NGO: OWN INCOME GENERATION STRATEGIES
NGO: OWN INCOME GENERATION STRATEGIES
Generating one’s own income is an issue that has established itself as the central issue of concern for NGOs today. Based on the successful experiences of different non-profit organizations in Latin America, the following strategies are proposed:
Stimulate the collaboration and participation of companies. Not necessarily as financiers but by proposing a way to improve their image and be part of the solution to social problems through strategic alliances and articulations with other institutions from different sectors.
Use the NGO’s experience and expertise in financial management. To create a credit institution that generates profits and that allows to continue financing social projects and even serve as a source of leverage to generate projects with private companies. (A very successful case is that of the Foundation for Higher Education – FES in Colombia and, in Peru, that of the Microfinance Portfolio of ADRA Peru).
Articulation with companies and philanthropic organizations for the implementation of Social Impact Bonds in Peru. According to the Multilateral Investment Fund, a member of the IDB group, Social Impact Bond is a society in which impact investors (investors seeking social impact as well as financial returns) and philanthropic – non-governmental – organizations assume the risk of financing a solution to a difficult social problem. Once NGOs and social enterprises receive working capital from private investors or philanthropic organizations, they can work directly with their communities to implement an effective social service, for example, a reintegration program for recently released inmates. If these organizations are successful, the government pays private investors for the positive social outcomes. As a result, governments are able to transfer the risk of trying innovative programs by paying only when there are results, NGOs can access flexible, longer-term funding, and taxpayers receive more rigour, responsibility, and value for their money. In Latin America, only Brazil and Mexico have begun to develop this model, which is already generating an important financial movement for NGOs.
Develop consulting or social research as a sales product. Related to the Line of Action in which the NGO is specialized. This type of product is of great relevance for the execution of major State projects, especially during the five-year term of office.
Generate a profitable use of own spaces. To have warehouses, offices or other real estate not used temporarily for rent to interested natural or juridical persons.
Sales of services. Specially related to the articulation of projects with the State and the private sector in which the NGO has vast experience.
Make investments with third parties and start your own business. Given that many organizations do not know the rules that govern the market or have not made an adequate analysis of existing supply in the area that is intended to incursion, the level of failure of this type of ventures is relatively high, say experts. The identification of the product and the market niche, the incubation of ideas and their development often require the injection of external funds and for relatively long periods. Governance and decision making are also aspects that deserve attention, since NGOs, with a general functioning as non-profit associations, must move on to solve issues and problems that are of the world of profit and profit. There, inclusive and democratic decision-making does not ensure effectiveness, and on the other hand, expeditious resolutions that ensure economic viability often go against participatory mechanisms, with the corresponding possible tensions. In addition, the legal framework does not appear to be conducive to the development of commercial ventures by nonprofit organizations, which often requires special arrangements and careful attention to certain protocols.
On the other hand, academic and activist opinions regarding a preponderant factor for fundraising agree that NGOs with professionally managed communication and marketing structures are those that have the highest public visibility, build the strongest corporate reputation, and are the most attractive to companies and individuals who wish to volunteer. However, the areas of communication and organizational marketing are the first to be affected when the budgets of the organizations decrease or a crisis is foreseen, thus generating circles that are not very virtuous.
Some of the MOST SUCCESSFUL and outstanding COMMUNICATION STRATEGIES are:
Dissemination of NGO actions. Actions such as updating websites with the activities of the organization and free downloading of documents; continuous interaction through social networks; publication of success stories, books and bulletins on topics of general interest and written for a wide public, which are often carried out in agreement with universities or public bodies; carrying out publicity campaigns in relation to anniversaries or commemorative days; some of them linked to international days for many topics that are of interest for development action.
Establishment of alliances with the media. It is a key tool for repositioning the NGO and attracting new funders, in addition to the possibility of generating a truce with the main body that often disseminates ambiguous concepts about the administration of funds of non-governmental organizations.
Works for Taxes
Law Nº 29230 – BUILDING LAW FOR TAXES, is a modality of public investment that allows the private company to advance the payment of its income tax, executing quickly and efficiently public investment projects of the national government, regional governments, local governments and public universities.
