Exciting times for 'return on society'

For small organizations in China that work for charity and social development, "profit" often seems to be a dirty word. This is understandable because unlike big corporations these non-governmental organizations (NGOs) pride themselves to be working for a greater good instead of making a few shareholders and top managers rich.

Small NGOs in China are normally run by a team of people who are highly passionate about the cause they work for, be it the environment, the physically challenged or the poor.

Unfortunately, the small scale of the NGOs and the educational and professional backgrounds of its staff members often come with a lack of business skills. As a result, many of these organizations struggle to find the right ways to raise funds, organize projects and make the most effective use of their resources. Decisions are more often made on "gut feeling" than on a proper business case with an analysis of the "return of investment".

Well, "return on investment" is another dirty phrase. Most certainly this would imply that these organizations are in it for the money. I beg to differ. NGOs are still trying to achieve a result (impact on social development) with their investments (resources like funding by donors and the time and labor given by employees and volunteers). Like any regular business, the NGOs' goal should be to create the highest possible impact with the available resources.

In that case, maybe we should soften up the terminology a bit and call it "return on society" and discuss how NGOs bring tangible return to Chinese society.

There is another reason why professional business practice will become more important for NGOs in the country: accountability and transparency.

When attracting major sponsors, chances are high that they will want to see some proof that their donations will be put to good use, and their money will not be wasted or mismanaged.

Then there's the public. Society has been demanding more transparency from the organizations it give money (as a donor) or time (as a volunteer) to. The recent Guo Meimei scandal has dealt a hard blow to the charity sector, with many people no longer willing to donate. It cannot be denied that lack of openness and transparency only increases public distrust in NGOs. The ability to show that money is spent in a proper way and actually creates an impact on society is crucial to the success and eventually the survival of NGOs.

This leads us to the question: How can NGOs incorporate aspects like accountability, return on society and transparency into their work? Honestly speaking, it is difficult. Small NGOs do not have the budget to attract highly skilled professionals. Media reports show that the average salary of an NGO employee in China is just about 2,000 yuan ($313) a month. With such a low pay, it is difficult for NGOs to attract skilled personnel, let alone retain them. But fortunately there is another way.

In recent years, large corporations have been implementing "corporate social responsibility" (CSR) but have mostly used it as a marketing tool. When products and services are becoming more homogenous and differences in prices and quality are narrowing , showing that your company does something good for society becomes a reason for consumers to buy your products instead of your competitor's.

But CSR is developing beyond that. An increasing number of consumers have begun asking corporations to be socially responsible. Consumers no longer want companies to continue polluting the environment and exploiting cheap labor in developing countries, and of late they have been criticizing many multinationals. So in the future, CSR would not be something that a company offers, but something its customers would demand. It will become crucial to the survival of businesses.

And therein lies the solution to the problem. One of the ways in which a corporation can provide "return on society" is by making its skilled staff members available for several hours or a certain number of days per month to work as volunteers with NGOs.

Research has shown that this often increases employees' satisfaction levels and loyalty, and at the same time it lends professional skills to NGOs in IT, accounting, marketing and business consultancy. Corporations can help make NGOs more successful and impacting.

What we need is a paradigm shift. NGOs in China must understand that they need to run like a business, while corporations need to seize the chance to build the capacity of these NGOs through corporate volunteering. These are exciting times for "return on society".

The author is an international volunteer working as a marketing consultant in Xi'an, Shaanxi province.

(China Daily 12/26/2011 page8)