Get more for your money
With the results agenda rapidly increasing in importance in the UK international development sector, it is timely for Bond and its members to examine the issue.
‘Value for money’ seems to be the catch-all term to express the need for proof that the UK aid budget is being well spent; a key determinant in awarding new DFID PPAs (Programme Partnership Arrangements) for 2011-14 was how well an organisation could deliver value for money while improving the lives of the poorest. Yet the term has acquired a fear-filled credence amongst the NGO sector, with people whispering about races to the bottom and cost over quality.
With this in mind, and conscious that several NGOs were already thinking about how a value for money approach could be applied to development work, Bond convened both DFID and several NGO speakers to share their thinking in early February 2011.
Value for money must be a strong thread running through all organisational processes.
DFID – “It’s not about what’s cheapest”
Jo Abbot, Deputy Head of DFID’s Civil Society Department, was at pains to stress that the cheapest way of doing things does not necessarily equal value for money. Emphasising that well thought through programmes, with budgets, logframes and proposals telling a coherent story, are more likely to score highly on value for money, DFID would like to see NGOs thinking about getting the most benefit for their funding across all areas of an organisation, and not as an afterthought or add on.
From unit costs, through considering the real costs of ‘doing business’, to benchmarking against other providers, considering value for money must be a strong thread running through all organisational processes.
Existing work amongst Bond members
Aside from DFID, participants heard from several Bond members who have already embarked on looking at how value for money can be applied to their organisation. WaterAid and VSO worked with nef (the New Economics Foundation) to look at using ‘social return on investment’ to measure the impact of their work. Oxfam presented their ‘basic efficiency resource’ approach and the International HIV/AIDS Alliance spoke about the substantial progress they have made in applying value for money and social return on investment to HIV programming.
Next steps
- Bring the sector together to define common position on value for money expressed in a discussion paper
- Bring together NGO programmes and aid effectiveness / policy to ensure positions are informed by both these perspectives
- Map existing work in the sector, and beyond, on approaches to value for money in development
- Ensure we work with funders, particularly DFID, to develop a common interpretation and implementation of value for money
- Embed value for money within the tools and approaches developed as part of the Bond effectiveness programme
Resources
Resources on the website include Jo Abbot’s presentations from DFID, the International HIV/AIDS Alliance, Oxfam, VSO and WaterAid. Further resources from nef and others on value for money and other approaches are also available online.
What does DFID want to see NGOs doing on value for money?
Less about
- Isolated methods / approaches (social return on investment, disability-adjusted life years, cost benefit analysis)
- Analysis delinked from organisational processes
- Applying a value for money recipe book or step by step guidance
- Value for money as an add on, discrete process or activity
- Blanket approach of formulas and ratios
More about
- Organisation-wide thinking
- Justifying the approach in a specific context
- Identifying options and prioritising areas for maximising value
- Continual commitment to learning and improving
- Piloting and monitoring
- Showing evidence and feedback loops
- Being practical
Bond Leaders’ Series event on value for money
In January, NGO leaders discussed the meaning and the implications of the value for money agenda for UK NGOs in an international development context. Read notes from the meeting and find out more about the Bond Leaders' Series online.
The Networker magazine showcases and highlights key issues, emerging debates, news and opportunities facing the UK development sector. It's free to download as a PDF. Bond members receive a printed copy each time it is published.
