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 donorfunded 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.
NEW ORGANIZATIONAL HYBRID - NONPROFIT IN
PURPOSE AND FOR-PROFIT IN APPROACH
• "NGO sustainable financing” is not
(necessarily) synonymous with "NGO selffinancing”
• NGOs should raise sufficient funds from
internal sources to cover their basic
operating costs, but approach external
funding agencies for their program costs.
• Thank you!
nicucuta@gmail.com
www.fdes.ro