Helping people is difficult

Guide to Financial Management

Helping people is difficult

Some clear-sighted NGOs deliver excellent work; others do not achieve a great deal by way of concrete results; some carry out poor quality work that makes poverty worse, even with the best intentions.

A number of factors across the sector can make it hard for NGOs to achieve good practice.

1 Growth

The NGO sector has grown quickly in recent years, in an unplanned way. Many new organisations are springing up, handling more money than ever before. Existing NGOs have grown quickly. This allows NGOs to achieve a great deal more. But managers have found it hard to invest in developing internal systems to handle this growth. Managing a $10,000 organisation is very different to managing a $100,000 organisation.

2 Confusion about goals and strategies

The word 'development' is used in different ways by different people - sometimes meaning 'empowerment' or 'service delivery' or 'humanitarian aid'. This has created a lot of confusion about what NGOs are trying to achieve. At the same time, many NGOs have not been pushed to work out how their specific activities contribute to broader social changes. So they do not all have strong strategies.

Funding mechanisms are often better for handling money than for working with people.

3 Financial pressure

Many NGOs work under a lot of financial pressure. This can encourage them to attract donors by exaggerating their ability to help people. It is also easy to confuse ‘what's good for the organisation’ with ‘what's good for beneficiaries’. NGOs have no incentive to report failures to donors - and a strong incentive not to mention them. This can prevent learning.

Staff spend time focused on donors' needs rather than beneficiaries

At the same time, institutional donors are under real bureaucratic pressure to use up their budgets. So, it may be in the interests of both donors and NGOs to spend money within a certain time frame (eg to build up NGOs) rather than to help people effectively.
Finally, donors ask NGOs for specific information and attach specific conditions to their funding. Most NGOs are funded by several donors - who generally ask for different things. So staff may spend their time focused on donors' needs (eg writing project proposals and reports). This makes it hard for staff to focus on beneficiaries, and to react flexibly to changes in the local environment.

4 Inappropriate systems

As the sector has grown up quickly, there are not many proven models for overseeing NGOs' work and holding them to account for how they use funds. This is partly due to the factors mentioned above. It is also partly due to organisations borrowing some systems from the commercial sector without fully adapting them to how NGOs work.

For example, very centralised systems of oversight and control make it difficult to adapt work to local realities. In particular, the use of 'projects' has been criticised by many writers.

Projects are often based on the assumption that certain pre-defined activities will logically lead to certain pre-defined outcomes.

This is seldom true when dealing with social situations because

  • (a) they are hard to understand in the first place, and
  • (b) they are always changing.

Rigid project plans cannot capture all the details of local people's realities; they also risk becoming out of date quickly.

So the more that NGO staff are pushed to follow rigid and pre-defined project plans, the less they can respond to local people's real needs. As a result, NGOs' impact can be undermined.

5 Limited oversight

Donors' and NGOs' claims are not regularly checked by any independent body or always by their boards of trustees. There is very little regulatory oversight of NGOs' field work (eg by government). Boards of trustees tend to rely on their managers and can find it hard to exert a great deal of control.

Conclusion

All these factors add up to a system that is growing rapidly but does not always encourage good practice. Funding is not directly linked to the quality of NGOs' work on the ground. NGOs win funds based on unverified claims of what they can deliver - and donors do not always question those claims too closely.

Helping people is harder than one might think. The structures and approaches assumed to be appropriate don’t always work as well as we would hope. There is a need for some new approaches.

Helping People is Difficult (6 page paper)

 

Back to top