Commercial contracts are a real and valuable source of income for many NGOs, yet they also remain a major challenge. Pursuing these opportunities is often viewed with skepticism about the impact on an organization’s nonprofit mandate, its soul.
Many of these fears are justified, but they should not tempt us to ignore the alternative operating basis that commercial contracts represent. Managed correctly, these contracts can help overcome some of the formidable challenges many NGOs face today: Falling grant income, the end of unrestricted partnership grants from the United Kingdom’s Department for International Development, more competition among NGOs, new entrants to the sector and an increasingly challenged or shrinking civic space in some countries.
The processes for procuring DfID grants and contracts aren't so different; here are some tips for making the switch.
Attracting and successfully winning commercial contacts is also littered with potential tripwires. Together with my colleagues at MzN International, we have been privileged to help several major international NGOs get “commercial contract ready.” Here are the top five tips we have learned.
1. Get ready and get serious