Sunday, May 16, 2010

Strategies to ensure the viability of small NGO's

Recently I participated in a conference panel on the sustainability and viability of small community based not-for-profit organizations in Western Australia. We discussed strategies that small agencies could use to ensure agency viability and sustainability, whilst maintaining their small scale, local grassroots efforts.

Small NGO's are under pressure on many fronts- from governments, from the private and corporate sector, and from larger NGO's who are moving in to the territory previously occupied by small agencies. For many viability it is a month by month struggle.

A number of us on the panel stressed the importance of "political strategies", particularly the need for small NGO's to have a unified voice in the form of a representative peak body to advocate for their interests. Most existing peak bodies are driven by representatives of big NGO's and so tend to advocate and promote strategies that benefit big NGO's first, but not necessarily small NGO's. For a number of reasons , many small agencies don't feel that their interests are represented by most peak bodies.

We also discussed "collaborative" strategies, whereby small agencies collaborate with other small agencies as shared entities, while retaining their individual identity and mission, and capacity to address local needs. This included using consortia to tender for larger projects and developing partnerships to deliver projects, programs and services.

We also emphasized the benefit of what I call "Shared Services Alliances", in which small agencies create 'back office' alliances involving partial integration or sharing of business and administrative functions. Sharing services assists small NGO's to leverage their size and resources to spread the costs of services across a number or agencies, making them more affordable. Agencies can maintain their grassroots local identity but develop more sophisticated models and services.

Shared services alliances are not new in the NGO sector (eg. co-location, shared service delivery, partnerships) however they have been underdeveloped by small NGO's in certain areas.

In addition to shared serviced delivery (probably the most common example) some shared service options include:
  • shared office space (as per the Lotteries House model or other forms of co-location of services)
  • shared purchasing, where agencies use their joint purchasing power to purchase goods and services
  • shared staff roles where agencies share particular staff roles
  • shared funding such as grants
  • shared services and functions, where agencies share administrative and business functions such as payroll, IT, accounting and bookkeeping, IT, insurance, facilities management, research, consultancy etc.
Useful articles on shared services in the Non-Profit sector can be found here, here and here.

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