The NGOs’ (non-governmental organisations) field of work is changing rapidly. Funding and fundraising are changing dramatically, for example due to the abolition of the Co-financing System. In addition, transparency is becoming an increasingly stringent requirement and the need to work in an increasingly decentralised manner is growing. Parallel to the opportunities presented by these changes, challenges also emerge. In this blog we describe the four most important challenges the industry has to face.
In order to be able to account for everything down to the last detail, you first need to have a good idea of the current budgets and projects and keep a grip on them. This can be challenging. Particularly if you often work with volunteers and local partners. They are usually very good and dedicated to the work they do for you, but they are not management or financial experts. It is therefore very important to make project management and control as simple as possible for all your employees. By doing so, you make reporting easy on the one hand, and you make sure that you can easily gain insight at the ‘back end’ based on the right data on the other hand.
BY: HENK NOORDHUIS
The fact that globalisation and technology have changed relations in the world is evident in all industries. This calls for a different way of working. Many NGOs are aware of this. Other things are required in order to stay afloat. You have to draw more attention to your ‘brand’. You have to be more transparent and be able to give insight to donors. And in order to do that, you must first have a clear picture of the status of projects and budgets.
In short, the changing world of NGOs creates many new challenges. Roughly speaking, they can be divided into four themes. We list them below in random order.
The abolition of the Co-financing System forces you to consider your organisation from a different perspective. What makes your ‘brand’ distinctive, what makes you unique and how must you market your ‘brand’? This also requires a better understanding of all the potential opportunities. You need to see the opportunities, and know how you can capitalise on them. For example, by examining which themes the Ministry or donors want to contribute to. This requires creative thinking. And, of course, it is important that you substantiate every proposal you submit – both on a project and financial level. This is the only way to actually capitalise on opportunities.
The requirements set by people have also changed. Transparency is no longer a ‘nice to have’: it’s part of your right to exist as an NGO. Donors and the government want to be sure that the money or resources they give actually end up in the right place. As an NGO, you play a key role between your donors and the local partners who do the work for you. These partners usually render limited accountability for the work they do. It is therefore essential to monitor this closely and ensure that they report in line with the requirements set. In this way, you ensure that you are compliant. That you can account for every euro spent and provide insight into which goals have been achieved.
In addition, with more insight and control you can better manage projects and ultimately work more efficiently. That means: doing more with the same investment.
You work together internationally and would like to arrange things locally. To achieve this, you work with partners and suppliers from all over the world. You use local expertise and create employment there. That does mean you have to be able to work in several languages, or arrange everything in English. And that you have to take account of other currencies, exchange rates, transaction costs and the risks this entails. A clear currency strategy and simple consolidation is the solution.
By taking on these four challenges, you ensure you have a strong basis and you prepare your organisation for the future. You will increase the effectiveness and efficiency of your organisation, which will ultimately enable you to do more. The playing field changes and you evolve in step with the changes. Because progress makes the world a better place.
Want to know how to get to grips with these four challenges in practice? Read the blog Getting a grip on numbers and content: how you can comply with IATI more easily as an NGO on compliance. Or visit the AllSolutions NGO page for more content on this industry.