New rules for nonprofit organizations

Explore, imagine, and learn to create a better future for your enterprise, and do something about it now!

New Rules for Nonprofit Organizations

Let’s investigate a different future together…

BUSINESS SCULPTORS Management Consultants

By Marcus Coetzee, 18 September 2008


It is time for us to take the “bull

by the horns” and rethink some

of our fundamentals


HDI Index:

• Educational Attainment

• Life Expectancy

• Literacy

• GDP/capita

Increase in HDI from 1975 to 2002

South Africa has lagged behind some

of the other developing countries


What has happened to this fine

organization – are you next?

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

NPOs and businesses converge

CONVERGENCE


A winning team!


…but how well would it play in a

game with new rules?


Ten New Rules for Nonprofit Organizations

1. Start thinking of yourselves as social enterprises 2. Purpose your organization 3. Focus on your outcomes 4. Sell your outcomes; don’t beg for funding 5. Demonstrate value-for-money 6. Pursue partnerships with businesses 7. Earn income; don’t rely on donations 8. Build highly-engaged communities 9. Embrace new media 10. Become a social entrepreneur


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


Have we always believed

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.”


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.


Time to discard that Vision & Mission


Rule 2: Purpose your organization Concept Key Question Example

Purpose Why do we exist? (…and what would happen if we did not exist?)

• Reduce TB in Nyanga.

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… •…


Inputs Activities Outputs Outcomes Fulfills

Purpose

People Money Time Skill etc.

Do workshops Do training courses Do research Do mentoring Do research Do lobbying

Numbers: - participants - research reports - workshops run

Change in behaviour Change in organizations

Reason why organization exists. Change in community, society etc. that the organization seeks to bring about.

Rule 3: Focus on your outcomes

How does one determine the

effectiveness of a social enterprise?


Inputs Activities Outputs Outcomes Fulfills

Purpose

An effective social enterprise can provide convincing evidence of having achieved its formally-stated outcomes.

Rule 3: Focus on your outcomes

Efficiency = Outcomes achieved / Inputs utilized

Productivity = Outputs achieved / Inputs utilized

SE-ROI = Value of Outcomes achieved / Value of Inputs utilized


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.


Is this your organization? Doing

good and “begging” for funding?


Sell the outcomes

your organization

achieves!

You can sell:

Functioning Clinics

Reduced crime rate

Policy Changes

Functioning Police

Stations

People Employed

Decrease inn rate of HIV, TB, Teenage Pregnancy

Responsible Teens

Rehabilitated Offenders

Treatment Adherence


Rule 4: Sell your outcomes; don’t beg for funding! Which of your organizations is

selling tragedy and trauma?


Sell success, not problems! www.abalimi.org.za


• 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!

Pitch

CSR

Demand

Favourable Policy

Supply

Research and Pitch – don’t mass mail


Would you look at a proposal of these orgs?


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

A brand for your organization?


Does the brand of this good

organization excite you?


…and the brand of

this organization?



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


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?

Demonstrate value-for-money


Rule 6: Pursue partnerships with businesses

Help Businesses to :

Honour responsibilities

Increase demand for products and services

Develop favourable policy environment

Secure supplies of valuable inputs


The BEE ownership partnership


Rule 7: Earn income; don’t rely on donations

It is immoral for your nonprofit

organizations to rely on “donations!”


• “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. ”


Does TADSA earn income

or receive donations?


Social enterprises are well-established 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.)

Social enterprises in the UK


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”

Rule 8: Build highly engaged communities


Rule 9: Embrace new media – some starting points

1. Website

2. Social Networking

3. Blogging

4. Subscription and Mailing Lists


What if I Google your cause in order to find a good investment – will I find YOU?

Highway Hospice comes out No 1.


Have you bought your cause’s keywords?


Does your organization have Facebook?


A blog for your organization?

This is one of the 39 blogs I

review every evening.


Viral Marketing

Vernon Koekemoer – a plumber

at a rave in Boxburg?


Rule 10: Become a social entrepreneur

Resources: (Time, money, expertise etc.)

Purpose Fulfilled

Blueprint

A social entrepreneur asks how he/she can improve social impact ten-fold using existing resources!

New Philosophy? New Paradigm? New Blueprint? New Rules?


Model 2: Recycling Tetra-Pak Rehabilitating Prisoners and Packaging waste


Tetra Pak

Timber Plastics recycles waste and employs

former prisoners

NICRO manages

rehabilitation

SASOL ChemCity

Green and low cost building materials

Fibre to Paper Mills

Earns income Provides

rehabilitation

Enterprise development and honouring responsibilities

Rehabilitating Prisoners and Packaging waste

Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Let’s catch the social enterprise sunrise!

Photo by Sung the Vagabond


Good Fortune and

Thank You

Marcus Coetzee

082-879-91-31

[email protected]

www.MarcusCoetzee.co.za

http://www.businesssculptors.com/

New rules for nonprofit organizations

Business

better future

different future

social enterprises

outcomes dont

social profit npos

nonprofit organizations

visionary organization

fine organization