Nigeria is currently experiencing an increasing wave in the growth
of non- profits and social businesses. This is majorly as a result of the poor
living conditions which current ranking shows that about 89 million people are
living below the poverty line. Many people especially youth have taken it upon
themselves to help proffer solutions to myriad of issues facing the country
from education to healthcare, technology, access to clean water and sanitation,
human capacity development, etc. Finding funding is one of the biggest
challenges faced by change makers. No matter how passionate you are about
fixing an identified need in your community, it is close to impossible to get
it off the ground without money.
Usually, accessing funding for social impact is very difficult as
most investors including banks are looking for an avenue to increase their own
profit margin. However, there are organizations that offer grants or seed money
for social impact but you need to be registered with the Corporate Affairs
Commission (CAC) to be able to access it.
So how do you access funding if you are just starting up? This
article will help you identify ways to get the funding you need to convert your
passion and ideas for social good into real social impact. To help you, here is a list of ways that you
can get your notprofit or social enterprise the support and funding it needs.
These are specifically designed to help social entrepreneurs
create and grow sustainable for-purpose businesses. Whether you’re in ideation
phase or already in operation, a pit stop at a social enterprise accelerator is
a great way to fast track your progress. As the sphere of social
entrepreneurship has expanded in the past few years, so too has the number of
accelerators (and incubators). In general, these programs offer a combination
of access to experienced entrepreneurs and mentors, business model refinement,
start-up capital, and the opportunity to pitch to potential investors. In
Nigeria, most social accelerator programs focus on tech based solutions to
problems. A good example is the LEAP Africa Social Innovator Program where
twenty social entrepreneurs who are proffering solutions to issues in the
community. You need to be registered and have worked for a year to qualify for
There are a number of well-known competitions that reward
winners with cold hard cash usually without needing to sacrifice equity. While
winning alone does not guarantee success, competitions can be a great way to
get attention and build recognition. A good example is the Tony Elumelu
Foundation Entrepreneurship Program that gives a seed capital of $5,000.
Friends, Family & Fools
(aka The Three Fs aka Angel Investors)
This is likely the most common funding source for a non- profit
and social enterprise as it can be the easiest and least time-consuming. On the
down side, acquiring funding this way can and often does result in unforeseen
problems since The Three Fs usually don’t have an appropriate understanding of
the risks involved with investing or lending money, particularly when it comes
to startups. Mixing personal and professional relationships is rarely a good
idea. Things can get VERY awkward when things don’t go as planned and money is
lost, which is HIGHLY likely.
Crowdfunding is a way of financing your social enterprise by
collecting small amounts of ‘contributions’ from a large number of people. You
publicly share your social enterprise idea and people can donate money toward
your financial goal if they believe in what you’re doing. Crowdfunding is on
the rise and is projected to become a $90-96 billion dollar industry by 2025.
Some social entrepreneurs opt to self-fund their enterprise by
using their own cash. If you have the bankroll available, bootstrapping
provides you with absolute financial and creative control. You own all the
equity so there’s no one else (partners, banks, investors etc.) that can
influence your decisions. However, to make self-funding work, you need to be
very financially disciplined – have a minimum burn rate and prolong your runway
for as long as possible.
While grants are sporadic and often location-specific they are
hard to beat. You receive money free of charge (or equity) that you can use to
launch or scale your social enterprise. It’s as good as it sounds. Finding and
securing grants can be very difficult, but you’ve got to be in it to win it.