Applying management principles of successful businesses towards the survival of non-profit organisations in the Western Cape

Abstract

Non-profit organisations serve disadvantaged people by fulfilling their social needs, promoting social inclusion and building economies. Non-profit organisations are confronted with a tightening funding environment, growing competition for donors and grants, rising demand for services and increasing calls for accountability. The objective of the study was to investigate the way in which non-profit organisations in the Western Cape province apply fifteen management factors of the Lussier Business Success Versus Failure Model. This model was successfully used in various parts of the world to predict the success or failure of a business. A descriptive research design, using a qualitative case-study research approach was used in this study. A purposive non-probability sampling method was applied, and convenience sampling was used to identify twelve participants from four non-profit organisations. Semi-structured interviews were conducted with founders, managers and staff. Descriptive and thematic analysis techniques were utilised, and a deductive coding approach was used to develop thematic areas. Thematic analysis showed three broad themes, namely people, management, and finance. The research established that the non-profit organisations applied nine success factors of the Lussier Business Success Versus Failure Model. Non-profit organisations keep accurate records and adequate financial controls. They do have staff with management experience, while the staff have limited NPO experience. The non-profit organisations make use of professional advisors and networks. The research also revealed that non-profit organisations experience challenges with income-generating activities. They do not plan for the long term and find it difficult to retain staff. Non-profit organisations also lack critical skills, such as strategic planning, marketing management, and administrative management. Non-profit organisations need to build and maintain relationships with government bodies, support organisations and other non-profit organisations. Enhanced information sharing and relationships will reduce the dependence on government grant funding. Applying management principles will enhance the long term survival of non-profit organisations.