How do we prepare nonprofit organisations for the long term?

Written by Hermann Jeuschenak The core principle of social benefit investment is the empowerment of individuals to the point where the intervention by benefactors is no longer required. That is to say, social benefit investment should be temporary and therefore too the existence of NGOs – in a non-profit, donor dependent form – should be temporary.

Importantly, this statement does not suggest that the underlying needs will forever disappear but supports the view that successful development will give rise to societies and individuals capable of attending to their own needs; societies that will have their own capacity to  address causes of moderate and manageable proportions.

To achieve this, two processes must follow. In the first instance, limited funding must be efficiently allocated to those that demonstrate the capacity and will to deliver on social needs – a process to which Whythawk Ratings aims to contribute through our ratings. The second process is to ensure that skills and capacity developed during the first process remain – for every society will forever require education and health-care, skills development and the nurturing of talented aspirants or hapless victims of fate; and, undeniably, because zero to low return social funding is, in every instance, finite.

The risk, and the current mind-set, is not to keep a sharp focus on the sustainability of funding and long term capacity – perhaps a consequence of magnitude and the seemingly insatiable demand global inequality suggests. But we, as a global society, involve ourselves because we believe that a distant solution or parity exists.

By encouraging best practices in NGOs we not only stand to improve the reach and effectiveness of our collective interventions but also prepare these organizations for self-sufficiency in the future – a cornerstone of capitalism; our best system for economic sustainability and growth so far.

And it is these best practices, amongst others, which any ratings system should encourage. Financial controls engender discipline and awareness and client feedback encourages a level of service delivery that creates its own demand. How so? Enterprise development consultants with proven track records and successful clients will, with time, attract paying clients eager to enter the economy. Adult learnership programmes, where learners with enhanced skills are able to demand higher wages, will soon attract individuals that are prepared to pay today for greater incomes tomorrow. And, for other sectors, where total independence from donors is an impossibility, their surrogate for self-sufficiency is the success they attain through the adoption of best practices. Throughout history the wealthy have supported causes, only the number of wealthy and the level of support have varied. Highly rated orphanages, for example, will attract the limited funding during leaner times and they, through this, will, in a way, be self-sufficient.

Social development is also for the long term and we must be brave and disciplined enough today if we are to succeed.

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