ZIMBABWE PROJECTS TRUST (ZPT)

Organizational Vision
Citizen Base Strategy
Results

Organizational Vision

ZPT is a Zimbawean citizen sector organization which supports community development initiatives, with an emphasis on micro-enterprise development. The organization was founded in 1978 with the initial goal of supporting the liberation struggle through logistical support and accessing finance from donors. After reaching independence, it shifted to playing a developmental role.

In 1989, ZPT began discussions with its main funder regarding donor fatigue and the need to develop a proactive strategy to become financially self-sustaining. The outcome of these discussions was the formation in 1990 of OCTREV (Pvt.) Ltd. – a separate company established to generate income for ZPT. The obstacles met by ZPT and how they overcame them is strategy in balancing for-profit and not-for profits.

Citizen Base Strategy

Define the for-profit activities.

In 1990, a team of private sector consultants was contracted to research the viability of various sectors and to develop and run businesses. The food industry and tourism were chosen as target sectors. The first businesses were a series of take-away shops, including one at a local college.

Create a management system that works.

Because it felt that it had hired "experts," ZPT allowed the consultant the freedom to run the businesses as they saw fit, and did not interfere in decision-making. No clear controls or structures of accountability were put in place. OCTREV soon ran into problems, finding that the consultants were motivated purely by self-interest. They stole ideas they developed for OCTREV to create private businesses for themselves, destroying OCTREV's businesses in the process.

From this experience, ZPT learned that there was a need for more oversight. They subsequently set-up a new structure whereby individuals who ran the businesses were employed directly by OCTREV at NGO wages. The problem with this strategy was that they found that managers from NGO backgrounds lacked sufficient business skills and orientation to run the businesses effectively.

In 1996, OCTREV hired a business manager with private sector experience. He built up a team of qualified managers with relevant experience to manage the various businesses. Managers were paid competitive private sector market rates and staff according to union pay scales. Hiring qualified business managers and providing extensive staff training helped OCTREV to overcome challenges associated with scaling up from small business investments to medium-sized ventures.

Recognize when an investment decision is not a good one.

One of the first decisions made by the OCTREV management was to sell off the take-away businesses because they were not viable. The expense of running them was higher than the income received and increasing competition was undercutting their prices. After weighing all factors, OCTREV's manager decided to sell even though the company suffered a loss on its original investment. At the same time, he spotted a new and more promising investment opportunity in a college where one of the take-away businesses was based. At the time, it was losing money due to mismanagement. But taking into account the high demand for education, the shortage of facilities, and the potential to improve management and make a profit, OCTREV decided to buy the college with funds from the sale of the take-away businesses.

Results

Thanks largely to the success of the college, OCTREV's sales are now improving. From Z$70,000 (US$127.51) in 1996, they rose to Z$200,000 (US$ 364.30) in 1997, and more than doubled in 1998. OCTREV's annual budget and monthly cash flow projects estimated amounts for its own expenses, capital expenditure and contributions to ZPT. The contribution to ZPT is only paid out once OCTREV expenses and capital expenditure have been met.

ZPT was fortunate that just as some of its donors were leaving Zimbabwe, its income generation company began to generate profits. By mid-1997, ZPT had received Z$800,000 (US$1547.19) from OCTREV, meaning that most of its projects could be funded at the same level as before.

Source: Lisa M. Cannon for "Life Beyond Aid: Twenty Strategies to Help Make NGOs Sustainable" – a publication of the Initiative for Participatory Development and INTERFUND.