DURHAM, N.C. – On Thursday, Sept. 26, a panel of experts discussed how international NGOs are responding to changes in the complex environment in which they work. Pressure to produce results efficiently and effectively, increase transparency and accountability, and compete successfully for shrinking aid monies is encouraging the introduction of private sector business practices in NGO operations management.

Meanwhile, international NGOs that engage in advocacy are revising organizational architecture, governance and management systems to create the resources, coordination and coherence required to be effective in representing the interests of developing country civil society on the global stage.

“As [organizations] strive to deliver measured results, they’ve had to look at themselves in the mirror,” said Vickie Barrow-Klein, Chief Financial Officer of Management Sciences for Health in Boston. “We can’t be all things to all people anymore.”

The panel, held at the Sanford School of Public Policy, was the first event of the 2013 Rethinking Development Policy series. The series, sponsored by the Duke Center for International Development (DCID), was designed to challenge conventional thinking on development issues and provoke lively discussion among participants.

The discussion was organized and moderated by Frank Webb, Visiting Professor of the Practice of Public Policy at DCID.

Focus on measurable results

The United Nations’ Millennium Development Goals, established in 2000, created a road map for all the world’s leading development institutions. These specific targets, along with changes in the aid landscape, including significant new donors like Bill Gates and George Soros, and unprecedented access to information, are pushing NGOs to be more transparent and find better ways to assess their impact.

“The world now sees what we’re doing,” Barrow-Klein said. “Before, they only saw what we said we were doing.”

Tom Dente, Chief Operating Officer of InsideNGO, an organization that aims to improve nonprofit management and leadership, said NGOs are asking themselves tough questions about their core missions and the services they are uniquely positioned to deliver. They are also boosting their effectiveness by forging partnerships with similar organizations, granting more autonomy to their country offices, or outsourcing functions to other providers.

“Where you see a focus on value and transparency, that often starts a whole era of innovation,” Dente said. “This is the time when there’s going to be profound change in the model and a great time to be a part of defining what that is.”

The “business” of doing good

The shift has also caused NGOs to operate more like private businesses, focusing more on the bottom line and delivering results.

“If you don’t have systems that allow you to be on top of what you’re bidding on, generating, executing, or reporting on, you will die from a business perspective,” said Al Siemens, Chief Executive Officer and Chairman of FHI360, a nonprofit human development organization headquartered in Durham.

He added that today’s donors should be seen not merely as benefactors, but as investors who expect returns.

“You have to make sure the project is on time, on target, on budget, and that the client is happy,” he said. “We are in the business of doing well while we do good.”

Local communities take active role

These changes in NGO management have affected not only the NGOs themselves, but also the countries and communities in which they work. Developing countries are increasingly defining their own needs and playing a greater role in development, securing the services of international NGOs to meet priorities that are identified by the country rather than by outsiders.

Gone are the days of “truck and chuck,” Barrow-Klein said, in which NGOs brought in commodities on the back of a truck and handed them out to local communities.

“Countries are now empowered and they do take ownership of their own development,” she said.

This approach, Siemens said, has also prompted NGOs to take a more holistic view of development and get at the root of issues rather than treating the symptoms.

“You can’t solve problems exclusively by looking at health, because if you put someone on treatment, they still go home without education, without water, and they’ll be back in the hospital again,” he said. “We have to look at broader issues in development and work with investors who see the importance of stimulating communities.”

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