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    Keeping the Work of
Social Entrepreneurs Alive:
The Importance of Being Sustainable

By Lisa Cannon

Social entrepreneurs around the world are putting their creative energies to work to solve some of society's most intractable problems.

Whether they are stemming the destruction of the Amazon or protecting and educating children living on the streets in India, social entrepreneurs tend to be so passionate and compelling about their work, that they are generally able to convince others in their societies to donate their time, money and skills to help get the job done.

In doing so, they often create new civil society organizations (CSOs) specifically designed to address the problems at hand in an original way. Most of the problems they are tackling, because they are big and complex, take years and even decades to solve. Thus, not only is there a need for the creation of new organizations, but also for sustaining these organizations and the benefits they produce.


Types of Sustainability

Concerns about sustainability are not unique to social entrepreneurs, they also lie at the heart of the current discourse amongst leaders of civil society, governments, private sector investors and donors the world over.

It is universally recognized that whatever the source of the initial investment to launch a social program, the benefits will not likely survive beyond the life of the investment if sustainability is not planned for and achieved. How many grain mills lie idle and rusting because there was no effective plan for their maintenance and repair? During the 1980s, when African governments were compelled to make deep cuts in social services in order to meet their debt payments to multi-lateral lenders, scores of health clinics were closed, erasing years of progress.

There are four inter-related types of sustainability that all of these parties are trying to understand and succeed in implementing:

  1. Benefit sustainability – This deals with how to ensure that the benefits accrued to society/communities from the work of social entrepreneurs are sustained with or without the programs or organizations that initiated the benefits. In many cases, social entrepreneurs are the vanguard who take risks and test out new ideas. Once they have created viable solutions, governments, donors, or private investors are more likely to put money into replication. In an era of declining public sector spending for social benefits, citizens themselves are often expected to pay user fees or contribute volunteer labor to sustain a portion of the cost of providing the service.

  2. Organizational sustainability – Another important aspect is ensuring that the organizations created by social entrepreneurs to carry out their work can become sustainable for the length of time necessary to fulfill their mission. Organizational sustainability looks at several key components of strong, effective organizations and works on the premise that all components are ultimately essential to the overall sustainability of the organization and its work. These components are: financial resources, human resources, management practices, governance, strategic direction, external relations, and service delivery. (For the definition used as the basis for the articles in this issue, see The Meaning of Sustainability.)

  3. Financial sustainability – This is a component of organizational sustainability, although the two are often confused. It is the measure of an organization's ability to raise resources from a variety of sources (earned income, local, national, international, private and public) with increasing amounts of local funding and earned income.

  4. Community sustainability – It is important to ensure that communities are empowered to create community-based organizations to provide services and/or effectively advocate with governments or private sector entities to provide the desired services.

This article focuses on organizational sustainability and, within that, financial sustainability. For social entrepreneurs and other civil society organizations, there are numerous benefits to achieving greater sustainability. For example, they can expect to see:

  • Increased financial consistency and security-they will be able to plan a three-year program and know that the necessary resources are in place;

  • Increased accountability to the community(ies) served – they will be able to deliver on promises made;

  • Increased public involvement in, and support of, the work of the organization, and;

  • Increased autonomy from external funders – they can develop a plan of action based on local priorities and implement it with funds generated for that purpose. This enables CSOs to avoid the trap of chasing money based on a donor's sense of priorities.


Moving Down the Path Toward Greater Sustainability

Read about The Meaning of Sustainability  
While most social entrepreneurs recognize the value of building sustainable organizations that can survive without dependence on external funding, there are few guidelines or examples on how to achieve this goal.

Experiences from the emerging field of social entrepreneurship provide some interesting strategies and insights that can be of broader relevance to civil society around the globe.

Dr. Carlos Garcia, Suraiya Haque and Ismael Ferreira, the three social entrepreneurs profiled in this issue of Changemakers, all started from the assumption that not only could they make their efforts sustainable, they should build sustainability into the very design of their programs.

Each succeeded in getting key stakeholders to take on part of the financial responsibility for the project. In doing so, they all defied the odds – making their efforts self-financing despite difficult economic circumstances in the communities where they work.

Ashoka Fellow Dr. Carlos Garcia has been able to achieve what his colleagues in the health field once deemed untenable. He created a private maternity hospital in a lower income neighborhood in Mexico City that is 100 percent self-financing and derives most of this income from patients' fees. Now, his model is being recognized and studied by others for replication throughout Mexico.

Bangladeshi garment factory manager, Suraiya Haque, left her day job to launch a program that organizes day care centers in the factories and was awarded an Ashoka fellowship for her idea. Haque speaks to factory owners in their own language, convincing them of the economic benefits of in-factory day care. As a result, she has engaged a growing number of factories in sponsoring these centers. The factory owners provide the space and some funding, while fees from parents cover the rest.

Ferreira collects fees to support 95 percent of the costs of running his organization. In the beginning his organization, APAEB, was supported entirely by international CSOs. During the 1980s, these groups provided more than 90 percent of the organization's income. In the 1990s, Ferreira began to make the transition to self-financing by investing international grants into organizational activities. Today, APAEB finances 95 percent of is own budget.

All three have shown ways in which organizations founded by social entrepreneurs can be made sustainable. Each of these examples focuses particularly on financial sustainability. They show how income generating strategies – that are directly linked to and reinforce the organization's mission – can both promote sustainability and strengthen its work.


When Sustainability is Even More Challenging

Sustaining a civil society organization is perhaps most feasible for organizations working on issues or needs that are recognized and valued by the community, especially those where a tangible service is provided and results are easy to see and measure.

A health clinic or a school for street children, for example, can convey their purpose and the benefits they provide in clear and straightforward terms. They can appeal to a sense of shared values and greater public good in asking citizens to support their work. In the case of health clinics, as Garcia's work shows, users of these services often can, and will, pay fees to help sustain the service.

However, where a social entrepreneur is working on an issue that the broader society does not yet see the value or importance of, they will have a difficult time raising funds locally in a manner that reinforces the main mission of the organization.

In many countries, groups working to protect the environment or human rights often struggle to raise funds. While there is a general sense in many societies that these are important issues, the direct benefit to individual citizens can often be difficult to convey or measure, much in the same way as it is difficult to precisely quantify how a financial contribution will make a direct impact. Thus, a large part of the work of these organizations lies in educating the public and influencing public opinion on the very subjects they work on.

In Rio de Janeiro, Ashoka Fellow Maria Braza who works with the elderly, commented that Brazilians like to give money for children, but don't realize that there are many elderly people in need who have fallen through the cracks of a limited social safety net. A large part of her challenge in raising funds locally will center on just raising awareness about the problem and convincing people that it is a cause worthy of their time and funds.


Looking Ahead to a More Sustainable Era

Currently, while many CSOs may perceive the road to becoming more and more sustainable as an arduous one, in many cases part of the problem lies in the nature of their design and development. In many countries, for example, there are often a large number of CSOs working on the same issue within a relatively small area.

Yes, the need is great, but when limited resources available are spent on a large number of small CSOs setting up offices, purchasing equipment and hiring a full complement of staff, the results are not always sustainable.

What is encouraging, is to see that new CSOs are forming with an eye to sustainability built into their very design. For example, in India, several Ashoka Fellows have designed lean networks and social franchises that piggyback on existing organizations to provide a service without having to create new offices, infrastructure and extensive staffing.

Donors are also recognizing that changes in their practice can also help promote greater sustainability for their grantees. In the United States, venture philanthropy, an approach modeled on the venture capital approach to business investing, is catching on as an interesting new model for philanthropic investment.

Venture philanthropists tend to invest in fewer organizations and put more funds into each investment, as well as taking a more hands-on role in capacity building and management. Among the hoped-for outcomes of such an approach are strong, well-managed organizations; a high return on investments; sustainability of the organization and the benefits it confers.

As both CSOs and their supporters learn more about the value of building sustainable communities and organizations, the opportunities to hold onto the advances made in tackling society's most intractable problems will be greater than ever.

For further information on sustainability and creative resourcing strategies, see Citizen Base Initiative, a Web site that features case studies, strategies and resources for civil society leaders and their organizations.

 

Lisa Cannon is the director of Ashoka's Citizen Base Initiative, which promotes the sustainability of civil society organizations by assisting their efforts to create and implement effective strategies for raising local funds, in-kind and volunteer support for their work. Prior to joining Ashoka, she worked for 15 years with local CSOs in Africa, Asia and Latin America as a trainer and researcher on sustainability issues. She is the author of "Life Beyond Aid: Twenty Strategies to Make NGOs Sustainable," (1998, InterFund and the Initiative for Participatory Development: Johannesburg, South Africa).






 

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