How sustainability is important for organizations pursuing a social mission? The trend of the last years, with a wave of social enterprises and social businesses, organizations that are equally trying to solve problems faced by the society while ensuring a financial return for their shareholders, clearly seems to indicate that the future of development sector belongs to new “hybrid” organizations.
These organizations are capable of ensuring a social impact while at the same time thriving as business entities, fulfilling a social mission while also turning a profit. This approach is also called “share value” helping improving your business while contributing at the same time to the wellbeing and prosperity of local communities or society at large.
This new model is welcome because it is shaking up the entire not for profit sector, bringing in a vital element of financial viability that is lacking in the traditional not for profit sector.
Are any other alternatives available? Is the entire sector facing a tectonic change towards financial sustainability?
If this holds true, what to do then with charitable money? Here I am talking about money that individuals, institutions and even government agencies are normally channeling towards charities, NGOs or any organizations without expecting a financial return.
In the recent conference on Social Impact organized by Social Impact Exchange, http://www.scalingconference.org/, Amy Celep, CEO of Community Wealth Ventures considered that the quest for sustainability, for most of the not for profit organizations, should be seen as “journey”, a long term process made by gradual discoveries and “pilot” initiatives.
Indeed sustainability or any kind of revenue model for traditional not for profit agencies do not come easily.
Their case is significantly different from new ventures which are designed since the outset to operate in the market while at the same time offering products or solutions with a social value that addresses a particular problem affecting the society.
Should all the traditional players shift to a revenue generating model? If so, how to do it? Is there any other “middle” path between not for profit and business with a social mission?
Certainly a gradual, step by step approach towards sustainability is needed in order to find the right model but this should never be at the expenses of the not for profit’s core mission.
We should avoid the risks of an “imposed” sustainability model that will only divert the attention from what really counts most: the supposed impact generated by the not for profits.
Here a simple, plain middle path “mantra”: impact first, sustainability later.
Let me explain: the most important thing in any kind of social organization is to ensure that the outcomes from its actions are generating a “social” return by improving the life conditions of the target groups or by addressing a given unmet need.
The financial return comes later on. I believe it is possible for traditional players to start an inner quest for financial viability only and if their “core” model of action is proving effective and efficient by offering tangible and well measurable results.
In short, the pre-conditions to be met for traditional not for profit players before immersing themselves in the journey towards self sustainability is that they must first ensure that they are doing a superb job.
Only if they are in the position to prove it, then I believe it is worthy to start the “journey”. The senior managers of these not for profit organizations, with learning by doing attitudes, should be ready to accept failure.
The bottom line is that you should not compromise on your impact standards because of sustainability concerns. That’s the reason why even if your journey fails and as long as you are doing well in terms of achievements, there will be always the rationale for having smart philanthropist ready to help you out. Remember: sustainability it is not the end but just one of the possible means.
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