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 the program.
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.