The following was taken from Asia Catalyst, a blog set up by Meg Davis about human rights and NGOs in Asia.
March 4, 2010 3:54 PM | No Comments
By Christina Lem
At times of change, start-up organizations should ask themselves what they want to become. If you want to remain independent, what is your future plan? Do you eventually want to be absorbed into a larger organization? Will you shut down once the need you're serving is met? NGOs should know how to shape their own future before others make the decision for them.
A few years ago, I visited over 50 non-profit organizations throughout Southern and East Africa on behalf of a foundation. The majority were grassroots groups created by dynamic founders who were determined to provide direct services or advocacy aid to those in terrible circumstances. Often these organizations had tiny staff and relied on community volunteers. They had just enough skills to create a budget and to document metrics that measured outcomes. Some didn't, and were considered to be failing by the international NGOs that were giving them technical advice. Almost all were dedicated to the work, but overwhelmed by weak management skills, low capacity, emotional burnout, limited financial resources, donor fatigue, and lack of infrastructure and trust in government.
This was despite the fact that in 2007 Sub-Saharan Africa received USD 38.7 billion in international aid. Much of the money trickled down to these grassroots organizations via government or large NGOs serving as their intermediaries, where bottlenecks and drip feeds were common. Grassroots NGOs often complained of not receiving the technical skills they needed to become self-sufficient, while their technical advisors, who were either government or large NGOs, frequently felt NGOs were not organized enough to implement what they were being taught. It was a constant, frustrating tug-of-war.
Grassroots NGOs face similar challenges in Asia. In some Asian countries, NGOs also face a difficult legal non-profit registration system. In China, for instance, non-profits without governmental approval must register as business organizations, without tax exemption and non-profit legal protection. Yet these restrictions have not slowed the growth of China's non-profit sector. According to the Ministry of Civil Affairs, the number of those registered as government-operated non-governmental organizations (GONGOs) jumped from 6,000 nonprofit organizations in the late 1990s to 386,916 in 2007. Most grassroots organizations work without any registration.
For groups like these, private funding is critical for sustainability. But money is only part of the equation. Sooner or later almost all private funders will ask their grantees questions about their plans for long-term sustainability and organizational growth, especially international funders. Most grassroots directors are activists, not business managers. But these two realms may not be as different as they might seem.
In the US, only 30% of start-up businesses still exist after 10 years. According to Scott Shane's "The Illusions of Entrepreneurship," sole proprietorships--such as single-starter non-profits--have the highest rates of failure. One likely reason is that they frequently begin operations without plans for growth. Important questions such as increasing intellectual and resource capacity, succession, and the future growth of the company are often considered too late.
Grassroots NGOs often have to react to too many needs and have little time or energy to think about the long term. But the best approach to gradually increasing capacity? Strategically planning for such growth, in phases. This will require strong management skills and a diverse network of supporters. NGOs should ask themselves:
· Is our organization making a substantial impact? How can we prove this?
· Do we want this organization to grow? In what ways? Do we have the intellectual and management capacity to make this happen?
· How can we involve others--advisors, board members, funders, employees--who might have new and needed skills?
· What will happen if the founder leaves? Is there someone who can effectively take his/her place?
· Since we can't do everything on our own, should we merge with another grassroots organization or larger nonprofit, and share hard-to-find resources?
This kind of long-term organizational planning should be seen as fundamental to the organization's work. Convening, organizing and networking to share resources would further strengthen grassroots organizations as a whole. Knowing the answers to these questions requires an honest evaluation of how the organization functions and can effectively grow - which can be essential to attracting new donors and retaining the ones you have already.
Christina Lem is a consultant to international foundations and non-profit organizations, ranging from start-up groups to large, established entities.