For the past few months, I have been trying to develop a write-up on the comparative analysis of running a generic NGO and running an NGO that has a real sustainable impact on humans. I have finally made up my mind to put thoughts to paper on this discourse. This is a study whose findings filled me with awe on how a little dose of sustainability can lead to an invaluable amount of business success.
The story started off when I was approached by a friend who asked a question that touched me deeply. Which led to the thought; this is how a person who wants to change the world thinks.
“Hey Eric, do you have some books that you would like to donate? I really want to run a school campaign where I’ll give these books to schools that are deficient in academic books. More like a mini NGO where I will on a monthly basis give books out to students. What say you?”
That was the mind-boggling question and the real inspiration behind this article.
This is the kind of message that you get when someone is very passionate about changing the world, This was a very nice and unusual gesture from a young man. Who at that time was unemployed, but was really interested in closing the knowledge gap in our secondary education. As he believes that the lack of quality books was one of the reasons why our students have been performing below par, in comparison to their contemporaries.
He had good intentions, and I took the opportunity to look into the way NGOs are being operated. From my little research, it was evident that though most NGOs claim to be alleviating poverty, their business structure is in direct conflict with their aims. As such, they are unable to meet their objectives in the long run. In this article, I will show you how NGOs can be restructured, so that it can provide a real and perpetual impact, in the lives of those whom it is meant to serve.
So what is an NGO?
There are several definitions of for an NGO, but I have decided to narrow it down to definitions from two of the most recognised organisation in human history. The World Health Organization and The United Nations.
The World Health Organization defines NGOs as “private organisations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.”
In comparison, The United Nations defines NGOs as “a not-for-profit, voluntary citizens’ group, which is organised on a local, national or international level to address issues in support of the public good.”
There is no general reason for the formation of an NGO as we have seen, but the truth is that most of them are being created to meet a particular need. A similar characteristic that NGOs possess is that they tend to serve a particular purpose at a particular time. An NGO cannot solve all life problems, that is why we have the likes of WHO, UNICEF, OXFAM, Bill and Melinda Gates Foundation, just to mention a few.
NGO Structure Redefined
I don’t have issues with the existence of NGOs, or the quality of their work. The centre of my argument falls within their operational structure, which doesn’t conform to sustainability standards most of the time. Merely looking at the business structure of most NGOs in existence, you will notice how unsustainable they are in both approach and structure. All this I will show you as we go on.
Questions We Should Ask Ourselves.
What separates a sustainable NGO from an unsustainable one? Let us consider the following questions:
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How much should an NGO spend on administrative cost?
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Do NGOs need Chief Executives?
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How many executives are just right to run an NGO and not perceived to be excessive?
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What makes an NGO sustainable?
These set of questions might sound or look trivial to some of you, but they are very important questions that everyone that donates to NGOs should ask themselves. If not for anything, at least you should know how monies given to these NGOs are being spent.
Richard Branson in his book Screw Business As Usual, expressed how he has been able to create successful small and medium scale businesses by focusing on actions that have long term values. In this book, he also stated emphatically how he is very concerned about the percentage of donated funds that goes into administrative expenses. This is one of the key factors in deciding whether to donate to a particular non-profit organisation.
Looking at the administrative cost of running an NGO, I have met some people during the cause of writing this article who told me that they simply can’t donate to any NGO, whose administrative expenses exceeds 10–15%. Surprised?
Don’t be. I bet you after reading this article you will ask far more questions.
Research conducted in 2013 by a leading market research and consulting U.K based organisation npfsynergy, revealed the following results:
‘The consultancy’s survey of 1,002 people, aged 16 and over, shows that 75 percent perceive a charity’s chief executive to be an administration cost, four per cent consider a chief executive to be a fundraising cost and three per cent say it is spending on the cause’
‘Respondents estimate that charities spend 25 percent of their income on fundraising but think that 22 percent would be an appropriate amount.’
‘The top 50 fundraising charities spend an average of 17.8 percent of their fundraising income on fundraising, the study finds. They also spend an average of 7.6 percent of their total income on ‘support costs’ and ‘governance’
I know these revelations will change how you view NGOs. Of course, that was the reason for this article. I want it to serve as an eye opener as to how your money is being spent.
How NGOs can be sustainable in Practice & Strategy
This article was not written to smite any NGO or Non-profit, but to serve as an eye opener to both the donor/giver and the NGO. Most NGOs don’t expect the public to be aware of trends like this and most times try to conceal financial information.
One of the core objectives of an NGO is to improve lives. An NGO is meant to either return people to their status quo (in a time of disaster) or to improve people’s lives in a case where it is perceived that a certain group of people lacks social advantages. Therefore for an NGO to be sustainable, they have to create activities that not only meets short-term needs, but also stretches to accommodate human development which results in the recipient being self-reliant. This can come in the form of offering training, internships, giving grants to small and medium scale businesses, offering pro bono consulting services to failing businesses, mentorship, etc. The list is endless. In summary, any activity that leaves the mark of unending impact, is considered sustainable in this context.
In addition, periodic financial reporting to the public is paramount to running a sustainable NGO — if people can give, they have the right to know how their money is being spent. Just as one tracks their shipments or delivery from Amazon, donors should be able to track their donation at intervals. Make your financial records visible (This can be on your website, through a quarterly based newsletter or can even be published in the dailies for wider coverage). A decision can be reached whether to donate to your NGO or not, based on the availability of these records — that’s if they are consistent and fraud free.
Bringing it all together
Non-profits and NGOs should strive to create systems that encourage human development i.e your business structure should encourage a long-term independent impact where the recipients can stand on their own and not depend on your NGO to provide them with constant aid. It is not too late to reevaluate your NGO. The reason that your NGO has not been gaining the traction it deserves, might be that sustainability was not considered as part of it’s operating strategy. While it is not too late to turn the table around, further delay can lead to the eventual death of your NGO as the public is beginning to get more informed on how NGOs are being run globally.