Monday, 9 November 2009

Pitfalls of the Traditional Non-Profit Model

A couple of months ago, an old friend who I had not met in a long time mentioned that he would be coming for a fund raiser to a restaurant five minutes from where I live. It was an opportunity that I would not miss, both because I would get to meet the friend and also in my view I would get to meet some people who work towards the improvement of the education sector in India. Given that it was a fund raiser, I do not need to state that this entity is a non-profit organisation. I was quite intrigued with this organisation that recruits high ranking professionals to teach in low income schools. So with a lot of expectations I went to the event; only to leave with a lot of scepticism and disappointment.

My disappointment had nothing to do with meeting my friend, which if anything at all was such a pleasant meeting. I was absolutely amazed to see that the last decade has not changed him and that his involvement with this organisation was genuine without any hidden agenda or motive. The disillusionment came more from the event, the way it was organised and how this organisation means to support itself.

The venue was a high end restaurant of South Mumbai and hence the expected attendees were the high earners and the elite. The crowd was exactly such, however, they were not present because they wanted to know more about the organisation. Most were present to attend a party, a social gathering where they could have a good time. In addition, there was a small goody bag being distributed, I am sure that came from the sponsors, however, I think the sponsorship for a good bag could have been exchanged to get something for the children that the organisation caters to.

I am not against having a good time or using good times to raise money for a good cause; however, I do feel that with little information being spread about the organisation and its aims, any fund raising attempt fills the coffers for a temporary time frame. Soon there is the need for another fund raiser. This modus operandi prevents the organisation from scaling efficiently and operating on a sustainable basis.

Voluntary contributions of cash and kind render most non-profits less effective than optimally required. It prevents the good behind these organisations from penetrating the society at large. The few devoted people work long and hard with a small infrastructure base to support them. It is their own personal network that they need to tap into to get things moving. It is a very slow and localised method. Kudos to people who put in all the hard work to promote such entities, but in my opinion, their efforts would be more worthwhile if they had a professional set up, with a core team that was being paid to do their job, a board that cracks the whip when required and an advisory committee of those who use their experience and network to further the cause. Any organisation that is only as big as its founder sees its growth stymie.

Non-profit organisations should be run as healthy businesses, with the difference that the money they make is not taken out but reinvested into furthering the cause. Social enterprises should pay those who render services and do not depend on volunteers to run the entities. Self sufficiency should be the aim of social ventures. Organisations that have followed such models have scaled up, penetrated deeper and have a future beyond the founding entrepreneur. In order to grow as a nation we need to sustain the good work and not rely on individual efforts. Maybe the non-profit definition needs to change from working for free to working for a fee to be free.