NGOs and the challenge of good management

NGOs and the challenge of good management

By Chris W. Green

JAKARTA (JP): "If you don't know where you're going, you'll
probably end up somewhere else." That was the title of a book
given to me many years ago by my boss. Perhaps he was trying to
tell me something?

But this advice was only a small part of the management
guidance and training that every member of the supervisory staff
of our company received. Like most successful commercial
enterprises, the company spent a significant proportion of
turnover on management development. It viewed this as an
essential investment in the future.

Since I retired and became involved in social activities, I
have found that the non-profit world views the situation very
differently. Managing a non-governmental organization (NGO, often
known as a non-profit in the U.S.) in fact requires a higher
level of management skills than a commercial enterprise.

For a start, management of volunteers is much more difficult
than managing salaried "human resources" within a company. The
hierarchy of wages, bonuses, promotions and benefits that a
company uses to motivate employees do not apply to volunteers.
Other ways must be found to reward their contribution, and people
skills become vastly more important. And rarely is there a "human
resources department" to handle the difficult bits.

Even for salaried staff, NGOs rarely have funds to compete
with the commercial world. They must find alternative ways to
attract and retain professional staff. But perhaps one of the
greatest challenges is that there is no "bottom line" against
which to assess performance, and no shareholders who require a
return on investment. Stakeholders are often unempowered, and
grateful for anything the NGO provides, but rarely have consumer
choice to look elsewhere for the service offered by the NGO.

Worse, in Indonesia most NGOs are funded by international
donors rather than the community. Even the best donors have their
own agenda, which may differ from that of the community, and
their evaluation of NGO performance may focus on different goals.
Because of this dependence upon donors, NGOs tend to compete
unhealthily for funding. They also tailor their plans to attract
the often short-term funding, rarely focusing on longer-term
sustainability. To counter this, NGOs need to develop greatly
their fund-raising skills, to diversify their funding sources and
enhance community involvement.

Yet, despite all of these challenges, few if any NGOs invest
in even basic management or supervisory training. "Capacity
building" or "organizational development" activities, often
carried out by the funders, tend to focus on technical
capability, rather than management. Few NGOs (or even donors)
have clear objectives or strategic plans. Most really "don't know
where they're going."

Commercial demand has caused the development of a wide variety
of business schools in Indonesia, both within universities and as
specialized institutes. Yet, as far as I know, none of these
offers management courses tailored to non-profits. Why? In
response to inquiries, several have shown an interest but have
reported no demand for such courses.

Clearly, individual NGOs cannot alone generate the demand that
will stimulate a response by the business schools. Even if all
the NGOs focusing on, says, AIDS were combined, it is unlikely
that they would be enough. What is required is a cross-sectoral
approach, which taps the need from all the non-profit
organizations in Indonesia. But generating such a coalition is
almost impossible.

Here, the fact that the funding of most NGO activities comes
from a handful of major funders suggests an alternative approach.
It would be to the benefit of all of these donors if the
organizations that receive their funding were better managed.
They should combine together to fund a business school to set up
a chair of non-profit management and to develop courses. To
support this, the business school should also be funded to carry
out research -- although case studies are available from other
parts of the world, most would agree that specific studies from
Indonesia would greatly enhance both training and NGO responses.

Such a program could become self-sustaining if all donors then
agreed to fund "their" NGOs to make use of these courses and
facilities.

All international donors have a stake in the improvement of
management of NGOs in Indonesia -- we have all read the stories
of mismanagement resulting in inefficient use of funds -- or
worse! Getting all to work together to support such a plan may
not be easy, but perhaps this is a task for the United Nations
Development Program, who have perhaps the greatest stake in this.

The government has clearly indicated a role for community-
based organizations in national development, particularly in the
field of health and social welfare. In many cases, the response
from the community has been less than effective. Improving NGO
management is one way to improve this and ensure that the
community is capable to accept this important challenge.

The writer is an AIDS activist in Jakarta. He was previously a
director of the Indonesian subsidiary of a large multinational
company.