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Social Impact Organisations: The Constant Juggle between Social Impact and Financial Viability

Social impact organisations are catalysts in developing countries to alleviate some of the biggest socio-economic issues. Their vision, aligned to the core idea of solving problems, is to create social impact and transform communities. However, there are many roadblocks on this pathway to ensure organisational sustainability, including uninterrupted funding which is critical. Even as corporate social responsibility (CSR) projects have opened funding channels in the social impact sector, opportunities fall short, particularly for non-governmental organisations (NGOs). Organisations receive grants and donations, which primarily cater to the programme implementation but there is hardly any funding for an organisation’s internal growth, development and system building. Donors are traditionally more inclined towards investing in programmes but not ideas. Some also have domain and region-specific preference. There is often a mismatch between donors’ objective versus the aspirations of social organisations. Most of the social development programmes such as poverty alleviation interventions require long gestation periods to reap intended outcomes. However, donors may not express patience required putting undue pressure on the programme teams to deliver and show impact within these short timelines. Donors often emphasise on economic returns over social impact. Many donors equate the size of an organisation to its success.

Lack of donors’ support and uninterrupted funding options stall ideas and projects. These factors eventually compel the organisation to change its ‘vision and mission’ altogether to cater to the requirements of donors. Consequently, they fail to create the intended impact. So, how should one warrant enough funds to support and scale efforts towards social impact?

Given the dynamic economic and political environment, it becomes imperative for organisations to transform towards sustainability. While donors remain key stakeholders, the need of the hour is to make the social impact organisations financially sustainable. Organisations should look at models essential for financial transformation and contextualise the ideas that work. The need is to increase funding streams to cover operating costs and above expenses to continue to deliver their impact with quality of programme delivery intact.

Few of the suggestions that emerged from our discussions that organisations can follow towards financial sustainability are:

It becomes crucial to balance and ensure the organisational vision stays intact to achieve the intended goals without compromising on financial health.

Is your organisation aspiring towards organisational sustainability? How can we make organisations financially viable?

Have thoughts or ideas? Write to us on [email protected] / [email protected]

This article is based on the larger discussion held in the ‘Transform for Scale’ solution circle during the Catalysing Social Impact (CSI) event held on August 29-30 in Bengaluru.

The author, Shweta is a Research Associate at Catalyst Management Services, Bengaluru.

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