IT was American cultural anthropologist Margaret Mead who declared: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
There’s no doubt that through the course of history, people have strove to change the world and make it a better place. Non-profit organisations through history were usually founded on a great platform, be it research, education, health care, environment or poverty alleviation — just to name a few — and through the creation of resources and services, each were purposed to impact communities and create a positive and sustainable change in the world.
While this lofty platform focuses to address a prevalent issue, many times it lacks the ability to create a long-term substantial effect on the community it serves or even the organisation as a whole. Failure to properly plan and account for both short- and long-term sustainability detracts from its positive contribution to society. For when the organisation fails, or when there’s a lack of funding, an even greater void is created within the community.
It’s unsurprising to realise that no matter how big or small they are, non-profit organisations have basically two things in common. One is to change the world in some way — be it big or small; the other is to reduce their dependence on grants and handouts. While funding bodies may like to put money into exciting projects, it’s the relatively mundane things — paying the gas bill or the rent — the so called “core funding” that most organisations have sleepless nights about.
But for six Malaysian non-profit organisations, there’s light at the end of the tunnel. In an effort to help non-profit organisations achieve self-sustainability, Yayasan Hasanah, the impact-based foundation of Khazanah Nasional, has collaborated with Acumen, a global non-profit impact investment platform, to provide these organisations with an opportunity to participate in the Acumen Nonprofit Earned Income Accelerator programme, which is a six-week bootcamp for non-profits looking to develop a social enterprise revenue stream for self-sustainability.
CHAMPIONING SOCIAL WELLBEING
Khazanah Nasional Berhad, incorporated in 1993, is a government-owned investment organisation that manages the sovereign wealth fund for the Government of Malaysia. While its overarching aim is to enhance government-linked companies’ performance, institutionalising good governance and delivering broader, impactful contributions to the national socioeconomic development, its sister entity, Yayasan Hasanah focuses on addressing the country’s pressing community and social issues.
“We have an overall mandate of nation-building and specifically, we’re trying to champion the social wellbeing of Malaysians. That’s the broad Yayasan Hasanah storyline,” explains Stanley Siva, Yayasan Hasanah’s senior vice-president.
The foundation, says Siva, strives to create real and positive social and environmental changes for Malaysia, focusing on education, community development, environment, arts, heritage and culture, knowledge and public spaces. Within these focus areas, Yayasan Hasanah partners with civil society, communities, corporates and government agencies to design and implement initiatives that will deliver the greatest impact.
“We support organisations operating within our focus areas,” he explains, pointing out that while giving grants help these organisations carry out their work and impacting the nation, Yayasan Hasanah wants to go beyond the traditional grant-making and enable them to overcome the challenges they face, be it fundraising, talent development, organisational management and more.
“Giving out grants shouldn’t be the only support they receive,” reiterates Siva. “What we’ve discovered along the way is that these organisations could use help in how to be better programme managers, how to run projects effectively, improve governance, financial management and be able to measure the kind of social impact that they’re doing. We found we needed to bolster the funding support we extend to our partners with capacity-building initiatives.”
Self-sustainability has long been the struggle of many non-profit organisations out there. Many non-profit organisations find it difficult to garner sufficient and continuous funding for their work. Gaining access to appropriate donors is a major component of this challenge. They may have limited resource mobilisation skills or lack the ability to diversify their sources of income. So they become largely dependent on grants.
When current donors shift priorities and withdraw funding, it impacts the organisation negatively. Without clear direction and planning, non-profit organisations might find themselves suffering from a general lack of project, organisational and financial sustainability. Siva agrees, saying: “We felt that while we can continue giving financial support, if the organisation doesn’t grow, they’ll be quite limited in the impact that they’re hoping to create.”
HELPING THEM TO HELP THEMSELVES
For most of the 20th century, non-profits had a reputation, for better or worse, of being slow to adapt to shifting demands and reluctant to adopt practices typically associated with for-profit corporations. Then, in the 1990s, donors and consultants started urging charities to become more efficient and business-like.
So what if non-profits could generate unrestricted capital to make them less reliant on philanthropic funding? Increasingly, non-profits are seeking to develop fee-for-service models or new product lines to subsidise organisational budgets. However, while some non-profit ventures have taken off, others have become time-consuming distractions that fail to recover their costs or distract from the core mission.
“This is where we came in,” shares Siva, elaborating that Yayasan Hasanah chose to collaborate with Acumen, a non-profit impact investment fund with almost two decades of experience in investing in non-profits and social enterprises that serves low-income communities in developing countries across Sub-Saharan Africa, South Asia, Latin America and the United States. Acumen aims to demonstrate that small amounts of philanthropic capital combined with large doses of business acumen can result in thriving enterprises that serve vast numbers of poor.
“We decided it’d be good to have that kind of experience to help our non-profits here in Malaysia,” recalls Siva. “When we approached them, they were quite keen to collaborate as up to this point, they’ve not been involved in any programmes in Southeast Asia.”
Because they’re based in the US and cannot be everywhere, Acumen, shares Siva, has developed many online tools and online platforms for non-profits and social enterprises to learn various aspects, including learning how to run organisations, social programmes and building the organisation. “We wanted to basically test out one of the modules to see if it could be relevant to our non-profit organisations here in Malaysia,” he says.
The non-profit organisations that took part in this first ever programme comprised Teach for Malaysia, Reef Check, Pusat Kreatif Kanak-Kanak Tuanku Bainun, Women of Will, Pintar Foundation and Yayasan Sejahtera.
The module packaged the steps to help non-profit leaders to develop a social enterprise model. Over six weeks, they’d have learnt the basics of developing an earned income stream, complete their own assignments, and then share them via interactive Learning Labs. The select group of Malaysian non-profit organisations joined a select cohort of other non-profit leaders to give and receive feedback on their ideas.
“At the end of the programme, each organisation learnt to develop their own little prototype business model — whether you want to sell products, improve your fundraising or education programmes. So you learn how to raise funds and you create your business model while being coached by Acumen,” explains Siva.
Non-profits deal with the same volatile, uncertain and ambiguous operating environments as for-profit companies. While they’ll always focus on doing good in the world, says Siva, they also need business decision-making skills on par with private sector leaders. Traditionally, fund support has been a key imponderable for non-profits. Since most non-profits were — and many still are — primarily dependent on grants and donations, they faced the constant threat of their money resources drying up.
To sustain the ability to do good for the long term, the organisation must be run efficiently and effectively. “We want to help raise a growing breed of non-profits that have become business-savvy and isn’t afraid to embrace modern management methods,” he avers.
What are your expectations for these NGOs? I ask. He ponders a while before replying: “We hope it benefits the organisation. We don’t have any hard expectations. Our hope is that all non-profits challenge themselves to be self-sustainable. The present financial climate doesn’t bode well for those dependent on grants to survive. The challenge going forward is for this segment of the social sector to redefine the rules and blaze forward with their ingenuity and business acumen.”
Teach for Malaysia
Fam Li Ying, Partnership Development Manager
Teach For Malaysia, an independent, not-for-profit organisation, is accepting applicants to their final intake to the Teach For Malaysia Fellowship Programme for this year. The aim of the programme is to work towards a Malaysia where all children are empowered to be leaders of their own learning, their future and the future of our nation. They recruit young graduates and professionals, train and place them in high-need schools across Malaysia.
“Traditionally, we’ve been funded by government grants as well as private corporations,” says Fam. “However, challenges have arisen due to the present economic climate where funding isn’t so easily obtained.” The Acumen programme, says Fam, has taught her to be more cost effective when it comes to running programmes. “Learning to speak ‘business’ was an important aspect I gathered from Acumen!”
Reef Check Malaysia
Theresa Ng Eng Tze, Programme Development Manager
Reef Check was set up to engage with the local community, to raise awareness of the importance of, and threats to Coral Reefs. It aims to bring together stakeholders to collaborate on coral reef monitoring, management, research and conservation and advocacy. Currently they work on three main islands — Tioman, Sibu and Mantanani.
“Working with nature takes a long time,” declares Ng. “Hence, all our programmes are long term and we rely mostly on corporate grants to run them.” This course, says Ng, got her thinking about Reef Check’s own income strategy. “Having the perspective of a donor is important and we learnt to think both about returning greater value to the donor in terms of returns of investment (ROI) and switching up the question to, ‘What value is the community getting for every dollar I’m investing?’” explains Ng, adding: “Having that perspective is beneficial when we’re trying to frame up a strategy in engaging the public to raise funds.”
Pusat Kreatif Kanak-Kanak Tuanku Bainun
Raja Mazlena Raja Aziz, General Manager
Pusat Kreatif Kanak Kanak Tuanku Bainun is a creative centre where children and youth come together to explore and develop their creativity through Alam Kreatif, a programme developed to enhance cognitive skills as well as develop their potential and inherent talents.
“Our source of income, besides grants, was through the rental earned from our office spaces occupying the 0.89ha estate in Taman Tun Dr Ismail,” explains Raja Mazlena. “However, there’s a still a 30 per cent gap between our income and expenses that we need to fill. We want to be less reliant on donations and grants — which is quite a challenging aspiration in this present time.”
The centre isn’t profit motivated, elaborates Raja Mazlena, but it needs diverse streams of income to keep it sustainable. “This programme showed us that while there were areas we were doing fine, there were also some parts that weren’t working. It was timely for us to revisit our current policies and relook into how we can best manage and come up with an effective fundraising strategy."
Women of Will Malaysia
Norman Seah, Treasurer
Through a micro-credit financing model combined with an Entrepreneurial Development Programme, Women of Will aims to transform the lives of disadvantaged women in Malaysia, their families and their communities. The mission is to empower women, primarily disadvantaged women in the bottom 40 category. Throughout the programme, Women of Will will support them and provide them business coaching.
“Fundraising remains one of the key challenges because it’s resource-intensive and being a non-profit, we don’t have a large team,” confesses Seah, adding that the programme has enabled him to explore the social enterprise model “It helped that there were case studies from other organisations who have successfully piloted earned income streams without divesting from their core social mission. We hope that this will help us to create our own opportunities for revenue while relying less on the generosity of others.”