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What pisses me off about the NGO sector...

In this interesting stage of my life (post startup) - where the party line is "actively seeking next gig", I've had a rare and cool opportunity to start exploring the commercial landscape to see what's out there and what I want to work on next.

Something that has always appealed to me is the NGO sector. The chance to use your skills to actually do some good in the world. Sure, money is nice - and I want lots of it. But sometimes the job satisfaction isn't all its cracked up to be. When you look back at age 55 (young retirement these days) - how will you feel about the jobs, startups and projects you undertook?

Photo Credit: B. Baltimore Brown (https://www.flickr.com/photos/bbaltimore/9064647)

And yet. The more I investigate the NGO sector, the more broken it appears. Forget the fragmentation - if just 20% of the millions of amazing projects out there could just find a way to band together, can you imagine...

Forget the people (who are awesome). I have grown an enormous amount of respect for those that ply their trade within this sector. They're more than tireless, many are superhuman.

Here's the crux. If you think corporate politics are bad - you should just dip your toe in donor funding.

I wanted to try and outline these thoughts, because I'm sure there are many NGO's that are breaking this mould. I'd love to know who they are. One of the trends in this sector appears to be towards "social business" as opposed to "non profit". That's starting to make some sense. Making money while making an impact - a positioning I can get behind.

A quote to kick things off. From the bastion of capitalism, Private Equity...

"You’re probably wondering why a private equity magazine is writing about impact investing.Well, three reasons, really.

The obvious answer is that some of the world’s leading impact investors don’t believe they have to sacrifice financial returns to deliver social returns; indeed, in some cases, they think that addressing a social problem can actually deliver outsized financial gains. In other words, these groups differ from regular private equity firms only in the strategy they pursue to achieve their returns (and the dual proposition they can offer investors, of course).

Perhaps more importantly, though, we take the not-very-controversial view that the future significance of impact investing – the scale of its own impact, if you like – depends to a large extent on its success in gaining access to institutional money and the capital markets more broadly. And this is the audience that we speak to every day.We know from talking to big investors that they have a growing interest in this area; we also know that they’re still a bit nervous about it. So we’re interested in looking at this issue from their perspective, and examining the pros and cons in a way that’s useful to them.

There’s also a third (slightly selfish) reason: this stuff is just really interesting to write about. The prospect of unlocking private capital to help solve big societal problems – from recidivism in the suburbs to malaria in Africa – is a hugely enticing one."

-- James Taylor, Senior Editor of Private Equity International 

My fundamental problem informed from early stage investigations into this sector: you're expected to have made your money first, before you can make an impact as a senior role-player in the NGO sector.

If you want to work your way up from the bottom, you have to make an enormous lifestyle and wealth sacrifice, very contradictory to human nature (and the primary reason why I've developed such immense respect for the 1000s of committed NGO grinders I've come across lately).

WHY? Why will NGO's not pay market related salaries (broadly speaking, there will obviously be exceptions) for senior people? Or just for people full stop?

The answer lies partially in the politics of donor funding. How every donor buck has to be accounted for - to the point where some NGO's spend more time accounting for their actions than taking actions. Every donor buck wants to make an immediate impact. Not an impact to an organisation or team that might make a bigger overall impact over a longer time period.

I came across one Managing Director of a kick-ass NGO lately. He was currently earning what I used to earn 9 years ago - as a fresh faced whippersnapper in the ad industry. And I haven't been exorbitantly paid throughout my career. It was disgusting. And yet he continued on, doing invaluable work that actually helps people - on the ground - where they need help.

Have we created a situation where NGO's are scrambling for cents instead of making sense out of the myriad of problems we, as a developing country, are faced with?

There's a TED Talk, given fairly recently, that I highly recommend you watch. It tackles the some of the issues I've raised: the lunacy of donor funding, donor restrictions and procedures on how that funding can be spent - and how "impact" is best achieved.

Don't get me wrong. I know very little about the NGO sector. If I'm way off here, tell me. If not, watch this. Talk about the problem. Go hug your friends that are working in the NGO sector and say thank you.

It may sound selfish, but it looks like I'm going to have to go and make some more money to pay off debt and fund the sproglet's education - before I'm "allowed" or able to enter this sector. Perhaps. Or perhaps someone will show me there's hope out there.

Perhaps I've found a problem I want to help solve one day. One day.

TED: The way we think about charity is dead wrong.


Comments

  1. Hey Andy,

    As someone who has spent the majority of her career in the NGO sector, and still devote a substantial portion of my freelance life to it...I can't help but agree with you.

    For a lot of reasons, it does come down to donor funding. The most common experience I can relate, and hear so often, is that donors want to fund PROJECTS, not staffing or salaries - the very things that MAKE projects and interventions possible.

    Providing sustainability funding, and guiding NGOs towards becoming self-sustainable is often overlooked, and it's not always possible, with the work that needs to be done.

    Sustainability funding, like paying salaries, office rentals or just keeping the admin boxes ticking, is severely lacking, and - I believe - and (for the record) I speak in my personal capacity here! - it is the crucial error made when it comes to donor funding.

    NGOs can't attract good talent, if they can't pay a good salary. And if they can't pay a good salary, they can't get important projects done.

    ReplyDelete
    Replies
    1. So I'm not mad? (yet)

      NGO/Non Profit tends to fill the gap I guess. Governments can't do everything - which is why the fund the sector. Theoretically, if NGO's were structured more like for profit organisations - where project performance was linked to profit incentive, they'd be more efficient than government - which would work out for everyone...

      Delete
    2. Nope, you're not mad. At all, ever, I think!

      Agreed, but it's not always possible for NGOs to look at making a profit, when they were borne of a desperate need for a service.

      As for NGO support and guidance, I often feel that donors fund, but don't provide adequate support - by funding, they should be investing, and through that, guide NGOs to become profit making businesses, or at least operate like one. I completely agree with you!

      Delete
  2. And a second comment, because it comes from a different headspace...

    The NGO/NPO sector is - in my belief - most often doing the work that should be implemented by a governmental agency. Granted, our tax money cannot do everything, and collaboration/partnership between state and NGO should happen. But, I regularly feel (again, in my personal capacity), that governmental support provided to NGO/NPO sectors is also lacking. It creates a sense of desperate competition, and shows that tax money goes to aeroplanes, rather than educating children. That pisses me off no end.

    ReplyDelete
  3. howzit Andy,

    My wife has been working for a really well established NGO this past year, without going into specifics it does seem that when the economy suffers, the NGOs REALLY suffer. Half the time is spent chasing the next buck/restructuring, must be even tougher for some of the smaller entitities.

    Plus the people work DAMN hard. It really isn't about the money.
    Steve

    ReplyDelete
  4. I received a comment via email, poster wished to remain anonymous - for obvious reasons...

    "I work for a prominent NGO, and you're 100% right. Donors - especially the big Western government agencies - seem to reward NGOs for how quickly they get cash out the door, rather than the impact they deliver with it. They are ticking boxes, not thinking deeply about how they can help us deliver sustainable change. There is very little funding out there for the basics an organisation needs to run efficiently - like basic admin support or decent basic marketing/branding - or simply to be invested in innovation and time to think and connect with others. And don't even get me started on the onerous reporting requirements - a friend who used to work for one of the biggest investment banks in the world told me our NGO's financial reporting requirements were more complex than anything she'd seen in a multi-billion dollar private sector firm.

    There is a great speech on this topic here from Owen Barder of the Centre For Global Development: http://cf.owen.org/wp-content/uploads/2014-05-16-CIFF-Board-Dinner-Evidence-and-scale-as-delivered.pdf

    All of that said, and despite the fact I get paid like sh*t and work 3x harder than friends in cushy private sector jobs, the sense of pride you get from changing someones life does make it all worthwhile..."

    ReplyDelete
  5. Hey Andy

    Good article. That's one of my favourite TED talks I think Dan explains the problem perfectly. The big challenge is that it's really difficult to change the way people think about overhead. I'm personally not comfortable giving R1000 of my hard earned cash to a hunger charity knowing that only 50% of it will get to the starving children. This might have something to do with the fact that most of the charities that I've been exposed to are not the best at finance, admin and marketing...most likely because they can't afford to pay the right staff the right salaries to do the job.

    ReplyDelete

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