Why Can’t NGOs Be More Business-like?



HOW often have you heard that non profits need to be “more business like”? Or witnessed the awe that greets people who cross over from the private sector to a job in an NGO? Despite the global financial meltdown, relentless reports of corporate malfeasance and catastrophic breakdowns in governance at some of the most respected businesses, the corporate sector is continually held up as a model of efficiency, effectiveness, leadership and innovation to non-profits in India and around the world.

If only, we are told, we would adopt ‘corporate best practices’ in strategy, systems, structure, skills, staffing, governance and, increasingly, even style, we might finally break out of the mindsets that keep too many NGOs small, slow and starving.

With corporate support promising volumes of new resources, NGOs across India are scrambling to acquire the board members, metrics, skills and language that will, they hope, unlock their slice of the CSR pie.

It’s been almost two decades since I escaped the corporate sector to find purpose, wholesomeness, significance and, yes, learning on the non-profit side of the fence.

It took me a while, and much pain and frustration, to shed my MBA hubris and unlearn the shallow paradigms that a decade in the glass towers had imprinted on me. 

Let me not discount the value of the many tools, processes, technologies and disciplines prevalent in the corporate sector that the non-profit sector could benefit from using. Or the fact that many NGOs would be well served by applying some hard-headed business logic to their operations.

Combining best of both

As I never tire of preaching: Non-profit is a tax status, not a business plan. Non-profits could also do well to emulate the ambition and agility that 21st century businesses demonstrate. It is as vital, however, that we recognise the limitations of business thinking and fully appreciate the value of much non-profit expertise.

Take, for instance, the fusion of head and heart that is virtually a prerequisite for decision-making in the non-profit sector. As businesses begin to grapple with customers, employees and investors demanding values as much as value, the pragmatic idealism that is the hallmark of a well-run NGO is a trait in ever greater demand.

So too, the ability to attract and retain staff where remuneration is not the sole or even the main, source of motivation at a time when businesses aspire to become more mission-driven. Consider the potential value to businesses of experience in the art of building consensus across diverse stakeholder groups.

What can business learn from organisations whose only real asset is public trust and whose entire existence depends on their ability to attract and motivate supporters on budgets that would not cover a day’s marketing expense at a corporate?

Increasingly, I find the non-profit sector polarised between those who espouse the corporate world-view and those that reject it in every form. Not only do these two groups seldom interact, each appears to hold the other in utter disdain. The schism obviates any possibility of combining forces or of cross-fertilising ideas and values.

On every issue, from gender-based violence to education and the arts to governance, interventions are fragmented rather than seeking to combine the best of both world-views. This polarisation also prevents the development of shared norms, narratives and networks, which in turn erodes the credibility of the sector and plays into the hands of those who seek to discredit it.

Business commands virtually unlimited financial resources. It enjoys great leverage with the mainstream media – through advertising as well as ownership. In an era when a nation’s performance is measured more by ‘ease of doing business’ and market indices, than by its progress on human development markers, big business barely needs to exercise more direct political clout through campaign contributions, lobbyists and worse.

Distinctive value of social sector

CSR funds and donations from individuals with active business interests becoming the mainstay of the non-profit sector should be cause for concern. More worrying than state capture, media control and power over NGO purse-strings, however, is the risk of having mind-sets, values and belief systems overrun.

A substantial part of civil society’s role comprises addressing the failings of state and market and curbing their excesses. The ability to design and deliver unfettered by either quarterly reporting requirements or election cycles is, or should be, a key strength of the social sector.

Efficiency vs. justice. Programme design tailored to 12-month reporting vs. the slow, often erratic processes that lead to sustained, and sustainable, change. Inclusion and diversity vs. the filter bubble that is the typical corporate boardroom.

Recognising the incredible levels of innovation and ingenuity that are required to survive on the margins of our societies vs. viewing people as ‘beneficiaries’ of our largesse.

Photogenic, feel-good interventions vs. defending our basic democratic rights and freedoms. Self-congratulatory donor engagement vs. deep partnerships that change hearts and minds.

If we are to emulate the private sector, I wish it would be in being able to set aside competitive differences to lobby in unison for policies that benefit the sector as a whole; or in seeking to simplify and rationalise the regulatory frameworks that keep us unsustainable and vulnerable; or to work together on developing norms and standards that strengthen our collective credibility; or just to make more serious investments in our people, our capabilities and our institutions.

In the television series Uncommon Ground and the book of the same name, Rohini Nilekani anchored dialogues between renowned individuals from business and civil society. Each dialogue, whether on land or financial inclusion, energy or employment, highlighted the clear and differentiated strengths and weaknesses of the private sector and its social counterpart.

In the decade since the programme was telecast, the interdependencies and conflicts between what Rohini calls sarkar, bazaar and samaj, have become much starker.

If we are indeed to make a dent in the wicked problems and complex issues we confront, we will have to collaborate in ways that are built on mutual respect and clear recognition of each sector’s distinctive value. We need enlightened leaders in government, civil society and business to show the way.

Ingrid Srinath is the Founder Director of the Centre for Social Impact and Philanthropy at the Ashoka University. The views expressed here are entirely her own and not those of the university.

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7 thoughts on “Why Can’t NGOs Be More Business-like?

  1. I hope lots of people on the business side read your piece! Non-profits get so much advice from people in business. Even when you don’t receive corporate funds, we live in an age where the relationship is almost colonial. We try to express our vision in words they understand, translating all the time. We use their frameworks and language. And judge ourselves, or let ourselves be judged by their standards. It would be good to have corporates occasionally send CSR people for real-life experience/ internships to see how the other half has to function!

    1. Thank you Swarna. I agree entirely. I would also be glad to see more written on what businesses could learn from civil society.

      1. Yes, think that’s a great idea. We will invite someone from the corporate world to write. If you have any recommendations Ingrid – or any of our readers – do leave your suggestions here. Thank you!

  2. When non-profits scale up their projects they certainly could do with the methods and practices of corporates – whose managers have enormous experience in scaling up, structuring, logistics, technology, operations and so on. Issues arise primarily with corporate CSR objectives vs non-profit objectives.
    The world over the three key activities of non-profits can be summed up as: advocacy, intervention and communication. Non-profits are enablers for social equity. Corporate objectives override these with issues of how good it would make the corporate look and whether it will negatively impact their relationship with the state. Therein lies the core difference. So far as intervention goes the last child, the last mile is critical to non-profits, while scaled up numbers that will impress are preferred by corporates. In terms of people, corporate HR processes filter out sensitive, heart-led personnel. While non-profits are filled with these types!
    The bug bear of non-profits is that corporates that fund them aren’t open to any form of social audit of their own operations from any perspective. Whereas corporates expect to put non-profits past an intrusive screening before funding.
    I remember the head of HR of one of the world’s biggest financial institutions asking me to sign a non disclosure agreement before entering his office – when, in fact, he had invited me to conduct a workshop with his staff on sexual abuse. His reasoning was that there was information on his office board! On being asked whether their organisation would provide an undertaking on child protection he quickly aborted the entire plan! Why should corporates that fund social projects escape scrutiny for the very same issues?
    It is best that the realm of corporate CSR initiatives does not include trying to teach non-profits how to run their projects. Complementary roles are certainly possible. But changing landscape of the social projects from what is needed to what looks good cannot be good by any yardstick.

    1. Exactly, Nishit. It’s the corporate colonisation of mindsets that is infinitely more dangerous than the mere adoption of tools, frameworks or technologies developed for or by business.

    2. I have accepted for years that scale is good. But now am beginning to question that logic? Is scale that important? And why?

      1. Scale of impact is, in general, good, I think. However, people too often conflate scale of operations with scale of impact. There are many pathways to scaling impact. One is by scaling operations. Think of the global NGOs or UN agencies. But scale via having one’s model replicated, suitably adapted to local contexts, may be a far more efficient, and effective means to scale. There are also hybrid models that scale those parts of an operation where scale provides efficiencies e.g. technology, fundraising, brand and the like but customise those parts of the operation where that is ideal e.g. in service delivery. Childline India is one of my favourite examples of that pathway to scale.

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