Financial sustainability is necessary for the long-term survival of any business, but for non-profits, money-making comes with an entirely different set of factors to consider — and collecting sufficient and continuous funds to deliver their organisational mission has long been giving NGOs and non-profits sleepless nights.
Even if you do have a stable source of revenue, it’s a good idea to look at diversifying and innovating with your money flow.
As a general rule, NGOs and non-profits should not let any of their income streams be responsible for more than 30 percent of their total income. The reason is that it is exceptionally difficult to adapt and survive if an organisation suddenly loses more than one-third of their income.
Although tourism is not the first industry that comes to mind when thinking about corporate social responsibility, there is a growing interest from tourism businesses not only to meet environmental criteria but also to give back to the people and places they visit. There’s also an increasing trend, particularly among millennials, to engage with brands that do good. Both the financial calculations and customer pressure are making tourism businesses look for new ways of working with communities. This in turn is opening new doors for NGOs and non-profits to engage with tourism, and to raise funds directly or indirectly through travel-related activities.
Here are a few sources of in-kind and unrestricted funding that tourism can bring to your organisation:
Many travel companies encourage their clients to make donations to projects in destinations they visit. Different models are practiced. The most common is optional donations collected at the moment of a purchase, during the tour (for example, when visiting particular organisations), or after the tour has taken place. More advanced companies incorporate donations in their tours, and so a small percentage of money paid by a tourist for a tour is automatically donated to a selected organisation. As an example, in 2017, Urban Adventures collected nearly $100,000 through incorporated donations, to support Action Aid’s Safe Cities campaign.
Some tourism companies work directly with NGOs, and some have dedicated foundations that take care of donations. For example, The Intrepid Foundation offers a way of collecting money for local projects. A traveller can donate money to one of the projects already supported by the foundation, and Intrepid Group will match their contribution, to double the impact.
Lack of money in your organisation may be the result of poor financial management or limited marketing and sales skills. If you manage to increase your organisation’s overall business acumen and staff competency, you will increase the chances of generating more money to meet your goals.
But instead of paying for training, you can use staff volunteering schemes. Many companies pay their employees for the time they volunteer at local projects. In most cases, NGOs use these programs for hands-on-volunteering. They may ask people to help distribute food for the homeless, clean the beach or pack gifts during Thanksgiving. Be smarter and use your volunteers wiser. When you have access to smart individuals with business experience, ask them to help you solve specific business cases. These could include creating a fundraising campaign, running a sales training for your team members or giving feedback on your organisation’s strategy and management plan.
Because the amount of time corporate employees can spend volunteering is limited, use it for time-defined and very specific projects, to maximise the effectiveness of such collaboration. The advantage of this model is that such skill-based volunteering can also be offered online, so you have a much bigger range of companies to work with, as you’re not limited to one location.
Urban Adventures also has a staff volunteering scheme, and every employee has 20 hours to help an organisation of their choice. As part of this program, Urban Adventures’ team members often help nonprofits and social enterprises involved in our In Focus program solve their business challenges.
Labour costs are usually the highest expense for any given organisation. But NGOs can engage travellers as a free workforce. Unlike staff volunteering schemes, volunteer tourism can offer full-time support for ongoing tasks and longer projects at your location.
Volunteer tourism (voluntourism) has gained a lot of criticism due to unethical money-making and greenwashing practiced by a number of companies, in particular in developing countries. Orphanage scams are probably the most egregious example. However, if you are a transparent organisation that genuinely needs hands to work, there is nothing wrong with offering a volunteer opportunity for travellers who have time and willingness to help you. But how to do it right?
Most importantly, offer placements that really enable volunteers to make a difference. This means you need to clearly define the job description of a volunteer and look for a person that has skills and competencies to help you. You also need to think what’s the optimal duration of such a project. It might be shorter if you need help with website design or data input, but if helping human beings is involved, such as with teaching or community work, it should take at least a few months. Be particularly conscious when offering volunteer opportunities with the most vulnerable group: children. In most of the cases, voluntourism will bring more harm than good. If you really need volunteers’ support to work with children, better to approach local volunteers than travellers, to build lasting connections and change.
Raising money through trading and forming social enterprises has gained popularity among NGOs and charities in the last decades. Organisations trade products and services to generate income. Such unrestricted funds are often necessary to cover operational costs that can’t be covered with money from donors.
The term ‘social enterprise’ refers to the process of applying a business solution to a social problem. It is not a legal term and definitions differ, but the main idea is that a social enterprise aims at achieving both a social and financial return, and money generated is reinvested back into the community.
There is a long list of tourism social enterprises that do amazing things, like OneHorizon in Kenya, Sapa O’Chau in Vietnam, EnVia in Mexico or Ayana Journeys in Cambodia, to name just a few. All these companies offer short or multi-day travel experiences, and use money generated from tourism to support vulnerable communities in their areas by offering training programs, financial support, micro-credits, etc.
Turning your NGO into a social enterprise can be the best move to achieve long-term sustainability and impact, but also quite a risky one. Not every organisation has the capacity to completely change their business model, and running a full-time social enterprise requires a different set of knowledge, skills and structure than running an NGO.
A model that has been gaining interest in the last few years are social impact tours — tours with a good cause. These are tours and activities offered by or run in collaboration with NGOs, nonprofits, cooperatives, social enterprises or educational institutions, which might not have had anything to do with tourism before. They are now looking to engage with a wider audience and show what they do by opening their doors to foreigners and domestic travellers. The thematic range of social impact tours is as wide as causes supported by non-profits, so no matter your organisation’s mission, there’s a high chance that you can turn things you do into an appealing tourist experience.
At the moment there are a few online platforms that list social impact tours and can help connect you with travellers. At Urban Adventures, however, we go a step further. Our In Focus program offers not only marketing but full support to NGOs and non-profits that are willing to offer tours and activities. This includes training and help with product development, pricing, customer service, sales and promotion of the experiences, ongoing mentoring, as well as access to an international network of like-minded people. Organisations that work with us not only get a new source of income but also increase their public exposure and gain access to new donors and supporters.
In Focus experiences vary in each destination, but in every instance, they bring travellers face-to-face with a local issue and a program designed to address that issue. Some examples include a Syrian refugee centre in Istanbul; entrepreneurship training for disadvantaged women in Kathmandu; employment support for formerly homeless people in Bucharest, and indigenous cultural preservation in Chile.
If you’d like to give social impact tours a try, join our webinar, “How to start making money from offering tours — guidelines for NGOs and nonprofits” on the 18th of July and the 1st of August. Sign up here to receive webinar login details, and useful resources that will help fund your NGO’s mission by engaging with tour companies.
What you’ll learn during the webinar:
If you have any questions, contact our Responsible Business Manager at firstname.lastname@example.org.