New rules for nonprofit organizations

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This presentation was given in 2008 to help teach South African nonprofit organizations about the changes in the industry and what they needed to do in order to stay in the game.

This presentation was given in 2008 to help teach South African nonprofit organizations about the changes in the industry and what they needed to do in order to stay in the game.

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  • 1. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! New Rules for Nonprofit Organizations Let’s investigate a different future together… BUSINESS SCULPTORS Management Consultants By Marcus Coetzee, 18 September 2008
  • 2. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! It is time for us to take the “bull by the horns” and rethink some of our fundamentals
  • 3. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! HDI Index: • Educational Attainment • Life Expectancy • Literacy • GDP/capita Increase in HDI from 1975 to 2002 South Africa has lagged behind some of the other developing countries
  • 4. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! What has happened to this fine organization – are you next?
  • 5. Nonprofit organizations become business-like • Social enterprise and income generation • Social entrepreneurship • Outcomes orientation • Social accounting (Social Audit Network) • SROI (REDF and NEF) • Exploring financial profit Businesses become socially responsible • CSR and the Good Corporate Citizen • Social and environmental reporting • Ethical consumerism and investing • CSI and Corporate Philanthropy • Social responsible companies + finding talent • Exploring social profit NPOs and businesses converge CONVERGENCE
  • 6. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! A winning team!
  • 7. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! …but how well would it play in a game with new rules?
  • 8. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Ten New Rules for Nonprofit Organizations 1. Start thinking of yourselves as social enterprises 2. Purpose your organization 3. Focus on your outcomes 4. Sell your outcomes; don’t beg for funding 5. Demonstrate value-for-money 6. Pursue partnerships with businesses 7. Earn income; don’t rely on donations 8. Build highly-engaged communities 9. Embrace new media 10. Become a social entrepreneur
  • 9. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 1: Start thinking like a social enterprise A social enterprise is a bold and visionary organization that seeks to make a real difference in the world. It is neither a “business” nor a “nonprofit organization” – but takes the best of both concepts and involves a subtle shift in perception. Enterprising (adjective): Showing initiative and resourcefulness…Oxford Dictionary
  • 10. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Have we always believed in this paradigm?
  • 11. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 2: Purpose your organization “Our mission is to contribute to the operationalization of the concept of sustainable development by building the capacity of the civil society to respond appropriately to all sustainable development issues through effective implementation of strategic sustainable development projects.”
  • 12. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! In search for the common denominator In the search for the common denominator, organizations have let their visions and missions become too abstract to be useful.
  • 13. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Time to discard that Vision & Mission
  • 14. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 2: Purpose your organization Concept Key Question Example Purpose Why do we exist? (…and what would happen if we did not exist?) • Reduce TB in Nyanga. Outcomes What are the outcomes we need to achieve in order to best fulfill our purpose • Effective district TB control strategy • Effective clinics • Effective treatment supporter system • Change in patient behaviour Indicators How will we know if we are achieving our outcomes? • Effective clinics (knowledge of TB amongst sisters, referral system, speed of sputum tests, record keeping…) Blueprint How do we accumulate the resources we need and use them to achieve our outcomes and thereby fulfill our purpose? – “Business Model” • Get payment from state • Run workshops • Setup treatment supporter system… •…
  • 15. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Inputs Activities Outputs Outcomes Fulfills Purpose People Money Time Skill etc. Do workshops Do training courses Do research Do mentoring Do research Do lobbying Numbers: - participants - research reports - workshops run Change in behaviour Change in organizations Reason why organization exists. Change in community, society etc. that the organization seeks to bring about. Rule 3: Focus on your outcomes How does one determine the effectiveness of a social enterprise?
  • 16. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Inputs Activities Outputs Outcomes Fulfills Purpose An effective social enterprise can provide convincing evidence of having achieved its formally-stated outcomes. Rule 3: Focus on your outcomes Efficiency = Outcomes achieved / Inputs utilized Productivity = Outputs achieved / Inputs utilized SE-ROI = Value of Outcomes achieved / Value of Inputs utilized
  • 17. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 4: Sell your outcomes; don’t beg for funding! 1. Define your purpose and outcomes. 2. Think of yourself as “selling outcomes” to Customers and Investors as opposed to “looking for donations.” 3. Sell success – not trauma. 4. Research and pitch – don’t mass mail. 5. Develop an enticing brand. 6. Use PR to develop a presence in your industry.
  • 18. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Is this your organization? Doing good and “begging” for funding?
  • 19. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Sell the outcomes your organization achieves! You can sell: Functioning Clinics Reduced crime rate Policy Changes Functioning Police Stations People Employed Decrease inn rate of HIV, TB, Teenage Pregnancy Responsible Teens Rehabilitated Offenders Treatment Adherence
  • 20. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 4: Sell your outcomes; don’t beg for funding!Which of your organizations is selling tragedy and trauma?
  • 21. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Sell success, not problems! www.abalimi.org.za
  • 22. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! • Nonprofit organizations should research corporates to find out how they can help them improve their strategic position. • “Pitch to investors” rather than simply write and send of hundreds of proposals to unfamiliar investors. • Make sure that companies that want to invest in your cause can easily find you! Pitch CSR Demand Favourable Policy Supply Research and Pitch – don’t mass mail
  • 23. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Would you look at a proposal of these orgs?
  • 24. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Brand is the sense that people have of an organization or product. It is frequently intangible yet has meaning. Brands can be so powerful that they can motivate people to give their lives to a cause. It is more than just: • Name, Logo and Corporate ID and Look • Reputation • Purpose • Customer Experience • History, successes and failures A brand for your organization?
  • 25. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Does the brand of this good organization excite you?
  • 26. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! …and the brand of this organization?
  • 27. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now!
  • 28. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 5: Demonstrate value-for-money Investors and Customers experience value-for-money when you satisfy their needs at a reasonable price and risk. Photo by Calvin Wallace
  • 29. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Are you substantially (e.g. 2-5 times) better than your “competitors” at: 1. Having the required social impact / $ paid or invested (some social enterprises even pay the investment back with profit.) 2. Accounting for your social impact – social accounting? 3. Reporting on your progress (in real time…)? 4. Improving your investors’ and/ or customers’ strategic position? Demonstrate value-for-money
  • 30. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 6: Pursue partnerships with businesses Help Businesses to : Honour responsibilities Increase demand for products and services Develop favourable policy environment Secure supplies of valuable inputs
  • 31. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! The BEE ownership partnership
  • 32. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 7: Earn income; don’t rely on donations It is immoral for your nonprofit organizations to rely on “donations!”
  • 33. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! • “Pioneer Human Services has been nationally recognized as a model social enterprise. Since our founding in 1963, we have served over 100,000 people through an integrated array of services including housing, employment, training, treatment, counseling, and re-entry services. Some of the people we serve are recovering from chemical dependencies; some are ex-offenders; others are homeless, but all are individuals on the margins of society.” • “Pioneer is a unique nonprofit organization in that it earns 99% of its income through the sale of its products or services. As social entrepreneurs, we combine the passionate pursuit of our social mission with the discipline and innovation of a for-profit company. ”
  • 34. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Does TADSA earn income or receive donations?
  • 35. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Social enterprises are well- established in the United Kingdom: • 55,000 social enterprises • Turnover of £27 billion/year • Employs 5% of workforce • Government has a social enterprise strategy and department of social enterprise • Legal form for social enterprises (community interest company) • Social enterprise funds (e.g. DOH has £100 million in investment fund for social enterprises.) Social enterprises in the UK
  • 36. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 8: Build highly-engaged communities
  • 37. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! • Japan won’t hunt humpback whales in southern ocean this summer for “scientific research” due to international pressure! • Green Peace ran campaign to name a whale they were tracking on satellite. • 130,000 people voted for “Mr Splashy Pants” Rule 8: Build highly engaged communities
  • 38. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 9: Embrace new media – some starting points 1. Website 2. Social Networking 3. Blogging 4. Subscription and Mailing Lists
  • 39. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! What if I Google your cause in order to find a good investment – will I find YOU? Highway Hospice comes out No 1.
  • 40. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Have you bought your cause’s keywords?
  • 41. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Does your organization have Facebook?
  • 42. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! A blog for your organization? This is one of the 39 blogs I review every evening.
  • 43. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Viral Marketing Vernon Koekemoer – a plumber at a rave in Boxburg?
  • 44. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Rule 10: Become a social entrepreneur Resources: (Time, money, expertise etc.) Purpose Fulfilled Blueprint A social entrepreneur asks how he/she can improve social impact ten-fold using existing resources! New Philosophy? New Paradigm? New Blueprint? New Rules?
  • 45. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Model 2: Recycling Tetra-Pak Rehabilitating Prisoners and Packaging waste
  • 46. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Tetra Pak Timber Plastics recycles waste and employs former prisoners NICRO manages rehabilitation SASOL ChemCity Green and low cost building materials Fibre to Paper Mills Earns incomeProvides rehabilitation Enterprise development and honouring responsibilities Rehabilitating Prisoners and Packaging waste
  • 47. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Let’s catch the social enterprise sunrise! Photo by Sung the Vagabond
  • 48. Explore, imagine, and learn to create a better future for your enterprise, and do something about it now! Good Fortune and Thank You Marcus Coetzee 082-879-91-31 Marcus.Coetzee@gmail.com www.MarcusCoetzee.co.za