Pitfalls to Avoid For New NGOs

The 1980s and 1990s saw an explosion in the number of non-governmental organizations (NGOs) active in relief and development. Official agencies often see NGOs as the ‘magic bullet’ for addressing the world’s most pressing problems.(1) The rapid increase in funding and number of NGOs represents both an opportunity and a danger. While it is clear that NGOs can do positive work, there are relatively few detailed studies of what is happening in particular places or within specific organizations.

“There are few analyses of the impact of NGO practices on relations of power among individuals, communities, and the state, and little attention to the discourse within which NGOs are presented as the solution to problems of welfare service delivery, development, and health.”(2)

Thus, it is not clear how and under what circumstances NGOs are effective and why some are more influential than others. Many NGOs are influential through their technical expertise or analysis of existing problems and pragmatic solutions. Other NGOs may be fragmentary voices, contributing to a cacophony of isolated programs that represent only narrow special interests. In starting a new NGO, there are three major pitfalls to avoid: (1) lack of a sustainable and scalable model, (2) lack of competency regarding the target community and interventions, and (3) inconsistent results and accountability mechanisms.

Pitfall 1: Un-sustainability and ‘Project Fatigue’

A central question that must be asked of any NGO is whether it is institutionally and politically sustainable in the long run and whether it will be able to make a valuable contribution to solving the inequity that currently defines our world.(3) Many new NGOs fall into the pitfall of unsustainability, as they operate for a summer or for a few years and then fade away.

The failure of NGOs to sustain their work stems from many inadequacies. Oftentimes, a lack of financial resources contributes to their demise. In other cases, lack of volunteers, materials, and overall capacity prevents an NGO from achieving long-term sustainability. One researcher comments on the difference between “first generation NGOs” and “local self-reliance:”

“First generation strategies involve the NGO in the direct delivery of services to meet an immediate deficiency or shortage experienced by the beneficiary population, such as needs for food, health care or shelter. Such strategies are particularly relevant to emergency or humanitarian relief in times of disaster or crisis, such as famine, flood or war, when immediate human needs must be met.  Local self-reliance, on the other hand, concerns NGO involvement in long-term development work or capacity-building, with the intent that benefits would be sustained beyond the period of NGO assistance. Second generation strategies focus the energies of the NGO on developing the capacities of the people to better meet their own needs through self-reliant local action.” (4)

The changing role of NGOs and an understanding of the changing context in which they work have led to a focus on capacity and sustainability.(5) Sustainability incorporates forward-looking attributes such as organizational autonomy, learning capacity, and leadership, which helps ensure self-reliance in the future.

Case Study: Childhood Development & Aid (CDA)

The pitfall of unsustainable practices is illustrated by a major British NGO which collapsed in 2002 due to poor financial management. This NGO, Childhood Development & Aid (CDA), was founded in the UK in 1990 and was a member of the Disasters Emergency Committee, a consortium of all the major humanitarian NGOs in the UK.(6) In 2001, it employed over 500 members of staff and ran varied humanitarian projects in 10 countries. However, early summary reports indicated major problems in the management. First, general reserves were negative for five years. The organization relied on restricted grants – which meant that income fluctuated a great deal (falling by almost 50% between 2000 and 2001). This made it hard to cover core costs or build up reserves. Lastly, projects were very diverse. They all aligned with the organization’s mission, which was general and lacked a concrete program of action. This meant that the organization struggled to build up expertise and learn effectively from its work. In 2002, CDA’s bank and other creditors started to ask for payment. In April that year, senior managers wrote to CDA’s previous employees for help:

“CDA is crumbling and we are desperately looking for help before it is too late.  Basically we urgently need to find a solution to our funding problems that will sort out our immediate cash shortfalls and improve financial stability for the future. As you probably remember only too well during your time working with us, it is nothing new for CDA to be suffering from cash flow constraints. However, the cumulative effects of having no reserves have now reached the point where it is becoming impossible to go on.”(7)

But no major donors were found. In May 2002, the charity magazine Third Sector ran a front-page story titled “Children’s charity in crisis after fall in funds”. Between May and August 2002, all CDA’s programs were wound down or passed over to other NGOs, all their staff made redundant and all their assets sold; in August 2002, the organization ceased to exist. In this case-study, a lack of financial sustainability led to the decline of the NGO. As a result, many impoverished children and families who had depended on the organization were without resources.

Pitfall 2: Lack of Competency

The context for NGO development work is ever changing. NGOs, like all effective organizations, must endeavor to master the dynamic environment in which they pursue their missions. New NGOs that fail to research and understand their working environment will not likely be successful. Factors such as globalization, technology, and networks present both challenges and opportunity.(8) These contextual factors change the playing field for NGOs in significant ways and, by mastering each, NGOs can increase the competency of their programs.

Globalization has the potential to eliminate or reduce barriers to human interaction across national boundaries. Understanding the dynamic forces of globalization will contribute to the overall competency of the organization, allowing its work to be sustainable and effective. “For NGOs, technology enables organizational linkages, constituency mobilization, public information, and fund raising in ways unimaginable in the very recent past.”(9) Lastly, networking is an aspect of globalization and is a major strategic device for NGOs as it can contribute to adaptability and problem-solving. “Networking does not mean working only with like-minded groups; it means building partnerships to tackle issues that would be impossible without these alliances.”(10)

Case Study: HDC in Aceh, Indonesia

The nongovernmental organization, the Henry Dunant Centre for Humanitarian Dialogue (HDC), played an unprecedented role in facilitating negotiations between the Indonesian government and the armed Acehnese separatist movement GAM.(11) The negotiations led in 2002 to a ceasefire, when the parties signed the Cessation of Hostilities Agreement. This agreement envisioned a cease-fire followed by demilitarization measures and an "all-inclusive dialogue" on autonomy provisions followed by provincial elections in Aceh. Within months, however, this agreement broke down, and Indonesian security forces launched their largest-ever military operation.

Extensive interviews with participants in the negotiation process were used to identify the strengths and weaknesses of an NGO like HDC in facilitating, mediating, and then attempting to guide implementation of complex agreement. Several major themes emerged from the examination of HDC's role in Aceh. First, political dynamics within and around Indonesia shifted significantly between late 1999 and early 2002 and it was not clear that the conflict was truly amenable for resolution at the time, a fact that HDC failed to consider. Second, HDC was repeatedly confronted with the limits to what a nongovernmental organization lacking formal power could do to ensure a successful accord. For example, HDC later recognized that a more substantial third-party role, ideally led by a state, would be necessary for successful peace implementation. The failure of HDC mediating activities was due in part to a lack of competency regarding mediating strategies and the sociopolitical dynamic between the Indonesian government and the armed Acehnese separatist movement.

Pitfall 3: Inconsistency

A third pitfall that new NGOs may fall into is inconsistency in their programs and results. This pitfall is often due to a lack of clear goals, action plan, and an evaluative framework. If NGOs fail to document their impact and fail to focus on empirical best practices, their efficacy will be limited. However, it is often difficult to assess the impact of NGO programs as a result of poor data, unclear objectives, rapidly changing circumstances, and poor-quality evaluations.(12) Furthermore, performance cannot be quantified by anecdotal and circumstantial evidence. Nonetheless, it is important to have an evaluation system geared toward improving the implementation of global health programs. If evaluations detect that harm is being done, resources are being wasted, or that there are inefficiencies in the system, action must be taken to address these problems.(13) Conversely, if evidence-based evaluations indicate success, then more resources should be allocated to the relevant programs and measures to scale-up the success.(14)

Case Study: NNGO Partners in Central America

In 1993, European or Northern NGOs (NNGOs) were experiencing a crisis of identity as they sought to review their mission statements, policies, and priorities. “One of the questions arising from this reassessment process concerned the impact of development projects implemented by NNGO partners in Central America.”(15) Although many individual development projects were successful, their overall impact was debated and often found to be disappointing.(16) For these reasons, there were questions regarding public support and funds for programs that were not producing clear, measurable results.(17) For example, one NGO that trained union leaders in Honduras was praised by trainees; for them, it had contributed to closer collaboration between unions that had not wanted to work together before.(18) Union leaders measured performance in terms of high and regular attendance at classes and the fact that some had managed to secure more responsible positions in the union as a result of their training. In other words, they valued modest changes with non-quantifiable impact. Because of a lack of clear assessment strategies, the main NNGO donor to the project announced that they would cut their funding, arguing that the training center was using ‘old-fashioned’ methodologies. This outcome could have been avoided if the NGO had a clear action plan and a system of evaluation to promote evidence-based programs.

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(1) Edwards, Michael and David Hulme. (1996) Beyond the Magic Bullet: NGO performance and accountability in the post-cold war world. West Hartford, CT: Kumarian Press.

(2) Ibid.

(3) Fisher, Julie. (1993) The Road from Rio: sustainable development and the nongovernmental movement in the Third World.Westport, Connecticut and London: Praeger, pp 263.

(4) Korten, D. C. (1987) Third generation NGO strategies: A key to people-centered development. World Development15 (Suppl.), pp. 145–159.

(5) Charlton, R. (1995) Sustaining an impact? Development NGOs in the 1990s (review article). Third World Quarterly16(3), 566–575.

(6) Case Study of an NGO’s Collapse. Accessed 04 September 2009.

(7) Ibid.

(8) Edwards, Michael and David Hulme (1996) Beyond the Magic Bullet: NGO performance and accountability in the post-cold war world, West Hartford, CT: Kumarian Press.

(9) Ibid.

(10) Fowler A. (1996). Assessing NGO performance: difficulties, dilemmas, and a way ahead. See Edwards & Hulme 1996a, pp. 169.86.

(11) Huber, Konrad. (2004). The HDC in Aceh : promises and pitfalls of NGO mediation and implementation.Washington, D.C.: East-West Center Washington.

(12) Fisher, William F. (1997) 'Doing Good? The Politics and Antipolitics of NGO Practices', Annual Review of Anthropology 26(1): 439–464.

(13) Kennedy, Brian. The promises and pitfalls of NGOs. Accessed 04 September 2009.

(14) Fowler A. (1996). Assessing NGO performance: difficulties, dilemmas, and a way ahead. See Edwards & Hulme 1996a, pp. 169.86.

(15) Ibid.

(16) Edwards, Michael and David Hulme (1996). Beyond the Magic Bullet: NGO performance and accountability in the post-cold war world, West Hartford, CT: Kumarian Press.

(17) Bebbington AJ, Thiele G. (1993). NGOs and the State in Latin America: Rethinking Roles in Sustainable Agricultural Development. London: Routledge.

(18) Fowler A. (1996). Assessing NGO performance: difficulties, dilemmas, and a way ahead. See Edwards & Hulme 1996a, pp. 169.86.