5 ways small NGOs can broaden their reach

Local development organizations play an important role in impacting local communities. With a unique understanding of the local context in which development programs are being implemented and the ability to mobilize on the ground quickly, these groups are effective and adaptable. But they often struggle to expand the scope and scale of their interventions. Large donors such as the U.S. Agency for International Development and the U.K. Department for International Development have expressed their desire to work closer with local nongovernmental organizations by funding them directly. Organizational and administrative capacity issues, however, often get in the way of that goal. “It is not an issue of skill. Ninety-five percent of RTI staff are local staff. The skill exists,” Volkan Cakir, regional director of RTI International’s Nairobi office, told Devex. “Unfortunately, donors look for things that many local organizations cannot demonstrate.” Despite the challenges both sides face — donors trying to implement policies that dictate more local spending and local organizations trying to absorb those funds — there are several small, but important steps NGOs can take to improve their chances of working with larger donors, which, in turn, will allow them to reach more people. 1. Understand donor requirements Projects funded by international donors generally involve strict bidding rules as well as financial management and reporting requirements that can confuse local partners. Even developing a well-structured proposal can be daunting for a young organization. According to Virginia Munyua, operations manager of Tradecare Africa, small NGOs often lack the technical know-how to articulate their role and contributions within a bigger and more complex program. The good news is that more experienced partners, including international NGOs and the private sector, are willing to help. Some donors are even offering training to educate local organizations about donor requirements and assist them through the proposal, execution and evaluation phases of a project. USAID, for example, offers a virtual training program designed to answer questions from organizations interested in partnering with the U.S. donor. Divided into a number of modules, the program explains the types of USAID awards and how to respond to award solicitations effectively, and offers advice on preparing budgets. 2. Build strategic partnerships Credibility and a good track record are among the factors international donors consider when choosing partners to work with. But building qualifications and gaining recognition can be difficult for smaller organizations, more so for those that are just starting out. Forming strategic partnerships with more established NGOs is one way for less known organizations to introduce themselves to donors and get a foot in the door. When the first partnership comes, even if it is with another small NGO, high-quality work makes it easier to secure the next one. It is important, however, to partner with like-minded organizations that have similar goals and offer a fair partnership. Another important factor to consider is whether potential partners require exclusivity. For example, if the local NGO’s expertise is needed in different geographical locations, partnering exclusively with an organization that only operates in some areas can limit the smaller NGO’s potential impact. Bidding as part of a consortium is another way for smaller NGOs to build qualifications and gain recognition. Doing so can also minimize the time and resources these organizations need to spend on technical proposal writing. It represents an excellent learning opportunity as well. Most importantly, participating in a consortium makes it easier to meet all the requirements listed in a donor’s request for proposal, something that a small NGO may not be able to do on its own. 3. Focus on a niche Small NGOs cannot provide the range of services larger organizations can. But by clearly defining their goals and focusing on what they do well, they can build expertise in a niche. This in turn can open doors to partnerships with other organizations that lack expertise in this area. Although larger NGOs do not audit potential partners as rigorously as donors, they still look for a well-organized organization with technically capable staff, sound financial systems and capabilities that they themselves are not equipped for. “What we really look for are people that are cutting edge in whatever they’re working on. People that have unique talents and skills,” Nicole Barnes, vice president for business strategy and communications at RTI International, said at Devex’s recent partnerships forum in Addis Ababa. Books For Africa is an example of a small organization that has a very narrow focus — to end the book famine in Africa. The organization works with a large number of volunteers, sorting, packaging and shipping books to different countries in Africa. Since its inception, Books For Africa has sent 32 million books to 49 countries. Although small, the organization's expertise in this niche has resulted in partnerships with larger organizations such as RTI and similar firms that are active in other geographical regions. Asratie Asfaw, the organization’s director for the East Coast and National Capital Region, said this has helped Books For Africa carry out its mission in more areas. 4. Establish and formalize organizational structure An organization that does not have a well-established structure in place will not inspire a potential donor or partner’s confidence, even if it has the right people and expertise. Although there may be more immediate needs, especially for a new NGO, taking the time to build the organization’s structure is important. A well-structured organization includes a solid governance structure, technically qualified staff and transparent financial systems. One accepted and effective governance model is a board of directors governed by clear bylaws. Board members should ideally share the same passion for the NGO’s mission and can commit both their time and talent toward advancing the organization’s goals. If the local organization does not yet have such structures in place, David Munyoro, chief recruitment coordination officer at the African Development Bank, recommends investing immediately in leadership training and hiring a reputed consultant to build proper organizational structure following best practices. 5. Ensure sound financial management and accountability Sound financial management, with systems in place to ensure transparency and accountability, gives donors the confidence that the funds they provide will be used correctly. To start, a small NGO should set up and follow established financial practices such as those followed by for-profit companies. These include a finance department staffed with qualified personnel, an accounting system to track cash flow and external auditors, even for a small organization. The Asian Development Bank Institute advises against placing the same person in charge of disbursements, managing accounts and holding funds. Another pitfall small NGOs should avoid is mingling the funds of the organization and that of its founders. Organizations can also benefit from outsourcing some of their financial departments’ duties. Outsourcing can be especially useful for once-in-a-while accounting, such as annual audits or tax reports. But as an NGO grows in size, it may make better sense to hire full-time staff and expand the capabilities of the finance department. Lastly, comply with all financial requirements such as financial audits and annual reports. Some donors ask bidders and partners to submit financial reports going back a number of years, so the sooner these systems are in place, the sooner local NGOs can meet this requirement. Financial management can be difficult, especially if those in the NGO are not well-versed in the topic. In this case, training can help an NGO set its systems in place. Organizations such as Mango, a U.K.-based charity, offer training and advice designed specifically to help NGOs manage their money well. Check out more practical business and development advice online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.