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Dear Prof. Garain

I found you as an expert on NGOs while researching for an article I am writing on need for NGOs to be self-sufficient/economically independent.

I am journalist who also writes for Karmany- a company that connects social enterprises with prospective candidates. Currently, I am working on an article on NGO sustainability. Could you please answer following questions for the same:

1. In what ways can NGOs be economically self-sufficient? I think one way could be charging for products and services provided to less-privileged sections of society they cater to. What are some other ways except donations/charity?

2. Can you provide two examples of NGOs that could not sustain themselves because of lack of charity/donations i.e. NGOs that were otherwise aligned in their objectives but could not operate because they were totally dependent on outside resources?

3. What is the difference between NGO and social enterprise? If NGOs also make their revenue model business-like similar to social enterprise (in order to be financially self-sufficient), how can NGOs be differentiated from social enterprises?


A bit about me:  I have Master's in Journalism from Harvard University. I write on a freelance basis and have written for publications like Forbes, Times of India, Outlook, Femina, DNA After Hrs, Chicken Soup for the Soul, among others.

I look forward to hearing from you!

Regards
Smita Pranav Kothari

Answer
Dear Smita

Interesting!

It is difficult to get/give answer for such vital questions you asked at this place due shortage of space, time, etc. Anyway, let me give you my views:

1. Self financing or financial sustainability for an NGO is very critical for its own survival. It can make a good beginning with membership fees, service charges, sale of products, consultancy work, training fees, renting out its premises/equipment for meetings/events/activities, space selling, subscription fees for its newsletters/publications, etc. to outsiders, employee driven consultancy fee sharing, among many others. One needs to assess its own internal expertise and market the same for revenue earning.

2. Example of NGOs that failed to sustain without charity. Earned revenue is not a priority as yet in India.  You may randomly pick up any NGO and analyse its earned revenue. It will mostly fit your bill.

3. legally there may or may not be in difference in NGO or social enterprise. one can run a social enterprise in either profit or not-for profit sector. However, social enterprises are different from traditional charity/welfare oriented NGOs as they are managed professionally with a eye on revenue model.  social enterprises are concerned to be financially viable, while some NGOs with a revenue model aims at generating some revenue from its economic activities.

Hope that helps

Dr Garain  

Social Work

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