A recent speech by Minister in-charge of social service integration Desmond Lee, noted that many donors prefer funding programmes that directly support beneficiaries, instead of investing in the capabilities of social impact agencies that deliver these programmes.
While investing in the immediate needs of beneficiaries is necessary, there is a lack of financial support when it comes to social innovation on a scalable, long-term basis.
In a conversation I had with the director of a large-scale non-profit organisation (NPO) in Singapore, he mentioned: “Comparing a private company to a NPO, the former has the ability to use its revenue and invest in areas such as strategic planning and research and development that have the potential to generate more profit. This increases the scale of the enterprise.”
“In contrast, for NPOs, there is an expectation that funds raised goes directly to support beneficiaries or caregiving duties”. As a result, when he looks at this staff base, many are functioning primarily as ‘caregivers’ who look after the needs of the people they serve. Many of the staff wear double hats and take on multiple high functioning roles including strategist, financial analyst, and change-maker. This is often sufficient to keep the organisation functioning, but leaves the staff with little to no bandwidth and capacity to innovate.
This decision on how to allocate resources is a commonly faced dilemma in the sector. While NPOs would like to innovate and scale their impact, their appetite for risk-taking is low especially when they have to bear most, if not all the consequences of those risks.The result is a high tendency to execute ‘tried and tested’ methods. A research paper by Wee Liang Tan on Nonprofit Organisations and Social Entrepreneurship echoes this, saying “(N)ot all nonprofit organisations seek to innovate or create social enterprises. They may continue to devote themselves to their specific fields and existing practices.” To reduce this risk, donors can play a part.
“The way we choose to give, and the conditions we attach to giving, can have the potential to create new opportunities for the sector.”
Donors, including corporations, have a part to play in influencing innovation in the social impact sector well. Ms Carrie Tan, Founder of charity Daughters of Tomorrow shared in an article by The Peak Magazine, “Some donors who have just begun their giving journeys may think that the money should be given directly to beneficiaries, whereas sometimes greater impact can be achieved if the funds are used in creating enabling programmes for beneficiaries instead of being given out as handouts, depending on the cause and mission of the charities.” The way we choose to give, and the conditions we attach to giving, can have the potential to create new opportunities for the sector.
This leads to the next question: How can corporations help the social impact sector innovate through their giving?
Here are 3 resources I would recommend to help corporations embark on their journey of innovative corporate giving.
1. “It’s Just Good Business” by National Volunteer and Philanthropy Centre
NVPC’s “It’s Just Good Business” guide is aimed at corporate giving practitioners who are new to corporate giving or intending to boost their corporate giving game.
It provides 4 practical milestones that can be used by any organisation as they plan and start their giving journey. This guide shares the different ways that companies can give, including pro-bono services, and skill-based volunteering. These giving options can create opportunities for corporations to provide strategic advice, reduce the uncertainties NPOs might have in exploring new opportunities, and supplement NPOs with additional manpower capacity through skill-based volunteering. You can access their guide here: https://cityofgood.sg/resources/its-just-good-business-a-corporate-giving-guide/
2. “Beneath the Rug” by Solve n+1
“Beneath the Rug” provides first-person insights of the tensions and dilemmas that social service practitioners and beneficiaries face across the social impact sector.
As a corporate giving practitioner looking to understand the social impact sector, Beneath the Rug will provide you with access to different perspectives in the social impact sector and develop your understanding of issues in the sector. This can aid you in shortlisting causes that will resonate with your company’s mission and employees, or provide you with an entry point to assess your company’s current giving strategy and impact. With a better understanding of social issues, corporations can also consider funding social innovation pilot programmes which are small in scale, experimental, and affordable to run. This reduces the risks while also providing an opportunity for NPOs to innovate for impact. You can purchase a copy of Beneath the Rug here: https://www.solvenplus.one/product-page
3. “Partnerships in Giving” by Temasek Trust
The social sector constantly forges partnerships with the private sector. “Partnerships in giving” equips corporations with the tools to navigate successful partnerships.
The guide provides 5 steps on how to create a successful partnership, beginning with the exploratory stages of partnerships and answering the important question of how to sustain it and make it successful. This guide enables corporations to understand their own needs and risk appetite in corporate giving, and assess the level of commitment they can provide to NPOs in their journey of innovation. The guide is available here: https://www.temasektrust.org.sg/getdoc/3d6f0208-bd60-4b4d-8b2e-4186ba275a9e/file
Businesses in the private sector have the ability to help the social sector innovate through various expressions of giving. Societal issues cannot be solved alone and it takes a whole of society approach where each of us contribute in the way we know how to. It’s important for us to partner one another in order to tap on each other’s area of expertise to create and amplify impact.