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2016-03-31 | Administration of NGO

Successful NGOs and grassroots provide high quality services to beneficiaries. To work successfully and meet the goals, NGOs have to continually improve and professionalize their work, which puts more and more demands on the management and leadership of an organization. This part of the module provides with core knowledge, practical skills and tools to manage, lead and administrate effectively a non-profit organization.

Foundation, Management and Administration of Grassroots and NGOs

Successful NGOs and grassroots provide high quality services to beneficiaries. To work successfully and meet the goals, NGOs have to continually improve and professionalize their work, which puts more and more demands on the management and leadership of an organization. This part of the module provides with core knowledge, practical skills and tools to manage, lead and administrate effectively a non-profit organization.

“The art of getting things done through people” (Mary Parker Follet).

Introduction to NGOs / Grassroots

Definition NGO

The term, "non-governmental organization" or NGO, came into use in 1945 because of the need for the UN to differentiate in its Charter between participation rights for intergovernmental specialized agencies and those for international private organizations. At the UN, virtually all types of private bodies can be recognized as NGOs. They only have to be independent from government control, not seeking to challenge governments either as a political party or by a narrow focus on human rights, non-profit-making and non-criminal. As of 2003, there were reportedly over 20,000 NGOs active in Iran. The majority of these organizations are charity organizations, and thus would not fall under the category of development-oriented NGOs. In this document the term NGO is primarily used for organizations other than charitable organizations. The structures of NGOs vary considerably. With the improvement in communications, more locally-based groups, referred to as grass-roots organizations or community based organizations, have become active at the national or even the global level. Increasingly this occurs through the formation of coalitions with other NGOs for particular goals, such as was the case in the case of the Bam earthquake for example. A civil society is composed of three sectors: government, the private sector and civil society, excluding businesses. NGOs are components of social movements within a civil society. In the case of Iran, where civil society is not yet mature, NGOs can have an important role in strengthening the foundations of an emergent civil society. The issue of independence is an important one in the credibility of an NGO. It is hard for NGOs not to come under any governmental influence. Individual governments do at times try to influence the NGO community in a particular field, by establishing NGOs that promote their policies. This has been recognized by quite common use of the acronym GONGO, to label a government-organized NGO. Also, in more authoritarian societies, NGOs may find it very difficult to act independently and they may not receive acknowledgment from other political actors even when they are acting independently. On the other hand, development and humanitarian relief NGOs need substantial resources, to run their operational programs, so most of them readily accept official funds. It is thus important for the NGO to have transparency in its operations and goals so that its relationship.

Definition Grassroots

A grassroots movement is driven by a community's politics. The term implies that the creation of the movement and the group supporting it are natural and spontaneous, highlighting the differences between this and a movement that is orchestrated by traditional power structures. Grassroots movements are often at the local level, as many volunteers in the community give their time to support the local party, which can lead to helping the national party.

How to Start an NGO/Grassroots?

Starting an NGO can be a very time-consuming process. It requires a strong vision and dedication from an individual or group that share a common concern about a community. If initiated correctly in an organized and strategic way, the services implemented to benefit the community can be very helpful and resourceful.

The following presents ten steps that are useful in the formation of an NGO. This paper acts as a broad “how to” guideline and these issues may vary depending on each NGO. It is important to realize that these situations also vary from country to country, as each one has its own specific requirements and recommendations.

Establish Purpose / Vision / Goals

The first essential step in starting an NGO is to determine the purpose of the organization. Do so with a clear and concise written statement that describes the charitable mission of the organization. The statement must be broad enough to reflect the values of the NGO and why it exists. It is important to remember who the target community of the organization is and why it is important to reach out to this community. It is also necessary to envision what the organization will become and what the long term goals and objectives are. This should be done through short-term planning (an annual plan) as well as long-term planning (a strategic plan).

Establish an Initial Board of Directors or responsible persons

When setting up an NGO, the founder(s) must recruit the initial board of directors. It is helpful to start with a small group of committed individuals because the first board is the foundation of the NGO. The members must have strong legal, financial, and technological skills and should know that they are expected to serve on the basis of the public’s best interest. People who clearly understand the mission and goals of the organization and who have new and progressive ideas to contribute are essential.

Most importantly, the initial board should be able to work as a team in order to help the organization get started and gain acceptance from the community. The size and structure of the board, as well as the people who make it up, may change based on the size and needs of the organization once the NGO becomes officially established.

Seek Legal Expertise

Because there are many legal matters that an NGO must deal with in first starting up, it is sometimes helpful to seek a lawyer. Legal support can help with:

  • Registering the NGO;
  • Filing articles of incorporation;
  • Filing reports;
  • Tax issues;
  • Securing licenses.

Even though many of these matters may be simple, a lawyer who specializes in this area is timesaving and reassuring. If money is an issue, it may be possible to provide the NGO with inexpensive legal services through a legal assistance program. Checking with the board members to see if they have any connections or contacts may be useful. Having an attorney with such expertise on the board is another option.

Chose a Name

Before registering an NGO, it is important to choose a name. It is essential to research local government agencies and state offices to make sure that the proposed name is not already being used. This also applies to the logo if the NGO is going to have one.

Write Articles of Incorporation

The articles of incorporation should provide a legal description of the NGO assigning power to the board. Once drafted, they should be submitted to the board for final approval before registration. The information that should be included in the articles varies between local state governments and also from country to country. Depending on what country the NGO is being formed in, it is important to check with local and federal governments to see what kind of forms need to be filled out and what should be included. The following are general examples of what is often expected:

  • Name of the NGO;
  • Purpose/Mission;
  • A statement declaring the NGO is nonprofit;
  • Location of the NGO;
  • Number and names of the board members;
  • Extent of personal liability;
  • Whether or not the NGO has capital stock (usually it will not).

Draft Bylaws / Statute

While the articles of incorporation prove the accountability of the organization to the external world, the bylaws represent the responsibilities of the NGO to itself. The bylaws of an NGO specify how it will run. They act as a rule book determining structure, power, and organization. The bylaws are self-imposed by the NGO and therefore, should conform to the needs of the specific organization. The bylaws help to resolve and minimize disputes and should be available to all members of an NGO for reference. Though it varies depending on the individual needs of an NGO, some general information included in the bylaws may be:

  • Purpose/Mission;
  • Registered Office of the NGO;
  • Members and qualifications and length of memberships;
  • Board size, responsibilities, structure;
  • Structure of board meetings;
  • Committee Structure;
  • Officer Duties.

Register the Organization

After a name is chosen and the bylaws are written, it is necessary to register or incorporate the organization within its local government. In most countries, there are specific people in governmental departments that work in registering an NGO and distributing the compulsory forms in which to do so. The documents to be submitted vary between countries, but in most cases information about the board members, mission statement, and staff members is required and the articles and/or bylaws are essential.

Hold an Initial Board of Directors Meeting

Once the NGO is legally incorporated (through an issued charter in most cases) an initial board of directors meeting should be held. The board members should officially adopt the bylaws in the first meeting because they should explain how the board functions. The first meeting is important in establishing officers, committees, and discussing preliminary projects.

Set Up An Accounting System

All NGOs need a system for recording where money comes from and how it is used. Because NGOs finances tend to be closely scrutinized, it is important to put an effective accounting system into place to deal with the nuances of nonprofit bookkeeping and reporting.Seeking the help of an accountant who can help set up a bookkeeping system and explain how to use it is highly recommended. Board members or business schools may be helpful in finding a volunteer accountant or an inexpensive one specializing in helping nonprofits get started. Often NGOs have an accountant on the board who is familiar with these systems, which is also a useful option. It is important to decide whether the bookkeeping system should be cash or accrual.

In general, it seems that the information provided through accrual based accounting is more useful to an organization than cash based accounting because it paints a broader financial picture. It allows an NGO to see not just its immediate payments and deposits, but also what kind of money they owe or may be receiving in the future. This allows an organization to be more aware of its financial status. Lastly, once the NGO decides what the bookkeeping system should be, it is essential that all financial transactions are documented and recorded into financial journals by the bookkeeper. Transactions should be numbered and put in chronological order and thank you notes are essential for every donation received.

Fundraising Plan

Money required for an NGO to operate primarily goes into their educational and social programs, the overall operation of the NGO (administration, utilities), and projects (surveys, giving programs). Both the board of directors and the executive director should be active participants in fundraising and it is important that writing grants, seeking contributions, and other fundraising skills are acquired skills early in the NGOs development. In order to come up with the best fundraising strategy, it is important to identify what the needs are of the NGO and what sources can best fulfill these needs. Professionalism, communication, and accountability are crucial for building trust with a potential donor. Also understanding why a person or group is supporting a program, activity, or the NGO as whole is useful in soliciting them to contribute for a second time or even continuously. The following presents some examples of ways in which an NGO may choose to pursue funding:

  1. Foundations. Generally, they all have readily available guidelines that can be found through researching that explain what kind of NGOs they fund and how to apply for grants. There tend to be three different types of foundations:

    • Most foundations fall under the category of independent foundations where most of the funding comes from individual, family, or group endowments;
    • Community Foundations receive money from local sources and distribute it to local NGOs;
    • Corporate Foundations are set up legally through business corporations and is governed by trustees. They tend to support communities in which the corporation operates.
  2. Corporations and businesses that have staff working in community relations or public relations departments. These departments fund many charities in communities where the company operates and usually provides grants to NGOs regardless of location.

  3. Religious groups tend to fund organizations regardless of location.

  4. Individuals may provide long term funding or short term funding to an NGO.

Additional Steps

Once the previous ten steps have been completed, the foundation of an NGO has essentially been established. There are only a few miscellaneous tasks that must be completed before the NGO can fully operate. Some of these include:

  • Hiring staff and volunteers.

  • Reaching out and becoming known in the community.

  • Seeking office supplies (furniture, computers, machinery).

  • Insuring the NGO.

  • Holding orientation.

After this point program activities can be discussed and implemented. It may take about a year before these prove to be successful. Finally, at the end of the first year, it is important to review the mission, goals, and vision to make sure the NGO has stayed on track. Critiquing programs and activities to see what can stay or be changed is also beneficial.

The Structure and Organization of NGOs

An NGO is a private, self-governing, not-for-profit organization acting of its own volition on behalf of others. Its size, scope, mission, structure, history, affiliations, activities, and governance determine the character of each NGO. Because they are self-defining, NGOs are usually quite clear about their values, their goals, and the purpose of their activities, which are set forth in a charter.

What does a typical NGO's organizational structure look like? What types of staff members work in an NGO, and what are their responsibilities?

The wide variety and complexity working on different themes, at different levels, or targeting different audiences, make it extremely difficult to create a generic outline of an organizational structure. In general, a typical NGO's organizational structure could be the following:

Management – Board

The management of an NGO could consists of three entities - the Board of Directors, the General Assembly, and the Executive Director.

While day-to-day decisions activities and management are taken care of by the board, the executive director and the staff members, the highest body that guides and advises the overall development and progress of the NGO. A general assembly may or may not be required by law, but such a body helps in creating a good transparent image for the NGO, in building trust with its partners and stakeholders, and in public relations and fund-raising activities.

Staff Members

Staff members of an NGO are responsible for the day-to-day functioning, and implementing of its programmes and projects. They report to the Executive Director, who overall is responsible for the NGO's activities. Staff members of an NGO could be grouped into: (1) administration, (2) publicity and (3) programmes/projects.

The staff positions and responsibilities outlined above are not, of course, fixed. NGOs can have other staff members too, or shared/related responsibilities can be held by one person. For example, related responsibilities of Membership Coordination and Public Relations can be handled by the same staff member. In cases where an NGO is just starting, or in the process of developing, this consolidation will particularly be true, where one staff member may be handling more than one and related responsibilities.

Details of all staff members, their roles and responsibilities, and overall NGO structure are concretized by including them in the NGO's by-laws. By-laws are needed for the legal registration of an NGO, and can be added to, or changed, with the approval of the Board of Directors and the General Assembly. The organizational structure itself may change over time, depending on how the programs and projects are and new ones initiated.

Accounting records

The foundations of all accounting are basic records that describe your earnings and spending. This means the contracts and letters for money you receive and the receipts and the invoices for things that you buy. These basic records prove that each and every transaction has taken place. They are the cornerstones of being accountable. You must make sure that all these records are carefully filed and kept safe. You must also make sure that you write down the details of each transaction. Write them down in a 'cashbook' - which is a list of how much you spent, on what and when. If you are keeping your basic records in good order and writing down the details of each transaction in a cashbook then you cannot go far wrong.

Internal control

Make sure that your organization has proper controls in place so that money cannot be misused. Controls always have to be adapted to different organizations. However, some controls that are often used include:

  • Keeping cash in a safe place (ideally in a bank account).

  • Making sure that all expenditure is properly authorized.

  • Following the budget.

  • Monitoring how much money has been spent on what every month.

  • Employing qualified finance staff.

  • Having an audit every year.

  • Carrying out a 'bank reconciliation' every month - which means checking that the amount of cash you have in the bank is the same as the amount that your cashbook tells you that you ought to have.

This last control is particularly important. It proves that the amounts recorded in the cashbook and the reports based on it are accurate.

Budgeting

For good financial management, you need to prepare accurate budgets, in order to know how much money you will need to carry out your work. A budget is only useful if it is worked out by carefully forecasting how much you expect to spend on your activities. The first step in preparing a good budget is to identify exactly what you hope to do and how you will do it. List your activities, then plan how much they will cost and how much income they will generate.

Reporting: Internal and external

This block is writing and reviewing financial and narrative reports. A financial report summarizes your income and expenditure over a certain period of time. Financial reports are created by adding together similar transactions. Financial reports summarize the information held in the cashbook. This is normally done using a system of codes, to allocate transactions to different categories. The narrative report describes all activities and shows interested the projects and achieved results. A template should be prepared and used regularly. The reporting addresses internals (board, members, staff) and external interested (donors, officials, etc.).

Communication strategy

A communications strategy is designed to help to communicate effectively and meet core organisational objectives. Here we look at the key elements of a communications strategy as well as how press/PR plans, web strategies and marketing plans fit into the NGO’s overall communications strategy.

Organisational objectives and communications objectives

Any communications strategy should closely reflect the overall organisational plan. In this section you should look at your organisation’s overall vision and core aims and objectives. You should then suggest how communications can help deliver these goals.

It is important that your communications objectives should be seen to contribute to the achievement of the overall objectives of the organisation. In this way they will be recognised not as an “add-on”, but something as fundamental as operational or policy objectives to achieving the organisation’s overall mission.

The example below shows how for a (fictional) homelessness organisation this might work in practice. Each of the organisation’s strategic objectives (from its business plan) can be broken down to show how operations and communications can contribute to delivering the objectives.

Communication objectives

Operational or policy objectives Communications objectives
To train the staff effectively To ensure all staff know and understand the standards of policy and energy efficiency
To build strong relationships with the local authority and other funders To provide a regular flow of information to key stakeholders
To fulfil contracts with the local authority to provide services for service users To regularly showcase organisational successes in the local media

Identifying stakeholders

In this section, a detailed description of the stakeholder is analysed – both external and internal. These might include the public, politicians, service users and staff. You might also refer to potential audiences that the organisation is keen to connect with.

Many organisations will find that they have lots of audiences who they need to interact with. One part of the strategy might look at which audiences will be interested in which parts of the organisation or activities. Understanding this may make it easier to prioritise the communications work.

In this fictional example, a charity providing advice and other services has looked at what its key stakeholders might be interested in:

Audience Advice or information Policies and practice Policy and research Financial accounts Success stories
Staff No X X X X
Board of trustees No X X X X
Donors No No No X X
Community groups X No X No No
Service users X X No No No
Social services No X X No X

Another way of prioritising the audiences or stakeholders might be to ‘map’ them. This involves choosing criteria which are important to the organisation and then ranking your different audiences against those criteria. This can help show which are the most important and therefore the ones on which should be spending most of effort communicating. It is often easier to do this analysis with two criteria, so can highlight the differences between audiences.

Key communications methods

For each audience identified in the previous section, should now indicate the most appropriate channels for communicating with them. These might include an e-bulletin, conference, workshop, leaflet, press release, event – or broader methods such as media and the website.

There are pros and cons to all of these channels, which once again will vary depending on the organizations needs and resources. Try a simple internal analysis of the channels you have at disposal to see which are the best to use for getting specific messages to particular audiences.

Once looking at the channels, start to construct communications plan, linking audiences, messages and channels.

For example:

Audience Key communications messages Key communications channels
Municipalities Trainings for public employees Open source trainings
Politicians   - Quarterly policy briefings on specific policy areas
- Look into creating an All Party Parliamentary Group
- Ensure all press releases are sent to relevant government department in advance- Positive media coverage
Civil society   Presentations, speeches, flyers

 

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