Why NGOs Should Go in Business
This story will be a story of a social enterprise. As Wikipedia tells us, a social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being — this may include maximizing social impact alongside profits for external shareholders. In other words, you run a business, make some profit, and at the same time do some good for others. That’s the reason social enterprises organically grow side by side with NGOs. An enterprise under consideration today is SPRIHA Collections, an offspring of CHORD.
But a small diversion first… During the pre-assignment for SAP Social Sabbatical, we watched some TED talks, read articles, and came to a shocking realization that the modern humanitarian system destroys economies, makes side profits, and more or less breaks the definition of doing good. Maybe the intentions are essentially good, but performance needs some serious improvement.
This brought up some crucial learnings. First, you need to listen to those you want to help, maybe what you think they need is far from what they actually need. Second, don’t treat your beneficiaries as objects of your good will, work hand in hand to make this world a better place. Third, enabling someone to earn their livelihoods is more efficient than making them dependent on donations. And the last one, we need to change our perception about NGOs: they should be able to invest in marketing or hire high-paid specialists to ensure bigger impact. Surprisingly (or not?), in many ways NGOs should function just like any other business.
Thus, the rules on an NGO market have changed. None of the corporations gives money away without assessing how it’s spent. As an NGO, you need a comprehensive business case to become a beneficiary. Your goals must resonate with the CSR goals of the donor, and the return on investment must be trackable. So, what do you do in this case? You create various projects partnering with your donors. That’s exactly what CHORD did. Together with Microsoft in Hyderabad, they launched the Growth Gene Project aiming to break the circle of poverty trough sensitization, education, skill training, and employment.
One of the significant outcomes of this initiative was SPRIHA Collections, a make-to-order sewing business and a social enterprise. Together with CHORD, my sub-team was working on a sustainable scaling up strategy to generate more demand, maximize the existing capacity, and expand the production of SPRIHA Collections. The detour above was meant to confront the possible thoughts in your mind (and I overheard this on a regular basis): “You’re an NGO, why do you want to make money?” Well, because that’s a natural way of having a bigger social impact.
CHORD organizes various skill trainings, one of which — tailoring. Two training centers are located in Bollaram and Yellama Banda. Women can come and join one of the batches for a 3-month training. As a result, they acquire a qualification and can get a job. Finding a job though is a challenging task in the slums of Hyderabad. That’s why CHORD takes it further and provides these women with the employment at SPRIHA Collections. This way, not only women learn a profession, they also secure a job and can provide for their families. One step further, it means that their children can go to school and get a proper education. In the end, the poverty circle is broken, as this family moves to a level higher, financially and socially. For me, this is a perfect example of sustainable social impact. Do you still think that business and NGO should stand aside?
