Building Sustainability: The Art of Crafting Business Plans for Social Return on Investment
Home to over 8.3 million people, Bolivia is one of the poorest countries in Latin America. According to the World Bank, approximately 67 percent of the population is poor, with low levels of education, health and nutrition. For the many NGO's working to improve the health of Bolivia's rural poor, maintaining support for their initiatives is a perpetual challenge.
PROCOSI, a Bolivian consortium of 24 member non-governmental organizations, is no exception. While each organization in the PROCOSI network has its own funding pattern, many have relied almost exclusively on one or two sources of donor investment to support their activities over the years, which has made achieving sustainability for their organizations and programs very difficult. Further, recent law reforms in Bolivia now prevent the NGO's from charging their clients - the rural poor - any fees for their basic health services or for certain products (i.e. vaccines and contraceptives). While the government does reimburse the NGOs for expenses related to treating the poor, it does not cover the actual cost, resulting in routine financial losses for the organizations.
"Members of the PROCOSI network serve the most underprivileged people in Bolivia," said Judy Seltzer, Principal Program Associate at Management Sciences for Health. "Because of that, these organizations will never be able to sustain themselves by charging fees for their services." Thus, in an effort to address this problem, the Management and Leadership Program of Management Sciences for Health, with support from the United States Agency for Development and NGO Networks, designed and is testing an integrated learning experience, titled "The Art of Crafting a Business Plan for Social Return on Investment."
This landmark business planning program, which has recently been delivered to members of the PROCOSI network, aims to shift the approach to sustainability from one defined by cost-recovery measures achieved through fees, to one that involves diversifying funding streams through the development and marketing of innovative products and services that meet clientele needs and provide social return on investment. Innovation is the key term, since many of the PROCOSI NGOs have traditionally been defined by their donors - developing services based on what the donors will pay for and not what their market demands. This program challenges the NGOs to be creative and develop their own plans for addressing client needs, while providing them with the tools they need to turn their ideas into action.
Utilizing new technologies, the program helps to build participating organizations expertise in such areas as: articulating and packaging breakthrough ideas, conducting market research and designing a marketing plan, identifying a product design and implementation team, estimating financial and other resource needs, and projecting social and financial returns on investment. In the words of one participant, "This business planning program allows us to reflect carefully about not only what our organizations are today, but what they could be tomorrow." In other words, with their new found expertise, these organizations have the potential to significantly expand their funding base by actively seeking support from donors, while at the same time improving their ability to make a difference in the health of Bolivia's poor communities by targeting programs to their specific needs.
Following completion of the initial launch of the program in October of this year, PROCOSI will add the program to their product line and offer it to other members of their network as well as to similar networks in other parts of Latin America. Currently, plans are underway to introduce the business planning program to the NicaSalud Network in Nicaragua. In addition, the program is being adapted for launch in several other countries, including Kenya. "We look forward to continuing to help stagnating NGOs reaffirm themselves as mission-driven rather than donor-driven entities," said Ms. Seltzer.