Background for Working with NGOs

From NGOPedia

At the end of this section you will have a better understanding of the following:

• Millennium Development Goals in relation to NGOs
• Why the NGO sector is important
• Changing roles of NGOs
• Value and size of the global NGO sector
• Challenges NGOs face today
• Benefits of working with NGOs
• Opportunities for Technology Service Providers

Millennium Development Goals in relation to NGOs

The publishing of the Millennium Development Goals (MDGs) by the United Nations in 2000 has been viewed by many as a milestone event for development initiatives in Africa – a guide for development in Africa. It set out a series of targets for Africa and the world to address the African situation. One of the MDG’s objectives is to work towards the establishment of a sustainable and competitive Africa. In order for Sub-Saharan Africa to become competitive and realise its potential as a significant player in the world economy, it is necessary to look long and hard at the gaps that exist in terms of the MDGs (MDG 8 in particular).

By actively bringing the three key players together namely, public, private and civil society sectors, the prospect of achieving the MDGs is greatly increased. Within the civil society sector, NGOs are recognised as having particular significance as powerful agents of the main economic accelerators.

In September 2000 the Millennium Declaration was adopted by 189 nations and signed by 147 heads of state and governments. The Millennium Development Goals comprise eight goals which were drawn from actions and targets contained in the Millennium Declaration and were adopted as a minimum measure for achieving poverty alleviation and development to be achieved by 2015.

Millennium Development Goals

Millennium Development Goals (MDGs) are:

1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a Global Partnership for Development

The Millennium Development Goals Gap Analysis concluded in 2008 that the biggest MDG gap exists in Sub-Saharan Africa and although progress has been made in some areas, there exists an imperative for greater mobilisation of resources through the involvement of government, private sector and civil society. MDG 8 – Global Partnership for Development – has been accepted as the first priority in order to achieve the other MDGs.

As the MDG Gap Analysis indicated, investments in PPPs, government/donor sponsorship and CSR are not sufficient. Collaboration between all three sectors is necessary, thereby creating a Global Partnership for Development, with civil society recognised as a significant contributor and strategic implementor. The objective is the “sweet spot” in the below diagram.

Partnerships for Development - NGO Ecosystem

The MDGs and ICTs

For this partnership to be effective, however, it is widely accepted that there is a pressing need for improved information and communication technology (ICT) functionality, skills, and access. ICT, a resource that is known to dramatically improve output, effectiveness and efficiency, is lacking in many NGOs. This is specifically spelled out in MDG 8, Target 5.

Why is the NGO sector important?

In the absence of adequate local infrastructure throughout Sub-Saharan Africa, NGOs work within local communities to develop skills and foster socio-economic growth and change. They offer a range of essential services that increase the access of poor people to resources around health, education, food security, economic development, human rights violations and policy development, and provide the voiceless with opportunities to speak out and be heard.

More specifically NGOs are:

• Active in all accelerators of economic growth –such as education, innovation, jobs and opportunity
• Key influencers of local government policy, advocacy and third party validation of technologies for development
• Key enablers to bring the benefits of relevant, accessible and affordable technology to the next 5 billion people (see pyramid levels 2 and 3 below)

World Population Pyramid

Given the significance of NGOs in development and economic growth, it is important to know how they operate and what roles they play in society.

The changing roles of NGOs

Since1994, NGOs have moved away from playing a strictly advocacy role to legitimate engagement in development and are seen by the state as significant partners together with the public and private sector (CSI) in the delivery of essential services.

Global economic growth during this same period led to a world-wide increase in the amount and availability of funding and resources. As a result, NGOs and their processes have achieved greater visibility, often becoming leading partners in public and private cross-sector collaborations. In order to accomplish this, they have needed to become more business-like in addressing the needs of their supporters.

Some of the key trends that have developed since 2000 being addressed by the development community include:

Public-Private Partnership (PPP): South Africa defines a public-private partnership as a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. This approach gained popularity immediately after the MDGs were published.

Corporate Social Responsibility (CSR): Also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB) and corporate social performance, CSR has been defined as “a commitment to improve community wellbeing through discretionary business practices and the contributions of corporate resources ”.

Corporate Social Investments (CSI): These are the initiatives or actual contributions made by a company towards community upliftment or socio-economic development.

Creative Capitalism: A term popularised by Bill Gates, American entrepreneur and Microsoft chairman, at the 2008 World Economic Forum in Davos, Switzerland, it refers to an ideology that calls for a new form of capitalism that, using market forces to better address the needs of the poor, works both to generate profits and solve the world’s inequities.. With the slogan “doing well by doing good”, it is manifesting in new business models that benefit both business and community.

Sustainable development: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” . The development of eco-friendly products and services and sustainable practices and business models for nonprofits and businesses which address the needs of the disadvantaged and take into consideration available resources and the environment, are all examples of sustainable development.

The development of innovative business models and new ways of engaging with the disadvantaged presents not only enormous opportunity for impact, but also significant challenges for civil society. Faced with this reality we might do well to bear in mind the words of Holly Ross, Director of NTen in the United States: “Collaboration is hard, messy, and uncomfortable. But it works.”

The value and size of the NGO sector

The information below is sourced from the following reports which are recommended as additional reading.

• The John Hopkins Non-Profit Comparative Research Project
• The South African NGO ICT impact survey 2007 conducted by World Wide Worx for SANGONET
• NGO Landscape analysis by Microsoft

Globally, there has been a dramatic expansion in the size, scope and capacity of NGOs since the 1990s as a result of economic globalisation and the expansion of telecommunications. The global NGO sector is a $1,3 trillion industry (equal to the world’s seventh largest economy), which employs over 40 million people and serves billions more in mature and emerging markets.

The table below shows three developing global regions illustrating growth patterns of NGO expenditure and estimated IT spend. See the figures for the Sub-Saharan Africa region, noting the % growth and relatively small % total spend.

Where do these resources come from?

Income generated through donations, grants, sales, membership dues, fees for services (contracts/tenders with government and the private sector) plus interest on investments is in excess of R16 billion per annum ($2,3 billion).

In 2007 R3 billion was contributed through corporate social investment. More than two million people volunteer their time, talent and expertise to NGOs annually, estimated to contribute a further R5,1 billion in sweat equity.

How are most of the resources used?

Over 750,000 people are employed in the NGO sector – a number greater than in the mining industry.

There are over 100,000 non-profit organisations registered in South Africa alone. How does the large NGO sector in Africa make use of ICT?

• NGOs and small-medium enterprises (SMEs) require more or less the same ICT solutions with the same sophistication level.
• 95% of NGOs use Microsoft software.
• Specialised software has a very low rate of usage – up to 33% of NGOs adapt/develop/ commission ICT development
• 75% of NGO’s outsource ICT.
• 38% of NGO staff telecommute (work outside the office) particularly in South Africa.

This is an exceptionally high figure for any market and indicates a powerful area of differentiation from other markets.

• Despite these figures, only 52% have a technology plan in place, which suggests that half of all NGOs are likely to be caught off guard by technological advances.
• The majority of NGOs utilise ICTs for administrative needs and email.

If one considers these statistics, it becomes clear that a range of opportunities for commercial technical service providers exists. However the context in which NGOs operate is unfamiliar territory and there is a need to understand in greater depth what drives these organisations, how they survive and the challenges they face.

The challenges facing NGOs today

NGOs face many challenges in a shifting environment of social needs. Their new role as significant partners in development carries much higher levels of responsibility. Long-term development agendas place additional burdens on the organisations to become more competent in areas such as communication, documentation, financial controls and reporting, research, and monitoring and evaluation. It is in these specific areas of function that support is particularly needed and this implies a potential market that has an imperative to grow and develop. In the current financial situation there is greater urgency to find new solutions and the commercial sector has the expertise to assist in developing these solutions. Some of the challenges facing NGOs:

Availability of funds: In a context of growing socio-economic challenges, the scarcity of available resources coupled with new donors/funders (with different requirements and expectations) makes access to funding more challenging.

Moving to sustainable business models: NGOs need to look at sustainable funding and other alternative models in order to continue to exist. They have to explore ways of applying business principles to their functioning without compromising their objectives.

Changing funder/donor requirements. Funding that is available from new donor and funding sources has different requirements. That will require faster and more concise proposal writing, comprehensive project management and effective reporting.

Creating partnerships. Partnerships are the embodiment of the MDGs. Joint projects undertaken by government, NGOs and the business sector have real benefits and outcomes that help to address critical socio-economic issues, but this involves the development of skills that many NGOs do not currently possess.

Limited business acumen (planning, budgeting, revenue generation). With the adoption of new business models, business-like practices are also introduced, however most NGOs have limited expertise in this area.

Limited IT skills. All of these challenges can be addressed to some degree through increased and more effective IT skills and access. However, many NGOs function with few IT resources or skills and in the rural areas in particular, IT skills are limited.

Despite the challenges faced by NGOs, they continue to survive, grow and indeed develop; in turn helping to develop the communities they serve. They continually widen the circle of access and empower more people to enter the job market while providing essential services that aid development and growth.

Why work with NGOs?

So, why should your organisation work with NGOs? What is in it for you? In the early 2000’s there was a huge surge in awareness and a flurry of investment in socio-economic causes world-wide. A number of new trends developed during this time global marketing awareness campaigns were launched, businesses committed to CSR/CSI initiatives and people donated time and money to causes around the world.

Many of you have CSI or CSR initiatives in place. You donate old or used computers, run a volunteer programme to assist a community project, or make cash donations to multiple organisations or causes. What were your objectives? What were you trying to accomplish? What impact did you actually make?

Historically, organisations have engaged in CSI/CSR initiatives in order to:

• Increase sales and market-share by reaching new markets and introducing new products
• Strengthen brand positioning and market awareness
• Attract and retain the best employees
• Decrease costs through product and cash donations
• Develop the local economy and community for future growth

Besides these traditional business justifications for social responsibility, recent developments and market conditions have given rise to a new and urgent rationale for this type of investment. Two examples of this are Creative Capitalism and Sustainable Development. The growth experienced in the late 1990’s and early 2000’s created globally intertwined economies and impacted local environments in ways never experienced before. Individuals and organisations became aware of this impact, and started to take responsibility for it.

Defining Creative Capitalism

Creative Capitalism was introduced by Bill Gates at the World Economic Forum on January 24th in Davos, Switzerland. In his address he states: “Capitalism harnesses self-interest in helpful and sustainable ways, but only on behalf of those who can pay. Philanthropy and government aid channel our caring for those who can’t pay, but the resources run out before they meet the need … I like to call this new system creative capitalism – an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.”

Gates further argues that technology can be used to facilitate this collaboration and can deliver effective solutions that work for larger groups of people.

Defining Sustainable Development

The concept of sustainable development emerged in the 1990's and, with the increase of globalisation, blossomed into a world-wide trend . The movement’s focus has shifted from business sustainability and growth to an emphasis on social, economic, and environmental sustainability. The concept is attractive to businesses around the world, involving as it does the creation of innovativeand effective low-cost, environmentally friendly solutions. To quote Rosabeth Moss Kantor of Harvard Business School:

“Companies that are breaking the mould are moving beyond corporate social responsibility to … social innovation. They view community needs as opportunities to develop ideas and demonstrate technologies, to find and serve new markets, and to solve long-standing business problems.”

Technology businesses can play an effective role in the field of sustainable development. New products, services, and solutions can be delivered economically via technology to communities and individuals in an unprecedented manner. In their efforts to deliver powerful interventions and communicate widely and meaningfully, civil society can benefit from the technology-based systems, techniques, workflows, and knowledge of the commercial sector, Working together using their combined strengths, , civil society and the private sector can create long-term sustainable solutions.

Can you profit from non-profit?

Here are some examples of “doing well by doing good.”

Working together we can!

We now know that the global economy is intricately related to local communities. The closure of a mine or a regional automobile-manufacturing company affects hundreds of people in local communities. You know that the organisations with the most experience in engaging with the disadvantaged are the non-profit organisations. You also know that these organisations are faced with increasing challenges that your organisation could help to mitigate. As a technology service provider, your organisation is uniquely resourced and positioned to help nonprofits not only with technology but also with their management and governance. In addition to cash donations, your contributions can include the creation of short-term solutions or longer-term sustainable programmes, products and services.

We will explore this in greater detail later, but your contribution could include:

• Volunteer hours
• NGO-specific tools and services
• Joint projects with experienced NGOs
• Management, sales & marketing experience

CSI/CSR initiatives reap long-term gains for the economy, creating jobs, stable environments, skills and greater socio-economic growth. However, as some of the above examples indicate, and as the premise of Creative Capitalism states, it doesn’t have to be for free or non-profit. Given some thought, programmes, products and solutions can be developed that are profitable and beneficial for the business entities while creating long-term opportunities for others.

Opportunities for Technology Service Providers

Hopefully, you now understand why the non-profit community is important for socio-economic growth and why it is financially, socio-economically and ethically important for your organisation to support their work. You may also want to get involved, and make your own CSR initiatives more impactful. Maybe your past interventions haven’t been as successful as you would have liked them to be and you believe that if you work with the experts, your future work will be more effective. Hopefully, you can also see that your involvement with the non-profit community will benefit both your organisations as you will learn from each other.

How can your work help?

In the last section we highlighted some of the reasons businesses get involved with socio-economic causes – these were to:

• Increase sales and market share
• Strengthen brand positioning
• Attract and retain the best employees
• Decrease costs
• Develop future economies

As a technology company, in what specific ways can your organisation help? We have listed below some of the challenges faced by NGOs today, as outlined previously, with some possible service provider solutions:

What IT support do NGOs need?

It might be valuable to note here, that although NGOs and SMEs serve a different customer base, have somewhat different processes, and SMEs have tighter funding constraints (requiring cost-effective solutions), they operate in a similar environment and require more or less the same ICT solutions with the same sophistication level.

The more you know about the non-profit communities, the better you, as a technology service provider, will be at providing an affordable, workable technology solution for them.

NGOs and SMEs have needs in the following areas:

Areas of ICT Support

There are many ways in which your organisation can get involved, and there are a number of organisations and resources that can advise and support you once you make that decision.

What’s next?

Below is a list of the type of services your organisation can offer: Technology services – there is a great need for relevant and sustainable NGO-specific solutions such as:

• Development of new, relevant and targeted applications
• Mentor– assist NGO professionals in business technology and life skills
• Volunteer– give freely of time and experience in a targeted manner
• Advisor– become involved as an advisor to help overcome specific challenges
• Consultant– help to develop viable business models to render sustainable ICT support to NGOs

Some questions to ask that can help you with your decisions:

• Should we get involved with the non-profit sector andin what way?
• How do we decide what level of commitment we should make?
• How best can we contribute?
• What type of involvement best suits our business needs?
  • Our interests?
  • Our community?
  • Our employees?

You will be able to find an appropriate solution for whatever level of involvement your organisation is willing and able to commit to. Not all assistance requires a huge investment. NGOs need various types of input, ranging from quick and simple solutions which may have high value, to complex, end-to-end interventions with high value and even greater impact.

Here are a few practical possibilities for engagement:

• Create a simple website for an NGO that manufactures and sells shoes made from recycled materials in Kenya
• Build a killer PowerPoint deck for an NGO to present an exciting Sustainable Employment Project, in a low-cost housing settlement near where you live, to potential project funders
• Write a simple Access solution to help an NGO working with orphans to keep track of the recipients of its newsletter
• Participate in a huge project to build an end-to-end solution for an international NGO delivering emergency relief in war-torn Sudan

It does not matter how simple or complex the intervention is. What matters is the impact it has on the work of the NGO and how sustainable the interaction between NGO and service provider is.

Check the picture if that makes sense:

There are different kinds of products when working with NGO’s: A simple excel spreadsheet is low in complexity and ok in value. But maybe a huge end-to-end solution (all the costly steps of finding a problem, developing a solution, implementing the solution and monitoring it spread out over multi locations and even across borders with many stakeholders).

Resources & links

• The John Hopkins Non-Profit Comparative Research Project
• Overview of NGO Landscape Analysis documents by Microsoft (Link needed)
• South African NGO ICT Impact Survey 2007, conducted by World Wide Worx
• Bill Gates on Creative Capitalism
• creativecapitalismblog.com
• www.gatesfoundation.org/annual-letter