• Perception of NGOs as ‘inefficient’ or ‘unaccountable’

  • Leads to pressure to adopt business practices

• Characteristics of NGOs suggests that wholesale adoption of for-profit organization practices will be difficult

  • Maybe even damaging

• Empirical research suggests that a more NGO-specific approach to MACS

  • Research is often normative i.e. what they should do, not what they do

Adopting practices from business

• Often encouraged to:

  • Measure more

  • Be more efficient

  • More effective

• Kaplan (2001):

  • Accountability and performance measurement becoming more important due to increasing competition

  • Governments and other sources of income focus only on financial measures

    • But it is hard to measure non-financial indicators

  • Suggests BSC

    • May make the NGO look more attractive to donors

    • But the argument for it is not convincing

• Porter & Kramer (1999):

  • “Not enough foundations think strategically”

  • “Little effort is devoted to measuring results”

  • Makes links between not being strategic and not measuring performance

  • But doesn’t say exactly what they should be doing!

• LeRoux & Wright (2010):

  • GPRA (Government Performance and Results Act, 1993) forced nonprofits to focus more on performance measurement

  • Less academic, and was influenced by the government

  • Important because increasingly being funded and controlled by government

  • Similar in many developed countries

• Bradley et al. (2003):

  • “Substantial opportunities for improvement”

  • “Streamlining and restructuring” could lead to $60bn a year

    • But Hall is skeptical of such numbers

  • NGOs aren’t efficient enough

  • Metrics now being used to report the efficiency of funds

  • Business-like language and practices

• Millennium Development Goals:

  • Adopted by world leaders in 2000

  • Provides concrete, numerical benchmarks for tackling extreme poverty

  • First time the idea of goals and performance measures in development

  • 21 quantifiable targets measured by 60 indicators

  • Many NGOs now report around the MGDs

    • Or focus on specific goals within them

  • Set the stage for many NGOs to start with performance measures

  • Increasing use of quantifiable targets and numerical benchmarks

  • Top-down targets

• Paris Declaration on Aid Effectiveness 2005

  • “Aid effectiveness must increase significantly”

  • “Strength governance and improve development performance”

• Dark (2004) characterized being ‘business-like’ along four dimensions:

• Goals:

  • Framed primarily, importantly or solely on revenue generation, profit or financial surplus terms

• Service delivery:

  • Program service delivery was restructured to produce higher volumes of more efficient, more measurably effective, more constrained/focused, less ambitious and less interpersonal services

• Organization and management:

  • Emphasis of taking charge of the organization’s agenda

  • Hard efforts toward the production of valued results

  • Active construction and reconstruction of the organization’s mandate

  • Positive focus on leveraging of maximal results from available resources

• Organizational rhetoric:

  • Use of rhetoric, discourse and language that refers to many elements of the NGO using business terminology

• “need for third sector organizations to question management systems derived from Western bureaucratic models” (Lewis, 2002)

...

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