is absent from the organisation for any length of time, the organisation flounders and often fails.
The solution for seamless and effective functioning is to ensure that the business systems are visible to all, not just one individual; importantly, the systems to manage areas like sales, marketing, HR, production, administration, fundraising and finance need to be clearly defined and documented, so that they can be understood and followed by all employees/volunteers and not just the CEO or Director. This ensures consistency and continuity, and also frees leaders to focus on those areas where their skills add the most value to the organisation. These systems are the building blocks of growth, and essential for sustainability and longevity.
4. Create access to resources (finance, skills, markets)
Whilst many an NGO has been built organically, starting with the efforts of one or two people, to grow rapidly an organisation needs resources – and the faster the growth, the more resources will be needed. As an NGO, the way to succeed is to plan for a project, fundraise and implement. This will ensure that one is not left in a situation where opportunities are lost due to a lack of necessary resources (financial, HR, administration).
Planning for success includes a plan for resourcing the organisation in the future, and for this reason forward-thinking managers will from day-one take financial record-keeping, a good credit rating and proven track-record seriously, ensuring they are a sound investment for potential funders.
Staff resources too require planning, and internal staff development builds team cohesion and staff satisfaction, and is an investment in future fortunes.
There is no doubt that the innovation, tenacity and drive needed to be successful is in abundant supply in both the commercial and developmental sectors in South Africa. Experience shows that a strong organisational vision, effective planning, robust systems and access to resources, leads to greater entrepreneurial confidence and improved results. These four simple steps can help the NGO sector to realise its potential, and make the kind of meaningful contribution it should be making towards economic growth and sustainable job creation.
- Cathy Wijnberg is an entrepreneur with experience in five sectors. She is Director of Fetola Mmoho, a Business Development consultancy that facilitates growth in the small business sector by designing and implementing CSI and business development programmes for NGOs, emerging businesses and community-based enterprises.
- Anton Ressel is an Associate at Fetola Mmoho and has over 15 years experience as an entrepreneur, trainer, business developer and mentor in the emerging business sector.
For more information on Fetola Mmoho, click here or call 021 701 7466.