It is 2021, 76 years since the term NGO became popular with the founding of the United Nations in 1945. Organisations that strive for the betterment of humanity have existed since the dawn of time, though the shape they take has constantly been evolving.
In the late 1970s in the UK, social entrepreneurship emerged as an alternative business model with the traditional profit motive and a social, environmental and governance focus. Our tiny nation is blessed with more than 300 active NGOs, yet not many social enterprises. Whether out of ignorance, lack of skills, complexity or sheer refusal to mix business with the social world, many NGOs do not alter their models, even though social enterprises tend to be more scalable and sustainable.
So dear NGOs, here are six reasons why you might be better off as a social enterprise:
1. Better finances
A social enterprise can find it easier to raise capital and funds for its projects by business sources of finance like issuing shares and selling its goods or services. Thus, it can raise revenue and profits to sustain its social operations. Also, with cost-effectiveness measures and investments in improving productivity and efficiency, it can improve its budget available. With the current pandemic situation, finances have already been hit with many businesses and individuals cutting back donations and streamlining their budgets for projects they have going majorly hitting our NGOs. However, social issues are still here and arguably more than before, so social entrepreneurship, by providing a more financially sound net for organisations, could be the way to go to ensure their survival and sustainable growth.
2. Room for business management strategies
Operating as a business, the organisation is likely to be made up of people with appropriate skills and specific jobs and an established organisational structure and a team of management workers. There might be better execution of activities at all levels and more professional projects management. Given the pressure to bring money into the business and tackle social problems, workers might be encouraged to undertake activities while ensuring the organisation’s resources are not wasted. Risk management techniques could also be implemented to ensure the business can face potential challenges better and a work culture created where innovative ideas are promoted. As a result, the organisation could become more resilient to changes, which is crucial in this ever-changing world today, especially for social organisations, whose existence, survival and growth will always be meaningful for the world to prosper.
3. Larger impact
With more money and management comes the potential for more, better and new activities. NGOs often lack funds for crucial activities that could impact people’s lives, but they can go for these and help even more people than they already do as social enterprises. For example, the NGO helping domestic violence victims could now afford to provide them with counselling facilities instead of only occasional support. The NGO fighting destruction of our beaches could now organise cleanup activities at more beaches across the island. Little by little, as our NGOs grow, so will their actions. Imagine how many vulnerable people we could reach or how many causes we could fight better with just a shift in the way we operate.
4. Attract more and better workers
Arguably, many people, including young graduates, often prefer to land a job in a company for the higher job security, bigger salary and perks instead of working for an NGO, even if the work might be more fulfilling or impactful. With limited budgets, NGOs often find it difficult to attract those bright talents and skilled people to come work for them, even though such people could help them make a difference in the world. The stability and potentially higher wage that social enterprises could afford to give workers could pull more excellent people into the social world.
5. Ability to educate a larger audience about social issues being tackled
An NGOs’ audience might be limited to its workers, people they help and others who share the same interests, while a social enterprise also has clients, networks in the business world and several other stakeholders. Therefore, it can raise more awareness about its cause and activities and get more and more people to care about the issues it is working on through social media and the marketing strategies to promote its brand. More attention could also help it operate better, obtain additional funding, and a more considerable following could entice volunteers.
6. More independence
One primary source of funds for NGOs tends to be donations, whether from the government or private sector, but these are often tied with sponsors’ conditions, whether formally requested or subtly implied, that the NGOs promote their ideals. This gives limited freedom to the organisation to pursue their actual goals, go about their activities in the way they would like and voice out their own genuine opinions about matters they care about, but restrained by a lack of funds, they often compromise. As social enterprises, though, the organisation, by developing a model whereby it is financially self-sufficient, would not have to tolerate the whims of such sponsors and can freely work in line with their values.
So, dear NGOs, what are you waiting for?
Krshtee Sukhbilas, BSc Economics & Finance student at the University of Mauritius, YUVA Intern