“Doing well by doing good” isn’t simply a platitude. It can be real. It can be very real. Lives can change for the better by virtue of your investment, without sacrificing returns. Yes, the social venture philanthropy (SVP) is a growing phenomenon in India across the verticals. Despite regulatory challenges and misalignment in creating synergy between the donors and organisations, from a larger perspective, philanthropy is considered one of the most important investments in the industry. However, it is the disequilibrium that the market has created (income inequality, racial injustice, failing education), which requires these non-profit organisations to contribute and raise funds to operate.

Today, the social enterprise sector is thriving in India in all formats right from individuals to institutions to corporate organizations, addressing multi-pronged issues at grass root level such as education, protecting girl child rights, women empowerment, water, sanitation, poverty, hunger etc. Tata Trusts, Reliance Foundation, Smile Foundation, Edelgive, and SVP India to name a few are among those who either support social endeavours or are involved as a corporate charitable arm. While this model is not new to the corporate landscape, it is an attractive way for individuals to align diverse perspectives and maximize impact by sharing knowledge and resources.

However, the question arises –

• Is the donor money enough to make the impact a non-profit organisation is aiming for?
• Does the work stop when the funding cycle ends?
• Will the non-profit organisations always depend on donors to bridge the needs of society?

There are consequences to this financial fuzziness. When nonprofits and funding sources are not well matched – promising programs are cut, curtailed, or never launched. And when grants become tight, a chaotic fundraising scramble is all the more likely to ensue. Today, when the world is rocked by COVID19, causing human, economic, and social misery on a scale most of us have not experienced in our lifetimes. To battle out the current crisis, a country requires innovation, equity, collaboration and organisations that can serve the society. And with the recession affecting every industry, the social sector is most affected leading to frozen funds and financial instability.

Developing a Self – Sustainable Model

This calls for a drastic change in the way small non- profits operate and the idea of sustainability comes in. Even though the model is not new to the social landscape, these times call for innovation and sustainability as the key to continue. To be able to sustain itself over the long term, a nonprofit should attract and effectively use enough and the right kinds of money necessary to achieve its long-term outcome goals along with strategic planning. There are eight key dimensions of non-profit organisation sustainability to be considered –

• Legal good standing and compliance
• Organisational capacity and expertise to do the work
• Financial viability of the organisation and its programmes
• Advocacy for the work undertaken to change the world and Policy reform
• Quality and professionalism of service provision while confidently demonstrating a social return on investment
• Stable infrastructure and ownership of assets
• Form alliances and build strong relationships with local business and government
• Building the brand and public image through consistent communications

One of the most important dimensions being ‘Financial Viability’ of the organisation. A possible model to maintain cash flow is by supporting earned income ventures. It is a revenue plan with financial projections which includes diverse income sources and avoids reliance on a single or few streams. Apart from the fundraising techniques appropriate to programmes, it is best to create a revenue business model to earn money which can be further distributed to the non-profit which can then deploy them to advance its mission.

A perfect example of earned income ventures is Goonj – A non profit organisation which follows the model of ‘Resource Recycler’. This organisation believes in urban discard as a tool to alleviate poverty and enhance the dignity of the poor in the world. Through their cloth collection drives and processing centers, they built a brand around reusing and up-cycling even the last shreds of material to create range of over 100 different products like purses, fancy bags, file folder, mats etc. made out of torn jeans, obsolete audio tapes, one side used paper etc. These are crafted and designed by women from nearby slums, thus also providing them employment. Buying a ‘Green by Goonj’ products ensures that their work in rural India continues unhindered irrespective of large/small funding support.

Another beautiful example is The Akshaya Patra Foundation, an NGO that strives to eliminate classroom hunger by implementing the Mid-Day Meal Scheme in the government schools and government-aided schools. It also aims at countering malnutrition and supporting the right to education of socio-economically disadvantaged children. Apart from the aids received from governments, corporates and individual donors, they offer The Dream Project Fellowship, a eight-month management fellowship programme, for professionals to amplify the impact in the lives of their beneficiaries. This fellowship can be availed with a minimal fee contribution by the fellows to learn and contribute their bit to the society.

Balancing Money and Charity

This model helps meet operating cash needs in the absence of adequate cash reserves, where a nonprofit can turn to a line of credit to meet the temporary imbalance between available cash and expenses due. Some nonprofits, depending on their mission, generate revenue by providing services, offer products, fees for services rendered, the interest generated from investments, and royalties generated from owned and copyrighted works. To keep the element of goodness and social work intact, this line of credit should ‘only’ be used to address an operating deficit and should not be the only source of fund.

As a founder of AA foundation, I believe we constantly need to innovate and keep the fund cycle intact. We keep moving in the vicious circle of insufficient money and capacity. Get out of your cocoon and go talk win-win deals and see the road to success through the creation of value. If you are tired of battering your head up against too little money or going through the nonprofit starvation cycle, forget both and focus on looking for new revenue streams and build a self-sustaining model. My intent is not to prescribe a single approach for a given nonprofit to pursue. Instead, non-profit leaders need to look into ways and examine the potential a non-profit organisation can achieve.