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Reimagining NGOs
“The best way to predict the future is to create it”- Abraham Lincoln. So, what lies in the future of NGOs and civil society organisations (CSOs)? Currently, they are going through a long overdue transition period.
A face-to-face combat with the 4C’s (covid, climate change, conflicts, and costs) has forced the sector into a rapid transformation. Yet, like every transformation, they are facing teething troubles. Every change is chaotic in the beginning. A clear vision and goal can simplify the journey. For that, we must ask one bold question: What should an NGO look like in 2030? Let’s take a quick dive into the current issues and the prospects for the future. Due to above mentioned 4C’s, the SDG 2030 has fallen way behind its agenda. It needs an accelerator to push things forward. Thus, it is crucial to put the available resources to the best of their capabilities and to avoid needless re-invention of the wheel.
The future of NGOs is Agile:
This article is written as means of sparking new thinking. In addition to the suggestions made the potentials are vast and comprehensive.
Agile environments like today need agile structures. Not allowing for flexibility might result in them snapping under pressure. COVID proved this by putting a lot of companies to the test. Many struggled, many snapped, and the agile ones survived. With shrinking civic spaces, shrinking funds, and a fast-changing environment, agility provides the flexibility to adapt and fit in. A lot of NGOs are approaching change with innovative design-thinking techniques. But the mindset change that needs to accompany design-thinking is challenging to achieve. The following features could be included in a non-profit that is fit for future.
Operations — A futuristic non-profit could consist of a big local team as grassroot experts and a smaller global team as global experts, who would contribute with their expertise in other regions. And the HQ should act more like advisors. The older hierarchical structure must change. Centralised support and decentralised decision-making would make an NGO agile enough for a rapid reorganisation if need be. To support this, it is important to directly fund and work with local partners.
As per the recent charity commissions report, the charity sector still struggles to disperse lingering doubts about the way it uses the funds that are entrusted to it. It can be concluded that higher and smarter involvement of stakeholders and donors into the projects is necessary. Higher transparency and the involvement of stakeholders and donors in decision making can achieve higher trust. Technology has the capacity to do this in an efficient and cost-effective way.
Monitoring & Evaluation — At the moment, Monitoring & Evaluation (M&E) are often used to produce reports and not as means to get results. When used this way there are two huge drawbacks; 1) Evaluators seem like “judges” and not advocates. 2) A risk of falling in the “success cartel” category; i.e decorating data to make it look better than the reality.
For ease of operation, many NGOs do not use the findings of research in their interventions. “Ignorance is bliss”, but only short-term. The M&E team should be able to make realistic operational recommendations. And these should be a part of the kick-off before the intervention and should be followed by a constant examination/adjustment throughout the intervention. If possible, a separate entity can be spun-off and funded separately to support monitoring and evaluation.
Partnerships — Nowadays, the words collaboration and partnership are heard everywhere, but most NGOs do not collaborate strategically. Depending on the nature of work and interests, every location or project area needs a bouquet of carefully selected for-profit, non-profit, and government agencies. Also, instead of working parallel, working together with the local activist groups would add to the strength and unity. To make it happen, it is important to work on 1) automation to minimise the paperwork needed; 2) accurate calculation of impact contribution from each participant, so they can claim the credit for it; 3) focus on maximum impact instead of competition. Many smaller NGOs who have partnered with INGOs, complain about sooner or later “disappearing” in the conglomerate. Other than money, recognition is one of the biggest motivators. Making sure that every participant gets the deserved official credit for their work is crucial for the success of a partnership.
Overhead/Admin costs — Almost all NGOs proudly parade the low admin costs as a positive barometer of their impact. Donors also see this as an important criterion to donate money. This is like the chicken and egg story. Non-profits amplify unrealistic expectations of funders (Individuals and granting organisations). They use accounting tricks to underreport their expenses instead of complaining against the issue. The vicious cycle leads to continuous underinvestment and obstructs the support system to function well. They lack appropriate technology, office spaces, and training, which hinders them from doing their jobs.
This puts non-profits into “starvation cycle “and often leads to poor performance and an inability to meet the goals and objectives of the organization. In a for-profit, even a company that is not personnel heavy will often have 20–25% admin and overhead costs. NGOs being the personnel-heavy sector should not cut corners on their admin costs.
“We must break the vicious NGO starvation cycle. Donors/funders need to understand that not funding overheads will negatively affect projects and lead to employee burnout. Successful programmes need talent, innovation, capacity building, learning and up-to-date infrastructure. And those need funding.” — Philippe Dresruesse, Welthungerhilfe.
In the best-case scenario: 1) Funders must commit to covering all overhead and admin costs. 2) Many funders concentrate on programmatic impact instead of unrestricted funding to financially secure a non-profit. “If programmatic growth is not accompanied by a proportionate growth in unrestricted reserves, the non-profit may become increasingly at risk to financial shocks and funding gaps, both of which will ultimately undermine their programmatic success”- Dr. Christine Sow, President, and CEO of Humentum. A small amount of unrestricted flow of funds towards scaling is an absolute necessity. This ensures long-term programme success and related employee satisfaction, loyalty, and financial stability.
Fundraising — People think the future of fundraising is technology. However, they often forget that technology can help increase the reach in numbers, but it can also hamper the personalised connection, the very core of fundraising. Getting in touch with the people asking for donations comes across as desperate. Using technology to connect with people, build relationships, and ask for their opinions and preferences, will make them feel more than an ATM. It will create long-term donors. Another way is to trickle into people’s daily life and help them integrate their social values into their routines. For example, ShareTheMeal has a simple solution to do exactly that. Every time you want to, you donate to the hungry with only one click. It is simple and it is done deliberately.
Many ways to raise funds are well known. Other than institutional grants there are conventional ways i.e crowdfunding, direct mail, online donation, peer-to-peer fundraising, marathons, and many more. Then there are unconventional ways like incorporating a social organisation, which provides a sturdier foundation for growth and opens different sources of funding, like impact investments. It also increases impact by providing job opportunities for people and frees the organisation from being dependent on donations. An unexplored source of income for non-profits could be providing sustainability consulting services or training in socially responsible behaviour to for-profit organisations.
Another creative way that organisations might need to consider in the future, is accepting donations in cryptocurrencies. There is no one right way to raise funds. It is always good for an organisation to not put all its eggs in one basket. A collection of different ways to raise funds will ensure constant flow.
Digital & data-driven — In today’s world, it is either digital or dead. All the above-mentioned points need digital tools to be efficient. Due to delays in keeping up with the digital trend, NGOs have been struggling. The IT systems are there but they are fragmented. Many private sector technology companies offer free or cost-effective tech services including staff support, to NGOs. If the project is too big to take a fragmented free service approach, it still could be useful to partner with big tech companies to plot a holistic digitalisation strategy. Alongside, having enough funds to source tech talents at a reasonable cost needs to be looked at. The amount of work needed in this space cannot be done small scale.
Data is the new gold rush for all kinds of sectors. It is available in abundance. But data and evidence are used inadequately to manage and run programmes. Data collection (research) is done by people who are not fully trained. Due to disconnected systems used to collect, analyse, and report, a lot gets lost in translation. Also, multiple manual steps reduce the data quality. An innovative NGO should have tools to collect data. It should also have fully integrated systems to make it easy to analyse and arrange the data. Besides, having automated dashboards (internal and external) will make it easy to understand the impact and take further decisions. There is a need for huge investment and strategy in this regard in the NGO sector. It connects us back to the point of having realistic admin costs.
Positioning — There is a lot of work happening in this space already. Also, depending on the type of NGO the relevance and the depth of structural change will vary. A futuristic civil society organisation or NGO should act as an enabler. Social responsibility and sustainability should be at the heart of every social system.
The USP of civil society/ non-profits is social responsibility and sustainability. They are the experts in inclusion and human rights. They are the closest to the people that are affected by non-inclusive decisions taken by for-profits. So, instead of being a standalone third sector, NGOs will or should be right in the center, acting as a vital facilitator influencing businesses, other CSOs, Governments, and even the public to integrate social values into their main purpose. With sustainability being one of the biggest agendas, it is only in businesses’ interest to accept this shift. For-profits themselves are in a huge transition period. A shift towards more socially responsible behaviour is inevitable.
Once sustainability reporting comes into full force, there will be standards and policies that would need to be followed. Most businesses have a CSR department but, as per a report from Harvard business review, most of them practice a multifaceted version of CSR. Although they embrace the bigger picture of CSR, they fail to integrate it into their daily jobs. To achieve the mindset and structural shift, it will make sense to involve the CSR department in the main internal consulting unit. Likewise, involving NGOs (depending on the nature of the business and the NGO) as external consultants or trainers, as sustainability specialists will help businesses ease out the reform. This would also mean they are using the capacity that is already available and not reinventing the wheel. This will ensure a calmer transition to become a green origination.
A rhythmic percussion of time and trend are moving the world into what I see in a positive direction. Without looking into the crystal ball, one thing is clear, the non-profits will have to rise from the ashes. I see a need for them to detach from the outdated structures and recognise the need for rebuilding, rethinking, redefining, and repositioning at a much faster pace. To avoid chaos and failures, the requirement is not running but sprinting. They need to enable and equip themselves to be able to provide “Good Help”.
