TT26 Building Partners' Financial Capacity

Guide to Financial Management

Top Tips 26

Top Tips for Partner Capacity Building

If you implement your programmes with the help of local partners, it makes sense to assess and strengthen their skills, confidence and systems to manage financial resources efficiently and effectively.  
And if you are an implementing partner NGO, having strong foundations for managing your funds will ensure fruitful and lasting partnerships.

In this Top Tip, we share some ideas on how NGOs can work together to develop an effective capacity building strategy, and thereby strengthen partnership relationships.

1. Building trust

Strong partnerships are built on trust and open communications. It is important for the partners to be clear about their respective roles in the capacity development process. Lead partners must reassure implementing partners that the process is not a ‘fault finding’ mission, rather a great opportunity to strengthen their organisation.

Senior managers and Board members, not just finance staff, must be actively involved throughout the process to ensure ownership and a high-level commitment to change. Board involvement (where possible) is critical for capacity assessment and strategy development.

2. Where are we now?

First, we need to identify if and where a partner needs to strengthen capacity.
One of the best tools to identify gaps in financial systems and skills is Mango’s free Finance Health Check (available in several languages). The Health Check helps the partner NGO to self-assess their current practice against a series of best practice statements covering budgeting, accounting, financial reporting, internal control, grant management and staffing. The statements also provide standards to aim for and track progress against.

Sometimes a more detailed, external, financial systems review is needed – eg where a significant ‘scaling up’ of operations is planned.  It is important to select suitably qualified finance professionals to carry out the review and give practical advice going forward. Mango’s consultancy service can advise you on this.

3. Where are we going?

The results of the capacity assessment should be shared openly with partners and at all levels in the local NGO. The partners can then work together to create a capacity building action plan, with achievable targets, around the key areas of staffing, skills and systems. The costs of implementing the action plan must be clearly laid out in a budget and agreement reached to finance the plans.

4. Staffing resources

Financial management systems are only as good as the people operating them. It is therefore essential to recruit the right people to key positions. A capacity building strategy must include a plan to ensure there are enough of the right people to keep the accounts, provide financial reports and oversee the management of financial resources.

If an implementing NGO is taking on a major new programme, it will need additional hours in the finance team, so this must be included in the programme budget. As an NGO grows and its accounting systems become more sophisticated, it will need to recruit more qualified finance staff or those with specific accounting software skills.
 

See Top Tip 15 on Recruiting the Best Finance Staff or contact Mango's Recruitment service.

5. Skills development

For partners to be well equipped to manage their programme funds, all staff and Board members need the confidence to use financial management tools in their everyday work. Programme officers need to build and manage project budgets. Senior managers and Board members need to plan, monitor and control resources to fulfil objectives. Finance officers need to prepare timely and accurate door reports.

But local NGOs often lack these key skills. Investing in a structured skills development plan will pay dividends. Options for skills development include:

  • Finance skills training for programme staff and Board members
  • Focussed one-to-one support for finance staff when new systems are introduced
  • Mentoring support to senior managers.
     

Mango‘s training service provides a comprehensive package of support tailored to NGOs, including training trainers to deliver fear-free finance training, an in-house training service and a global calendar of training events.

6. Systems Development

If a partner NGO’s systems need a major update, such as introducing a computerised accounting package, they may need expert help and advice to implement the changes. It is important to involve the senior management team and Board in the selection of external consultants to ensure their cooperation and support. Contact Mango’s consultancy service if you need to call in the professionals!

7. Create support networks

A great, free, way to continue developing skills and confidence is to create local networks with other NGOs to share knowledge and advice. For example, lead partners could encourage local partners attending a workshop to set up a support group that meets regularly to discuss and resolve common challenges. Mango is also setting up networking groups in regional locations.

8. Review and celebrate successes

Once the capacity development strategy is underway, make time to regularly check in to review progress together. It is great to acknowledge growth and improvements. This builds confidence and morale and the learning can be shared with others too.

Want to learn more?

Mango’s training course Assessing your partners’ financial health  is a must for international NGO staff who want to learn how to assess and strengthen partners' financial management capacity.

View our calendar of courses around the world here: www.mango.org.uk/training/opentrainingprogramme

See Mango’s Guide to Financial Management for NGOs for free advice and tools, including Mango's Health Check and a sample risk register.  See: www.mango.org.uk/guide.

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Mango helps NGOs to make more of their money by: running practical training, supporting people in finance roles, advising NGOs and donors, and publishing free tools and guides: www.mango.org.uk