The funding environment for nonprofits is changing around the world and many organizations are finding that they need to update or adapt the way they work in order to survive. Many international aid agencies are moving from the donor model, towards a sustainable social enterprise model – one where they are receiving funds in return for the sale of a product or a service, rather than donations from altruistic people.
What has precipitated this is that many NGOs who have been relying on core funding from government, or one or two key funders, or fundraising events, are finding these sources dwindling away year after year. Suddenly they find themselves having to make decisions about which programs or services to cut.
Because NGOs are mission driven, these decisions impact lives directly, and therefore agencies most often continuing doing the work with little or no resources. This is not sustainable in the long run.
The ideal environment for an NGO is a model that allows it to think creatively for ways to respond to the needs it is addressing, to act independently – not bound by program funding or donor influence in any way – and to use business strategies or practices to generate revenues and solve the problems in community that meet their mission directly.
Social entrepreneurship is not for everyone, but it is a promising model for a sector that needs and is looking for change.