On which factors does sustainability depend within NGOs in developing countries?

The world is turned upside down due to the Coronavirus. Nearly every country, community and organization are affected by its impact on health, economy and society. Our world has changed fundamentally. Especially now, the help of local NGOs is very much needed, to help the local people. Many NGOs are also feeling the negative effects of the virus.

There are NGOs that depend on volunteers. These volunteers come mainly from abroad. Because the borders are closed, volunteers cannot help. Because of that, many activities have been stopped. There are not enough people who can help with the activities and for their own safety. A lot of people are sitting home, workless. A lot of income stopped because the donors stopped giving money. Volunteers were also a source of income for many NGOs. This has also dropped out.

It can be concluded from this that in some areas local NGOs are not sustainable. They are dependent on sources and volunteers that stop during a pandemic. This can prevent them from surviving, while these local NGOs are very important for the local environment, even during such a pandemic. Ebola has shown that local NGOs are most effective in fighting the disease because they can help and empower communities in the quickest and most trustful way. International aid organizations were not able to do this so quickly (We Forum, 2020.). But how can NGOs do that if they are dependent of volunteers and can't continue the activities to help the local people?

Different ways have been explored to make NGOs more sustainable. This does not guarantee that these tips will always help NGOs to survive a pandemic like COVID-19, but sustainability is very important when it comes to the aid and development and also financially. NGOs should have clear long-term plans and their vision for the future should be centred around the entire staff and not on one person. Financial sustainability is necessary for the long-term survival of any NGO. For non-profits, making money is completely different matter. They need to raise enough money to have sufficient and continuous resources to fulfil their mission.  

Tips for NGOs:

  • As a general rule, NGOs and non-profit organizations may not claim more than 30 percent of their total income. The reason for this is that if an organization loses more than one third of its income, it is very difficult to survive. This can now be seen in some NGOs, they suddenly have no more income and nothing in reserve (Galewska, 2018).
  • There is an increasing trend, especially among millennials, to focus on brands that are doing well. For NGOs and non-profits this is a good source of income. They use this tourism to directly or indirectly raise money for activities. Many travel organizations encourage their clients to make donations to projects in destinations they visit. A small percentage of the money a tourist pays for a tour is automatically donated to a selected organization (Galewska, 2018).
    Important for if there is a pandemic: it's important that NGOs are not depended of the tourism.

  • Many NGOs depend on volunteers. Volunteers are very useful for certain tasks. Often volunteers do this to do something good for the world. This does not take into account that volunteers actually take jobs from local residents. NGOs have to take into account that they use local people to take on these tasks. This can be done by drawing up a good financial plan so that these people have an income. Volunteers are always welcome to help and donate to give a better platform for the NGO. They won't be without employees during a pandemic. 

  • For NGOs, it would be useful to develop a risk framework mechanism. This framework defines the risks that an NGO may face, such as the crisis we are currently experiencing. This model should become one that allows for much greater risk-sharing, so that NGOs not only bear the burden of the financial risks - but that is also acceptable to donors. Donor zero tolerance of loss risks is unrelated to reality and is a useless framework for decision making - especially for humanitarian organizations working in the most volatile, risky environments, even when the strictest controls are in place (We Forum, 2020).

  • Lack of money in an organization can be the result of poor financial management or limited marketing and sales skills. This in turn can be the cause that an organization will not survive when there is a pandemic, such as COVID-19. It is important that the organization succeeds in improving insight and financial competence. Often volunteers are now used to do practical work, such as helping to build houses, distributing food to the homeless or cleaning the beach.
    Tip: These volunteers can be deployed differently. Think of volunteers who have experience with business knowledge. They can share this knowledge and the employees of such an NGO can learn this. In this way an organization creates a better financial plan and they are able to organize and manage the financial business. As soon as volunteers are welcome again from abroad, organizations can make use of this. They can make a plan how to become and stay financially stronger, even during a crisis.

Tips for Public authorities:

  • Public authorities should set up an anticipatory funding mechanism to make financial resources in advance available at scale to address immediate needs, to respond to immediate needs in times of crisis. Examples are; training people on how to stop the spread of the disease; resources for hospitals; cash payments to people in need; maintenance of the food supply chain. For NGOs this will be helpful to be more sustainable (We Forum, 2020). 

  • The public sector could use a COVID-19 response investment instrument, for example, a result-oriented funding model that economically supports households and communities when they take social distance, coupled with a measurable medium-term reduction in the economic impact of the pandemic (We Forum, 2020).

  • In order to better handle a crisis such as the Coronavirus for NGOs, the government could start thinking about an NGO Liquidity Fund. This can be used by an NGO to cover the general costs in the short term and pay them back over time. In this way, an NGO can continue to exist in times of crisis (We Forum, 2020).
International Aid & Development - COVID-19
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