Costs Kill

Mistake #3: Dependency on regular funding

People in the NGO world spend a lot of time talking about sustainability strategies. In the commercial sector, the secret to business success is simple: make more money than you spend. If you build something that doesn’t actually have any income however (like most civic sites), this approach is problematic. There are therefore three main paths that organisations take: (1) find a way to make money from the site, (2) accept donations, or (3) get funding from a friendly benefactor. Unfortunately the first two are very difficult. Some big sites manage this1 but most don’t — leaving only the third option.

My favourite approach, however, is (4): have no running costs.

I’m not simply talking here about sites that are so simple they can be built in a few days and forgotten about (great though those can be). Rather I’m talking about a model where you receive funding to build a site, but you construct it in such a way as it can then run itself without ongoing funding.

This requires automating everything you possibly can (and I mean everything), and putting your users in charge of anything you can’t2. That doesn’t mean scrimping on costs — in fact the opposite is usually true. Usually this requires spending more money up front: automation takes much more work than just creating a database to populate, and much more effort is required to build tools suitable for use by the the public at large, or even volunteers, than internal staff who can more easily be trained how to work around the idiosyncrasies.

Nor does it mean you can’t spend money on marketing, PR, outreach, and the like. Again, on the contrary, if you’re going to be depending on users to maintain the site for you, you probably need to get a lot more of them to make that happen (following the 90/9/1 rule). I’m not saying these sites shouldn’t have any costs. Rather, I’m simply saying they shouldn’t require any maintenance costs. For such time as you have funding, then of course you should spend it making the site better, growing it, raising awareness of it, etc., but if the money runs out, then the site should be able to keep running at its current level. It should even be able to outlive your organisation.

Geeks are used to this kind of thinking (you can even buy the t-shirt). NGOs aren’t. In fact it positively scares most of them. I met an organisation recently who produce regular reports on what MEPs from their country are doing. They collect about 80 different pieces of data about each one, tally them all up using a complex formula, and then rank each MEP. This currently requires five full-time researchers (and sufficient funding every year to keep them all employed). When I suggested developing a series of tools to go fetch all this data automatically from various European Parliament websites, populate a database with it, and generate all the reports without any human involvement other than to double check that everything was working smoothly and the results looked OK, the organisation was horrified. That would put them out of business and destroy five jobs!

Ironically though, if you’re capable of doing this, then it actually makes it easier to get more funding. Most funders I’ve talked to are frustrated at supporting sites which start off well, but then run out of money and simply disappear. But they don’t want to have to keep bankrolling them every year simply to keep the site alive. People with the knack of building self-sustaining sites will have very little difficulty in getting more money to work their magic again and again. It’s not like there’s any shortage of problems to solve!

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  1. I’m always interested in more examples, so please leave comments of ones you know []
  2. We’ll talk more about this half later at “V”. []
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One Response to Costs Kill

  1. Cool link to t-shirts. Want one 😀

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