Using a Business Mindset to Fund NGOs in Kyrgyzstan
This article was first published on the Open Global Rights website.
Shifting to a business mindset is hard for non-profit organizations, but with limited opportunities for funding in Central Asia, it is a change worth making.
Kyrgyzstan is often described as the “Switzerland of Central Asia”, but not only for our spectacular mountains. Relative to more autocratic minded neighbors, we represent the most open country in this region. However, despite a reputation for hosting the most vibrant civil society in Central Asia, the sector lives in a precarious situation, vulnerable to a political system that grants disproportionate power to the presidential administration. This unstable political reality combines with limited opportunities for NGOs to find funding. With a population too poor to donate, and little support from the government, international donors remain the major source of funding for much of civil society, creating a competitive and unsustainable atmosphere.
When I co-founded the Precedent law firm, we had a mission quite different from others. In addition to our goal of providing some of the best legal services and advice in the country, our law firm profits help fund the Precedent Partner Group—a legal NGO that promotes the rule of law in Kyrgyzstan.
The Precedent Partner Group is an important part of Kyrgyzstan’s civil society. As a community of legal professionals, we’re working to revive Kyrgyzstan’s legal landscape by eschewing corruption, providing civic education for Kyrgyz citizens, monitoring legislation and doing what we can to defend the public interest. This includes monitoring parliamentary committees, providing legal conclusions for draft laws and even initiating cases against parliament when needed.
The civic education work we do is important because many people in Kyrgyzstan simply don’t know the law exists to protect them. We put a lot of effort into improving media literacy, making sure citizens know their rights, and educating them on how the law can help. In addition to improving access to information, we are also supporting the next generation of Kyrgyz lawyers, providing them with internships before graduation. While this improves their resumes for future work, it also exposes them to more socially minded and ethical ways of working—something they take with them once they graduate.
Of course, none of this comes cheap. Back in 2012 we realised that our ambitions for the NGO far outstripped what grants could cover. At first we experimented with membership fees but soon realized this wasn’t a realistic way to earn the amount required. Given that we were all lawyers, using our professional skills to open a law firm was a logical step to take. We haven’t looked back since—it’s been an enormous success and, by donating part profits to the Precedent Partner Group, we’ve managed to increase the number of programs, workshops and activities we offer.
One of the biggest benefits of a steady stream of sustainable income has been the psychological and stress relief it provides. As anyone with experience of applying for grants knows all too well, it can be an exhausting and time-consuming process. Grants are usually project specific, have a strict time limit, and you’re always thinking how to get the next one. It makes a massive difference knowing there is a chunk of money coming in without conditions and deadlines attached. Of course, grants remain an important source of income for Precedent, and Kyrgyzstan is one of the few countries in Central Asia where international funding is still accessible to civil society.
That said, making the transition to more sustainable income methods wasn’t without its obstacles. One of the biggest hurdles was changing our mindset—a challenge for most non-profits. For example, it was difficult to get used to relying on legal fees as a means of income. For lawyers this is normal, but for an NGO used to working out regular salaries from set grant amounts it has been difficult. There is no silver bullet for anyone making this transition—it takes hard work, perseverance and belief that the customers will come. The most important part was determining who would be our target client base. As our client list grew, our faith in the concept was rewarded, but it was an unsettling start. Although it is easier now, the pressure is always there to bring in business or the NGO won’t be getting cash.
Sometimes people ask if we are taken seriously as a law firm given our social mission, but this simply isn’t something that concerns our clients. We work with over 60 businesses and organizations in Bishkek providing legal consultations, preparing documents and gaining permissions. We’ve established a reputation for professionalism, expertise and results that means customers approach us for this, first and foremost, rather than for the fact that we donate our profits to the Precedent Partner Group.
There are so many different ways non-profits can make money from their services or by tweaking the way they work. The biggest change is in the mind. So we are sharing this story to encourage other NGOs to shift their fundraising models, and to further this goal we recently released a book as part of a fellowship with the Prague Civil Society Centre, called From Grants to Business Models.
As well as being a guide for NGOs wanting to experiment with business models, the book contains over 30 examples of successful business models implemented by NGOs in Eastern Europe and Central Asia. These range from non-profits in Central Asia renting out their spaces and hosting paid-for public events, to an environmental NGO selling products made from recycled plastics. The book showcases just how much potential there is for NGOs to monetize their work in some way. Most non-profits I’ve met with face the same common hurdles to incorporate business models into their strategies: lack of connections with the business community, lack of knowledge about marketing and business in general, and little concept of customer relations. All of these can be overcome if they are ready to change the way they think.
Of course, there is plenty of scepticism for these ideas and that’s understandable. When I presented my book to leaders of various non-profits in Bishkek recently, their doubts were a reminder that embracing moneymaking remains an alien—and sometimes distasteful—concept for many. However, the way the political winds are blowing in this region means that adapting early is essential. It is possible for non-profits to make money and not compromise on the work they do.
Fatima Iakupbaeva is a lawyer from Kyrgyzstan and passionate advocate of sustainable civil society. She founded a successful law firm (Precedent) in her home country in order to help fund her rule of law NGO.
Photo by Iñaki del Olmo on Unsplash