I have just started working on business models for NGOs. It is actually quite interesting to see that not-for-profit organisations have similar needs in terms of business modelling than the business sector. Although not many organisations want to admit it, some early adopters (or change agents) in the NGO world are realizing that there is no way around applying modern management practices to their organizations if they want to survive…
As soon as I have some results from my work with some NGOs I will post the material on the Web. As usual, interested people may contact me by email.
The NGOs have different point of view. Actually the NGOs are non-profitable organizations. But they have the organizational structure like other business organizations. As they are non-profitable, they have some different plans to expand their business, they do not have sales and marketing type department or activities.
By the by, I am doing masters thesis in Business modeling of microcredit. Microcredit activities are performed by NGOs and it is the major activity of them. I worked 6 years in NGO sectors in a developing country.
Sazzadur
Sweden
sr_tusar@hotmail.com
Personally, I think this is a rather limited view of NGOs. If you look at Oxfam, for example, they most definetly have a sales and marketing department. Some NGOs may uniquely rely on donor money and thus donors, but an increasing number of not-for-profit organizations rely on new business models. One of the reasons for this is exactly because they want to break free of donors… And anyways, a more “customer oriented” approach, rather than donor oriented, can only be healthy for the NGO sector
I mentioned about the NGOs in developing countries. Oxfam is probably UK based NGO. In my country, many NGOs got non-refundable healthy fund from Oxfam to compensate cyclone victims.
Many NGOs always want money from donor although they have to run their business with their own fund. NGOs always want to admit poor people as their members, but they do not have traditional sales and marketing department like commercial organizations. They try to convince and motivate poor people to become their members and they can show their existing members. You can say this activities are sales/marketing activities.
/Sazzadur
I model businesses and NGOs. NGOs have a slightly different orientation than revenue driven businesses. The structure of NGOs is oriented around funding rather than revenues. In this respect their “customers” are donors. From a modeling point of view “consumers” of the NGOs’ product are classified as beneficiaries. Sales and marketing constructs indeed exist and their message is targeted towards donors. A donor is any entity who has an interest in supporting the beneficiaries as a class type.
If an NGO breaks free of donors than they are modeled as any regular business with the extra spin of non-profit branding. Think of Paul Newman’s food products, Newman’s Own, where their profits, over $125 million, have been donated to charities. The difference between them and for-profits is that they don’t have to deal with tax consequences and shareholders otherwise all other business considerations are the same.
My focus with clients always begins with identifying what their strategies are for sustainability. This means they must develop value propositions that resonate with their customers with consistency and persistency. For NGOs this is a major challenge as their customers are donors. Donors are segmented no differently than revenue markets. Some fall into charity de jour, others have a binding relationship with the targeted beneficiaries and some others participate to get a brand lift for their own company or agenda.
All businesses, this includes charities, must have serve others in order to survive.
Hi,
I am a management consultant currently working for an NGO, my first not-for-profit experience. To help move the NGO forward I am very interested in a business model that works in an environment with 2 sets of customers and multiple stakeholders.
The two sets of customers are:
1) donors (individuals, companies, institutions)
2) the beneficiaries
Looking forward to any tips/tools.