Profiting From The Non-profit Sector

Updated: Nov 15 2003, 05:30am hrs
Business school graduates have for years been using their training and expertise to help transform large organisations, help them realise untapped opportunities and engage in reconstructive consultancy. However, there is growing recognition of the need to help implement self-help models in NGOs who function in a non-structured environment.

The S.P. Jain Institute of Management and Research (SPJIMR), through its Centre for development of Corporate Citizenship (DOCC) seeks to do this through live projects and consultancy assignments with a large number of NGOs and corporate houses. This year, Team Shristi, a 6-week project undertaken by first year students of SPJIMR, in collaboration with GE, bagged the Best All-India Manageme-nt project of the year award by the Institute of Management Consultants of India.

The objective of the project was to demonstrate the applicability of management principles in the social sector and see how management can transform even a non-structured environment into a profitable enterprise.

Says Gautam Agar-wal, a 2nd year student, who was part of the project,Our project brought us to Shristi Special Academy, an NGO engaged in providing care to the mentally challenged. We came to Shristi with the objective of generating ideas and designing systems that would enhance and breed organisational effectiveness.

The first step was to take a close look at the processes wit-hin Shristi. On the basis of this, the organisations problems were classified into four sectio-ns: Funds, Awareness, People Processes and Internal Processes.

Next, a thorough costing and inventory analysis was made of the products manufactured at Shristis vocational unit, to see which products were profitable in order to make them more customer-focused and market-driven. Shristi was also sensitised about the need to actively market its products and realise the vocational units importance in sustenance of its operations.

Funds
Shristi generates funds from childrens fees, one-time donations, sponsorships from corporates and individuals and revenue from the vocational unit. The problem lay in continuity, surety and availability of funds at all times for the organisation. This could be helped by building awareness about its activities among donors, philanthropists, socially sensitive companies and the general public.

Also, it was obvious that the only sure source of revenue was the sale of products from the vocational unit. Therefore, the next step, logically was to assist them market their products more professionally thro-ugh brand building activities. Day-long events were held with the objective of selling Shristis products and generating revenue, raising awareness about Shristi, generating volunteers and collecting market intelligence and customer feedback about its products. Says Gautam,We were able to generate revenue of Rs 12,500 through four such events.

Branding
Branding efforts included helping them make brochures, video clips, relationship building through newspapers, TV and FM radio.

We recommended that Shristi build a brand around its services and products, suggested and implemented the compulsory use of the Shristi logo in all their communication with the external world. Today, Shristis stickers are affixed on all products manufactured by the children. With the objective of taking Shristi to prospective patrons rather than waiting for the reverse to happen, we made a 5-minute video film capturing life at Shr-isti. We designed a brochure to sustain the awareness-building activities at the organisation.says Mr Gautam.

Commenting on the major issues confronting the organisation, he says,We found that the mindset needed maximum correction. This change of mindsets and attitudes was critical to whatever little success we might have achieved finally.

People ProcessesM
There was a need to give the business a focus and run it in a professional manner. People were clearly Shristis greatest assets and in order to tap their potential it was essential to delineate roles and responsibilities and identify skillsets. What was helpful was that the people were quite forthcoming and willing to listen and make changes.

At the end of the exercise we found that it was a closer knit and focussed unit. In order to provide a structure to peoples processes, we implemented a career-plan oriented performance appraisal system and laid out a blueprint for recruitments and selection. After extensive consultation with the top management, we defined roles for various employees of the organisation. The emphasis was on pursuing areas like funding etc. with a dedicated effort, ensuring that none of the critical activities were neglected.

Internal Processes
Internal Systems were streamlined by designing a Donor Management system, a user-interface driven software tool that will assist in keeping track of donors and patrons of the organisation. The system is simple, easy to work with, serves its purpose effectively and above all meets the organisations requirements.

In the case of the vocational unit, the major issues were costing and pricing, inventory buildup and lack of product standardisation. For this a total of 60 SKUs from 6 sub-sects were suggested and an effecti-ve use of spreadsheet for stock keeping and analysis for better inventory management.

Though the initial work is over, continuous hand-holding would be needed and for this, the DOCC will coordinate with Shristi to provide on going assistance. SPJIMR is present-ly conducting presentations across major cities, outlining the various intricacies of the Shrishti model in the context of effective NGO manageme-nt. This is to demonstrate effe-ctively how such a model can be successfully implemented.

So the way ahead is to dev-elop the Shristi model of NGO management which will be used as a benchmark for future DOCC projects at SPJIMR.