For a sector that prides itself on innovation and change, is it time that we international nongovernmental organizations fundamentally revisited what it means — and what it takes — to deliver our programs in the countries where we want to operate?
I became CEO of HelpAge International in late 2013. I joined from Save the Children, where my last major project had been to assist with the takeover of MERLIN. The decision of the MERLIN Board to call time on their organizational independence and seek a merger had a rather personal resonance for me — my first mission as a humanitarian worker had also been MERLIN’s first mission, a vaccination program in Nagorno Karabakh in 1993.
I wonder now as I wondered during the due diligence stage of the takeover process two years ago — in a sector that is rightly questioned for its profound shortage of proactive, mission-driven consolidation — why does there appear to be so few stages or options between complete operational independence among different charities, and a board instigating a final merger or winding-up process?
A need for impact-driven consolidation
Despite an almost limitless number of different mandates and programming approaches, we NGOs always seem to start with the unquestioned assumption that we each need our own separate delivery and support infrastructure at national or regional level. For more than 60 years now, the NGO “country office” has spread out and multiplied across cities like New Delhi, Nairobi, and Bogotá, and with suboffices around these countries in even greater measure. Each new office brings not just their specialist technical and advocacy staff, but all the support functions associated with delivering operations and accountabilities.
There have been attempts at country-level consolidation, and very successful ones — one thinks of Save the Children or World Vision — but the examples we remember are precisely those that happened between different members of the largest international federations, rather than between agencies with no formal institutional relationship. It is surely this latter group where the need for and potential benefits of value and impact-driven consolidation is greatest.
Currently, we carry on with our country office model. We open them and we close them, we expand them and we shrink them, we restructure them and we reculture them — but it's always based on the assumption that we will still have our own country office at the end of it.
The private sector would find this laughable. Imagine if every single manufacturer of every different phone or tablet coming to market insisted not just on having their own brand and design, but their own operating system, their own processors, their own transistors — and, while we are at it, independently sourcing the raw materials for each part themselves.
Now is surely the time to revisit whether the business model that has underpinned NGO operations for the past 60 years is suitable for the future.
An alternative model
As with all disruption, there are some clear “megatrends” that should be making innovation more attractive and more urgent. Here are three of these trends:
1. Despite reasonably stable overall levels of official development assistance and overall amounts channeled via the NGO sector, the majority of organizations — large or small — are seeing less of the unrestricted or flexible funding that invariably underpins our operational infrastructures.
2. Potentially more significantly, there is an obvious shift in the political economy at global and country level in which international NGOs are operating. For a variety of different reasons, mostly good ones, the future lead roles supporting national development processes surely belong more to national NGOs and less to international ones. This shift is arguably being held back because of the perception — real and/or imagined — that established international NGOs have more effective operational and reporting structures and systems than emergent national ones.
3. Given the rapid development processes in many core regional and country offices, many organizations report increasing difficulties attracting and particularly retaining staff to key support functions, such as finance, IT, HR, etc.
What is it that today makes a HelpAge office distinctively “ours”? Is it the accountants, auditors and grant management systems? No — though we have good accountants. Is it our vehicles and fleet management teams? Our software licenses? Our procurement teams? No — though we do all this well enough.
But what makes us HelpAge is surely our focus and expertise on older women and men, our institutional knowledge, our experience with working with older people at community level, our support for the national ageing organizations that are part of our global network, and the credibility we have with governments, other organizations and older people themselves. In staff and budget terms, I would guess that 25-35 percent of our core investment at country and regional level directly stands up that expert capability that other organizations don’t have, and perhaps 65-75 percent goes to broader functions that can and will be found in a majority of similar organizations.
What might that mean for future models? The easiest change to anticipate, already positive, would be groups of different NGOs coming together, in a structured or ad hoc way, to share (initially back office) functions and staff within a single unit. The idea of “shared services” is already out there, but take up has been slow, perhaps because the idea is too often pitched at the largest (and richest) agencies where incentives and urgency to find cost savings at country level are less pronounced.
Predictions for the future
I personally would like to see something more radical. Could the future in a country like Kenya, Nigeria or Myanmar, for example, be the emergence of locally owned and run social businesses, in countries with large NGO presence and activities? Might a social entrepreneur, for example, see the benefits of providing a costed service of different support packages, some kind of “Regus for NGOs,” that would substantially lower both the infrastructural operations and recurrent cost for NGOs with existing programs in a country, and provide far lower barriers to entry for new ones?
I couldn’t say at this point exactly how it would work, but it is not hard to see how economies of scale and incentives could lead to such an organization quite quickly able to offer organizations like mine more sophisticated financial, IT, procurement, and operations services than those we might be able to put up and sustain independently.
Operating at far greater scale on behalf of a wide number of NGOs would offer such an enterprise obvious operational efficiencies, the potential for more systems investment, as well as provide a potential magnet to potential employees.
On our side, freed of the responsibility for running these functions, would there not be an immediate, decisive shift whereby more NGO management time, financial and human resources could be refocused on what we are most passionate about and where we excel — mission expertise, innovation, policy and advocacy, for example.
Critically, a social enterprise or shared service joint venture along these lines might also make it easier to break out of the current impasse whereby many national NGOs feel out of sight and overlooked by many international private and institutional donors to development and humanitarian assistance, because they are held not to have delivery and reporting systems equal to their international counterparts. If a viable outsourced service existed to run and report on operations, nationality of the NGO would be an irrelevance.
It's going to be a roller coaster few years for the international civil society sector. Whatever the future holds, the idea that each INGO needs to have their own separate office and logistics to deliver missions that are increasingly seen as overlapping is implausible.
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