At Humentum’s OpEx DC 2019 Conference, more than 1,200 professionals from almost 300 member organizations heard Humentum’s out-going CEO Tom Dente speak of the current challenges and opportunities facing our sector. During his keynote, Dente stressed that the social sector — for- and not-for-profit alike — is called to be a “trust keeper.” [a][b]This is to say that we are entrusted not only to do good in the world, but to do so in a manner that empowers, enables, and does not undermine the human dignity of those we seek to aid.
Certainly, and most obviously, we are called upon by the beneficiaries of our work — who are often the world’s most vulnerable and marginalized — to deliver programs, projects, aid, interventions, assistance, and support. There is both a spoken and unspoken mandate to deliver our work efficiently, effectively, with sustainability at the core of what we seek to do, and with the assurance we will do no harm — safeguarding all involved.
“To be trust keepers, we as a sector must actively demonstrate trustworthiness.”
— Cynthia SmithWe are also called upon by donor agencies and philanthropic institutions to be good stewards of the public and private sector financial resources that we employ to do this work. And, we are entrusted by and must demonstrate trust in our own human resources, our partnering organizations, and the local entities with whom we have historically had an inherent power imbalance.
That is, to be trust keepers, we as a sector must actively demonstrate trustworthiness. And trust, when it truly exists, is grounded in the principle of reciprocity. We must give it to get it in equal measure. But, how do we do this in a climate of ever-increasing stakes?
A seismic shift
According to Development Initiatives, global humanitarian aid alone increased by 30% in the five years since 2014, totaling $28.9 billion in 2018. With nearly 2 billion people living in poverty worldwide — almost 700 million of whom live in extreme poverty — this assistance often represents the difference between life and death. Indeed, the need to which our sector responds is breathtaking in its scope and scale. And, this need is concentrated in countries rife with conflict and internal displacement — including Syria, Yemen, South Sudan, Iraq, and Somalia — amplifying the risks and rewards for all stakeholders in the safe and effective delivery of assistance.
How to foster an organizational culture of trust
1. Examine institutional culture to discern whether it promotes compliance. Consider whether you undertake internal operational audits and assess transparency. Are technical staff held equally responsible as operational staff for faithful implementation of internal policies and procedures? Does the organizational structure and daily operations reflect the organization’s mission?
2. Know who you are and where operational and technical strengths and challenges lie. Do you undertake a periodic resource mapping of your own[c][d] organization? You should identify both those resources that enable and, perhaps, impede the ability to move forward as an agile and functional organization. Country and local staff should also be considered as equally capable and be included in any resource mapping, rather than considering them as project-based, transitory, and expendable human resources.
3. Invest daily in the vitality and sustainability of local actors, implementers, and stakeholders, within and outside our organizations. In financial and programmatic decision-making, consider whether the management capacity of local team members is being acknowledged and cultivated.
4. Expect and reward internal transparency. Think about sharing award documents, agreements, and budgets so headquarters and country staff are informed equally of their responsibilities to donors, partners, and all stakeholders. Doing so strengthens internal accountability and the likelihood of compliance with donor-driven policies. Clear mechanisms for internal whistleblowing and policy violation reporting should be created, and all allegations of fraud, corruption, discrimination, abuse, and harassment should be thoroughly investigated.
5. Operate on the presumption that team members and local partners are trustworthy. Consider whether you are preventing fraud, corruption, and abuse by investing in good governance and system-wide controls, rather than by policing staff and partners.
Meanwhile, donor agencies have been placing greater emphasis on localizing efforts in the design and delivery of development and humanitarian assistance. This means the traditional implementers — both for and not-for-profit international organizations — are expected to develop and rely upon lasting and substantive partnerships with local actors and organizations more than ever before, all while delivering aid timely and effectively. Whether or not the current donor targets for this localization of assistance are realistic is really beside the point. It is no longer a matter of whether or when we localize; it is how we do so sustainably.
At the same time, donor agencies are experimenting with the application of results-based cost reimbursement in lieu of the traditional, cost-recovery based model. The results of this experiment will inform whether donors such as the U.S. Agency for International Development expand into performance-based reporting and payment agency-wide. For implementing organizations with integrated service delivery projects, expenses and draw-downs on USAID funds are becoming an increasingly complicated matter, with uncertainties about newly articulated funding stream requirements.
And, USAID’s increasing use of a participatory, inclusive co-creation model in its procurement processes — from Broad Agency Announcements and Annual Program Statements to multi-stage Requests for Applications — is opening the doors to more and varied stakeholders in the crafting of solutions to development conundrums. However, these performance-based and co-creation models are not without their — often unintended — shifts of costs and burdens among social sector organizations.
Additionally, technology and innovation are driving changes in how, when, and where we undertake development and deliver assistance. Thanks to both, we live in an increasingly transparent world, where donors, recipients, and stakeholders in development and assistance can glean real time the successes and challenges that arise in our delivery of aid. These forces cannot be neatly packaged in binary categories of good or bad. They simply are. And, as Devex’s President and Editor-in-Chief Raj Kumar noted during his keynote at OpEx DC 2019, they are disrupting the status quo in the sector.
Today, more than ever, we must be more agile, more responsive, more accountable, and more strategic in our work to be effective. We must be trust keepers.
Placing compliance and risk at the forefront
Trust is vital, but there are some universal truths about trust that we all know and share: trust cannot be forced; trust cannot be engendered when there are mismatched expectations; trust is easily corrupted and broken; and trust, once ruptured, is not easily repaired.
Development and humanitarian assistance rules, regulations, and accountability measures are intended to reflect our social contract with one another, at an individual and institutional level. They articulate a shared ethos and a common understanding of our rights and responsibilities in both the delivery and receipt of aid and assistance. The same is true for our organizational policies and procedures. We cannot expect to engender trust internally or externally without clearly articulating our organizational ethos through our policies, procedures, and practices. And, we cannot adhere to donor-driven rules and regulations without following consistently our own policies and procedures.
Earlier this year, Humentum surveyed member organizations and participants in its compliance-related training to identify the key areas that could be impacting capacity to ensure compliance and risk mitigation systems are in place. We heard from more than 350 respondents. We learned that respondents feel increasingly comfortable with specific aspects of donor compliance, such as determining cost allowability and screening for ineligible individuals or organizations.
However, fundamental gaps remain. Survey respondents reported that the design and roll-out of internal policies and procedures globally remains a major area of weakness. While some organizations may have clearly articulated policy documents at headquarters, they struggle with the consistent application of those policies across their myriad country offices. Further, respondents highlighted a disparity between headquarters and country offices in access to information necessary for compliance with donor policies. Finally, while survey respondents noted progress in the areas of fraud prevention, procurement, and sub-recipient management, all three were also the areas of highest risk and concern among respondents.
The path forward
Localized. Transparent. Partnership. Participatory. These are not merely hollow buzzwords, but hallmarks of the path forward. While there are no easy, cookie-cutter solutions, there are some tools our organizations have that we can start using today.
For example, we at Humentum — which convenes finance, compliance, HR, learning, legal, and other professionals — are entrusted with our community’s stories of achievements and challenges, as well as their ongoing efforts to adapt to the forces of disruption facing our sector. To keep this trust, we turn our community’s knowledge and insight into practical solutions to their common issues through training, consulting, and collaboration. We aim to answer their call to galvanize collective action on issues that require systemic change — such as approaches to risk-sharing between funders and implementers, creating international reporting financial standards, and addressing the growing burden and cost of compliance.
By working with our community of members to do all of this, we aim to live up to the challenge Dente set for us — to be trust keepers.
To learn more about being a trust keeper, click here.
About the author
Cynthia Smith
Cynthia Smith, a seasoned advocate with over 25 years of global development policy and program leadership experience, is the senior director of global initiatives for Humentum. In addition to leading the participatory design, implementation, and evaluation of development programs across the Americas and Southeast Asia, Cynthia has mobilized civil society advocacy with the Organization of American States, Association of Southeast Asian Nations, Organization for Economic Cooperation and Development, global development policy fora, U.S. Congress, and U.S. executive branch agencies. She has expertise in organizational governance, compliance, risk, and accountability; participatory processes; access to justice; and network and coalition building.
