Often, you will hear donors and sponsors suggesting that an orphanage needs to generate income and sustain itself. While that idea sounds and tests very good, the reality of it is what has proven to be a challenge.
Our Africa Coordinator has spent the last three years training the orphanages on the sustainability projects and he shares his thoughts on the question above.
“Orphanages on their own cannot generate income and or become sustainable. By design they have been established to be income takers and not creators. After a carefully examination of the issue of sustainability for Children homes and having had an opportunity to visit and work with over 100 orphanages in the last three years, I have come to three conclusions.
- Orphanages cannot generate income by themselves and therefor they will remain to depend on donors, well wishers and people of good will or other external projects. Why?
- Because any activity that an orphanage engages in other than the primary objective of caring for orphaned, vulnerable and destitute children, becomes a secondary activity with a different objective. Let me share two examples
- If an orphanage decides that they will sink a borehole, pump water, which some will be sold directly and the other will be purified and bottled for sale. The water selling venture becomes the income making component and not the orphanage itself.
- If an orphanage decides to undertake a dairy farming project of poultry farming, similarly the poultry or the dairy farming project becomes the income generating component and not the orphanages.
- Being two distinct undertakings and each with different objectives- They require different management approaches, systems and investment.
What I have observed
- People who tell orphanage directors to initiate income generating projects, are barely willing to make the necessary investment needed to make those projects worthy much. For instance buying 50 or 100 layers for an orphanage of 60+ children might look like a big deal, but in reality it’s a waster of time and resources. Those 100 layers will need to be cared for, fed, treated and even get psychological attention. Bringing them without figuring out what will be needed to care for them might mean a number of things. Use of orphanage fundraised money to buy layers feed, use of orphanage staffs to take care of the layers, the director spending most of her time worrying about the layers than the children…..Compare the hassle with the output for the layers at the end of the day and tell me if it’s worthy it?
- Many directors overrun the income generating projects and want to control it. This despite the fact that they have no skills, knowledge, abilities and their motivation for profit, compared to their motivation for charity is very low…. In fact many have ended up giving out products meant for sale for free.
- While many orphanages have huge budgetary needs, the income projects produce far much less than the needed amounted, many times leading the projects to be just for show-off that they are doing something, while in reality they do not earn anything from them.
- Many small different projects proposed by different supporters….Suck garden here, a few chicken birds there, a green house here, one cow there….is what you come across when you visit many orphanages—–Its because each donor wants to start something of their own. What’s the purpose of having too many small projects that are not working?
WHAT I HAVE RECOMMENDED AND TRAINED
- Separation of the orphanage and income generating projects and activities. Where each side has their mandate clear. For instance the orphanage side concentrates on caring for children, the income generating side focuses on making profit that can be used to drive activities on the orphanage side. With this separation, teams, structures and systems will be set up to aid each side to achieve they core mandate.
- Measure and understand how much the Orphanage side consumes per month or annually….based on that design a business or project that will contribute at least 50% of the amount needed by the orphanage side. That’s after the business or project has broken even and can take care of it’s own needs. (I always advise that not all profit should be consumed, its a good practice to continue re-investing in the business or project)
- If possible, populate the project and business side with people who are skilled and professional in the area or line of business…If properly constituted, the business side has an opportunity to tap into complex funding opportunities available on the market, that an ordinary orphanage cannot access.
- I also recommend that there is no harm starting small, but being strategic enough to build one project or business overtime that then in a certain period, say, five to ten years it will be able to generate significant profit to drive itself and also take care of the orphanage needs.
Of course there is a lot more that goes into running a successful income generating project to sustain and support and orphanage. What is important is to avoid the temptations of throwing something inform of an income generating project to an orphanage without having involved them, understood their capacity and without the commitment of walking with them in the long haul to see that the project succeeds. I tell directors and orphanages founders to prepare elaborate business plans when someone suggests they would like to support an income generating project. I also tell them to avoid jumping on to projects just because they fear they will not be funded if they refuse to accept a bee farming idea….which they completely have no clue about.”
LIFT THE CHILDREN