Non-profits and Profits: How Can non-governmental Organizations Engage in Business

The core of running a non-profit is to rely on generous donations by corporations and individuals. The essence of such organizations is to ensure that they can meet their objective without making profits from their work.

However, over the years, the landscape has been changing. A Harvard Business Review commentary published in 2005 states that more non-profits seek ways to generate profits and grow their organizations.

"Earned-income ventures are nothing new in the non-profit sector, of course. Universities, hospitals, and theatre groups, for example, have long been run by charitable organizations. What is new is the breadth of interest. No longer relegated to education, health care, and the arts, revenue-generating initiatives are being launched or considered in virtually every non-profit domain, from human services to housing to the environment," the article said.?

In every country, licenses given to non-profits ensure that they are not engaging in gainful activities and help them stay within their tax confines. But once in a while, these organizations require multiple sources of income to push their endeavor forward.?

How do non-profits engage with business and profit activities without breaking the rule? How can they ensure they open up more avenues to support their committed programs?

Reach out to earlier funders of the organization and explain the new shift. The earlier funders for the organization might think you were a wolf in sheep's clothing, pretending to help while eyeing how to make money.

Opening a Separate Entity

Opening a separate entity is probably the best way to ensure that non-profits engage in business well within the law. Non-profits can set out a separate entity for the sole reason to increase their funds to support their causes.?

This separation of ideology can help organizations take advantage of their opportunities while keeping their original mandate intact. However, organizations must find out what the law says in their regions and how the two entities can engage seamlessly within the law.?

Even so, non-profits need to be careful that they don't go into predatory business cultures that go against their values. In addition, they need to ensure the goals and objectives of the new outfit do not eclipse the original intentions of the non-profits.?

Long Term Partnership With Profitable Businesses

Creating long-term partnerships with profitable businesses is one of the most popular ways to increase funds for non-profits. This would mean that the companies commit to a set period to support the causes of the non-profit organization.?

Even though it is a valued alternative, most organizations should rely on several partnerships instead of one.?

A great way to create partnerships with businesses is to ensure that the business goals align with the organization's goals. Even so, see if the company is working around the organization's area of expertise in their community social responsibility activities.?

An article in the Candid Blog states that non-profits have a lot to offer commercial business through partnership.?

It said that "By establishing these policies, businesses work both internally and externally to be more responsible stewards. Because consumers demand more transparent and responsible products and services, more and more businesses are creating corporate social responsibility policies. This means that a non-profit could actually help a business become more profitable and attractive to consumers through partnership."

A Subsidiary of a Large Corporation?

Safaricom in Kenya has probably created one of the most vibrant social organizations in Kenya through its Safaricom Foundation. The strong link between the foundation and its mother company has seen many projects in education, health, community initiatives, and many more launched seamlessly and successfully.?

Donations from established enterprises can give non-profits the needed stability. However, non-profits should not lose focus on the impact goals of their organization. It is easy to be quickly roped in on the parent's company plan.?

It is encouraged that a clear management distance is brokered between the corporation and its non-profit arm to preserve the organizations' integrity.?

Spun a Social-Impact Outfit

Social impact projects sit between profitable businesses and community-focused initiatives. As a result, social impact projects or organizations have strong stability as they have figured out how to create a revenue stream while creating significant benefits for society. In the end, the dependency on donations is tamed.?

Experts even believe that having an impact-led organization can lead to faster social transformation.?

"Impact-driven businesses make money while making a difference because they impact lives. They, therefore, bridge the gap between economic growth and social development by creating shared prosperity and consequently a better, safer world," Professor Henrietta Onwuegbuzie of Lagos Business School said in an interview with Yale University publication, Yale Insights.

Some initiatives that can transform societies are alternative energy, recycling services, organic farming, low-cost health initiatives, and many more. These areas touch the lives of many in the community. Non-profits can opt to create an outfit that does just this.?

Conclusion

As stated before, non-profits need to assess their environment before engaging with corporates or beginning profitable ventures. However, most countries would allow collaboration to enable non-profits to grow their work beyond dependency on donations and well-wishers.?

It is worth considering if the social impact of African non-profits is to be felt in a much larger form.?

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