Saturday, October 23, 2010

On Enabling Non-Profits to Create Profitable Business


Well, my intention is not to create a paradox about "profitable non-profits," but there is always a feeling deep inside my heart that if one can actually make economic sense out of charitable/CSR activities; one should really try to achieve it as a goal, and orienting his efforts towards that front. The spark that caused such an entry entry into this blog is this very same thought I had when I visited the road-show conducted by an NGO that receives constant support and appreciation from our HR.

This NGO does a great work by supporting the cause of the girl child. They provide support in the educational needs of school going children, and also provide mid-day meal programs, etc. Recently they organized a campaign in the office premises to promote their efforts. They also set up a stall to sell some household items/decoration material, etc. Proceedings from this sale shall be directed towards one of their several programs. I am happy with the response they received from people in the office, but at the same time slightly apprehensive about the valuation system they might have used to price the goods on sale.

May be such thoughts resulted from the pricing exercises I was undertaking with the team, or the recent influence of articles from experts like McKinsey. But honestly, I didn’t like the way items were priced in the stall. Other than that the proceedings of this sale shall be spent towards a bigger cause, there wasn’t a good enough reason to buy those products. I even imagined asking the HR assistant why we can’t take a step forward and sign a contract with them to design our corporate gift items, now that we are sponsoring this organization for a few years now. We can actually take pride in ourselves for being able to support an NGO which fights for a cause. It would also add to our brand value as organization that facilitates its CSR roles and also creates us a certain comfortable reputation among clients when we gift them with items created by the lesser privileged people we support. But would the HR or Corporate Communications buy this idea? May be not.

Why? Because I find no other apparent reason to buy an unfinished gaudy-looking candle measuring a few inches for an uncomfortable price of 50Rupees. Same was the story with the bags on display that had large capacities, but handles not durable enough to carry the weight of things they are designed to contain. I left the stall with the thought “Is it impossible to design good products with an aim to support charity? Is the cost equation so elastic in a society like ours?”

I was (and still am) of the opinion that unless philanthropic efforts are able to retrieve some value of the funds they receive or put to use, economic instability will remain. Taking a second look at the stall and its offerings, I started thinking what can be done differently than just pumping more money onto such initiatives. It would be great if we could encourage this NGO to create and market products in a presentable and profitable way. I see no wrong in that if it could transfer part of such value created, to the people who actually work on it, and see to it that it enhances their life and that they are not in a position to do anything and everything (like usual businesses do) to retain a corporate sponsor or a reputed client. This notion goes very well my concept of an ideal non-profit.

Do you think it makes sense of teaching a non-profit how to create and sell products a profitable way? Do please comment.

Image courtesy: Wilson Chin

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