NGOs continue to be challenged to “do more with less”, provide “greatest value for money”, reduce “squandering of funds”, and to not pay their executives disproportional salaries. But these challenges also present a great opportunity to evaluate what NGOs can do to further improve their operational efficiency.
There is no silver bullet to the systemic challenges of the delivery system that NGOs operate in. But there can be small but very effective interventions to help organisations, donors and foundations increase their efficiency to provide maximum impact with the funds entrusted.
Here are six concrete examples that have helped organisations achieve increased efficiency and visibility over their operations:
- Don’t pay too much. Over-invoicing is common, whether it concerns renting a conference venue or procuring supplies at manufacture. Any organisation with an international name (that your local office is associated with) is exposed to this risk. A one-off independent price verification on specific budget items is not only a smart investment that directly pays off, it also sends a signal to suppliers that you are cost-conscious and informed.
- Do your monitoring locally. On a daily basis, we are asked to verify documents or monitor progress of projects that are sponsored by donors based 4,000 miles away. This avoids unnecessary travel, reduces time and cost of core staff, and improves oversight of what is going on.
- Bundle the third party quality and quantity inspection of your aid supplies with other NGOs where possible. For example, with our 24/7 local presence, SGS verified aid supplies that poured in to Haiti after the earthquake in 2010 from various donors at once. This saved time and costs.
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- Reduce the risk of counterfeit or poor quality goods entering your supply chain. Preserving the authenticity and integrity of equipment and supplies is a real challenge as they travel through the aid chain: packaged and labelled at factory, shipped, offloaded, transported, warehoused, and further distributed in country to the last mile to beneficiary. Investment in third party monitoring at strategic points can go a long way to avoid theft, corruption, waste, and the wrong stuff ending up at the beneficiary end.
- Ask for an independent and globally recognised assessment of your organisational performance. Comprehensive and third party verifications help convince even the most sceptical funder where your organisation stands. Use it as an effective tool to target internal monitoring where attention is really needed.
- If you work with other INGOs in a certain country, share and coordinate the due diligence on your local NGO implementing partners. Save time by writing or reviewing individual reports on both sides. We have consolidated evaluations and undertaken accountability screenings on behalf of various donors working on a project, and an estimated 15% of time was saved as a result.