BUSINESS SCULPTORS Management Consultants
New Rules for Nonprofit Organizations
Let’s investigate a different future together…
By Marcus Coetzee,
18 September 2008
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It is time for us to take the “bull
by the horns” and rethink some
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of ourExplore,
fundamentals
Increase in HDI from 1975 to 2002
HDI Index:
• Educational
Attainment
• Life Expectancy
• Literacy
• GDP/capita
South Africa has lagged behind some
of the other developing countries
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What has happened to this fine
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organization
– are you next?
NPOs and businesses converge
Nonprofit organizations become
business-like
• Social enterprise and income
generation
• Social entrepreneurship
• Outcomes orientation
• Social accounting (Social Audit
Network)
• SROI (REDF and NEF)
• Exploring financial profit
Businesses become socially
responsible
• CSR and the Good Corporate
Citizen
• Social and environmental
reporting
• Ethical consumerism and
investing
• CSI and Corporate Philanthropy
• Social responsible companies +
finding talent
• Exploring social profit
CONVERGENCE
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A winning
team!
…but how well would it play in a
and learn to create a better future for your enterprise, and do something about it now!
game Explore,
with imagine,
new rules?
Ten New Rules for Nonprofit Organizations
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Start thinking of yourselves as social enterprises
Purpose your organization
Focus on your outcomes
Sell your outcomes; don’t beg for funding
Demonstrate value-for-money
Pursue partnerships with businesses
Earn income; don’t rely on donations
Build highly-engaged communities
Embrace new media
Become a social entrepreneur
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Rule 1: Start thinking like a social enterprise
A social enterprise is a bold and visionary organization
that seeks to make a real difference in the world.
It is neither a “business” nor a “nonprofit organization”
– but takes the best of both concepts and involves a
subtle shift in perception.
Enterprising (adjective): Showing initiative and
resourcefulness…Oxford Dictionary
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Have we always believed
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in this paradigm?
Rule 2: Purpose your organization
“Our mission is to contribute to the
operationalization of the concept of sustainable
development by building the capacity of the civil
society to respond appropriately to all sustainable
development issues through effective implementation
of strategic sustainable development projects.”
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In search for the common denominator
In the search for the
common denominator,
organizations have let
their visions and
missions become too
abstract to be useful.
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Time to discard that Vision & Mission
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Rule 2: Purpose your organization
Concept
Key Question
Example
Purpose
Why do we exist? (…and
• Reduce TB in Nyanga.
what would happen if we did
not exist?)
Outcomes
What are the outcomes we
need to achieve in order to
best fulfill our purpose
• Effective district TB control strategy
• Effective clinics
• Effective treatment supporter system
• Change in patient behaviour
Indicators
How will we know if we are
achieving our outcomes?
• Effective clinics (knowledge of TB
amongst sisters, referral system, speed of
sputum tests, record keeping…)
Blueprint
How do we accumulate the
resources we need and use
them to achieve our
outcomes and thereby fulfill
our purpose? – “Business
Model”
• Get payment from state
• Run workshops
• Setup treatment supporter system…
•…
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Rule 3: Focus on your outcomes
Inputs
People
Money
Time
Skill etc.
Activities
Do workshops
Do training courses
Do research
Do mentoring
Do research
Do lobbying
Outputs
Numbers:
- participants
- research reports
- workshops run
Outcomes
Fulfills
Purpose
Change in behaviour
Reason why
Change in organizations organization
exists. Change in
community,
society etc. that
the organization
seeks to bring
about.
How does one determine the
effectiveness of a social enterprise?
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Rule 3: Focus on your outcomes
Inputs
Activities
Outputs
Outcomes
Fulfills
Purpose
An effective social enterprise can provide convincing evidence
of having achieved its formally-stated outcomes.
Efficiency = Outcomes achieved / Inputs utilized
Productivity = Outputs achieved / Inputs utilized
SE-ROI = Value of Outcomes achieved / Value of Inputs utilized
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Rule 4: Sell your outcomes; don’t beg for funding!
1. Define your purpose and outcomes.
2. Think of yourself as “selling outcomes” to Customers and
Investors as opposed to “looking for donations.”
3. Sell success – not trauma.
4. Research and pitch – don’t mass mail.
5. Develop an enticing brand.
6. Use PR to develop a presence in your industry.
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Is this your organization? Doing
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a better future
for your
enterprise, and do something
it now!
good
and
“begging”
forabout
funding?
Sell the outcomes
your organization
achieves!
Functioning
Clinics
Treatment
Adherence
Rehabilitated
Offenders
Reduced
crime rate
You can
sell:
Policy
Changes
Functioning
Police
Stations
Responsible
Teens
Decrease inn
rate of HIV,
TB, Teenage
Pregnancy
People
Employed
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Which
of your
organizations
is
Rule 4: Sell your outcomes;
don’t
beg
for funding!
selling tragedy and trauma?
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Sell success, not problems!
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www.abalimi.org.za
Research and Pitch – don’t mass mail
• Nonprofit organizations
should research corporates
to find out how they can
help them improve their
strategic position.
• “Pitch to investors” rather
than simply write and send
of hundreds of proposals to
unfamiliar investors.
• Make sure that companies
that want to invest in your
cause can easily find you!
CSR
Supply
Pitch
Demand
Favourable
Policy
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Would you look at a proposal of these orgs?
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A brand for your organization?
Brand is the sense that people have of an organization or
product. It is frequently intangible yet has meaning.
Brands can be so powerful that they can motivate people to give
their lives to a cause.
It is more than just:
• Name, Logo and Corporate ID and Look
• Reputation
• Purpose
• Customer Experience
• History, successes and failures
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Does the brand of this good
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organization excite you?
…and the brand of
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this organization?
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Rule 5: Demonstrate value-for-money
Investors and Customers
experience value-for-money
when you satisfy their needs
at a reasonable price and risk.
Photo by Calvin Wallace
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Demonstrate value-for-money
Are you substantially (e.g. 2-5 times) better than your
“competitors” at:
1. Having the required social impact / $ paid or invested (some
social enterprises even pay the investment back with profit.)
2. Accounting for your social impact – social accounting?
3. Reporting on your progress (in real time…)?
4. Improving your investors’ and/ or customers’ strategic
position?
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Rule 6: Pursue partnerships with businesses
Honour
responsibilities
Secure supplies of
valuable inputs
Help
Businesses to :
Increase demand for
products and services
Develop favourable
policy environment
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The BEE ownership partnership
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Rule 7: Earn income; don’t rely on donations
It is immoral for your nonprofit
organizations to rely on “donations!”
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• “Pioneer Human Services has been nationally recognized as a model social
enterprise. Since our founding in 1963, we have served over 100,000
people through an integrated array of services including housing,
employment, training, treatment, counseling, and re-entry services. Some
of the people we serve are recovering from chemical dependencies; some
are ex-offenders; others are homeless, but all are individuals on the
margins of society.”
• “Pioneer is a unique nonprofit organization in that it earns 99% of its
income through the sale of its products or services. As social
entrepreneurs, we combine the passionate pursuit of our social mission
with the discipline and innovation of a for-profit company. ”
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Does TADSA earn income
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or receive donations?
Social enterprises in the UK
Social enterprises are wellestablished in the United Kingdom:
• 55,000 social enterprises
• Turnover of £27 billion/year
• Employs 5% of workforce
• Government has a social
enterprise strategy and
department of social enterprise
• Legal form for social enterprises
(community interest company)
• Social enterprise funds (e.g. DOH
has £100 million in investment
fund for social enterprises.)
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Rule 8: Build highly-engaged communities
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Rule 8: Build highly engaged communities
• Japan won’t hunt humpback whales in
southern ocean this summer for “scientific
research” due to international pressure!
• Green Peace ran campaign to name a whale
they were tracking on satellite.
• 130,000 people voted for “Mr Splashy Pants”
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Rule 9: Embrace new media – some starting points
1. Website
2. Social Networking
3. Blogging
4. Subscription and Mailing Lists
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What if I Google your cause in order to find a
good investment – will I find YOU?
Highway Hospice comes out No 1.
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Have you bought your cause’s keywords?
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Does your organization have Facebook?
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A blog for your organization?
This is one of the 39 blogs I
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review every evening.
Viral Marketing
Vernon Koekemoer – a plumber
at a rave in Boxburg?
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Rule 10: Become a social entrepreneur
A social entrepreneur
asks how he/she can
improve social impact
ten-fold using existing
resources!
Resources:
(Time, money,
expertise etc.)
Blueprint
New Philosophy?
New Paradigm?
New Blueprint?
New Rules?
Purpose
Fulfilled
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Rehabilitating Prisoners and Packaging waste
Model 2: Recycling Tetra-Pak
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Rehabilitating Prisoners and Packaging waste
Timber Plastics recycles
waste and employs
former prisoners
Green and low cost
building materials
Provides
rehabilitation
Earns
income
Fibre to Paper Mills
NICRO
manages
rehabilitation
SASOL ChemCity
Enterprise development and
honouring responsibilities
Tetra Pak
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Photo by Sung the Vagabond
Let’s catch the social enterprise sunrise!
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Good Fortune
and
Thank You
Marcus Coetzee
082-879-91-31
Marcus.Coetzee@gmail.com
www.MarcusCoetzee.co.za
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