For the most recent edition of Vértices, we spoke with Catalina Escobar Bravo, co-founder of Makaia, BeTek and Nodoká, about the crisis of cooperation and the opportunities that are opening up for the impact ecosystem. Here we share the full conversation.

‍

How deep is the funding crisis we are facing in the sector and what impacts are you seeing on social organizations?

We are seeing a bit of everything. There are organizations that have been deeply affected, some have even had to close operations, while for others the crisis does not represent a significant impact on their annual budget.

The spectrum is very broad, which brings us to a fundamental issue: business models and income generation in social sector organizations. Although we should talk about the social impact sector, because the impact is not limited to NGOs. It also includes universities, think tanks, private companies, foundations... in short, all kinds of organizations.

The impact is profound, especially if we consider that Colombia was the main recipient of international cooperation resources from USAID and the State Department in Latin America and the Caribbean. This aggravates the situation, but the crisis exposes structural problems that were already present in the sector.

What signs did we miss and what lessons does this moment leave for the civil society ecosystem?

That this happened from one day to the next was a surprise. But there were signs, you just had to know how to read between the lines. For example, no organization with a social purpose should depend exclusively on projects. If the purpose transcends a specific project, sustainability cannot be based on specific calls for proposals and funds. It is necessary to think of the organization as a whole and understand how its different sources of income contribute to its mission.

Project-based business models alone were already a warning sign. No one can depend on that alone. Another foreseeable factor was Colombia's transition at USAID toward the concept of self-sufficiency. As an upper-middle income country, it was on its way to becoming less dependent on official development assistance and funding its social impact strategies internally. We knew it would happen at some point, but not when. What was unexpected was that the change happened overnight.

Organizations that understood their purpose beyond project execution were probably better prepared because they had already diversified their sources of income.

You've talked a lot about the importance of moving from a project-based model to a program-based model. How are they different and what is needed to make that transition?

This is a key issue that organizations need to focus on. A project-based model - and I say this because this is what Makaia was like ten years ago - revolves around executing third-party initiatives. We worked for MinTIC, for foundations, we implemented projects that didn't really belong to us.

Over time, we made the conscious decision not to depend on the will of third parties or donations to execute. This is how we started to create programs.

A project has a start, an end, deliverables, budget and a specific duration. At the end of the project, the next one must be sought. A program, on the other hand, can integrate several projects or be an organizational structure with no defined beginning or end.

For example, at Makaia we have a technology appropriation program. Within it we develop our own projects and offer services such as courses, training and events that generate income. A program is a broader structure that combines projects with other lines of financing.

But the most important thing is the change of mentality. With a program, you define the purpose, the goals and its evolution. You are in the driver's seat. When you only execute projects, you are a passenger; the one who drives is the donor who puts up the money.

Thinking about the current moment, in which many organizations feel that the floor has been moved, how to move towards a more strategic model when most of them are in survival mode?

I think that at this moment it is very difficult to think about it. We are in crisis mode. For me, there is a very clear analogy with what we experienced in the early days of the pandemic. That feeling of What are we going to do? How many jobs are going to be lost? How do we combat the misinformation? How do we unite? How do we work together?

When everything is so scrambled, it is very difficult to think about strategy. But I do believe that this will eventually lead us to rethink how we diversify our sources of income. And be careful, it is not just a matter of substituting resources, it is not a matter of saying "they don't give me any more money here, I will look in Australia or Sweden". No. The problem is mine, as an organization.

I have to rethink how I generate income, how I design actions that are sustainable not only in terms of social impact, but also economically.

Now, I think that for many organizations that are having a hard time, it is very difficult to think beyond the day-to-day. They are in a multiple urgency: legal, accounting, legal, tax... in addition to a brutal misinformation, which does not allow them to see clearly.

But I do believe that in a few weeks the conversations will have to become more structural, more substantive, about the sustainability of social purpose organizations.

There is a lot of talk about diversifying funding sources. In the short term, how does this translate, and what strategies can organizations begin to implement?

Mental barriers must be broken down. In the social sector, talking about business models is almost demonized. But we have to talk about it. We are non-profit organizations, but not loss-making. We have to have sustainable sources of income that allow us to maintain an operation that, in turn, leads us to fulfill the social purpose for which we were created. 

Now, how do you diversify? First, it doesn't happen overnight. It takes time. In our case, in Makaia, these were decisions we made about ten years ago; we decided that we were not going to depend on a single source of income, or only on projects. Where to start? You have to ask yourself: what assets does my organization have? And those assets can be physical or knowledge assets. How can I monetize them?

For example, there are organizations that have physical assets. I know the case of one in Medellín, Fundación Bien Humano, which has a beautiful headquarters in the center of the city, but it was underutilized. They transformed it into a social coworking space, and today it generates income. This is an example of how to monetize a physical asset without losing focus and social purpose. In fact, on the contrary, this income allows them to better fulfill their mission.

There are also the knowledge assets: what knowledge do I have as an organization? How can I package and sell it? It can be through courses, workshops, training... and here we have to break the myth: the private sector can perfectly buy that knowledge. It can also be translated into consultancies or project proposals based on the organization's own knowledge.

So, there are many ways to monetize assets-tangible or intangible, physical or intellectual-but the important thing is that, when you reach that point, you generate a more stable cash flow. A cash flow that does not depend only on projects, which we know go up and down and can put the operation at risk.

So yes, there are tips to move from projects to programs, which is an alternative, but there are also other ways to generate income, from monetizing assets. This takes time and also requires, ideally, a more or less calm sea to be able to think it through and plan it well.

What would you say to an organization that is in a moment of crisis? Thinking in the short term, is there anything that can really help them get out of the mire, even momentarily, before they can think about long-term strategies?

It depends a lot on the sector each organization is in, but when they say that cliché that crises are opportunities... I do believe in that. I know it is very difficult, but some organizations can -with effort- abstract a little bit from the problem and see what opportunities open up in the midst of the crisis.

A very concrete example: if I am in crisis because a development worker has left, I raise my hand and talk to the others. We did it, we wrote letters to all our development workers explaining our situation. We told them, "This is happening to us, we want to talk". And maybe one of those allies will throw you a lifeline, because they believe in you beyond a specific project. Believe in your mission.

What I would say to an organization in crisis is, if you have other allies, contact them. Tell them, with full transparency, what's going on. Talk to your teams as well. Sometimes it takes a cool head to think through the chaos: How do we organize ourselves to create something new? 

Raise your hand. And that doesn't necessarily mean asking for money. In fact, one of my recommendations is that the best way to ask for support is not to ask for money directly. It's opening up the conversation.

Many times we don't talk. We keep the crisis to ourselves. And the rest of the sector may be the same, but nobody says anything. Imagine being a funder who is supporting a local organization and, in the midst of the crisis, that organization is silent. You, as a funder, would think: "Everything must be fine". So my recommendation is: talk to your partners and donors, tell them, "We are going through this difficulty, we are working with our team to respond, and we want to talk to you to see what ideas we can come up with together to navigate this situation."

Since the announcement of the freezing of USAID funds, multiple initiatives have appeared to diagnose the level of affectation. Beyond solidarity, how could a more articulated response from the social sector be organized?

I believe that the solidity of a sector is demonstrated precisely by its capacity to react, and yes, I feel that this capacity today is very fragmented. There are actors doing surveys on their own... we are doing one ourselves. And leaving aside how valuable it is to have information to understand reality, the problem is that this information will end up over-diagnosed or dispersed. And that can make it difficult for us to make collective decisions.

I believe that the sector lacks strong associations and associations. And this is not a problem exclusive to Colombia, it happens in many parts of the world. The private sector has powerful associations that articulate, convene and generate consensus. The public sector, by its very nature, also has this coordination capacity. But the social sector does not necessarily have a strong entity that represents, articulates or leads with sufficient weight. And I repeat, it is not only a local issue, it is global. We lack the capacity for collective representation. And this is noticeable: information is becoming dispersed and, probably, so are actions.

I do believe that many information-gathering mechanisms have been activated, and I return to the analogy with the pandemic: everyone was trying to diagnose, to understand. Maybe that overdiagnosis also leaves us with something positive, visibility. 

Because this is a very invisible sector. And those who are outside this "black box" do not really understand what is going on here. Hopefully all this will help society to better understand what we do in this sector. Of course, this also implies that we have to make a much greater effort to communicate what we do.

In times of crisis, the ability to demonstrate impact becomes a determining factor in accessing funding. How can we best communicate the value of what we do, especially when we are not focused on addressing primary needs?

I don't have a clear answer because it's exactly the same for us. Recently, someone from the team was telling us that he was at a fair with other NGOs. He was next to an organization that works on food, and on the other side, one that works on school education. And he said to us: "How can I sell what we do? And it was very nice, because he ended up telling us about the impact on jobs in technology, and how this generates social mobility, access to opportunities... and also transforms lives.

But yes, it is the same for us. Our work is not focused on meeting an immediate primary need, but on other dimensions that are also fundamental for development and social mobility. The problem is that many times, from the outside, this is not seen as a priority.

It is said that the key is in the stories. And yes, they are powerful, inspiring. But I have a love-hate relationship with them, because we can't stop there. Social impact must also be measured with numbers, with theories of change, with evidence. And that takes time. We constantly ask ourselves: how do we communicate the ultimate purpose of what happens when a person learns to use technology? Because it's not just about the tool, it's about everything that it can trigger. And I think this context is going to force us to think even more about how we communicate.

Here I take this opportunity to say something that concerns us a lot, we need to start building positive narratives about what we do. Because, in addition to the crisis due to the reduction of resources - like USAID - we see a very dangerous anti-diversity, anti-gender equity, anti-NGO narrative coming.

It is already happening in the United States. And we are concerned that, after the freezing of funds, a second wave of disinformation and attacks on the social sector will follow. There is a great opportunity here: how do we start, from now on, to build and share these positive narratives? That is why, as a collective, we must work on communicating better. And do it in a way that society really understands what we do and why it matters.

How do you imagine an ideal version of sustainability in the social sector? What lessons could be learned from this crisis to arrive at such a scenario?

Well, I believe that, after we get through this crisis, the sector is not going to disappear. The social sector exists with or without resources from the U.S. government. There are organizations that were not even affected; some did not even know what happened. What is happening is that, in recent years, more and more organizations have been benefiting from these funds.

So what will happen? Perhaps the sector will weaken a bit, yes, but I also believe that this crisis will teach a very valuable lesson about income models in the sector. Even those organizations that were not directly affected are surely listening and reflecting on what is happening.

I always try to see the glass half full. I am one of those who believe in possible futures. And if something good can come out of all this, it is precisely that learning, understanding that we have to talk about sources of income, diversification, exploring other ways of doing things and approaching other sectors.

Hopefully this crisis will leave us with the understanding that depending on a single source of financing is simply a bad idea for the sustainability of any organization. My hope is that this will also lead us to become stronger, to generate more guilds and associations that will give us the representativeness that we are sorely lacking today.

We were talking a moment ago about the importance of breaking down barriers to working with the private sector. What paths would you suggest for those who are just starting to approach this sector? How can bridges be built between the social sector, the private sector and also the public sector, which is often even more difficult to connect?

I would add that we must also cross bridges with the public sector. Sometimes it is very difficult, but I do believe that we are called to work with all sectors of society. We have to start by removing the myths and paradigms that exist about the other sectors. And understand that, just as we have them about them, they also have them about us.

For me, the key is empathy. To think beyond whether someone comes from the public, private or social sector, and focus on the higher purpose that can unite us. Is it education? Culture? Democracy? Let's look for those conversations that connect us, that convene us, beyond what divides us.

I believe that we must stop seeing ourselves as isolated actors and start seeing ourselves as means to achieve the same purpose. And something I have always believed in is that all sectors are jointly responsible for the development of our society. No one can do it alone. If we want a more prosperous society, we have to work together. That is the only alternative.

Perhaps that is the common thread, if we do not work together, if we remain divided, those gaps that open up end up being the places through which crises can creep in.

‍