NGO Benchmarking «Getting the Seal of Good Housekeeping»
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1 NGO Benchmarking «Getting the Seal of Good Housekeeping»
2 Nonprofits Extremely diverse: Managerial abilities Working capital ratios Effectiveness of operations Leverage at the Public or Private sectors levels Attitudes vis a vis grantors Is their growing influence matched by increased ACCOUNTABILITY? 2
3 Accountability To Inform interested parties (Implies knowing them all) To Listen To Report to their concerns (Implies participation) i.e. to assume responsibility for the means and the results (Implies sound management practices) 3
4 How to rise to the Accountability Challenge? 1 st Party Self-Assessment We are very good 2 nd Party An interested party does the assessment Conflict of Interest? 3 rd Party An independent body, referring to a Standard 4
5 Typical Accountability Framework Local? Authorities? Suppliers NGO 1 st PARTY Grantee? Contractors Surrounding? Communities NGO Clients 2 nd PARTY NGO Clients 2 nd PARTY Grantors Beneficiaries Proper accountability Shall consider ALL stakeholders and Be assessed by bodies that are no party to the transactions 5
6 Money talks Grantors (and any stakeholder) are entitled to receive proper accounts on how their trust and money is being utilized How to identify an organization that Is trustworthy, reliable, sustainable, compliant Could make a difference? 6
7 Referenced Codes and Standards Grantors and civil society organizations have established International Codes & Standards for eligibility / funding purposes (25 today) Based on their specific requirements Humanitarian principles Quality of Deliveries Finances Ethics etc. None is truly comprehensive in terms of Accountability Risk Assessment 7
8 Approach to these Standards: Our Rationale (1): Consolidate what exists today (and complement it) Focusing on the RISKS and their consequences in terms of Image, Performance, Resource Allocation, Control Mechanisms, Sustainability, 8
9 Types of Risks Management: HR: Market: Competition: Funding : Insurance: IP : Technology : Projects: Leadership Profiles in line with exigencies Stakeholders going to buy Offering something similar/better Fundraising ability to sustain itself Liability and property Right to use the intellectual property it is using Appropriateness Reasonable, feasible, outcomes measurable 9
10 Our Rationale (2): IF YOU CANNOT MEASURE IT, YOU CAN NOT IMPROVE IT Lord Kelvin ( ) Identify, in reviewed Standards, Objectively Measurable Indicators 108 criteria in NGO BM V1 Establish a rating system so that: Clear identification of strenghts / weaknesses Over time, improvements can be traced Data bases for comparison purposes 10
11 P1: Dimensions of Best Practices Perspectives Governing Board, Strategic Framework, Integrity Management, Advocacy and Public Image, HR, Finances, Operations, Outcomes, Continuous Improvement P2: Stakeholders Expectations Transparency, Efficiency, Effectiveness P3: Management Components System, Activities, HR, Finance P4: Continuous Improvement Plan, Do, Check, Act Each and every stakeholder can select his entry point into the results 11
12 P1: Dimensions of Best Practices 1. Board of Trustees: 2. Strategic Framework: 0 25% 50% 75% 100% Score 58.3% 94.4% # of Criteria Integrity Management: 4. Communication, Advocacy and Public Image: 7. Operations: 42.2% 46.7% 5. Human Resources: 88.9% Fundraising, Resources Allocation and Financial 90.7% 88.2% Outcomes: 9. Continuous Improvement: 71.4% 75.0% 7 8 Overall: 74.3% 100 A Certificate is awarded if (a) 70 + %, (b) no major NC and (c) D1, 2, 6, 7 >50% Validity: : months 12
13 P2: Contributors Expectations 3. Score by Contributors' Expectation Transparency Efficiency Effectiveness Overall 77.3% 66.7% 77.8% 75.8% 25% 50% 70% 25% 50% 70% 25% 50% 70% 25% 50% 70% 0% 100% 0% 100% 0% 100% 0% 100% # o f C riteria: 50 # o f C riteria: 16 # o f C riteria: 36 # o f C riteria:
14 P3: Management Components 100% 80% VM CR Total = 78.1% 60% 40% 20% 0% System Program/ Project Human Resources Finance 14
15 P4: 4 Steps towards Continuous Improvement All organizations need a "feedback loop" to improve! 1. PLAN: Define / Prepare 2. DO: Apply / Execute 3. CHECK: Confirm it works! 4. ACT: Modify / Adjust Do Plan Check Act NGO BENCHMARKING Higher Quality 15
16 P4: Continuous Improvement 100% 80% VM CR Total = 78.1% 60% 40% 20% 0% Plan Do Check Act 16
17 Purpose of NGO BM Institutional Due Diligence: Beyond programs & projects: Overall assessment to determine if leadership and management have the capacity, willingness and readiness to accomplish what they claim i.e. To provide assurance to stakeholders that an NGO is Fit for purpose Accountable Sustainable In reference to a consolidated Standard of Best Practices 17
18 NGO BM Certification Audit IS NOT: An Impact Assessment of projects, activities A financial or a management audit A substitute for dialogue with Stakeholders IS A Measure of Compliance with International Best Practices to be translated into an internal management tool for Continuous Improvement Purposes Designed for the NGO to keep control over its processes / results, using it for the outside world, whenever necessary and appropriate. 18
19 Services provided under NGO BENCHMARKING AUDIT TRAINING CONSULTANCY Self-Assessment (web) Pre-Audit Documentary Assessment Certification Audit Consolidated Reports Trainers NGOs Coverage: The 50 most important Best Practices criteria 2 to 3-day sessions with case studies, exercices etc. Design of Second-Party Standards based on client s by-laws or specific requirements + application through audits 19
20 Contact: Robert Jourdain Aid Efficiency Services Phone: Mobile: Fax:
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