Capacity building for local NGOs A guidance manual for good practice Published by the Catholic Institute for International Relations Unit 3, 190a New North Road, London N1 7BJ, UK www. ciir. org © CIIR 2005 Printed manual ISBN 1 85287 314 0 CD-Rom ISBN 1 85287 315 9 CIIR is registered in the UK as a charity (number 294329) and a company (number 2002500) In some countries, CIIR operates under the name of International Cooperation for Development (ICD) Cover photo: A woman at Ayaha returnee camp in Somaliland. Photo © Nick Sireau/CIIR.
CIIR gratefully acknowledges funding from Comic Relief for this publication About the author The originating author of the material in this manual is Lainie Thomas, who developed and wrote the material while working as a CIIR/ICD development worker in Somaliland. Further information about the work that led to the publication of this manual is given in the Introduction. Capacity building for local NGOs A guidance manual for good practice Contents ____________________________________________________________ ____________________________________ Contents 1 The basics 1. 1 Outline of chapter 1. 2 Aims 1. Development: definition and approach 1. 4 Organisational principles 1. 5 Defining the organisation’s mission 1. 6 Conclusion: organisational success and sustainability Organisational governance 2. 1 Outline of chapter 2. 2 Leadership 2. 3 The governing body 2. 4 A governing document 2. 5 The role of trustees 2. 6 Terms of reference 2. 7 Meetings 2. 8 Organisational policy development 2. 9 Conclusion: successful governing bodies Appendices Strategic planning 3. 1 Outline of chapter 3. 2 Organisational vision 3. 3 Strategic planning 3. 4 Strategic plan: structure 3. 5 Annual team work plan 3. Individual performance objectives 3. 7 Individual work plans 3. 8 Conclusion Managing finances 4. 1 Outline of chapter 4. 2 Purpose 4. 3 Roles and responsibilities 4. 4 Accounting systems 4. 5 The budget 4. 6 Reporting and monitoring 4. 7 Financial reports: timetable 4. 8 Specimen forms Appendices 1 1 1 5 6 8 10 13 13 14 15 16 24 28 30 31 32 33 41 41 42 44 45 66 67 68 70 71 71 72 73 76 89 92 94 95 96 2 3 4 ii Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ ____________________________________ Contents Managing people 5. 1 Outline of chapter 5. 2 Equal opportunities and diversity 5. 3 Selection and recruitment 5. 4 Terms and conditions of service 5. 5 Performance management 5. 6 Staff development 5. 7 Raising concerns at work (grievance) 5. 8 Disciplinary procedures 5. 9 Harassment and bullying at work 5. 10 Health and safety at work 5. 11 Conclusion Managing projects 6. 1 Outline of chapter 6. 2 Strategic plan and project management 6. 3 Needs assessment 6. 4 A concept paper 6. 5 A full project proposal 6. 6 Project management 6. 7 Conclusion Appendix Office administration 7. Outline of chapter 7. 2 An organisational structure chart 7. 3 Office communications 7. 4 Internal office communications 7. 5 Filing and record keeping 7. 6 Administrative audit 7. 7 Setting up a resource centre 7. 8 Conclusion Appendices Publicity and fundraising 8. 1 Outline of chapter 8. 2 External relations and publicity 8. 3 Producing a brochure 8. 4 Producing a newsletter 8. 5 Developing a fundraising plan 8. 6 Conclusion 121 121 122 124 131 138 140 141 142 144 147 148 149 149 149 156 167 168 173 176 177 179 179 179 181 185 187 190 192 199 200 209 209 209 212 213 214 217 219 6 7 8
Further reading and resources Capacity building for local NGOs: A guidance manual for good practice iii iv Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________________________________ Introduction Introduction The project of preparing and publishing this guidance manual on capacity building for local NGOs (nongovernmental organisations) has been a lengthy one involving many people along the way. The concept for the manual arose from groundbreaking work in CIIR/ICD’s Somaliland programme initiated in 2000.
This work continues today through a long-standing programme of capacity-building support to the indigenous local NGO sector in Somaliland funded by Comic Relief. Through this publication, we hope that this guidance on capacity building will have a wider use and purpose and will prove of benefit to capacity-building activities with local organisations in many different parts of the world. The original manuals (written by Lainie Thomas and now collected together into this publication) aro s e f rom an international NGO forum created in Somaliland in 1999, known as the Capacity Building Caucus (CBC).
In the early 1990s, as Somaliland emerged from civil war and conflict, indigenous non-governmental and community-based organisations mushroomed. International organisations began targ e t i n g reconstruction and development aid through local organisations and quickly came to realise the need for institutional strengthening and capacity building. The CBC was formed to ensure learning from best practice, to coordinate capacity-building activities, and eventually to promote sustainability through a ‘training of trainers’ programme for Somal i capacitybuilding officers.
The manuals were developed in part as a curriculum for the training of trainers p rogramme, and in part for use by individual local organisations to assist them in the ongoing process of developing their own capacity. Writing about the CBC, Dr Adan Abokor, CIIR/ICD’s country representative in Somaliland, says: The CBC was started in a very informal way as an attempt to achieve improved coordination in the work of international NGOs providing the same kind of service to local NGOs.
In the course of their collaboration, the members grew more and more conscious that coordination between international agencies in capacity building has to be structured and improved constantly. The CBC remained an informal, specialised working group, able to feed information and outputs about capacity-building principles, tools and best practice to other coordination bodies and sectoral working groups in Somaliland. The CBC’s work is based on voluntary coordination between the participants with no intention of imposing views or tools on anybody.
One of the most active participants and founding members of the CBC was CIIR/ICD’s development worker Lainie Thomas. Lainie developed and wrote the original manuals on which this publication is based. Without her energy, vision and dynamism the training manuals would not have been produced. Among others who have contributed advice, thinking, inputs to content, editorial work and sheer determination to see the manuals published are: • Dr Adan Abokor • Abdirahman Hudow Osman • Caroline Roseveare • Andrew Humphreys • The CBC in Somaliland • Anne-Marie Sharman • Alastair Whitson • Pippa Hoyland The ublication has been made possible through funding received from Comic Relief. Capacity building for local NGOs: A guidance manual for good practice v ____________________________________________________________ _________________________ Chapter 1: The basics Chapter 1: The basics 1. 1 OUTLINE OF CHAPTER This chapter opens by outlining the aims of the manual and listing the elements of organisational success. It suggests which organisations may find the book particularly useful, bearing in mind the many different types of ‘not for profit’ or non-governmental organisations (NGOs) that exist.
The chapter goes on to look at some different definitions of and approaches to development, emphasising the importance of participation, empowerment and inclusion. A first step for any organisation to take, either when it is being formed or during periods of reflection on its purpose, focus and direction, is to define the broad principles it will adhere to in its daily practice and programme activities. Some guidance is provided to help organisations discuss and agree on these. The principles an organisation adopts are reflected in the way it defines its mission.
Hence another important preliminary step is to clarify the organisation’s mission. It should be clear what the organisation has been formed to achieve, and how it will set about achieving it. Establishing a clarity of purpose and focus that is shared by staff teams, partners and other stakeholders provides an important base from which to develop a governing document (see Chapter 2: Organisational governance) and a strategic plan (see Chapter 3: Strategic planning). A written mission statement is also a useful tool for an organisation to publicise itself (see Chapter 8: Publicity and fundraising).
This chapter concludes with a summary of some factors that influence an organisation’s success and sustainability. 1. 2 AIMS What? The primary aim of this manual is to help local non-governmental organisations (NGOs) achieve the greatest possible programme impact through the best organisational practice. Local NGOs are created to bring about, or support processes to bring about, major positive change in the lives of the beneficiaries, clients or service users they have been formed to serve. In other words, these Capacity building for local NGOs: A guidance manual for good practice 1
Chapter 1: The basics______________________________________________________ ________________________________ organisations are a means to a broader end. At the core of their work, as the diagram below illustrates, are the programmes they deliver. If they are to achieve maximum positive impact through these programmes, organisations need to work as effectively as possible. However, the ingredients of organisational effectiveness are not easy to unravel: different authors have advocated different recipes for success in a wide array of books and articles. ACCOUNTABILITY governance PROFILE & SECURITY fundraising and publicity FOCUS strategic plan
The essential ingredients of organisational effectiveness as defined in this manual can be depicted as follows: If an organisation is to be truly accountable it will need a strong system of internal organisational governance. This will assure its clients or beneficiaries that it exists to further their interests, and assure its members, staff and funding agencies that its resources are being put to the best possible use (see Chapter 2: Organisational governance). RELIABILITY office administration PROGRAMME BENEFICIARIES TRUST financial probity DELIVERY programme management
CREATIVITY human resources management Without a clear focus to its programme it is difficult, if not impossible, for an organisation to achieve significant impact because its energies and resources will be poorly channelled and dissipated (see Chapter 3: Strategic planning). There are many ways in which an organisation can win or lose the trust of its beneficiaries, staff, funding agencies and the general public. One of the most important aspects of building trust is to establish systems to guarantee that financial resources are responsibly managed and efficiently used (see Chapter 4: Managing finances).
In an increasingly complex world, development issues are by no means simple to address, so those working to support communities and individuals who most need justice and redress must have creativity. A staff body that is well managed, highly motivated and working well as a team is much more likely to succeed than one characterised by insecurity, lack of support and opportunity, hierarchy and unclear lines of responsibility and reporting (see Chapter 5: Managing people). To effect real change in people’s lives, all NGOs develop and deliver programmes.
These may use a number of different strategies, including advocacy, capacity building, physical projects (such as buildings or repair of rural roads, water pumps, etc), research and information, networking, and others. An NGO must manage the delivery of these different elements of support to beneficiaries efficiently and effectively – from planning through implementation to the review stage – if it is to achieve the intended positive impact (see Chapter 6: Managing projects). The foundation of an efficient, effective and high impact organisation is its office administration.
The reliability of these systems must be such that they are largely invisible. An untidy, chaotic office where important 2 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________________________ Chapter 1: The basics documents cannot be located easily, where visitors feel unwelcome and telephone messages go unrecorded, gives a bad impression and undermines the efforts of the staff team (see Chapter 7: Office administration).
Last, but by no means least, it is difficult if not impossible to advance the interests of beneficiaries without carving out a public profile for the organisation and its programme. Without this it will remain unknown and isolated when it could be networking effectively with others and building a solid reputation for delivering high quality, high impact programmes. A solid reputation is also linked to an organisation’s long term security: it is much easier for a reputable organisation to secure funding for its work (see Chapter 8: Publicity and fundraising). Who?
This manual is designed to help organisations in the making, both new local NGOs and those that have been working for some time, by outlining some basic standards of best practice. Smaller community based organisations (CBOs) may also find some parts of it helpful. However, the primary target audience is NGOs working at national or regional (provincial) level in partnership with CBOs working at community level, or directly with communities. The manual is designed to be accessible to NGOs regardless of the number of staff they employ or the size of their budget.
Larger, more complex organisations employing experienced and technically skilled personnel may find that they already use many of the procedures and processes suggested. However, even these organisations may find some useful checklists to help them reach ever higher standards. How? The manual can be used as a step by step guide to developing an effective and well-managed organisation that makes best use of its people and financial resources to design, deliver and develop its programme. The chapters can be used individually for reference on the topics covered.
Each chapter contains examples of best practice as well as a number of exercises and prompts in the form of ‘issues to consider’. These can be used in small internal discussions or larger workshops to help clarify thinking on key aspects of organisational development. Certain terms are employed throughout the manual for the sake of consistency. For example, ‘Executive Director’ is used to describe the most senior post holder in an NGO, even though this person may be called a Manager, Managing Director or something else.
Similarly, the term ‘governing document’ is used throughout, although some organisations call this document a constitution. Non-governmental organisations (NGOs) Defining a national or local NGO is neither as easy nor as straightforward as it might appear. In some cases these organisations are defined by laws governing their registration or through an NGO policy adopted by the government. But sometimes the way in which the government defines NGOs differs from the way in which the NGO community chooses to define itself.
Capacity building for local NGOs: A guidance manual for good practice 3 Chapter 1: The basics ____________________________________________________________ ________________________ A study of Namibian NGOs (Allison et al, 1996), for example, found that these organisations had reached consensus about how they wanted to be defined after much debate. Their definition was: An NGO is any organisation that operates outside government, is not for profit, is voluntary, is non-ethnic, is non-religious, is non-union, is non-political and is not community-based.
Here the NGO community decided that it was important to draw a distinction between: • NGOs established to operate at a national level within the country as a whole or in the different, vast regions (regional NGOs) comprising it; and • CBOs that work in a single community and with whom national (or regional) NGOs enjoy close working relations. The distinction between NGOs and CBOs is maintained in this manual. Where there is no legislation covering national or local NGOs, it is imperative for these organisations to play an active role in shaping new or proposed legislation to reflect their particular historical evolution and context.
It is important to remember that NGOs are not a homogenous group of institutions. They differ from one another in many ways including those listed in the box below. HOW NGOS DIFFER 1 The length of time an NGO has been in existence. 2 The main reason why an NGO was established: this might be to provide services or for some other purpose such as policy advocacy in human rights or training and capacity building for organisational development. 3 The impetus driving the organisation: for example, whether it is a membership based organisation; whether it was formed in response to community demand or to the availability of international funding. How it generates its income: whether an NGO generates its own income (this includes those with programme activities linked to small-scale enterprise) or has the potential to do so, or whether it depends entirely on funding from external sources (such as international NGOs). 5 Adoption of one or more target groups as a focus (for example, to work with rural women, people with disabilities or pastoralists) or a broader spectrum of work not focused on a particular target group. Adoption of a sector focus (for example, primary health care, adult literacy, rural water development) or a thematic focus (for example, the self-organisation of people to advance their rights to land). 7 Programmes may be targeted to a specific region or province, or be spread throughout a country. 4 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________________________ Chapter 1: The basics 1. 3 DEVELOPMENT: DEFINITION AND APPROACH
Not only do NGOs differ from each another in many ways, but they often have very different definitions of development. This will have a significant influence on their programmes and the relationships they form with others, including their beneficiaries, clients or service users, government, and international funding agencies. It is helpful for organisations to reflect and agree on their approach to development. The exercise below is intended to encourage dialogue. It contains some examples taken from discussions with NGOs in Somaliland. EXERCISE: DEFINING DEVELOPMENT
See if you agree with the definitions of development outlined below or have different ideas about what development is about. Definition 1 Development is about people and the way they live, not about objects, things or services given to them. Development is a process in which a community of people strives to make it possible for all its members to satisfy their fundamental human needs and to enhance the quality of their lives. Definition 2 Development is a process. Fundamental human needs include understanding, participation, creation, identity and freedom.
These are things that cannot be satisfied by giving services or things. To be complete and sustainable, development must involve the beneficiaries and help them to develop skills to understand the real causes of their problems, take initiatives, be creative, and participate in and organise action. Development means reflection and action. Members of the community need to be taught about both. Definition 3 Development is sustainable long term improvement and changes for people and their target community areas. Definition 4 Development is people’s rights to get justice and equal opportunity in all areas and levels of life.
Definition 5 Development is improving people’s lives, interests, and whatever they share. That can be achieved by living peacefully, understanding each other, sharing information, and justice. Definition 6 Development is elevating people’s economic situation, knowledge and skills to meet their fundamental human needs and achieve selfreliance, understanding and sustainable changes in life. Capacity building for local NGOs: A guidance manual for good practice 5 Chapter 1: The basics ____________________________________________________________ ________________________
Empowerment, participation and inclusion For many NGOs the concepts or principles of empowerment, participation and inclusion are of central importance in the way they define and approach development. This is because they see disempowerment, marginalisation, discrimination, exclusion and voicelessness as major causes as well as results of poverty, conflict and suffering. Increasingly NGOs believe that unless people can influence decisions that directly affect their lives, they will remain excluded from mainstream development. They will be merely the passive recipients of aid and assistance from the government or other sources.
National or local NGOs that define development in this way see their role as being, first and foremost, to support increasing empowerment and the active participation of people in decision making. The Capacity Building Caucus (CBC) in Somaliland emphasises that NGOs have a duty to support communities in deepening their understanding of the root causes of suffering and identifying their own solutions to overcome them: The role of a local NGO is not to do things itself, but to help the target community make changes for itself … The CBC, as one of its principles, always recommends a participatory approach to capacity building.
It recognises the importance of allowing the community to select its own priorities. The way an organisation chooses to work is important. Its approaches are not neutral. How programme activities are designed and implemented will directly affect their impact on people’s capacity to bring about real changes in their lives, and their ability to dictate for themselves the direction and pace of such change. 1. 4 ORGANISATIONAL PRINCIPLES The principles of an NGO are reflected in the ways it works internally as an organisation and externally in its relationships with communities, clients, service users or beneficiaries.
What is a principle? A principle is a belief or rule about which people agree. For example, the principle of sustainability is one that many NGOs believe is important for an organisation and its programmes. It means approaching development in ways that are lasting, rather than dependent on continual external assistance and intervention. A principle is an idea or concept that people support. For example, many people support the principles of equality and nondiscrimination.
An organisation with these principles would take steps to make sure that ethnic minorities, disabled people and women, among others, do not suffer discrimination. It would take concrete steps towards realising these principles through, for example, an equal opportunities policy. It might go a step further and actively encourage and celebrate difference and diversity, in both its staff team and its programme (see Chapter 5: Managing people). 6 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ ________________________ Chapter 1: The basics A principle is something that guides everyday practice. For example, many NGOs share the principles of democracy and accountability. This means that they give a high premium to consultative, transparent and participatory ways of working and decision making. However, internal organisational democracy, transparency and accountability are often difficult principles to practise and NGOs that advocate transparent democratic and accountable government are more likely to be heard if they are seen to practise these principles themselves.
Some NGOs regard their accountability to staff, members and target groups as equally important to their accountability to international funding agencies. Clarifying organisational principles An organisation’s members together with its staff, the governing body and other key stakeholders might want to share ideas about its principles so that they have a real stake in it and share a common understanding of its purpose and what it stands for. The CBC has developed a checklist of organisational principles. CHECKLIST: ORGANISATIONAL PRINCIPLES
Our organisational principles 1. Use a participatory strategy A participatory strategy means involving the participants and the community in the organisation, starting from when it defines its objectives and ideas all the way through to programme implementation and evaluation. How to implement the principle • Approve a governing document that will define roles and responsibilities. • Adopt a management style that supports people. • Plan the involvement of beneficiaries in measuring the NGO’s effectiveness. 2.
Be transparent and accountable The organisation must be transparent to staff, members, communities and funding agencies, in both financial and programmatic senses. • Approve and implement financial and administrative policies and procedures. • Prepare quality financial reports for the governing body and other key stakeholders. • Conduct regular systems audits. 3. Build partnerships and trust through: Cooperation. Work with and listen carefully to others. Impact. If an organisation supports a community in achieving real and positive change it will earn respect and reputation Participation.
People respect and value what they are or have been involved in themselves. • Put the concept of partnership into the NGO’s system so that people work together. • Collaborate with other key actors in social development. • Establish strong links with the community and plan how best to collaborate. Capacity building for local NGOs: A guidance manual for good practice 7 Chapter 1: The basics ____________________________________________________________ ________________________ 1. 5 DEFINING THE ORGANISATION’S MISSION
An important step for any organisation is to make clear its key purpose and how it will achieve what it has set out to do. The process of doing this can offer a good opportunity to build consensus within the staff team as well as with partners, beneficiaries and other stakeholders. A written mission statement provides a brief summary of the decisions reached during what may have been a long process of consultation, dialogue and debate. It can be useful to share this document with others to publicise the organisation (see Chapter 8: Publicity and fundraising).
Ideally, it should be no more than a one page summary. What is a mission statement? A mission statement summarises what the organisation is about. It defines its direction, and tells others how it hopes to achieve its ideals. The mission statement distinguishes an organisation from others by specifying what it aims to do and how. A clear and well defined mission is important to focus the organisation. It also clarifies the organisation’s style of working. An NGO that has a mission statement will have a better idea of why it exists, whom it wants to help, and how it will reach its goals.
Such a statement is best developed when an organisation is founded. However, once an organisation has been operating for some time and has a clearer mandate, this may be an opportune moment to write it down. A mission statement has the characteristics outlined in the box below. CHARACTERISTICS OF A MISSION STATEMENT • It is the organisation’s self-concept. • It is a broad-based, strategic statement of the NGO’s goals, attitudes, orientation, and outlook. • It is clearly defined to serve as a focal point, to encourage others to identify with the organisation’s purpose. It is long range; it looks into the future of the organisation. • It is brief and to the point. • It distinguishes the organisation from others and shows what makes it different. • It provides focus for the organisation. The organisation’s members and its staff team can join together to share their ideas and to agree on the common purpose of the organisation and why it was formed. An organisation is formed for the good of its beneficiaries, so they should participate in the process of defining its mission, which will provide a summary of the NGO’s agreed mandate.
If only a few people take part, others may not have a sense of ownership. Before developing a mission statement, it may help to read those of some other organisations to get a better idea of how they look. The next step is to identify what information the mission statement might provide about the organisation by discussing the questions outlined below. 8 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________________________ Chapter 1: The basics EXERCISE: INFORMATION FOR A MISSION STATEMENT Founding date. On what date was the organisation formed? • Purpose. What is the main reason the organisation was formed? What change does it intend to help bring about? • Focus. What type of focus does the organisation have in terms of its target groups, sectors, themes, strategies? • Geographical area of work. Where does the organisation work? • Beneficiaries. Who does the organisation support (eg refugees, women, street children, poor women and men, pastoralists, landless rural residents, etc)? • Organisational values. What does the organisation stand for? • Type of organisation.
What type of organisation is it (eg nongovernmental, voluntary organisation, independent charity, women’s organisation, non-profit, non-political, etc)? • Religious affiliation. Does the organisation have any ties to a religious body? If not, the mission statement may state that it is non-sectarian (non-religious). • Methodology. What is distinctive about the organisation’s style of working (eg participatory, inclusive, empowering)? It can be helpful to work in a large group or smaller subgroups to decide what defines the organisation and what makes it different.
This will help to determine what information to include in the statement. The following exercise provides some guidance on how to work together to define a mission statement. EXERCISE: DEFINING A MISSION STATEMENT 1 Once the types of information to be included in the mission statement have been agreed, write a list on a flipchart. 2 Discuss what information to include under each heading. Some items are easy, such as the founding date; but others, such as organisational values, are more complex and may need more discussion. 3 Discuss all the information to include until consensus is reached. Finally, summarise the information into a single statement. 5 Once a draft mission statement has been developed, share it with and invite feedback from members, staff and other important stakeholders who did not participate in drawing it up. 6 Once the mission statement has been agreed and put in writing, the governing body should approve it. 7 After it is approved, discuss whether to display the mission statement in the office or include it on the office letterhead. Think about what languages it should appear in. Capacity building for local NGOs: A guidance manual for good practice Chapter 1: The basics ____________________________________________________________ ________________________ Here is an example of a mission statement developed using these guidelines: The Association of Pastoral Farmers is a membership based nongovernmental and non-sectarian organisation. It was established on 28 July 2001 with the purpose of obtaining grazing rights for small pastoral farmers. Working in partnership with representative CBOs, it will provide capacity building for advocacy through small grants for organisational development and training.
The target group is femaleheaded households living in the poorest regions of X and Y. If the organisation wanted to put the mission statement on its printed stationery, then it would need to develop a strap line that is even more succinct. This might read as follows: The association works in partnership with representative organisations to promote the grazing rights of impoverished women pastoral farmers by building their capacity for advocacy. 1. 6 CONCLUSION: ORGANISATIONAL SUCCESS AND SUSTAINABILITY Organisational sustainability is essential for an NGO to be effective.
This concept can be defined in different ways, but it boils down to certain key factors that lead to success. Not all NGOs are created to last for decades. Some may be set up for a timebound purpose. For example, an NGO established to organise women’s groups to participate effectively in a world conference on women’s rights might transform itself or close down after the conference. Nevertheless during its existence the organisation would strive to be sustainable. In other words sustainability does not necessarily imply longevity but it does mean effectiveness.
Some of the factors which national NGOs in Namibia, for example, regarded as most essential for success are summarised in the box below. In other settings different factors might be identified. SUCCESS FACTORS FOR NGOS • Organisational vision, which includes the positioning of an organisation within the external environment and its flexibility to adapt to changes in this environment. • Individual staff capacities, skills and aptitude, and their collective synergy. • Organisational capacity to attract and retain a staff body and individual staff of the calibre or potential calibre necessary for running programmes effectively. Organisational capacity to be accountable to funders, governing bodies or boards, staff and target groups. 10 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________________________ Chapter 1: The basics In the box below are some examples of what Namibian NGOs believe are the major factors that determine their effectiveness. It may be helpful to look at these factors, pick out those most relevant to the local context and add new ones to the list.
ORGANISATIONAL EFFECTIVENESS • Organisational ability to remain detached from party politics. • Able and committed leadership with solid skills derived either from grassroots experience and connections, or from formal educational qualifications. • Participatory and democratic involvement of grassroots membership and NGO staff in matters pertaining to organisational and programme development (including staff selection). • Transparent and accountable (to grassroots membership and staff) management. • Secure donor funding from known organisations with which partnerships have been developed. Donors who are committed to capacity building, skills development and conflict resolution. • Donors who refrain from becoming enmeshed in internal organisational politics, and who are able to adopt noninterventionist methods. • Donors who are able to gauge the NGO’s capacity to absorb and manage resources and who tailor financial and other support to meet this. • Sound organisational control mechanisms deriving from democratic participation and/or measurable control systems. • Development of forward-thinking management and leadership strategies, and reduced reliance on organisational crisis management. Investment in human capital without prejudice to individual personalities, and with carefully selected training interventions. Capacity building for local NGOs: A guidance manual for good practice 11 ____________________________________________________________ _________ Chapter 2: Organisational governance Chapter 2: Organisational governance 2. 1 OUTLINE OF CHAPTER It is only through a system of strong organisational governance that beneficiaries can be assured that an organisation established on their behalf is indeed serving their best interests.
This chapter provides guidance on the role of a governing body and its trustees in the effective administration and management of an NGO. Leadership, accountability and transparency are essential ingredients of organisational success. Specific guidance is provided on how to write a governing document, detailing the standard provisions that it should contain. These include: • the aims of an organisation • the powers of the governing body trustees as custodians of the organisation acting on behalf of its beneficiaries or service users • meetings and administrative procedures • provisions for membership and meetings • financial accounts.
More guidance is also provided about trustees: how to select individuals who can contribute the appropriate skills and experience to the work of the organisation; how to ensure that they perform their roles responsibly; and what to do when individual trustees leave the governing body. The second part of the chapter looks at how to establish a robust governing body by suggesting some possible terms of reference to guide its work and that of the trustees. Because the development of organisational policy and the scrutiny of its implementation are key functions of the governing body, some guidelines on this are also provided.
The chapter concludes with a summary of factors influencing the success of a governing body, and hence good organisational governance. Capacity building for local NGOs: A guidance manual for good practice 13 Chapter 2: Organisational governance ____________________________________________________________ _________ 2. 2 LEADERSHIP There are different levels of leadership responsibility within an NGO. Typically, the governing document will outline the responsibilities of the governing body as well as the rights and obligations of trustees and members.
These can be further specified in terms of reference for the trustees. In addition, the job descriptions of individual staff members, including the Executive Director, will outline leadership roles in the staff team (See Chapter 5: Managing people). Every organisation has a range of different leadership needs. The duties of leaders break down into four categories outlined in the box below. GOVERNING BODY LEADERSHIP DUTIES 1. Planning • Policy development and oversight for the implementation of policies and procedures. • Planning the organisation’s future (long and short term). Deciding which services or programmes the organisation provides. • Evaluating or scrutinising the organisation’s programmes and operations on a regular basis. 2. Administration • Providing the governing body members with opportunities to grow as leaders. • Selecting the Executive Director and evaluating his or her performance. 3. Finance • Ensuring financial accountability. • Overseeing, reviewing and approving the organisation’s budget. • Raising funds and ensuring that adequate funds are raised to support the organisation’s work. • Monitoring expenditure against budget. Safeguarding the assets of the organisation. 4. Community relations • Ensuring that programmes and services appropriately address community or client needs. • Marketing the organisation’s services and programmes. • Continuing public relations, which includes an awareness that governing body members are agents or messengers of the organisation in the community. • Representing the community and its interests. 14 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________ Chapter 2: Organisational governance 2. 3
THE GOVERNING BODY There are different types of governing body with different names (for example, executive committee, board of governors, board of directors, trustee body, leadership body) but their purpose is always the same: to ensure that the organisation serves the interests of its beneficiaries, clients or service users as well as it can. It is important to think carefully about the role of a governing body in setting the overall direction of the organisation – ensuring that it benefits those whom it seeks to serve, and that it is accountable to these people as the custodian of their interests.
Think carefully, therefore, about what purposes the governing body will serve. An example is provided in the box below. EXAMPLE: ROLE OF THE GOVERNING BODY • To ensure the organisation’s success by providing clear strategic direction and sound management. • To provide active leadership of the organisation within a framework of effective checks and balances. • To set the organisation’s strategic aims and ensure that the necessary financial and human resources are in place for the organisation to meet them. • To ensure that the interests of beneficiaries are always at the centre of the organisation’s thinking and work. To safeguard the organisation’s (financial and human) resources. Not for profit, charitable or non-governmental organisations can be run in many different ways as specified in the governing document. The trustees are responsible under these rules for controlling the management and administration of the organisation, whether they are called members of an executive or management committee, nonexecutive directors, trustees or governors. Here the term trustee is used. Anyone responsible for the overall management and administration of the organisation is a trustee.
A governing body is made up of trustees (the number will be specified in the governing document). It may also comprise some non-voting members who represent particular stakeholder groups. Normally the Executive Director will sit on the governing body but he or she will not be a trustee and will therefore not have voting rights. The Executive Director is selected and appointed by the governing body and is directly accountable to it, usually through the Chair, who is responsible for managing the Executive Director’s performance.
Membership organisations may also choose to specify in their governing document that a certain number of members will be represented on the governing body, either as trustees with voting rights or as non-voting members. Capacity building for local NGOs: A guidance manual for good practice 15 Chapter 2: Organisational governance ____________________________________________________________ _________ Below is an example of a governing body structure. EXAMPLE OF A GOVERNING BODY STRUCTURE Chairperson Vice Chairperson Treasurer Secretary Subcommittees • Finance • Human resources • Prog development
Voting members/ trustees, Observing members, Co-opted members Executive Director and staff 2. 4 A GOVERNING DOCUMENT A governing document outlines the purposes of an organisation and how it will be run. It may also be a trust deed, constitution, memorandum and articles of association, or another formal, legal document. A governing document is important as an instruction manual for the trustees and other members of the governing body. Depending on how it is written and on local legislation concerning ‘not for profit’ or nongovernmental organisations, it may also be a document which carries legally binding obligations.
It is best to develop a governing document when in the process of establishing an organisation, even if this is not required by law or for the purposes of registration. However, such a document can also be written later. Because the governing document outlines the principles by which the organisation is governed and managed, it is important that its provisions are discussed with key stakeholders (see Chapter 3: Strategic planning: stakeholder analysis). 16 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ ________ Chapter 2: Organisational governance How to write a governing document As with any key policy document forward planning will make the task of developing a governing document much easier. The exercise below follows the steps in this process. EXERCISE: DEVELOPING A GOVERNING DOCUMENT STEP 1 Identify the main headings to include in the document. Use these headings for an outline of the document, and consider which stakeholders to consult about different provisions. Arrange the consultations with the various stakeholders. Make sure that someone is nominated to take notes of key points raised.
Highlight those aspects that may be included in the draft document. If specific points are unclear or ambiguous, then a legal adviser may be able to provide specialist advice. Once the document has been drafted, key stakeholders may be consulted again, perhaps through a workshop. Make sure that the draft document is circulated in advance with explanatory notes, and that someone is selected to present and explain its contents at the workshop. After the workshop, incorporate any agreed modifications or additions and ask a legal adviser to take a final look at the document to make sure that it complies with any relevant local legislation.
Once the document has been finalised, it must be approved by the governing body. If the document is written before a governing body has been created, an important item on the agenda of the body’s first meeting will be approval of the governing document. Make sure that all trustees have a copy of the governing document and that they understand its contents. This is usually the task of the Chair. STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8 For a sample governing document see Appendix 1 of this chapter. Capacity building for local NGOs: A guidance manual for good practice 7 Chapter 2: Organisational governance ____________________________________________________________ _________ The importance of standard provisions A number of standard provisions should be included in a governing document. The checklist below includes those which reflect good practice and will help trustees avoid some of the common pitfalls in the management of an NGO. The provisions in the list are explained in the following pages. CHECKLIST: STANDARD PROVISIONS 1 2 3 4 Name of the organisation and power to amend the name.
Aims which clearly set out what the organisation was set up to do (including details of beneficiaries). Powers clearly separated from the aims. Provisions which describe how the trustee body is set up (including how trustees are appointed and the length of time they serve). Provisions which deal with trustee meetings and proceedings at those meetings, including voting and a quorum. Provisions for a membership (if appropriate), including how someone becomes a member, and voting rights. Provisions for members’ meetings and proceedings, if appropriate (eg annual general meetings, special general meetings).
Provisions for keeping the organisation’s accounts and the control of its bank account. Provisions that trustees should not have a personal interest. A provision for amending the governing document. A provision for dissolving the organisation. 5 6 7 8 9 10 11 Provision 1. It is important to consider the name of the organisation carefully because it may not be easy to change it once it is incorporated into the governing document. Provision 2. The aims set out what an organisation is set up to do. They should therefore be described clearly, using words with a commonly accepted meaning.
An organisation may have more than one aim. It is important to remember that: • the aims should reflect what the organisation intends to do; and • the aims should be easy to understand. Below are some points to consider when framing the organisation’s aims. AIMS: SOME POINTS TO CONSIDER • If the organisation has been established to benefit a particular group of beneficiaries (target group) rather than the community as a whole, this should be clearly spelt out in the aims. Similarly if the organisation is not going to benefit specific individuals or groups, this should be clear. If the benefits of the organisation are to be confined to a particular geographical area, that area should be specified. • It is important to include a power to amend the aims. 18 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________ Chapter 2: Organisational governance Taking the example used in Chapter 1, of the Association of Pastoral Farmers, the objects might read as follows: • To promote the grazing rights of pastoral farmers with particular emphasis on impoverished female-headed households living in X & Y regions. To work in partnership with representative organisations of pastoral farmers to deliver capacity building and other community development programmes. Provision 3. Powers are usually set out in a separate clause immediately following the aims. The trustees of most organisations will need some powers which they can use to help them carry out the aims. Consider carefully what powers the trustees might reasonably be expected to need and include them. This might avoid having to amend the document later. EXAMPLE: POWERS OF TRUSTEES
The trustees have the following powers, which may be exercised only in promoting the aims: • to provide advice • to cooperate with other bodies • to establish a membership structure • to raise funds • to make grants • to deposit or invest funds in any lawful manner • to insure the property of the organisation against risk and take out other insurance policies to protect it • to enter into contracts to provide services to or on behalf of other bodies • to do anything else within the law that promotes, or helps to promote, the aims. Provision 4.
Trustees are the people responsible for the general management and administration of the organisation. The governing document should spell out clearly: • how many trustees there will be • how they will be appointed • how long they will serve. The governing document normally either appoints, or provides for the appointment of, the first trustees of the organisation. These individuals are thus named in the document as the ‘first trustees’. The following box illustrates some of the key decisions that an organisation will need to make regarding its trustees.
Capacity building for local NGOs: A guidance manual for good practice 19 Chapter 2: Organisational governance ____________________________________________________________ _________ DECISIONS TO TAKE: TRUSTEES Number of trustees. The organisation can decide what number of trustees will best meet its needs, bearing in mind that too many will make meetings unwieldy and decision making difficult, but having too few will place an unfair burden of work on a few individuals. Length of office. It is advisable for the governing document to state how many years the trustees will hold office.
Appointments are normally specified as being anything from one to five years. Eligibility. The organisation’s clients, beneficiaries or service users and members may also be trustees, provided that there are adequate provisions for dealing with any conflict of interest that may arise. Re-appointment. Trustees are usually re-appointed only if those with the power to appoint them are satisfied that they are still those bestequipped to take the organisation forward. A provision which allows a competent trustee to be re-appointed can be useful for retaining valuable experience and providing continuity.
Most organisations appoint at least three trustees, and most have between three and nine. Some organisations (umbrella NGOs or network NGOs) have more than nine trustees, so that all the member organisations have the opportunity to appoint a representative. For the sake of continuity, it is a good idea for the governing document to state that individual trustees will hold office for different periods of time. For example: Trustee 1 holds office from April 2000 to March 2003. Trustee 2 holds office from August 2000 to July 2003.
Trustee 3 holds office from November 2000 to October 2003. Staggering the terms of office avoids a situation in which all trustee appointments end at the same time. This process may occur naturally as trustees resign or retire from office and new ones are appointed to the governing body. When an individual is nominated by an external organisation to be a trustee, this gives a voice in running the organisation to a member of a group which has an interest in the organisation’s work. This could be a beneficiary, a client, a service user, or the representative of a funding body.
These nominated individuals can be a valuable asset to an organisation because they bring external perspectives which prevent the trustee body from becoming too inward-looking. 20 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________ Chapter 2: Organisational governance There is no difference in duties and responsibilities between a trustee selected by other trustees or elected by the members of the organisation and a trustee nominated by an external organisation.
However, nominated trustees should be aware that having two roles may bring conflicting demands, especially if they are also members of the external organisation that nominated them. Where a potential conflict of interest for a trustee arises on a particular issue that the governing body is considering, she should not take part in the discussions or vote on that issue. The governing document must also explain the specific circumstances in which a trusteeship will end. It may contain provisions stating the circumstances in which trustees can be removed from office, as outlined in the box below.
PROVISIONS FOR TERMINATION OF TRUSTEESHIP The governing document may specify that the trustees can remove a trustee who consistently fails to attend meetings, or fails to attend three consecutive meetings. It might also specify that a trustee may be removed if: • The organisation has conducted an inquiry and is satisfied that there has been misconduct or mismanagement; or • In broad terms, the individual has failed to protect the organisation’s resources or to ensure that its resources are properly used.
It is a good idea to set a limit to the term of trusteeship and state this clearly in the governing document (together with a re-election procedure). A trustee may resign at any time although she should give sufficient notice to the remaining trustees. It is important that an organisation maintains a balance between experienced and new recruits. It is wise to consider devising a rota of resignations and successions to allow for experience to accumulate and to prevent a vacuum from developing. A fixed term of office of, for example, three years, can be included as a provision in the governing document.
Provision 5. Meetings and administrative provisions. Unless the governing document outlines a basic administrative framework, the trustees will find it difficult to run the organisation efficiently. Consider the list of provisions contained in the box below and add others as necessary. Capacity building for local NGOs: A guidance manual for good practice 21 Chapter 2: Organisational governance ____________________________________________________________ _________ PROVISIONS FOR MEETINGS AND ADMINISTRATIVE PROCEDURES 1.
MEETINGS • What is the minimum number of meetings that the trustees should have each year in addition to an annual general meeting (AGM)? • How will meetings of the trustees be arranged? • How will emergency or special meetings be called to discuss a particular issue? 2. THE CHAIR • How will the Chair be appointed? • Will the Chair have the right to a second or casting vote when the numbers of trustees voting for and against a resolution are equal? 3. A QUORUM • What number of trustees must be present if a meeting is to be valid (that is, what is the minimum number of trustees needed for a quorum)?
If there are three, four or five trustees, then the quorum might be two, but if there are six or more trustees, the quorum stated could be, for example ‘three, or one-third of all the current trustees, whichever is more’. The number required for a quorum should not be set too high as this can lead to difficulties when an insufficient number of people can attend meetings. Provision 6. Membership. For membership organisations the governing document should set out who is eligible to be a member. For example, membership may be defined in terms of individuals or organisations only, or both individuals and organisations.
The following box lists some key considerations for membership provisions. 22 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________ Chapter 2: Organisational governance MEMBERSHIP PROVISIONS • Membership fees Is a subscription or membership fee payable? How often will fees become due (for example, annually or upon becoming a member, etc)? • Eligibility How will individuals or organisations apply for membership? What criteria will be used for accepting or rejecting applications? Voting rights Will members have any voting rights on the governing body? • Termination of membership How may membership be terminated? It is good practice to terminate the membership of an individual or organisation only: • if good and sufficient reason exists and is explained to the individual concerned; and • if the individual or organisation concerned has exercised the right to be heard before a final decision is made. It is important that members understand that they must exercise their membership rights only in the interests of the organisation, and not for any personal gain.
Provision 7. Members’ meetings. If a governing document provides for a membership, it is also advisable to provide for general and special meetings of that membership in addition to the regular meetings of the trustees and the AGM. Some questions to consider are presented in the box below. PROVISIONS FOR MEMBERS’ MEETINGS 1 What type and period of notice will be given before the meeting? The notice will normally specify the time, place and general nature of the business of the meeting. 2 How will minute taking and voting be organised?
There may be a Secretary for the governing body or this task may be rotated between its members. A suggested format for the minutes of governing body committee meetings is given in Appendix 2 of this chapter. Provision 8. Financial accounts and bank accounts. The governing document should provide for one or more bank accounts to be set up, and make adequate provision for the control of these accounts, including authority for signing cheques. Make sure that the provisions contained in the governing document match those in the financial procedures policy document (see Chapter 4: Managing finances).
Capacity building for local NGOs: A guidance manual for good practice 23 Chapter 2: Organisational governance ____________________________________________________________ _________ Provision 9. Personal interest. The governing document should include provisions for dealing with any conflict of interest that may arise. Trustees should not be able to use their position in the organisation to promote their own personal financial gain, or other personal and direct benefit. For example, there should be a provision requiring trustees to declare their business interests and for these to be recorded.
Provision 10. Amendments. The governing document should set out a procedure by which it may be amended. There are likely to be occasions when this is required to meet changing organisational needs and imperatives. Provision 11. Power of dissolution. There may come a time when, for whatever reasons, an organisation cannot continue to operate. Therefore the governing document should specify: • how the organisation may be dissolved • what will happen to any remaining assets after all debts and liabilities have been settled. 2. 5 THE ROLE OF TRUSTEES
Trustees play a very important role in organisational governance. The next part of this chapter looks at issues concerning trustees that may arise when an NGO is establishing its governing body. Selecting trustees Trustees need to be carefully selected and trained to ensure that they contribute their best to the efficient management of the organisation. The box below suggests some guidelines for selecting trustees. GUIDELINES FOR THE SELECTION OF TRUSTEES • Trustees must be selected for what they can contribute to the organisation and the delivery of its objects and mission.
They should NOT be appointed solely for their status or position in the community. • Trustees must be able – and willing – to give time to the efficient running of the organisation and the fulfilment of its objects and mission. • Trustees should be selected on the basis of their relevant experience and skills and must be prepared to play an active role in running the organisation. • Trustees can be beneficiaries, clients or users provided that arrangements are made to avoid conflicts of interest, such as a trustee voting for something from which he or she might gain personal and direct benefit.
Trustee skills Prospective trustees should be selected for their ability to make an effective contribution with their skills and experience. The following exercise is suggested to help the organisation think about what types of trustee it needs. 24 Capacity building for local NGOs: A guidance manual for good practice ____________________________________________________________ _________ Chapter 2: Organisational governance EXERCISE: SELECTING TRUSTEES STEP 1: ASSESS EXISTING TRUSTEE SKILLS • List the current skills and experience that are represented on the existing governing body.
Include skills such as fundraising, bookkeeping, or management skills. • An individual’s experience of working for another organisation is valuable. So too is the experience of someone who has been in the same position as the beneficiaries, clients or service users of the organisation OR who is a client or user and thus fully understands the needs of this group. STEP 2: IDENTIFY GAPS IN SKILLS AND EXPERIENCE • Assess what skills are lacking on the governing body. Draw up a list of the gaps. • Make a list of the skills sought in a new trustee.
Some of these skills may be essential whereas others may be desirable. • Some organisations draw up a job description for prospective trustees just as they do when employing new staff. STEP 3: LOOK FOR BALANCE AND DIVERSITY • Consider the current balance of the governing body. • It can be very useful to have a group of individuals who are diverse in terms of age, sex, race or ethnicity, background and skills. • If the organisation has an equal opportunities policy or a diversity policy, it should apply to the trustees as well as to staff.
The procedures for selecting and recruiting trustees should mirror, to the extent possible, those applied in the selection and recruitment of the NGO’s staff (see Chapter 5: Managing people). Finding new trustees Once the skills, competence and experience the organisation needs in its trustees have been agreed, it is a good idea to draw up a list of recruitment sources which may include those outlined in the box below. RECRUITMENT SOURCES: TRUSTEES Good recruitment sources might include: • government • traditional elders • religious leaders • university professors • international funding agencies.
You could also: • advertise for trustees in the press • hold an open day to show potential trustees what the organisation is about. Capacity building for local NGOs: A guidance manual for good practice 25 Chapter 2: Organisational governance ____________________________________________________________ _________ It is highly recommended that the organisation approaches other NGOs or international organisations, academic institutions and schools or reputable local businesses to ask whether they know of individuals who might be willing and able to act as trustees.
Press advertisements can also be an effective way of reaching a wider group of people as the advertisement can specify the particular skills needed. However, advertising is costly. Since the role of trustee is normally voluntar