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					                                                    Passion
                                                    profit
                                                      versus

                                                    Should a non-profit organisation be run
                                                    like a business or not? JACO LEUVENNINK
                                                    discovered a more nuanced reality and need
                                                    for symbiotic relationships.




S
              ome buSineSS people                   electronic donation management and other              Smit maintains that “a commercial busi-
              still have the outdated percep-       services to NPOs, donors and interested par-      ness and an NPO pose different challenges
              tion of the non-profit sector         ties internationally. On average about a third    to their leaders and managers”. They exist
              as ‘charity work’ badly run by        of the income of NPOs is self-generated.          for different purposes, create different kinds
              bored volunteers. They see the            In theory, the only difference between a      of value for society, and serve the interests
sector as peripheral, and dependent on the          business and an NPO is who profits or is          of different kinds of stakeholders. He says a
generosity of others. Far from it: this diverse     rewarded by its activities – its sharehold-       clear understanding of similarities and dif-
sector is a veritable force in South Africa.        ers or the NPO, its work, or its beneficia-       ferences is important.
    Dr Arnold Smit, executive of the Centre         ries, says Christian van Schalkwyk, execu-            “Both need money to operate, but they
for Business and Society at USB Executive           tive responsible for Risk Management at           obtain it from different sources and apply
Development (USB-ED), says the growing              Capitec Bank. “The question thus is not           it for different purposes. Both need staff to
socio-economic importance of the non-               why NPOs should be managed like a busi-           do the work; but, in the case of commercial
profit sector should not be underestimated.         ness, but why not.”                               business, staff are carefully recruited, paid
It is not only about caring for the tender so-          Moreover, King III, the corporate go-         according to market rates and performance
cial fabric of our country, but also aims to        vernance charter, sets governance require-        is managed, while in the case of non-profits
make people more self-sufficient. In South          ments for NPOs which are not much dif-            the work most often gets done by unpaid
Africa, with its historic divisions, it is hardly   ferent from those of the for-profit business      volunteers.” Finally, Smit points out: “Both
a coherent sector, but it has a major eco-          sector, and the new Companies Act will put        have financial years, but the rhythm of
nomic impact and even political clout.              the NPO sector under the same umbrella            business cycles are very different from the
    The non-profit sector ranges from small,        with not-for-profit companies.                    seasons in the life of communities where
informal community-based organisations;                 And surely the basic management prin-         NPOs operate.”
to church- and faith-based charities, trusts,       ciples like accountability, control, order, di-       Management challenges in NPOs are
cooperatives and foundations; to cultural,          vision of work and the need for fairness and      essentially the scarcity of board governance
sport and environmental organisations; to           initiative are the same?                          skills and the management of volunteers
trade unions and huge international non-                But it is not so simple.                      while retaining their commitment in a sus-
governmental organisations.                             Milly Siebrits, CEO of Cape Town’s            tainable way. “In today’s technology-driven,
    A growing number of non-profit or-              scouts movement, who serves on the USB            performance-sensitive and highly regulated
ganisations (NPOs) do not depend on do-             alumni committee which runs an NPO                organisational environment, NPOs often
nations alone, but are taking proactive steps       management development programme,                 have to make do with volunteers to take
to diversify funding sources, selling products      says the dynamics in a non-profit organisa-       responsibility for rather specialist manage-
or services, and focusing on sustainability,        tion are different, especially where you work     ment functions such as finance, marketing,
says Colin Habberton, CEO of GivenGain              only with volunteers. “You must have pas-         fundraising, project management and ITC,”
Foundation in SA, an NPO that provides              sion and not work for money.”                     says Smit.




32      AGENDA No 2 | 2010 | www.usb.ac.za
                                                                                                                               in deptH | fUNDING


                                                                                                                       How big is
                                                                                                     AFR               SA’S NPo SEctor?
                                                                                              www.usb.ac.za/agenda     About 61 000 NPOs are registered at
                                                                                                                       the SA department of social develop-
                                                                                                                       ment. The total figure is estimated at
                                                                                                                       100 000 to 160 000 NPOs, with an
                                                                                                                       income of R14–R18 billion. The sector
                                                                                                                       employs about a million people with
                                                                                                                       another 5 million volunteering their time
                                                                                                                       and expertise through these structures.
                                                                                                                       – Ann Bown


                                                                                                                       usb training
                                                                                                                       for NPos
                                                                                                                       The Management Programme for NPOs,
                                                                                                                       run by USB alumni in collaboration
                                                                                                                       with the SEED Trust and USB Executive
                                                                                                                       Development (USB-ED), now includes
                                                                                                                       leadership training. The management
                                                                                                                       programme aims to promote social
                                                                                                                       transformation by enhancing manage-
                                                                                                                       rial effectiveness, service delivery and
                   Ann Bown, consultant to the NPO sec-          ing to excellent research and a long list of
                tor and past president of the SA Institute       inspiring people who have actually beaten
                                                                                                                       good governance in the NPO sector
                of Fundraising, agrees that the biggest          cancer, is a well-known success story.                through the transfer of necessary skills.
                challenges for NPOs are with leadership,             In tough economic times, any organi-              This subsidised programme is made
                especially at board level. “There is a need to   sation (whether in the public, commer-                possible through the support and
                be diligent and ensure full accountability to    cial or non-profit sector) should imbue               sponsorships of alumni, faculty, USB
                donors, their beneficiaries and the public.      confidence in those with whom they                    and USB-ED. Bursaries are available. Visit
                Sometimes leaders are just there to have         hope to deal – especially if they take or             www.usb ac.za/npo
                tea and a nice time together. They do not        ask for money. This becomes even more
                want to be bothered by reports or to ask         important in a world where corruption is
                hard questions.”                                 feared, where the environment is fragile,
                   Habberton reckons for NPOs to be sus-         and where a big income divide is a real
                tainable they will need to apply business        challenge.                                            The growing socio-
                principles in action and account in order            There is no ready-made management
                to avoid the impact of declining donors          model that can be carried over from the               economic importance
                through economic shifts or lack of trans-        business or public management worlds to               of the non-profit
                parency about delivery on objectives.            the non-profit sector. The ideal model (es-           sector should not be
                   Dr Therese Fish, chairperson of the           pecially for a developmental state, which
                alumni committee that runs the USB’s             SA claims to be) seems to be where the                underestimated.
                NPO management programme, also stress-           state (public services), the private sector                                           Dr Arnold Smit,
                es effective management and leadership to        (wealth creation) and civil society (social                                           USB-ED
                make projects sustainable. “That’s why we        empowerment), each on its own platform,
                are enhancing our training by adding a           work together to meet developmental needs
                three-day leadership training choice to the      responsibly. In partnerships, all can profit.
                programme.”                                          Smit concludes: “I would like to see
                                                                                                                                             ‘We are enhancing
                   Donors want something for their money         some non-profits having the same sense of                                   our training by
                – at least a tax certificate and information     urgency, efficiency and drive for quality and                               adding a three-day
                on where the money is going, but also feed-      performance that many business organi-
                back like newsletters and recognition of         sations have. Likewise, I would like to see
                                                                                                                                             leadership training
                                                                                                                                             choice to the
pictures: usb




                involvement. Relationship management is          some businesses display more of the same
                very important. Getting it right, CANSA          sense of passion, virtue and willingness to                                 programme.’
                (Cancer Association of South Africa) has         serve and to do good that characterise so             Dr Therese Fish,
                become a household name in SA and, ow-           many NPOs.”                                           USB NPO Management Programme chair



                                                                                                                     www.usb.ac.za | AGENDA No 2 | 2010       33

				
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