Blog: 01.12.22Resilient NGOs: thriving in uncertain times

The world has changed. Ever more polarized and uncertain, the times we live in will go down in history as a period of great tension that, despite its difficulties, presents tools of unprecedented complexity and human values that finally dare to confront abuses and drifts. These values of equity, sustainability, solidarity, and economic and social justice are carried by a growing number of NGOs around the world, which continue to show resilience in their support for the poorest and the planet. These organizations are driven by teams whose commitment and will are challenged on a daily basis, whether by lack of financial or political support.

A 2011 study published in the International NGO Journal categorizes NGO challenges into two main groups. The first includes all activities internal to the organization. Typically, financial issues, human resources, management skills, or internal communication are the main challenges within an NGO. The second group includes all the elements external to the NGO, i.e. the geopolitical context, relations with governments or interactions with the private sector.

With challenges of this magnitude, the true mark of resilience is not to simply survive, but to thrive. To understand these issues in order to grow, to move forward and to always find new solutions adapted to its cause and its time. This is especially true given the current macroeconomic context as the world faces an energy crisis, geopolitical tensions and ESG imperatives. Indeed, the deteriorating global environment has made it more difficult to govern, raise funds and find donors.

Since the publication of this study, the international development finance landscape has been transformed by new policy narratives, emerging technologies, and new actors. While the nature of the challenges remains unchanged, the way they are addressed has changed dramatically.

Financial Management: Building Trust Through Transparency

Most NGOs have the ability to generate a variety of data to make informed decisions, but organizing, maintaining, and accessing data can be very complex, especially when it comes to financial data in a multitude of currencies.

NGOs must therefore ensure that they have adequate financial planning and donor reporting structures in place, with an architecture that is appropriate for their size and organization. This is truly the lifeblood of the organization, and a prerequisite for building the trust needed to raise funds. The COVID-19 pandemic has also highlighted the limitations of current systems, as 77% of charities surveyed acknowledged that COVID-19 had affected their funding, according to a survey by the International Development Charities Network. While NGOs could have been a lifesaving source of support during the pandemic, they seemed to struggle to increase donations. Among other things, this 2021 paper hypothesizes that blockchain and the development of “charity 4.0” could restore donor confidence and restore philanthropy to levels comparable to the pre-COVID era. But before considering blockchain, there are many things that can be done to prove that one is worthy of donations.

Transparency starts with organization and harmonization of data, whether for small local structures, or large decentralized operations with operational fragmentation that complicates information gathering. In order to be transparent, one must first have a clear vision, for example through a dynamic dashboard in the cloud that allows maintaining and updating finances at every level of the operation.

Accurate and accessible information allows for deep strategic thinking: What are the imminent emergencies and risks, and can we meet our spending commitments? Is fundraising aligned with short, medium and long-term needs?

Today’s businesses are more complex than ever, and sometimes you need to focus on your core business while creating synergistic partnerships. For example, can NGOs increase their efficiency by leveraging an outsourced accounting and HR management technology or service like IODD? A better understanding of finances and cash flow leads to greater transparency and therefore internal and external trust.

Create coherence between structures

Internally, poor communication weakens an NGO’s ability to optimize its performance and can negatively impact the agility of satellite teams and the relevance of decision-making.

In fact, centralized NGO architectures often lead to more efficient structures, but perhaps too “top-down” and removed from the reality on the ground. The trend toward decentralization is exciting. Yet too much delegation of responsibility can create problems – especially when the pendulum swings too far in delegating strategic decisions to local offices or the field, where a more “macro” reading of issues and priorities might be skewed by too much proximity.

Gaps in communication can begin to appear. For example, inconsistencies in financial or donor reporting are a concern as organizations move away from centralized models. There may also be a lack of alignment of broader brand messages.

NGO leaders need to position themselves, ask the right questions, and understand how a more aligned vision can be achieved – while retaining elements of creativity and independence that allow its members to deal with the reality on the ground.

Organizational and operational resilience involves planning to handle the unexpected, outsourcing when necessary, and adapting to changing circumstances.

To ensure long-term success in an uncertain and anxiety-provoking world, we believe that the fundamental pillars of any NGO, regardless of its structure, should be a commitment to effective communication, a commitment to transparency, and a strong belief in the need to build trust with all stakeholders.