Shifting Towards Social Entrepreneurship

ngos donors sustainability social enterprises
Tuesday, 7 May, 2013 - 16:58

Non-governmental organisations should consider becoming social enterprises to ensure their long-term sustainability

The term non-governmental organisation (NGO) has the connotation and literal meaning of a group of people performing social projects parallel to government services. One of the earliest mentions of the term was just after the formation of the United Nations, immediately after the World War II. It worked well in that context as most countries and communities were suffering during the aftermath of that war; there was little trust and resources for state services and outside funding agencies worked with civil society to implement social projects to restore the well-being of communities. In South Africa, the term became fashionable in the 1990s, during the dawn of democracy, as international donors lined-up to assist in restoring the injustices of the previous regime.

Is the term still relevant in the current set-up? As the donor funding model dries up, most NGOs are failing to adapt and to re-look at their role in advancing social service projects. Currently, most international funding is channelled through government; so why would government support NGOs which by connotation work parallel to government social programmes? By the way, is there a future in South Africa for such social services, with imminent donor funding challenges? Seeing that most companies prefer to align their social investment initiatives to government priorities, and the Department of Social Development prefers to support community-based organisations (CBOs), maybe now is the time for NGOs to shift toward becoming Social Enterprises (SEs). Governments and society in general probably acknowledge the limitations of the NGO concept, but in the absence of a viable alternative, accepted it as a ‘necessary evil’.

The transition from NGO to SEs is very challenging but rewarding in the long-term and could translate into sustaining social projects. Strategy and operation has to change, and a leadership mindset shift is critical in restructuring the organisation to become a social enterprise. That evokes the spirit of entrepreneurship, which requires innovation and determination in the leadership. The approach in strategy and operation is similar to running a normal business and the only difference is motivation, which in this case would be social value instead of economic value. General business principles are applied but goals should be mission driven and appeal to the goodwill of society.

Sustainability of social projects is critical, hence services have to be carefully looked at and delivered in a way that adds value to society while generating income for the organisation. Social entrepreneurs should adopt the basic rule that if the service or product is not sellable then it is probably not valuable. CBOs should not be confused with SEs, the former generally serve a specific geographical location and their services are an extension of government social services, such as feeding schemes. Meanwhile, SEs should be scalable at other locations and their interventions should be measurable in terms of impact in people’s lives.

Most successful SE’s interventions utilise a ‘problem-based approach’, where plans are put in place to address current challenges in order to project a better future. An example would be an organisation that provides career guidance with a special emphasis on mathematics, engineering and technology to rural learners, who would otherwise not have access to such critical information. That project could be easily scaled-up and measured to determine impact and the service is critical as middle class families could pay for such information. The only trick would be to determine how innovative the project is in order to generate income for its sustainability. 

Innovation by its definition involves doing things differently. Continuing with the career guidance example, the organisation could utilise young professionals practising in those fields of study to ‘tell their stories’ to learners - that way learners are not only getting first-hand information but are also motivated by meeting ‘living role models’ who did their high schooling in the same or similar environments. Another practice associated with entrepreneurship is the ability to spot partnerships in order to complement an existing service, instead of being a ‘Jack of all trades’.

Successful innovators form strategic partnerships to maximise their offerings. In this case, the career guidance organisation can source video revision lessons and study guides in those critical subjects and offer them to ‘their’ schools and learners at a reasonable fee. They may also want to facilitate weekend classes, where learners register and access additional support offered by the young professionals in problematic subject topics. That way the organisation will create a market to deliver its career guidance service while generating an income.

The above description is a simplified process of one NGO adjusting towards a social enterprise; the actual shift requires time, will and determination from its leadership and all those who are involved. The implementation of social projects requires a clear understanding of the communities involved and buy in from multiple stakeholders. It is important for social projects to acknowledge that community members are capable of making their lives better, given the necessary support and tools. Project managers should spend some time in the communities to understand local issues, spot champions and provide support for communities to ‘own’ the projects.

- Goodman Chauke is a marketing manager of Mindset Network and a social entrepreneurship student at the Gordon Institute of Business Science (University of Pretoria).

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