Hard times for Kenyan NGOs as funds dry up and controls tighten

Every time we turn on a TV set, computer, or mobile phone we are inundated by troubling news from around the globe.

While the world faces mounting and critical issues such as global warming, discrimination, war, terrorism, and poverty, the need for non-governmental organisations (NGOs) seems greater than ever.

However, NGOs in Kenya and much of the world face a seven-fold crisis.

First, austerity measures in much of the traditional donor world have taken their toll on official development assistance to the developing world.
The reduction in steady predictable donor funding has led in recent years to wide unpredictability of NGO contracts.

Meanwhile China, an upcoming global powerhouse, does not use the traditional NGO structures but rather funds projects directly through its nationals’ firms.

While many NGOs focus on the most vulnerable among society, some NGO officials turn to self-preservation in uncertain times and spend inordinate amounts of time on contract extensions, job applications, and add-on programmes with less concern for communities.

In Kenya, the top three industries highly prized by job seekers are the Government, banks and NGOs. Given the present volatility, NGOs risk losing their allure as coveted employers.

Secondly, NGOs rely on donors from around the world for funding. These days fundraising has become increasingly difficult for them as better informed fundraisers search for and receive information from multiple online media sources, TVs, radios, billboards, etc.

As a result, NGOs are increasingly finding it difficult to stand above the crowd and garner support from donors in developed countries.

Third, Kenya’s new classification as a middle income country has led to multiple donors pulling out and focusing their interventions on poorer countries. As a result, Kenya receives a smaller percentage of an already shrinking pie.

Fourth, large private charities have, over the last 10 years, became increasingly aware of impact and how to measure it effectively.

Such organisations now want NGOs to quantify the impact of their interventions and whether it made any difference in the lives of beneficiaries when compared to control groups.

As a result, many programmes end prematurely when NGOs fail to meet impact standards.

Fifth, NGOs have turned into an industry where executives can amass considerable personal wealth. When a boss can, for instance, take home over Sh1.2 million per month in salary and benefits he loses sight of the poor he is meant to serve.

Sixth, the emergence of a new type of business model which targets profits, social impact (people), and environmental impact is poised to dislodge NGOs as drivers of social change due to the magnitude of what profit brings to sustainability.

Facebook and Twitter have arguably brought about more transformative change in the fight for human rights than all NGO aocacy campaigns in the last 50 years.

Uncover fraud

Social businesses also do not retain the agency problem, whereby users of services are not the ones paying for them. In businesses, consumers buy goods and services. Socially conscious businesses stay more in tune with the needs of users than NGOs.

Seven, NGOs can cause massive inefficiencies in achieving their mission, which is not the case with for profit entities.

Some large NGOs operating in Kenya require up to nine different signatures before making the slightest of external purchases. This goes towards ensuring accountability and transparency.

Contrast this bureaucracy with small NGOs which latch onto a sponsor, often from overseas, who believes in them and often ships large sums of cash to them in disregard of accountability principles.

A church in the United States, for instance, spent over Sh200 million on building a school through a local small NGO only to later find out that the executive had registered the land title deed in his own name, not that of the NGO.

The NGO industry oscillates between too strict structures in large entities and a shocking lack of the same in small ones.

Both sides need to move towards a middle ground and borrow a leaf from the business world and integrate values into the delivery of services.
Read about how to uncover fraud and conflict of interest in NGOs next week.

Mr Ochieng is an NGO and social business efficiency specialist. javince@javince.org

SOURCE: BUSINESS DAILY