Friday, 10 December 2010

Principles and Practices of Sustainability

Sustainability is the capability of a community to continue the programmes and remain reactive to change after the termination of external assistance. Many community development institutions remain active only while they are supported by external agencies. Hence there is huge dependency among community-based health and development institutions. They are not organisationally independent and financially viable while they are sustained by international support agencies in one way or the other. However Karim Sahyoun (see link below) suggests that development institutions can make a positive contribution without becoming totally dependent on outside help. He states that local community participation with clear ownership, commitment and enhanced capacity may prevent dependency. In this context, sustainability can be considered as the ability of the local institutions to maintain and continue the programmes incepted by international development agencies without interference by such external agencies.

Dr Emelita Santos Goddard claims that it is important to have a shared vision and plan for community-based development interventions to be sustainable (follow link below). Being fully dependent on outside charity does not promote sustainability. She suggests that sustainability is achieved when development initiatives and interventions are owned and managed by local people. Hence shared vision, local participation, authentic institutional partnership between support agencies and local implementing organisations, and a clear plan for local handover and continued encouragement are the keys to sustainability. In many cases, partnership has been focused on project funding systems, as donors give grants and in return recipient organisations provide reports. However, a partnership between agencies, based on a mutually binding covenant relationship goes far beyond project-based funding contract that has reciprocal relationship and mutual understanding on long-term sustainability of programmes.

Enhanced capacity and reinforced confidence of community-based institutions and individuals are vital for sustainable development. In order to implement a strategy of sustainability, the community must believe that they are capable of solving their problems and shaping their own future. Engaging stakeholders in all stages of development process and creating a network and extending cooperation among likeminded individuals and institutions locally and internationally are equally important. It is also sensible to have a very strong core group of individuals, who are guided by a shared vision and have strong desire to run the programmes, and the organisation is positioned in strong values. The following steps are the key to achieve sustainable community health and development:
  • Identify stakeholders and get their agreement on programme implementation
  • Conduct a participatory community assessment
  • Perform community organisation and raise awareness
  • Create a community vision and develop a roadmap for reaching that vision
  • Develop sustainability indicators to measure progress
  • Introduce organisational development practices
  • Run training and capacity building activities
  • Identify sources of assistance and mobilize resources
  • Carry out regular monitoring and evaluation

Link and Resources:

Saturday, 4 December 2010

Financial Sustainability

Sustainability, a long-term perspective in which organisations or programmes aim for independent operations, has become a buzzword in the NGO sector. The concept of sustainability has long preoccupied donors and development practitioners, but there is a lack of clarity in its meaning. Sustainability is the ability of organisations to continue their institutions and programmes beyond the termination of external assistance and remain reactive to changes. Sustainability has two key dimensions: institutional and financial. Institutional sustainability is the capacity of viable and stable organisations to continue programme interventions on their own, whereas financial sustainability refers to the capacity of generating required revenues locally or ensuring that the external source of fund is available to continue the programmes.

Financial sustainability is the state of having financial continuity and security where the organisations or programmes do not collapse if the external funding is withdrawn. Many international development agencies desire that their community-based programmes should evolve into self-reliant local entities that are able to continue the programme activities. With increasing international donor fatigue but the potential availability of resources locally, many development professionals are talking about local institutions becoming independent and financially sustainable. However community-based health care institutions remain weak because they lack reliable and long-term funding mechanisms. They become vulnerable to outside influence and project-based funding that inhibits the ability of the local institutions to respond to their beneficiaries. It needs a long-term strategic vision for them to become financially self-sufficient. From the financial sustainability point of view, it is good to have diversity of funding or income sources to avoid dependency on a single donor or income source.

Here are some tips for the secrets of financial sustainability given by the organisation called Mango (see link below), which include:
  • A diversified funding base
  • Availability of unrestricted funds
  • Availability of financial reserves
  • Strong stakeholder relationships
  • Assessing and managing risks

It is a huge challenge for community-based health programmes to become financially viable on their own without external support, especially in the context of the resource-poor countries. Many community-based health care programmes do not have a strategy for cost recovery through local income as they are heavily dependent on the external grants. Community-based health programmes should therefore develop fundraising mechanisms that include both internal and external sources of funding. Most community-based health programmes are struggling to develop a sound funding base due to a lack of a fundraising strategy.

David Moore, the Programme Director of International Centre for Not-for-Profit Law has written an article on Laws and other Mechanisms for Promoting NGO Financial Sustainability in the NGO sector (see link below). He claimed that NGOs are predominantly dependent on international donor funding. However these NGOs are challenged by the tendency of withdrawal or reduction of levels of support by the international donors, thereby increasing the urgency of long-term sustainability. He has outlined the mechanisms that promote the financial sustainability of the NGOs. Some of them include:
  • Government or public sector support
  • Private charity
  • Self-generated income
  • Community contribution
  • Volunteerism

References and Links:

Friday, 3 December 2010

Sustainability of Community-Based Health Programmes

Sustainability is a long-term perspective in which organisations or programmes aim for independent operations. The concept of sustainability has long preoccupied donors and development practitioners, but there is a lack of clarity in its meaning. Sustainability can be defined as the ability of organisations and individuals to continue their institutions and programmes beyond the termination of external assistance and remain reactive to changes (Devkota 2010). According to Swedish International Development Cooperation Agency, “A development programme is sustainable when it is able to deliver an appropriate number of benefits for an extended period of time after major financial, managerial and technical assistance from an external donor is terminated”.

Sustainability has many dimensions but institutional and financial dimensions are particularly important in the context of managing community health projects. Institutional sustainability refers to the ability of the organisation to govern and manage its work according to the principles of accountability and transparency without interference of external agencies. It is essential that health care institutions are governed and led by a group of people who have vision and commitment and the organisations are positioned in the strong values. Financial sustainability refers to the capacity of generating required revenues locally or ensuring that the external sources of funds are available to continue the programmes. In fact, institutional and financial sustainability are mutually interdependent (Hailey 2000a; Low and Davenport 2002). Many community-based health programmes are not sustainable because they are not organisationally capable, economically viable and financially independent. The sustainability of programmes can be promoted through generating local revenue and building leadership and management capacity. Most international agencies desire their community-based programmes evolve into self-reliant local entities that are able to continue the project activities. With increasing international donor fatigue and the potential availability of local resources, many development professionals are talking about local institutions becoming independent and financially sustainable (Mango 2010). However community-based health care institutions remain weak because they lack reliable and long-term funding. They become vulnerable to outside influence and project-based funding that inhibits the ability of the local institutions to respond to their beneficiaries. It needs a long-term strategic vision for them to become financially self-sufficient by generating local revenues. Long-range planning and budgeting process and efficient financial management are important aspects to pursue financial sustainability. From the financial sustainability point of view, it is good to have diversity of funding or income sources to avoid dependency on a single donor or income source. The organisation called, Mango (http://www.mango.org.uk/Guide/TT4) provides some tips for the secrets of financial sustainability that include:
  • A diversified funding base
  • Availability of unrestricted funds
  • Availability of financial reserves
  • Strong stakeholder relationships
  • Assessing and managing risks

Funding assistance from international donor agencies in the form of time-bound project funding does not contribute to long-term financial sustainability. A couple of strategies including setting up an ‘endowment fund’ as suggested by Holloway (2001) and Moore (2005), and the idea of ‘matching fund’ as suggested by Conradie (1999) and Hoksbergen (2005) are found to be important strategies towards achieving financial sustainability. The ‘endowment fund’ is a fund that is set up using money or property donated to an organisation, with the stipulation that the fund be invested, and the principal remain intact. The expenditures of the organisation are met by the income earned from the investment, without using the principal fund. It is very challenging to become self-reliant financially for those health care programmes whose primary mission and vision is to help poor people at the grassroots level. Even in the concept of the ‘endowment fund’, there is a need of huge external grants support to set up the fund and it is an important issue to own and handle the fund with care in the resource-poor countries where there is the lack of transparency, integrity and accountability. However it is more applicable to certain types of organisations, such as hospitals and training institutions. The ‘matching fund’ is the term used to describe the requirement or condition placed by donors to their local partners that a certain level of contribution (preferably 50%) should originate locally. In this context, local organisations raise half of total income locally and donors contribute the other half as grants support. There are few donors who are willing to provide start-up capital as seed money or a revolving fund. However due to lack of skills and linkages to wider networks grassroots institutions do not have strong access to regular sources of capital.

Moore (2005) also claims that NGOs are predominantly dependent on international donor funding. However NGOs are challenged by the tendency of withdrawal or reduction of levels of support by international donors, thereby increasing the urgency of long-term sustainability. He has outlined the mechanisms that promote the financial sustainability of NGOs. These include government or public sector support, private charity, self-generated income, community contribution and volunteerism.

It is advisable that the community health care programmes run their institutions like a business and the concept of user charges be promoted to aim for financial viability. However there is a danger of health care institutions moving away from being a value-driven service provider to a profit making business. The identity of community health programmes can lead to conflict between profit goals and a non-profit mission. If programmes begin charging fees or operating for a “profit” then a negative public perception of charitable health care providers could result. When a charity institution enters the for-profit or cost recovery sector, it becomes as vulnerable as other businesses to the usual challenges of business management and development (Devkota 2010).

It is a huge challenge for community-based health programmes to become financially viable on their own without external support, especially in the context of resource-poor countries. The feasible target for such organisations would be to cover some expenses by generating local income through selling their services or products. They should have a cost recovery strategy for a certain level of expenditures that can be covered through local revenue. Many community-based health care programmes do not have a strategy for cost recovery through local income as they are heavily dependent on the external grants. It is appropriate for community-based health programmes to develop a fundraising mechanism that includes both internal and external sources of funding. Most community-based health programmes are struggling to develop a sound funding base due to a lack of a fundraising strategy. It is essential for them to develop a marketing plan with both short-term and long-term fundraising strategies. Maintaining donor relations and being able to attract donors that provide long-term funding assistance is also a part of being sustainable.

Community-based health care institutions can be regarded as viable organisations if they are driven by their mission and vision and are able to generate some of their required income locally. It is too optimistic to expect local charitable health care institutions not to rely on external funding support particularly in the context of the resource-poor countries. However, institutions should not assume that external grants shall continually flow in their direction. Through launching income generating programmes that are sustainable and regularly produce income, the economic situation of local people can be improved. Their improved economic status and increased purchasing power may lead them to being able to pay the fees of the services provided by health care institutions. Hence, a valid strategy of community-based health programmes could be to develop the purchasing power of their beneficiaries. In this way they can generate local income and aim for financial sustainability. It is quite simple that institutions should run like a business with sound fundraising mechanisms and balanced income and expenditure. However, it is essential for them to maintain their charitable status and values by adopting business tools and techniques that are in keeping with their ethics and vision.


References:
·        Conradie, H.F. (1999). Non-governmental organisations and financial sustainability. Development Southern Africa. 16 (2).
·        Devkota, B. (2010). Nationalisation of International Non-Governmental Organisations: A Study on the Process, Problems and Pitfalls of the Transformation of Development Institutions through the Process of Nationalisation in the Context of Cambodia. PhD Thesis. University of Reading.
·        Hailey, J. (2000). Learning for growth: Organisational learning in South Asian NGOs. In: New roles and relevance: Development NGOs and the challenge of change. (D. Lewis and T. Wallace, eds.). Bloomfield: Kumarian Press Inc.
·        Holloway, R. (2001). Towards financial self-reliance: A handbook of resource mobilisation for civil society organisations in the South. London: Earthscan Publications Ltd.
·        Hoksbergen, R. (2005). Building civil society through partnership: Lessons from case study of the Christian Reformed World Relief Committee. Development in Practice. 15 (1):16-27.
·        Low, W. and Davenport, E. (2002). NGO capacity building and sustainability in the Pacific. Asia Pacific Viewpoint. 43 (3): 367-379.
·        Mango (2010): Financial Sustainability. URL: http://www.mango.org.uk/ [Accessed on 1 December 2010]
·        Moore, D. (2005). Laws and other mechanisms for promoting NGO financial sustainability. URL: http://www.icnl.org/knowledge/pubs/Financial_Sustainability.pdf [Accessed on 1 December 2010]

Faith-Based Interventions

Faith-based organisations (FBOs) have been at the forefront of service delivery and social movements. They have made vital contributions in the development of third world countries, particularly in health care, education and poverty reduction (De Kadt 2009:781). The faith-based development approach is becoming increasingly popular as the secular materialistic approach is failing to achieve the anticipated change in health and development. FBOs derive inspiration from their value-based programmes and faith-based school of thought (Clarke 2008:6). Faith-based values of participation, compassion, love, integrity, generosity, justice and stewardship provide an essential driving force for development. Most recently, the faith-based provision is found to be more efficient than state-run services (James 2009a:3). Donors are currently seeking greater engagement with FBOs because of their value added development process with the focus on reaching to the needy and building their capacity. Faith-based donors seek to influence national and international policy. Their focus lies on the process of development that includes empowerment of the people they serve.

FBOs focus on holistic development. This is considered as an effective approach to make sustainable changes in the lives of people and communities. It helps to address the needs and problems of people from different dimensions including material, social and spiritual. FBOs have gained a greater recognition in delivering health and development programmes over secular agencies. The growing prominence of FBOs indicates the enormous role they play in delivering health care services (James 2009b:7). However, like many local secular development agencies, FBOs often lack visionary leaders with strategic thinking, and managers with business mind. They lack skilled personnel, particularly in managing health institutions, developing their business plans, engaging stakeholders and putting mechanisms in place that promote the sound financial, human resources and monitoring and evaluation systems. It requires changes in the behaviour and attitudes of the personnel to develop an organisation which is value-based and delivers services on the strong foundation of faith.

Rick James and Anna Aiken have recently written papers on faith-based organisations in INTRAC publications. Their articles may be useful to articulate the issues to be considered in managing community-based health care programmes, particularly those that are church-based. Rick James’s paper on ‘handle with care: engaging with faith-based organisations in development’ (http://www.intrac.org/data/files/resources/625/Handle-With-Care-Engaging-with-faith-based-organisations.pdf) mainly articulates the value added of faith and practical challenges for engaging with FBOs. According to him, FBOs offer the potential benefits to add value to development in a number of ways. They can:
  • Provide efficient development services
  • Reach the poorest at the grassroots
  • Have a long-term and sustainable presence
  • Be legitimate and valued by the poorest
  • Provide an alternative to a secular theory of development
  • Elicit motivated and voluntary service
  • Encourage civil society advocacy

Rick James suggests the number of issues as a way forward that include: greater donor engagement with FBOs for long-term development; greater attention to faith and to understanding of FBOs; clearly defined faith identity and coherence between FBOs’ theology of development and their organisational behaviour and programmes; and engaging with more FBOs. 

Further Rick James has also written an article on ‘faith-based organisational development with churches in Malawi(http://www.intrac.org/data/files/resources/584/Praxis-Note-47-Faith-Based-Organisational-Development-with-Churches-in-Malawi.pdf) which, mainly focuses on the challenges faced by church-based organisations. The issues such as features of church-based organisations including governance, stakeholder relationships, resources, power and control, recognition by communities, beliefs and development strategy, leadership and culture, staffing and recruitment and systems have been discussed. According to him, while working with churches in a faith-based approach, organisational development involves:
  • Understanding the FBO in the context of the religious institution
  • Including the wider religious institution within FBO organisational development process
  • Addressing common church organisational development issues
  • Exploring the meaning and implications of its faith identity
  • Integrating the organisational development process with the faith of the client
  • Using your own faith in organisational development

Finally, he argues that church-based organisations exhibit specific features that include: the formal and informal relationship between the FBO and the religious institution; the advantage of being motivated by their faith; the extra dimension of spiritual authority ascribed to religious leaders means they have greater power to drive or block change; but also staffing dilemmas in recruitment, outside hours behaviour, remuneration packages; and the tendency to have weak financial and human resource management systems.

Similarly, Anna Aiken’s article on ‘assessing the impact of faith: a methodological contribution’ (http://www.intrac.org/data/files/resources/690/Praxis-Note-55-Assessing-the-Impact-of-Faith.pdf) is found to be useful to study the key issues in assessing the impact of faith in a faith-based organisation. She undertook a case study research of an FBO-run child development programme funded by an international sponsorship scheme in Uganda. The main research question was ‘what difference does faith make to the work of faith-based organisations?’ The impact of faith was assessed in the following six key areas:
  • Change in the community
  • Theology and development goals
  • Selection of beneficiaries
  • Programme design and implementation
  • Staff motivation
  • Faith in internal practice

The findings of the study suggest that staff play a crucial role in maintaining and developing the faith identity of the FBO. Personal faith of employees is considered important in shaping faith-based organisational system and culture. Faith helps the staff in developing strong ties with one another, ensuring that the social capital of the organisation is high, which is quite crucial for engaging stakeholders. Finally, the study suggests that the faith-based identity of the organisation is vital to gaining the trust and cooperation of the target community and for programme success.


References:
·    Clarke, G. (2008). Faith-based organisations and international development. In Clarke and Jennings (eds.). Development, civil society and faith-based organisations: Bridging the sacred and the secular. Basingstoke: Palgrave Macmillan.
·    De Kadt, E. (2009). Should God play a role in development? Journal of International Development. 21:781-786.
·    James, R. (2009a). Handle with care: Engaging with faith-based organisations in development. URL: http://www.intrac.org/data/files/resources/625/Handle-With-Care-Engaging-with-faith-based-organisations.pdf
·    James, R. (2009b). What is distinctive about FBOs? How European FBOs define and operationalise their faith. INTRAC Praxis Paper 22. URL: http://www.intrac.org/data/files/resources/482/Praxis-Paper-22-What-is-Distinctive-About-FBOs.pdf

Challenges Facing NGOs in Fragile States

This paper attempts to address issues concerning challenges facing NGOs particularly regarding programming in fragile states. Over the past decades NGOs have become major players in the arena of development focusing on relief and welfare and poverty reduction. However, the development of the NGO sector has been transformed by shifts in development approaches and changing roles and strategies of NGOs. This is associated with shifts in the development paradigm away from the provision of relief and service delivery through direct implementation and management towards bottom-up power structures, capacity building and organisational development in partnership with local public institutions and civil society organisations, including local NGOs. The scope of NGOs has widened from relief and disaster response to service delivery, and most recently to advocacy and policy analysis. As the NGO sector has expanded in terms of funding and function, there has been a growing interest in organisational development, accountability, capacity building and sustainability. Further, due to the shift in local contexts including political, economical, social and technological, the role and scope of NGOs is changing.

There has been rapid growth and changes in the NGO sector both in the Northern industrialised countries and the Southern aid recipient countries. Generally, NGOs play two main roles in international development, service delivery and policy advocacy. As service delivery agents, NGOs provide services such as relief and welfare, technical skills, capacity building, physical infrastructure and financial services. The other role of NGOs is policy advocacy, seeking social change by lobbying and influencing policies and practices. However, due to political, economical and organisational changes globally, there have been significant changes in the arena of international development. The role of Northern NGOs has changed due to the emergence of local institutions on the one hand, and weak public services on the other, in the South. Thus, the role of Northern NGOs has changed from operations to advocacy, networking, capacity building and promoting accountability of Southern governmental and non-governmental institutions. In weaker states, NGOs are involved in delivering public services, which often does not help to strengthen the capacity of the state. Hence, it is important that NGOs step back from the role of surrogate social services providers. This would not solve the problems of governance, accountability and transparency of government and other local institutions. It is necessary that NGOs make clear to the government about what their role is and why they have to step back from this role. The role of the government is to fulfil the needs of its populace. The role of NGOs is to enhance the capacity of government institutions and other local organisations so that the government can ensure that basic services are delivered to citizens. This involves building technical and organisational capacity, enhancing good governance in service provision and institutionalization of public services in partnerships with government institutions and local NGOs.

There are more specific challenges for NGOs in fragile states. Fragile states are those countries where the governments are either unable or unwilling to provide basic services to their citizens. Fragile states are characterised by very weak policies, institutions and governance and the state structures lack capacity and political will to deliver public safety and security, good governance and poverty reduction to their citizens. These states can be considered as failed states or at risk of being failed with respect to authority and legitimacy. In most of the fragile contexts, the government is found either very restrictive or too open for NGOs. If the government is restrictive then it may apply pressure to NGOs that advocate policies that are at odds with the government’s policies or actions. On the other hand, if the government is not doing anything then there is a danger of the NGO sector being totally unregulated, which could create chaos between the role of the state and the NGOs. The role of NGOs is to establish and strengthen good governance, democratise development, innovation and the institutionalisation and capacity building of local organisations, so that state institutions become capable of delivering public services more efficiently and effectively.

In fragile states, the government is weak and suffering from a lack of well developed institutional framework, powerlessness to maintain rule of law, poor system of governance and pressure facing from civil society and international communities. When the state is weak, other groups or institutions, e.g., political parties, civil society organisations and international pressure groups, can rule against the government authority and functions. The government cannot implement their policies and in this situation, the role of NGOs can be considered from two perspectives. Firstly, NGOs takeover the role of the state and provide services to citizens. The role of NGOs is to work on behalf of the state by filling the needs of the people that the state cannot provide. However, the approach of NGOs in this way may damage the capacity and legitimacy of the state to be able to formulate policies and deliver services. Secondly, NGOs may operate within the framework of the state in partnership and help the state to develop mechanisms for better service delivery and meet the goals set by the state. Here the role of NGOs is to work for the state to develop an institutional framework, build the capacity of public institutions and civil servants, and enhance the state governance systems so that public institutions run smoothly. However, the roles and boundaries of the state, NGOs and the private sector are contested. Hence, the main challenge for NGOs is to get a balance in their role in supporting the state’s development delivery services.

NGOs working in fragile contexts have to deal with a culture where corruption is often widespread and nepotism is prevalent and people are distrustful of one another and pessimistic about their future. One of the main problems in fragile contexts is weak governance systems with a lack of transparency and accountability and limited public sector institutional capacity. Weak policies, institutions and governance systems contribute to a high level of corruption. A deeply rooted culture of corruption is one of the most important constraints for economic growth and poverty reduction. NGOs working in partnership with local institutions and engaging the state and non-state actors in development in fragile states face many challenges. The lack of transparency and accountability, nepotism and corruption in both public and civil society organisations often lead to poor relationships and broken trust among development partners, which ultimately affects the viability of local institutions. This also affects the overall aim of building the capacity of local institutions, both state and non-state actors.

Other challenges in the fragile contexts are caused by weak foundations necessary for growth and development, creating enormous costs and security risks internationally and a lack of adequate governance and policies. Further, the lack of detailed analysis of social, economical and political contexts and the roles and incentives of different development sectors, namely public, private and the third sector; lack of adequate resources including financial and competent human resources; and lack of awareness about the role and power of the civil society are other challenges. Similarly, due to an unstable political situation and turbulent environment, people are often less hopeful about their future and mistrust is prevalent. People’s focus lies in obtaining short-term benefits.

Another challenge facing NGOs is the role of policy advocacy. Advocacy plays a significant role to exert pressure on government institutions to maintain rule of law and deliver effective services to its populace. However, there may be potential risk of expulsion or government persecution. It is very important that NGOs working in fragile states understand the political environment and potential consequences of advocacy work. Although public service delivery may be almost collapsed in fragile states, NGOs should not bypass the public sector. NGOs alone are not in a position to cover the whole range of services nationwide and their development programmes are time-bound and cannot remain permanently.

A balance between short-term relief and long-term sustainable development is required; leading to an exit strategy (localisation); adapted to local regulatory systems – political and legal. The strategies to overcome these challenges may include moving from a project-based service delivery approach to institutional development and capacity building, through sustained engagement of civil society; a shift amongst NGOs from being agents of foreign aid to vehicles of cooperation between development agents; focusing on long-term partnership relationships between developmental actors instead of one-off project implementation. Further, provision of technical assistance followed by substantial local capacity building; advocacy towards state and non-state actors for accountability and good governance; building social capital with improved interpersonal trust within a society; and focusing on the development of the state’s capacity with improved policy formulation and implementation, instead of bypassing public institutions, are the other priorities in dealing with the challenges facing NGOs in fragile contexts.