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.

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First published in the SmallChange.ngo blog in July 2018.

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