What NGOs do

Guide to Financial Management

What NGOs do

This section of Mango's Guide describes what NGOs do and some implications of this for how they are managed.

Finance managers need to understand what NGOs do in order to help staff make the best use of their funds. For example, there are some important differences between NGO work and commercial work. NGO work is all about getting involved with complicated social situations and responding to people's changing needs.

Almost all NGOs are small and not very powerful compared to the scale of poverty and injustice that they aim to tackle. They are also small compared to institutions that create and reinforce poverty, such as political interests, business interests, cultural factors, conflict and many others. So NGOs aim to achieve their goals in four ways:

These activities overlap with each other. They are all based on social values about how people relate to each other - such as demonstrating a fundamental respect for each other.

NGOs often find that helping people is difficult. It is hard to solve other people's problems.

Effective help depends on understanding the local context and developing a strong relationship with local people.

This has important implications for how NGOs organise their work. They have to encourage their staff to take a flexible approach to working closely with people at the local level - while also maintaining minimum standards of control. Mango sums up the implications of this in two golden rules:

Two golden rules

  1. NGOs have to maintain a respectful dialogue with the people they aim to help.
  2. NGOs depend on their field staff and have to empower them to make good judgements.

We believe that NGOs' financial management systems should aim to work in tune with the golden rules - putting beneficiaries and field staff at the heart of an NGOs' systems. It is not an easy thing to do, due to a series of practical problems. But otherwise there is a risk that staff may be encouraged to focus more on bureaucracy than the people they are trying to help.

The implications of this are discussed further in A new management agenda

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