1 NGO Management Lesson 4 Capacity Building for Not-Profit Organizations for Development

2 Focusing Topics  Capacity Building for Not-Profit Organizations for Development –Institution and Organization –NGO Capacity Framework –Organizational Capacity –Organizational Effectiveness –Range of capacity building in relation to development and poverty reduction

3 Institutions and Organizations Institutions govern individual and collective behaviour. They may be formal-legal systems, property rights, enforcement mechanisms; or informal-customs, traditions, norms...,may operate at different levels and may nest within a larger organizations. Institutions are often referred as “the rules of the game”. If institutions can be defined as the rules of the game, organizations are how we structure ourselves to play under these rules. So the distinction between the institutions and organizations is that between rules and players. Organizations encompass public and political bodies, economic bodies and social bodies.

4 Institutional and Organizational Development People often use the terms “institution” when they mean “organization”. For example they talk about institutional weaknesses when they mean organizational ones such as weaknesses in structure, people or processes of an organization. Organisational reform is important, but the bigger institutional picture, which includes rules, incentives and enforcement mechanisms, is important too. E.g. without policy reform on pay and incentives, anti- corruption programs will be hindered.

5 Institutional and Organizational Development Institutional causes of poverty can include: Economiccastes that restrict access to markets, land, labour opportunities, and credit Legalsystems of property rights that favour only men; corrupt practices by police and judiciary Politicaldemocratic processes that deny poor people a political voice e.g. vote buying Socialclass, exploitative patron-client relations

6 Capacity Building Context Basic skills Job specific related skills Leadership and management skills Attitude and behavior Experiences Organizational direction and plans Program/ service management Internal structures, systems and policies Human resource management Organizational leadership External relationship and resource mobilization Financial management Formal: legal framework, rights... Informal: norms, customs, traditions...

7 NGO Capacity Framework NGO capacity framework – areas which are critical to the NGOs work and their role in society for doing development. Organizational capacity is the capability of an organization to achieve what the planned outputs/ activities in order to realize the mission For effective development, NGOs must have adequate capacity in five areas; and each must be consistent with the other. 1.Organizational Design-structure 2.Systems 3.Mobilizing Resources 4.Maintaining Relationships, and 5.Producing Results

8 Organization Relationships NGO Capacity Framework Society Vision Resources Results People Systems Management Structure Impact Strategies Projects Programs Mission

9 Organizational Capacity Factors contribute to capacity: –People –Structure –Systems and procedures –Finances –Physical facilities –Management… NGO capacity must be viewed in relation to organization results. Therefore, efforts to NGO capacity building should not be separated from achieving external change-results.

10 Organizational Effectiveness AccountabilityInternal organizational governance to ensure that resources are being put to the best possible use FocusStrategic planning to achieve significant impact on society TrustSystems to guarantee that financial resources are responsibly managed and efficiently used CreativityHuman resources management with motivation, team spirit… DeliveryStrategies for management of service delivery such as advocacy, capacity building, physical projects… ReliabilityAdministrative systems that are reliable and effective such as documentation, communications… Profile & Security Make known to others, networking, build reputation, fund raising…

11 Essential Ingredients of Organizational Effectiveness Accountability Governance Trust Financial Probity Creativity Human Resources Management Delivery Program Management Reliability Office Management Profile & Security Fund Raising & Publicity Focus Strategic Plan Program Beneficiaries

12 Complexity and range of capacity building activity is linked to an organization’s approach to reducing poverty Structural Transformation Provide goods and services to individuals & communities. Humanitarian Service Build capacity of local Indigenous organizations Community Development Build capacity of local, regional and national systems Sustainable Systems Create new structures and transform systems

13 Humanitarian Service Capacity building strategy is based on improving the NGO’s communication and logistics for effective delivery of appropriate goods and services. Humanitarian Service

14 Community Development Capacity building is focused on strengthening the performance of local organizations in relation to their mission, vision, context, resources and viability. Community Development

15 Sustainable Systems Capacity building focuses on networking with government and other organizations to develop a system to sustain local, regional or national development. Integrated systems work to inter- related the efforts of multiple development sectors, for example, environment, microfinance, agriculture, education, etc. Sustainable Systems

16 Structural Transformation Capacity building focuses on creating networks and strategies to transform systems at all levels, to create new ways of organizing and new ways of thinking about economic, social and political relationships. Structural Transformation

17 Skill Areas for NGO Capacity Building To achieve an impact on society, the capacity building should focuses on: –Strategic Planning –Project Proposal writing –Project Management –NGO Accountability and Governance –NGO Leadership –Financial Management –Managing People –Office Administration –Fund Raising

18 Remarks Capacity development for an organization should look at all three levels: institutional, organizational and individual Capacity on building relationships and mobilizing resources is vital for NGO capacity Finally, building NGO capacity must be linked to organizational effectiveness.