Choosing the Right NGOs for Your Social Investments

Choosing the Right NGOs for Your Social Investments

As the context in which businesses play changes from one of just profit maximisation to value creation, greater societal/public good, and responsible business practices, it is important that businesses have the right knowledge and systems in place for shared value creation among its stakeholders. Also, as businesses carry out various social investments, they tend to seek successful partnerships with organisations, usually non-governmental organisations (NGOs) or nonprofits, that have the capacity to implement various corporate social responsibility (CSR) projects. These partners can make or mar a project.

Social investments are carried out by businesses in order to create business value, positive societal impact, achieve the organisation’s long-term vision, raise industry performance as well as benefit from the leveraging potential of the project, which simply means utilising the positive outcomes of the project in other aspects of the business.

Creating the needed value and benefit from a social investment goes beyond throwing huge sums of money at partners, rather it involves and requires a systematic and structured process. Businesses are encouraged to develop criteria for engaging NGO partners in line with best practices. At a generic scale, most of these criteria apply or can be modified to suit individual businesses, although some of them are location based as shall be discussed. Using the below criteria, businesses can select the right NGO partners that will deliver measurable and sustainable value to them and to their host communities.

Formal Existence

In picking an NGO, the first criterion to lookout for is if the organisation is formally registered. Registered NGOs are legal entities which can be held accountable for their actions. Also, due to the availability of necessary documentation, registered companies are compelled to be more transparent in their operations. It is important to note, that registered organisations are more likely to be engaged by businesses than unregistered NGOs. However, it is not unusual for forward thinking businesses to be part of the setting up or formalisation of a nonprofit if their vision aligns.

Documentation

This criterion is closely related to the aforementioned. In line with best practices, businesses should request for some important documents from its prospective NGO partner(s). Some of such document can include formal registration certificate, copies of audited accounts usually between 2–3 years, relevant policy documents and many others. It is worthy to note that the types of documentation requested from NGOs are often location specific.

Credibility and History

Except for cases of seed funding, businesses should look through the records of their prospective NGOs. This is useful in assessing the credibility, reputation and the kind of partner the NGO is likely to be. This can also inform businesses of the potential, expertise and capabilities of the NGOs they are looking to work with.

Mission Alignment

There is need for the alignment of the goals of both organisations. It makes no value sense for a business that wishes to create impact in the area of coding or programming to partner with a business seeking to reduce environmental pollution through waste education in a slum. This is because in business and NGO partnerships, “like charges attract, while unlike charges repel”. Sustainable and responsible businesses have goals that affect the triple bottom line – people, planet and profit. It is important that these goals correlate with that which the NGO partner is putting forward.

Serving A Need

Does the project serve a need? What category of the business’ stakeholders does the project serve? Typically, social investments are meant to serve the host community(ies) of businesses. Therefore, businesses should be sure that the project is going to serve the need of at least one or more stakeholder groups of a community. This may involve conducting a needs assessment by businesses or by requesting the proof of project need by the community from the prospective NGO partner.

Measurability

Are the outcomes of the project measurable? Have the proposers of the project taken time to set the necessary metrics for measuring the results of the project? Outcome measurement is one of the most important bit when assessing a prospective NGO partner. The absence of this metrics mean that the impact created by the project would be difficult to determine and that businesses cannot also determine the return on investment for their CSR projects. Any project that has no impact is as good as nothing.

Social investments remain a key tool for endearing a business to its stakeholders. With the above criteria, businesses can further assess their prospective NGO partners, in other to maximise the value of their partnership, while contributing immensely to their host communities and man’s common good.

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