TT08 Reporting to beneficiaries

Guide to Financial Management

Top Tips 8

Top Tips on Reporting to Beneficiaries

NGO finance staff can encourage good practice, reduce the risk of fraud and increase long-term impact by providing regular financial reports to beneficiaries.

1.  Why should NGOs report to beneficiaries?

  • Financial reporting to beneficiaries can improve participation, and make NGOs more accountable to the people they aim to help. This is the foundation stone of good practice and effective NGO work.
  • What’s most important is whether an NGO’s work meets beneficiaries’ real priorities, and whether it helps beneficiaries gain more confidence. So, how NGOs work with beneficiaries is just as important as what concrete activities they carry out – if not more important.
  • Beneficiaries should be closely involved in making key decisions, like how budgets are spent and what activities are carried out. They can only do this if they know how much money is available – ie if NGOs are transparent about their budgets.
  • Beneficiaries can also monitor actual expenditure compared to the budget. This helps them build their confidence; it can identify efficiencies or savings; and it can help prevent or spot fraud. It also demonstrates that NGOs are treating them with respect.
  • Finally, financial transparency by NGOs shows government agencies what is possible. It helps build up NGOs’ legitimacy when they are trying to hold governments to account, and push for good governance. NGOs should be leading the way in this area!

Tearfund published its budget in a school building project in Afghanistan. It improved community relations, so that rebuilding could continue after it had been halted, reduced overspending and identified a case of fraud.

2. What should NGOs report to beneficiaries?

  • As a general principle, NGOs should aim to be as open as possible about financial matters. (After all, the money is given to help the beneficiaries, not the NGO.) This means publishing how much money they have in each community (budgets), and how much they have spent.
  • But it all depends on the local context, and the sort of relationship that the NGO has (or wants to have) with beneficiaries. If the relationship is long term, trusting and empowering, then NGOs should be very open. If it is short term, or trust is in short supply, or the environment is dangerous, then NGOs may be less open.
  • It may be easier to start being transparent about direct project costs (like the amount of money spent building a new school), rather than indirect costs (like overheads and staff salaries). The important thing is to make a start, with whatever you are comfortable with.

The Ugandan government fought corruption, and increased the funds arriving at rural primary schools from 24% to 82% by publishing financial information about them in newspapers.

3.  How should NGOs report to beneficiaries?

  • NGOs should present information in ways that are easy for beneficiaries to access and understand.
  • This means presenting information in local languages and local currencies, using the media that local people find easy to access. This might include posters outside the office, or signboards, or presentations at public meetings, or even radio & newspapers.
  • It may be easier to present financial information in graphical form, using simple charts.
  • Expenditure can be summarised by activity, or geographical area, or local partner. It should be presented for activities that are relevant to beneficiaries.
  • Reports should be no more than 15 lines long, and be updated regularly (perhaps every month while projects are active).

The National Development Foundation in Sri Lanka went a step further, and set up community bank accounts for local Farmers Organisations, empowering them to take charge of their own development spending.

Want to learn more?

See Mango’s Guide to Financial Management for NGOs for free advice, case studies and tools, including a section on reporting to beneficiaries. See www.mango.org.uk/guide