Journal of Small Business and Entrepreneurship Development

The Capacity of NGOs to Become Sustainable by Creating Social Enterprises
Lanisia Rhoden

Abstract
“Neither the state nor the market alone could catalyse the necessary innovations and reforms of society, but rather that the source would be a ‘third alternative’, that could combine the efficiency of the entrepreneurial market place with the welfare orientation of the state”. Etzimi (1973) The increasing number of Non- Governmental Organisations (NGOs) that have been developed over the years as well as worsening economic conditions globally, have contributed to the reduction in the amount of funding available for NGOs to serve their communities, execute projects and remain sustainable. NGOs play a significant role in society, as they fill a need that cannot be adequately file by the government or the private sector. This is acknowledged by society and the government (UK) has encouraged NGOs to engage in enterprising activities to generate own revenue. While many NGOs improve their fundraising efforts to attract additional philanthropic donations, many are still not engaged any in form of enterprising activities and lack innovative and business skills that are required to be a sustainable enterprise. The research examines the organisational structures and human resource capacity of NGOs by comparative analysis against that of Social Enterprises. It then applies the theory of change framework to determine if NGOs have the capacity to develop Social Enterprises in order to generate their own revenues and profits to become sustainable. The research reveals the differences between the organisational structures and funding models of NGOs and Social Enterprises and contributes to the developing field of social entrepreneurship by bridging the gap between both concepts through process innovation. The research concludes with a discussion of the implications of the research findings and recommendations are proposed to non-profit and social entrepreneurship scholars.

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