How do NGOs make money

Make money, well done!

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In Germany, the question of the color of money is repeatedly asked. Can money be good or bad? And if so, when is it good and when is it bad? Is it allowed to earn bad money with some good things or should certain projects fall under the protective term “non-profit” and thus be implemented in the corresponding legal forms?

The “social” sector is particularly pervaded by these questions. It starts with the nursing profession and ends as the managing director of an NGO - making money is virtually taboo in the non-profit sector and when it does, you don't talk about it. It's embarrassing that I do good and get paid for it. Completely wrong, we think!

As a social entrepreneur in particular, one is repeatedly confronted with the question of money. "What is social about you, you make money?" is just one of them. We spoke to three social enterprises about this topic and came to the conclusion that we are all riding the same troubled wave ...

Is that possible to be social and still earn money?

As a social entrepreneur, you usually produce a product or offer a service like any other company. The difference, however, is that profit is not in the foreground, but the social impact. So can you make money as a social entrepreneur? We asked around.

Mowgli, for example, inspire children with their sustainable organic products for food and nature, in order to bring healthy food back to the table or to keep it there. We spoke to founder Armin Steuerungagel. Armin is of the opinion that some people ask about the compatibility of money and social issues in the first place, because in the past - and also now - there are companies that are “socially” or “sustainable”, but only this Do it for marketing purposes and not because you really want to change something. You hear greenwashing a lot! At Mowgli, however, things are different, he emphasizes: "We actually see our company as a non-profit company ... this is reflected in the fact that we do not pay out our profits to ourselves, but see it as a start for new products / projects". For Mowgli is the profit is not the purpose of the companybut means to be able to pursue the actual purpose of “getting children excited about healthy food”. But there is also more to it than that: “In the type of economy we are active in, that is, in an economy where profits are not the only thing that counts, our employees and customers are of course very important and are treated with respect and not just as Instruments seen ”.

Florian Henle from Polarstern also makes it clear: "We are a social enterprise because we weight the economic, ecological and social components equally, and that's how our products are set up." Polarstern earns money through renewable energies. But they also help developing countries to switch to renewable energies, and the customer knows that and pays for it. “We also prefer to work with companies that work in exactly the same way” Florian emphasizes: "Money in itself is not antisocial, it depends on what you do with it."

It's similar with MeineKleineFarm. We spoke to founder Laura Kübke, who is also a social entrepreneur and cannot understand why some people ask this question at all. “We ourselves no longer ask ourselves this question, because everyone has to earn money and I prefer to earn it with something that I am 100% behind than with something that I am related to, and still have a clear conscience . ”

So the bottom line: Being social and earning money is not only possible, it has to be! Of course, none of the entrepreneurs is solely concerned with profits, they could achieve that much faster elsewhere, but it is about promoting the sense / purpose of a social business idea and doing something good for the community. And isn't it precisely the people who think this way who should actually be the turn to become millionaires? We hope so!

Why do you choose the economic route and not just found an association?

Another question that social entrepreneurs have to deal with again and again. Who does not know this, especially when you have your counterpart to the point that he understands that the profit of your own company is only secondary and that you pursue a purpose above all, he wonders why you don't just found an association.

Of course, Florian also finds a legitimate question: “We want to think entrepreneurially and be independent, we couldn't do that as a club”. Another uniqueness for some social entrepreneurs may be in the product. You don't just manufacture a product that is actually produced well and sustainably, but also something that is supposed to change the behavior of the consumer, thus the market and ultimately the world. In the words of Armin: "We want to do something that has such a value in and of itself that one is willing to pay for it". We couldn't be more convinced - YES, let's offer or manufacture all products that are so great, so meaningful and valuable that others are happy to pay for them and you don't have to live on donations and be nice.

MeineKleineFarm could also have founded an association, but they want to change the behavior of the consumer with the actual “problem product” - less meat consumption through the sale of meat is their motto. A difficult model with which they turn the consumer into a “prosumer”, that is, create awareness. They don't want to make someone a vegetarian, they want to make people more aware of their consumption and that works best through the product itself. So their charitable status can only work if people actually buy the products and thus assert themselves against the competition. Your Competitiveness is central to their message. A very clear case for a social business.

“I believe in good business and I defend myself against the assumption that there is a bad economy on the one hand and good NGOs on the other that take care of ironing out all the shit that the economy produces,” says Armin. We also find an important point, because the economy is an integral part of our society and does not have to be thought away at all, but maybe only reformed from within. “We will only be able to change the world if we ourselves lead the economy back to a reasonable form, where it comes from within itself serves the needs of the people and does not become an end in itself”Armin speaks to us from the soul. Maybe tomorrow there will be no more clubs to make the world a better place, but maybe there will be such a major paradigm shift that “our economy is developing from a profit-driven economy to a meaningful economy, because especially the young people who are now on the The job market is coming, no longer wanting to work so that someone can cram their pockets ”argues Armin. And so the world would be a whole lot healthier.

This article was created in collaboration with Triodos Bank. The social enterprises in this article are all business customers of Triodos Bank. Triodos Bank is a sustainability bank that seeks innovative ways to make money work for society and a better future. And this with the greatest possible transparency - by reporting on every loan granted. With loans, the sustainability bank only supports projects and companies that bring about positive changes for people and the environment in the long term.

Mogli produces sustainable organic food for children to help families bring healthy food to the table and to make children aware of the healthy use of food and nature. The profits are reinvested in other child-friendly products to educate people about nature and healthy food.

The aim of MeineKleineFarm is to turn meat lovers into animal lovers too. It is not about banning the consumption of meat, but about creating awareness for it. The profits flow into projects such as “Schulschwein”, where more conscious meat enjoyment is to be conveyed as early as childhood.

Polarstern is Germany's only energy supplier that relies entirely on renewable energies for electricity and gas. The profits are invested, among other things, in projects in developing countries, where they help on site to switch to renewable energies.