According to the updated registers at the Department of Social Development, there are slightly over 80,000 compliant NPOs in South Africa. In recent years there were over 150,000, but due to non-compliance and financial challenges, almost half were classified as non-compliant.
Compliance is a topic on its own that is dealt in another article in this issue; our focus here is explaining why many are not funded even though their causes are genuine. There can be two NPOs operating in one place, sharing same building, rent free, one well-funded, the other starving, yet both having access to same networks of potential funders, and both led by the founders.
What causes the one to succeed and the other not to succeed?
Many NPOs in South Africa and the rest of the world, are founder led institutions, that in most cases, they never operate in the fullest potential because of what I would term the Catfish Syndrome.
A catfish is the bull of the fishpond, the biggest in the village, and all creatures within that pond know no other large animal than the catfish. When the story of waters changes into rivers, lakes, dams, sea and ocean, that changes the whole perspective, as the catfish becomes extremely insignificant, with larger creatures taking the throne of largeness.
So often founders of NPOs operate their start-up institutions with the mind of the catfish, that when pushed into rivers and lakes, it fails to realise that it is not the largest at all, and that prevents them from making decisions that allow for growth. The catfish founder not understanding that Social Entrepreneurship is about building a somewhat Republic and they are “the Prince” – Governance.
The catfish founder will suffer from the FBI virus – Fear Bitterness and Insecurity, preventing succession planning. The catfish founder will not know how to fully utilise their Social Balance Sheet, denting their pocket and eventually ruining their reputation. And lastly, the catfish founder will not move away from their Sympathy Markets, not growing into a large institution – Market Strategy.
The Social Entrepreneur and the Republic
Most founders of institutions are “know-it-alls”, that is fair and fine, even good in most cases, but none of them are “do-it-alls”, as they can never be able to do it all by themselves. A realisation of this, and acceptance will help the founder create an enterprise, that if looked at from a Machiavellian perspective, is a Republic. The founder is the prince establishing the republic, at the same time are an entrepreneur whose business is social welfare of a define area. A republic requires governmental structures, these basic structures include Nobles, people who, even though elite, are important in one fundamental – funding, as without it, no republic or enterprise can thrive.
The republic of Florence flourished, and we all know Banking because of the Medici family that established the republic with the help of carefully selected and managed elite relationships. The catfish founder will not create relationships with people of influence because they assume just because their cause is good, then all must fall to their knees when they hear of it, and fall in line. It does not work like that; relationships matter, as LinkedIn mantra dictates. The catfish founder needs to know that they are starting a business, that, even though it does not declare profit at the end of its trading period, it must however be run like a profit-making enterprise. The enterprise that does not grow in the profit-making world is one that does not know how to attract and manage working capital; that is so in the non-profit-making world. There are topics, that must be known by the founder, and must be mastered before or in the early days of start-up, to ensure that the enterprise is established, well-funded, and grows.
The topics include, but not exhaustive, Project Management Basics, Project Development, Campaign Management, Project Software, Project Budgeting & Financial Management, Report Writing, Team Management, Social CRM, and Presentations & Meetings, Brand Ideology & Management, Advertising & Public Relations, Event Strategy & Management, Content & Media Management, Market Research, and Cloud Funding, Cause & Strategy Management, Conflict Management, Team Dynamics, Leadership Development and Dispensationalism, and Exit Management.
Essentially, all this helps create a government within the organisation, or a concept of the same, to sustain the development of the oragnisation. This can be done on start-up or in the first five years, but it must be something that is within the mental and emotional framework of the founder. Those leaders who do not have such within their emotional disposition have what I call the FBI virus.
The FBI Virus
There is an emotional sickness that needs to rid leaders – the Fear Bitterness and Insecurity Virus. The FBI Virus is a serious, yet subtle virus that grips any wronged or misguided person or leader. For several years I have followed the teachings and behaviour of leaders brought to me, including studying some ancient ones from Europe and Africa, and have seen, just as the HIV virus, the FBI virus is syndrome infested.
The first being the Fear Syndrome. When fear grips a leader of any movement, institute, or even home, their decision making and behaviour is impaired causing the exhibition of irrationality, resulting is worsening of circumstances. Having begun well, fear often causes the leader to fumble in an extreme painful manner.
The next is the Bitterness Syndrome. Everyone in Africa suffers from one form of abuse or the other, especially when the colour of our skin is called “black” as though it is a wrong skin to be born into. Since the ages of slavery and colonialism there has not been a tangible paradigm shift in the African victim’s mind to let the past go and progress with the future, with the key word being “better-ness” as opposed to “bitterness”. This has resulted in a cycle of regressive progression that makes us move two steps forward and five steps backward in all circles of society – economic, political, social, and spiritual culture. Bitterness is what causes many political movements to be formed and only time tests their strength, with splits a result of the shaky ground they were built on.
The FBI virus is completed by the Insecurity Syndrome. Now insecurity manifests itself only through the fusion of Fear and Bitterness. Insecurity is what every person has when he starts doing things that result in losing confidence and disintegration in light of their pride. Many African states and enterprises are failing because of poor succession planning caused by insecurities of their founders. Remember the military genius Chaka Zulu, who fell prey to insecurity?
The founder of the NPO often suffers from the FBI virus because of past experiences, but most importantly because they do not fully realise their potential in that they are a literal Asset that is being turned into profit, thus must understand how to manage and present their Social Balance Sheet when the auditing of life comes.
The Auditing of Life and the Social Balance Sheet
The auditing of the daily life of the leader reveals their capitalisation in what I call a Social Balance Sheet. In basic accounting a Balance Sheet is a financial report that reveals the trading status of a business to its owners and stakeholders, comprising has Assets and Liabilities, thus allowing for interpretation of the future by prospective partners (customers, creditors, and investors). Every leader has and is a Social Balance Sheet, comprising Assets and Liabilities.
Assets within themselves are structured as Fixed and Current (trading). Liabilities are structured as Current (trading) and Long Term (debt and capital). Social Assets can be your brains (fixed), your immediate positions and relationships, conduct, stage management, notwithstanding actual cash or property or investments owned by the same. Equity in accounting is basically the financial resources or those assets that can be turned into money, that all together fund the institution. Now, regarding a leader’s Social Equity, realize that every leader, once appointed, acquires or loses intangible equity that can only be traded on the social scene, an informal stock exchange per se. The structure of this acquired or lost equity is what accountants, before intellectual property accounting, called Goodwill and that being a tradable asset.
Social Liabilities on the other hand refer to the leader’s short term and long-term relationships and deemed public failures that erode the credibility of their name and its derivatives. It is important for a public figure to always see themselves as a listed company, with every activity contributing to their trading statistics and balance sheet, as every leader has a Social Balance Sheet that accounts for their operations (relating with people), and comprises Assets and Liabilities (relational or otherwise). There comes a time when the leader goes through a Social Audit, whether self-commissioned or not, and it often comes as a storm of opinion, amongst many modes in public spheres.
Just like in accounting, the Social Audit, is an assessment, or in auditing terms an Assurance of the leader’s going concern, how they are running their business, whether it shall continue or not, and what things must be corrected in order to have financial and trading health. The definition of ‘Going Concern’ being an accounting term used for a company that has the resources needed in order to continue to operate indefinitely. During times of Social Audits, the integrity of their Assets is checked against your notable or recorded Liabilities, to assess the balance or imbalance of your trading for a certain period.
As a leader acquires equity and revenue for their Social Balance Sheet, they need to master the art of Profit Relations and not necessarily limit to just Public Relations in the relating. Public Relations is the practice of managing the spread of information between an individual or an organization and the public. The aim of Public Relations is to persuade the public, prospective customers, investors, partners, employees, and other stakeholders to maintain a certain point of view about it, its leadership, products, or of political decisions. Profit Relations is the premeditated relating of a brand or business to its publics with the sole objective of profit for both parties involved, thus denoting elements of Brand or Business Development. It is not possible to relate with publics effectively if communication of business or brand development are non-existent in the DNA of the language. The founder of the NPO must know that they possess an automatic Social Balance Sheet comprising Assets and Liabilities that determining their Equity, or social worth to trade, thus relate, lest they never grow out of their sympathy markets.
Sympathy Marketing
The founder an NPO is not only a Social Balance Sheet, but is a brand that is creating a brand, and most start around the people that are sympathetic to their causes; the danger arising when they do not grow out of sympathy marketing. Sympathy marketing, that simple aspect of brand communication to acquire profitable support to enable growth of the brand is a necessity for market penetration and also growth to some extent. Sympathy markets are those emotional market segments that brands use to mobilise consumers to buy into their brands and support the cause created by the brand. Sympathy markets are also market segments where brands create a messaging of called “we need your help to prosper” from consumers, and they use various emotionalised campaigns to earn buy in.
Sympathy Markets can only be sustainably accessed for a certain period, as after a while, most consumers want brands to mature in their delivery of product or service. There will be no excuses once the markets expect you to be mature and deliver substance, as that results in the reverse of the desired outcome. Those brands that overstay in Sympathy Marketing mode often find themselves losing brand loyal consumers, partners, and even their teams that make the brands great. Sympathy Markets are only places for those brands that understand the rules of war. Sun Tzu says, “in war, the objective is victory and not lengthy campaigns”, and a misunderstanding of this is what makes many brands struggle to grow be out of their sympathy markets.
Consumers, in the NPO’s case, beneficiaries and partners, are not always interested in anything less than victory for a contending brand, and it is only time that tells the extent of the sympathy endowed on a brand that asked for their sympathy. Brands that understand victory know that you only access sympathy markets for a short period and move the consumers’ perception in a place of dominance, and then deliver it with them.
The language or speech of victory can only come from a founder that does not have a catfish mindset, or one that has exited the survival mode of most enterprises, as the catfish does in dry seasons.
Exiting Survival Mode
All ponds dry up, especially ones that are near streams instead of rivers. A catfish goes into survival mode when the pond dries out, and waits for the next rainy season. It creeps into a puddle of mud, and folds itself, changes its breathing to extremely low heartbeats in order to conserve energy and oxygen, and can even survive for years. The catfish founder must know that surviving is not living but just slow death because of not wanting to exit that mode of survival.
The catfish founder needs to realise that there is a greater world called ocean where even in that ocean there are several large creatures such as sharks and whales that fight for domain, and it must get over its pond mindset in order to grow, lest it looks for a puddle of mud and live out the dry seasons by being in survival mode until the rains come.
