humanitarian.info

IRIN reports on how the financial crisis is affecting the NGO community while Michael rounds up the details (and will be keeping a running tally, no doubt):

“Clearly the impact of the financial downturn on charities is widening and deepening,” said Dame Suzi Leather, chair of the Charity Commission, the independent regulator for charitable activity in England and Wales. “Some charities still face that double whammy of a drop in income as well as an increased demand for services.”

When I was last in the UK, those I spoke to in the NGO sector all had the same story to tell – budgets predicted to fall and programmes scaling back. It’s likely that the programs that will be affected are long-term development rather than emergency response, since money tends to come through for the disasters no matter what, and it’s going to be core staff that disappear while consultants take up the slack.¹ My main recommendation for the NGO community would be this: if you’re going to be receiving less money, and you’re going to be doing more work, then you need to work smarter, not harder.

The NGO community is quite smart at the tactical level – in the field, where resources are constrained, as we discussed in the series on humanitarian innovation. It’s not so smart at the strategic level – at headquarters, global or regional, where those resources are allocated and where the big picture thinking usually gets done. It’s not because there aren’t smart people thinking about key issues in the NGO community – you only need to read Duncan Green’s From Poverty to Power blog to realise that there’s a very high level of analytical capacity out there. However much of that thought is directed towards the issues that the NGOs deal with, rather than the effective functioning of the NGOs themselves.

There’s been a big push in recent years towards redressing the balance – the ECB Project being the most notable example – but there are certain institutional constraints built in. One of them is that we’ve had it drummed into us for decades that spending money on the organisation is a Bad Thing. You must spend as little money as possible on the organisation, the reasoning goes, because then you’ll be spending more on the communities that you work with. The basis for this is public perception as much as anything – imagine what the average private donor would feel if they knew you were spending 50 cents in the Euro on your running costs. Those running costs have to be paid for somehow, though, which has lead to all sort of budgetary trickery to hide the fact that – gasp! – we actually pay staff. I’d argue that this is a communications failure, that it’s an inevitable byproduct of the way that we treat private donors in general², but that’s (yet again) a discussion for another time.

Since this is supposed to be a blog primarily about humanitarian information management (although that feels increasingly tangential these days…), I suppose I should point out that investing in technology can offer ways of leveraging scarce resources. Although I tend to agree that the productivity revolution promised by technology hasn’t actually arrived yet, there are a range of smaller impacts that are blindingly obvious. For example: if you haven’t moved most of your main office communication  to VOIP now, then why not go into the carpark with a big pile of dollar bills and set fire to them? The NGO community shouldn’t be exempt from the evolutionary algorithms that drive organisational developments. There’s a good chance that some organisations will collapse if funding streams dry up to the extent that some people fear they will – but there’s also a  good chance that some organisations will find this is the opportunity to radically change the way they do business, and they’ll come  out of that process working smarter  than they did before.

That’s the theory, anyway.

1. I could be particularly provocative and say that I’m looking forward to seeing whether the withdrawal of NGO support makes a significant difference to the lives of affected communities, but I’ll save that for later. [↩]
2. Briefly: as idiots. [↩]