Presentation on theme: "Social business - a sustainable solution for CSOs Sustainability – concept or practice?"— Presentation transcript:
Social business - a sustainable solution for CSOs Sustainability – concept or practice?
NGOs are simply "sharing in the poverty” of an already-limited but decreasing and restricted pie of donor resources. NGOs "go where the money is" NGOs remain purely consumers of resources rather than generators of additional resources.
LIMITATIONS OF THE TRADITIONAL FOREIGN ASSISTANCE AND PROJECT-BASED DONOR FUNDING Limited availability of resources => discontinuity Limited duration of resources => NGOs' inability to plan long-term strategies and sustain donor- funded projects beyond a terminal project cycle Limiting restrictions on resources => the risk of being “donor driven” instead of “mission driven”
NGOS SUSTAINABILITY How an NGO can generate and maintain an adequate source of income for its activities is a central determinant of its ability to act effectively, independently, and on an on-going basis. Sustainable NGO financing relies on a diverse base of funding sources to minimize an organization's dependency on any one source and its vulnerability to both shifts in fund availability and donor preferences. => NGOs need to diversify not only their donor funds but also their overall revenue sources.
NEW ORGANIZATIONAL HYBRID - NONPROFIT IN PURPOSE AND FOR-PROFIT IN APPROACH Nonprofits need to decide what line of business they can devise to create the profits needed to support their societal mission. Instead of seeing themselves as a charitable activity dependent on “generous” benefactors, NGOs must become enterprises that produce goods and services they can sell at a realistic price and hence lead rapidly to financial autonomy.
Example A Community Health Enterprise creates wealth by selling something that people buy for reasons independent of their charitable intentions. But the wealth it generates is returned to the community in the form of free/heavily subsidized direct services or grants to community-based service providers.
"NGO sustainable financing” is not (necessarily) synonymous with "NGO self- financing” NGOs should raise sufficient funds from internal sources to cover their basic operating costs, but approach external funding agencies for their program costs. NEW ORGANIZATIONAL HYBRID - NONPROFIT IN PURPOSE AND FOR-PROFIT IN APPROACH