Increases in funding in recent years have led to a proliferation of development non-governmental organisations (NGOs). This has led to much-debated problems associated with their accountability, size, growth and processes of evaluation. The NGO sector has grown so fast that no sector-wide institutions have yet emerged or been encouraged. Unlike private businesses, there is no co-operation to bolster public confidence.
This article puts forward a solution towards these problems as collective self-regulation through voluntary national professional associations. These associations would apply norms that increase transparency and introduce accountability, providing information both for the public and for donors. All interested parties have much to gain from NGOs becoming organised in this manner.
Four key problems NGOs face are:
- Accountability: There are no sanctions if NGOs fail to use their budgets properly.
- Structural growth: Increases in funding are often not matched by institutional changes, as the founder does not want to relinquish overall control. However, NGOs do need structures for reporting, accounting, evaluation, etc or they will lose the confidence of their funders.
- Evaluation: This is difficult for NGOs who are experimental, have intangible goals, or operate in a hostile environment. Meeting norms of structure and processes may be a valid alternative to quantitative evaluation.
- Economies of scale: Most NGOs are very small and lack cheap and easy access to specialist knowledge they require. Furthermore, the sector is highly internally competitive for funds.
The introduction of self-regulation through norms of corporate governance would help address each of the above problems. Typical issues covered would be timing of reports, issues to be publicly disclosed, staffing policies, sources of finance and auditing and evaluation arrangements.
- Such standards would bring greater accountability and transparency, prevent reluctance to introduce management and institutional changes and provide a quality rating for donors, reducing the need for more expensive forms of evaluation.
- It would provide an incentive for the provision of collective services to members by the NGO association that members cannot provide for themselves, for example staff training, management consultancy or donor information.
- This could be done in a decentralised fashion, for example AIDS NGOs working together will attract donors and hence other members. The NGO association would only give and renew membership to those organisations that observe self-regulation standards, hence the process becomes quasi-automatic.
- The regulations would not be rigid, as this is contrary to the flexibility of NGOs. Neither would there be a blueprint of the norms – they should evolve in country in order to be appropriate.
