Home | Blog | THE BUSINESS OF NGOs: STAYING FINANCIALLY FIT IN TIGHT TIMES

Take a look at in-depth pieces and powerful narratives from some of South Africa's best literary minds and critical thinkers, as well as the latest Nal'ibali news and updates. 

THE BUSINESS OF NGOs: STAYING FINANCIALLY FIT IN TIGHT TIMES

Yandiswa Xhakaza is an MBA graduate and the CEO of the Nal’ibali reading-for-enjoyment campaign. Having taken up her position just weeks ahead of the COVID-19 pandemic, she is using her business insights to steer the organisation through the recession. She offers tips and advice to other NGOs below.

As a social activist, I understand all too well the mechanics and complexities of development work. There is nothing more fulfilling than working for an organisation whose sole purpose is to improve a specific development area plaguing society. It is no wonder then that the sector is often comprised of passionate, purpose-driven people who want to change the world. 

We manage to gain the support of others who back our causes with money, skills and other in-kind donations and in this way, non-profits can grow to be sizeable organisations; both in terms of the number of employees, as well as annual budgets being administered.

The bigger the NGO, the more complex its operations, financial controls, programmes and teams can be. This is when they need to apply business principles to solve the complex social problems the sector is grappling with. 

Never has this been more important. The financial crunch that COVID brought to commercial enterprises has also been felt by NGOs and showing financial fitness to funders and partners can make or break a for-good organisation. 

I want to focus on five key areas that I deem as non-negotiable for any NGO: 
 

  1. Professional staff members: There is nothing an organisation is going to achieve without the right people to execute its plans. NGOs need staff that interrogate, suggest, are proactive and can think on their feet. A competent staff understands that there are individual, departmental, and organisational key performance indicators that must be met, that excellent delivery is non-negotiable, meeting deadlines is essential, and an impeccable work ethic is necessary. NGOs should not tolerate non-performance and should be stringent in hiring the right people for the job. Individuals who are not just passionate and mission-aligned, but also competent and skilled. 
     
  2. Cut the frills: This speaks directly to understanding your core business. What problem is your organisation solving, and what methods are being used to solve it? Once this is clear, everything else is “nice-to-have” and small amounts can add up over time. These could be branded items such as T-shirts, caps or costly monthly licenses or subscriptions. Unchecked service providers that are just always used could easily be charging more than 50% of market prices. There are a lot of frills, and we must declutter. It is costly not to do so. 
     
  3. Pro bono work: Some NGOs are good at using their status to get services for free, some don’t do this at all. Non-profits would be surprised at the number of companies, professionals and sometimes even government departments that are willing to provide services to NGOs pro bono. We have to ask, and I believe we don’t ask enough. Our collective efforts go towards the upliftment of the country, and we all stand to benefit from the work of different NGOs. Asking for preferential rates and free services should be a regular practice. 
     
  4. Partnering: NGOs don’t partner enough. This is well known and is spoken about a lot more than it is actioned. Partnerships mean we leverage each other’s resources and skills for greater impact. There are a lot of like-minded NGOs working in silos where collaboration would make more sense. The end goal is not which NGO implemented the most programmes or had a presence in the most provinces; the goal is how many lives have been improved by our collective efforts. If we keep our eyes on that goal, we will be able to see the many ways in which we can work together to benefit the communities we serve. 
     
  5. Not everything is for free: There is an untapped opportunity that is not explored by most NGOs and that is to sell some of their goods and services to a different segment of the market. This is not always feasible, but where it is, and the effort to sell the goods and services does not outweigh the benefits, then it should be considered as a way to diversify income and increase financial security.

That said, NGOs will always be different from commercial enterprises; we are differently constituted. But, there are principles that we can borrow that will lead to better management of staff and programmes, to better financial controls and expenditure as well as better planning and innovation.  

We should be open to exploring those different ways and open ourselves up to doing things differently, better and more efficiently. We have a responsibility to demonstrate our impact to our donors and our beneficiaries, and we need to be able to change with the times and as we grow.

For more information about the Nal’ibali campaign, or to access children’s stories in a range of SA languages, visit www.nalibali.org and www.nalibali.mobi or find them on Facebook and Twitter: @nalibaliSA.

 

Social Share