Becoming a social enterprise — for NGOs

Transitioning from donations and grants, to a mixed revenue stream

Michael Freer

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Photo by Mathew Schwartz on Unsplash

So you’ve seen the number of grants and projects in your area of expertise diminish, be it due to emerging trends or a change of government. Donations are down as the economic crisis looms, or your service users aren’t deemed donation worthy.

You’d read about social enterprise a long time ago, and thought it’s about time you change your model to ensure the sustainability and longevity of your organisation. However you’re unsure what steps you need to take next.

Here are a few pointers that we found useful when working with NGOs before:

Get the board on board

No matter where you are based, the likelihood is that you have a board of some sort to help with the direction and strategy of your NGO. This board will stay in place as you become a social enterprise, however you need to ensure that it gives you support during the transition.

Having a board that is extremely risk averse, slow and unresponsive will not help. Selling a product or service needs a certain amount of quick decision-making and the ability to meet current market trends, if these decisions don’t need board approval then great, but if they do, you better have a board in place that will ensure the success and not death of your entrepreneurial exploits.

We’d suggest speaking to them individually about their views and gauging their support, then looking at what skills they could offer to the new ideas. Once you have this, you can see what else you need to bring on board to ensure a comprehensive, complementary board that will guide you onwards and upwards.

Make sure you’re legally able to trade

Depending on your country and the rules for NGOs or charities, there’s a chance you can’t trade. You may be able to add the trading activities to your organisation, and if so then make sure you do so in a cost efficient way. If there isn’t this option however, then maybe it’s time to open something new.

As a legal entity (NGO/charity), you can actually open another legal entity, ensuring decision making remains by the owner (in this…

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Michael Freer

Social enterprise enthusiast, avid traveller and fiction writer. www.ensoco.co.uk