Fundamentals of NGO financial sustainability

... by the designers of this manual, but it is not the only approach. It should be modified to meet the needs of users. 4 Fundamentals of NGO Financial Sustainability Organization of the ManualThe ... Elements of Sustainability PurposeIntroduce the concept of sustainability. Target Skills1. Describe and define the primary types of sustainability. 2. Identify the principal characteristics of sustainability ... explain how they interact.3. Describe financial sustainability. Key Elements of Sustainability 1-3Key Elements of Sustainability Sustainability is a measure of an organization’s ability to fulfill...

... received Fundamentals of NGO Management1 Fundamentals of NGO Management A Practical Guide to the Financial Management of NGOs Theunis Keulder & Erika Benz Fundamentals of NGO Management18and ... Honoraria agreement) Fundamentals of NGO Management23Annexures Fundamentals of NGO Management24Annex 1: Expense summaryMonthly expensesExchange rate YearName of donor:Name of organisation:Budget€BudgetN$Over/(Under)N$TotalN$JanN$FebN$MarN$AprN$MayN$JunN$JulN$AugN$SepN$OctN$NovN$DecN$1 ... compassionate leave)•period of leave, indicated by inclusive days•signature of employee•signature of person granting the leave•number of leave days taken.• Fundamentals of NGO Management22(See...

... streamlined the cover-age of yield curves.Revised Treatment of Financial StatementsIn the wake of the corporate scandals, we have taken steps to enhance our dis-cussion of financial statements ... high profits in spite of its low book value. Theythen bid Apple’s stock up well above its book value.6. The time dimension. The balance sheet may be thought of as a snapshot of thefirm’s financial ... the order of the items shown on the balance sheetdetermined?A company has $2 million of cash and equivalents, $2 million of inventory, $3 million of accounts receivable, $3 million of accountspayable,...

... Costs and the Clientele Effect of Dividends,” The Journal of Financial Economics, December 1977, 419–436.Clientele EffectThe tendency of a firm to attract aset of investors who like itsdividend ... income would be disadvantaged. The value of their stock might increase, but they would be forced to go to the trouble andexpense of selling off some of their shares to obtain cash. Also, some ... we must be able to measure with ahigh degree of accuracy each firm’s cost of equity. Neither of these two condi-tions holds: We cannot find a set of publicly owned firms that differ only in theirdividend...

... Products: Summary of Financial Ratios (Millions of Dollars)CHAPTER 3 ■ ANALYSIS OF FINANCIAL STATEMENTS108(ROA) can be multiplied by the equity multiplier, which is the ratio of assets tocommon ... RatioThe ratio of a stock’s market priceto its book value.CHAPTER 3 ■ ANALYSIS OF FINANCIAL STATEMENTS104eBAY’S FINANCIAL STATEMENTSIf you examine the financial statements of a typical Internetretailer, ... of net income tocommon equity; measures the rate of return on commonstockholders’ investment.Return on Total Assets (ROA)The ratio of net income to totalassets.CHAPTER 3 ■ ANALYSIS OF FINANCIAL...

... rates7-9Present and future value of a cash flow stream7-8Future value of an annuity7-7Future value of an annuity due7-6Future value of an annuity7-5Effective rate of interest7-4 Financial calculator ... payments,$50 at the end of each of the next 3 years, plus a payment of $1,050 at the end of Year4. Your friend says she can get you some of these securities at a cost of $900 each. Yourmoney ... Return(%)100150–700.40.30.20.1Expected Rate of ReturnProbability of Occurrenceb. U.S. WaterRate of Return(%)20150100.40.30.20.1Expected Rate of ReturnCHAPTER 7 ■ TIME VALUE OF MONEY338 of the following 10...

... apartnership.Professional Corporation(Professional Association)A type of corporation commonamong professionals that providesmost of the benefits of incorporation but does not relievethe participants of ... operations, in its state of incorporation.CHAPTER 1 ■ AN OVERVIEW OF FINANCIAL MANAGEMENT143. The value of an asset also depends on its liquidity, which means the ease of selling the asset and ... which provide most of the benefits of incorporation but do not re-lieve the participants of professional (malpractice) liability. Indeed, the primarymotivation behind the professional corporation...

... FRONTIERSLegacyDocuments Financial Sustainability of RHServicesDetermineCostsEarlytoEnhance Sustainability Asexternalsupportforinnovativeinterventionscontinuestodecline,programmanagersneedtoconsiderlong‐termusefulnessand sustainability of anyneworrevisedinterventionsbeingpilot‐tested;thereislittlepointintestinginterventionsthatarenotaffordable.Somestrategiesprogramscanusetoassesscost of testingandexpandingreproductivehealthprojects,aswellasways of assessingpotentialincome‐generatingstrategies,follow.Considercosts of implementingandscalingupinterventionsfromearliestplanningstages.Implementinginterventionsandinstitutionalizingeffectivepracticesinvolvecosts—includinglabor,capitol,materials,technicalassistance,andopportunitycosts—all of whichneedtobebornebygovernment,NGOs,donors,orserviceusers.Thus,whendesigningapilotproject,plannersshouldattempttoestimatecosts of institutionalizingandscalingupinterventionsbeforeembarkingonimplementation.Suchplanningcanhelptoavoidpilotingunsustainableinterventions.Thiscanbedonebyidentifyingandcostingresourcerequirementsaccordingtothethreemainphases of apilot–test:planning;introduction of intervention;andongoingservicedelivery(Janowitzetal.2007).Thisreducescomplexity of costingbybreakingprojectimplementationdownintocomponentpartsandfocusingoncostsassociatedwitheachphase.Scaling‐upcostscanthenbeestimatedonthebasis of thesecondtwophases,whicharelikelytorepresentcosts of expandingintonewsites(introduction of intervention)andsustainingservicesonaroutinebasis(ongoingservicedelivery).Calculatefirst‐phaseandscale‐upcostsseparately.Costs of routinelyimplementingscaled‐upinterventionsarenotsimplemultipliers of costs of pilotprojects,butusuallyarelowerthanthepilotprojectonaper‐sitebasisbecause of economies of scale,streamlining of activitiesandsubstitution of lower‐costresources(Boatengetal.2006;Birungietal.2008).Numerousfactorsaffectthecost of scalingupasuccessfulpilotinterventiontomultipleservicedeliverypoints(SDPs)—includingnumberandsize of SDPs,whoprovidesresourcesandatwhatprices,andchangesininterventionalteringcostcalculationsinscale‐up.Modelingthescale‐up of apilotprojecttoimproveFPclient‐providerinteractionsinEgyptianclinicsshowscostperclinicforimplementationwoulddropsignificantlyfrompilottoscale‐up,inpartbecausemanyplanningmeetingsandpreparatoryactivities—about25percent of cost of thepilotproject—canbereduced,orcancoveralargernumber of clinics.Economies of scalealsoreducecost of otheractivities,suchastraining,becauselargernumbers of providerscanbetrainedtogether.Forexample,modelingscale‐upfrom24to567clinicsreducesprojectedcosts of planningfrom$1,018perclinicto$40perclinicbecauselittleadditionalworkisneededtoplanfor567comparedwith24clinics.Bycontrast,supervisioncostsmightnotchangeafterscale‐upascontinualsupervisionisusuallynecessarytoensurecorrectimplementation of intervention(Janowitzetal.2007).FRONTIERSLegacyDocuments Financial Sustainability of RHServicesUseexistinginstitutionstopilot‐testactivitiesthatcouldbescaledup.InKenyaandSenegal,multisectoralapproachesforimprovingyouthreproductivehealthwereintroducedthroughpublic‐sectorministriesbecauseexistingstructuresaresustainableandalreadyreachthevastpopulationmajority.Stafffromthreeministriesineachcountryplannedandimplementedinterventions;communityleadersandexistingyouthorganizationsparticipatedinplanningandplayedmajorrolesinoutreachandeducation.Thisapproachnotonlycontainedcostspilot‐testingdonorsthroughenormousresourcecontributions of ministrystafftime,infrastructureandfacilities,butalsoenabledexpansionandscale‐upcoststobeinstitutionalizedwithinannualbudgetsandministryworkplans(Joyceetal.2008).CapacityBuildingtoHelpNGOsAchieve Financial Sustainability Itisdifficulttofindtrainedprofessionalsinnongovernmentalorganizations(NGOs)withexperiencecollectingandanalyzinginformationonservicedeliverycosts.Moreover,fewhealthNGOspossessessentialbusinessskillsincosting,break‐evenanalysisandmarketresearch,skillsnecessaryforplanningandevaluatinginterventionstocontrolcostsandincreaseincome.FRONTIERSpartner,FamilyHealthInternational,implementedthe Financial Sustainability CapacityBuildingInitiative”(FSCBI)from1999to2008tobuildskillsineconomicanalysistohelpNGOsimprove sustainability. StaffandmanagersfromparticipatingNGOsinAfrica,Asia,andLatinAmericaattendedweek‐longregionalworkshopscombiningtrainingoneconomicanalyseswithresearchproposaldevelopment(Box2);thosewhoseproposalswereacceptedreceived financial andtechnicalassistancetoconductcapacitybuildingandresearch(Bratt,Janowitz,Homan,andForeit2008).Box ... FRONTIERSLegacyDocuments Financial Sustainability of RHServicesDetermineCostsEarlytoEnhance Sustainability Asexternalsupportforinnovativeinterventionscontinuestodecline,programmanagersneedtoconsiderlong‐termusefulnessand sustainability of anyneworrevisedinterventionsbeingpilot‐tested;thereislittlepointintestinginterventionsthatarenotaffordable.Somestrategiesprogramscanusetoassesscost of testingandexpandingreproductivehealthprojects,aswellasways of assessingpotentialincome‐generatingstrategies,follow.Considercosts of implementingandscalingupinterventionsfromearliestplanningstages.Implementinginterventionsandinstitutionalizingeffectivepracticesinvolvecosts—includinglabor,capitol,materials,technicalassistance,andopportunitycosts—all of whichneedtobebornebygovernment,NGOs,donors,orserviceusers.Thus,whendesigningapilotproject,plannersshouldattempttoestimatecosts of institutionalizingandscalingupinterventionsbeforeembarkingonimplementation.Suchplanningcanhelptoavoidpilotingunsustainableinterventions.Thiscanbedonebyidentifyingandcostingresourcerequirementsaccordingtothethreemainphases of apilot–test:planning;introduction of intervention;andongoingservicedelivery(Janowitzetal.2007).Thisreducescomplexity of costingbybreakingprojectimplementationdownintocomponentpartsandfocusingoncostsassociatedwitheachphase.Scaling‐upcostscanthenbeestimatedonthebasis of thesecondtwophases,whicharelikelytorepresentcosts of expandingintonewsites(introduction of intervention)andsustainingservicesonaroutinebasis(ongoingservicedelivery).Calculatefirst‐phaseandscale‐upcostsseparately.Costs of routinelyimplementingscaled‐upinterventionsarenotsimplemultipliers of costs of pilotprojects,butusuallyarelowerthanthepilotprojectonaper‐sitebasisbecause of economies of scale,streamlining of activitiesandsubstitution of lower‐costresources(Boatengetal.2006;Birungietal.2008).Numerousfactorsaffectthecost of scalingupasuccessfulpilotinterventiontomultipleservicedeliverypoints(SDPs)—includingnumberandsize of SDPs,whoprovidesresourcesandatwhatprices,andchangesininterventionalteringcostcalculationsinscale‐up.Modelingthescale‐up of apilotprojecttoimproveFPclient‐providerinteractionsinEgyptianclinicsshowscostperclinicforimplementationwoulddropsignificantlyfrompilottoscale‐up,inpartbecausemanyplanningmeetingsandpreparatoryactivities—about25percent of cost of thepilotproject—canbereduced,orcancoveralargernumber of clinics.Economies of scalealsoreducecost of otheractivities,suchastraining,becauselargernumbers of providerscanbetrainedtogether.Forexample,modelingscale‐upfrom24to567clinicsreducesprojectedcosts of planningfrom$1,018perclinicto$40perclinicbecauselittleadditionalworkisneededtoplanfor567comparedwith24clinics.Bycontrast,supervisioncostsmightnotchangeafterscale‐upascontinualsupervisionisusuallynecessarytoensurecorrectimplementation of intervention(Janowitzetal.2007).FRONTIERSLegacyDocuments Financial Sustainability of RHServicesUseexistinginstitutionstopilot‐testactivitiesthatcouldbescaledup.InKenyaandSenegal,multisectoralapproachesforimprovingyouthreproductivehealthwereintroducedthroughpublic‐sectorministriesbecauseexistingstructuresaresustainableandalreadyreachthevastpopulationmajority.Stafffromthreeministriesineachcountryplannedandimplementedinterventions;communityleadersandexistingyouthorganizationsparticipatedinplanningandplayedmajorrolesinoutreachandeducation.Thisapproachnotonlycontainedcostspilot‐testingdonorsthroughenormousresourcecontributions of ministrystafftime,infrastructureandfacilities,butalsoenabledexpansionandscale‐upcoststobeinstitutionalizedwithinannualbudgetsandministryworkplans(Joyceetal.2008).CapacityBuildingtoHelpNGOsAchieve Financial Sustainability Itisdifficulttofindtrainedprofessionalsinnongovernmentalorganizations(NGOs)withexperiencecollectingandanalyzinginformationonservicedeliverycosts.Moreover,fewhealthNGOspossessessentialbusinessskillsincosting,break‐evenanalysisandmarketresearch,skillsnecessaryforplanningandevaluatinginterventionstocontrolcostsandincreaseincome.FRONTIERSpartner,FamilyHealthInternational,implementedthe Financial Sustainability CapacityBuildingInitiative”(FSCBI)from1999to2008tobuildskillsineconomicanalysistohelpNGOsimprove sustainability. StaffandmanagersfromparticipatingNGOsinAfrica,Asia,andLatinAmericaattendedweek‐longregionalworkshopscombiningtrainingoneconomicanalyseswithresearchproposaldevelopment(Box2);thosewhoseproposalswereacceptedreceived financial andtechnicalassistancetoconductcapacitybuildingandresearch(Bratt,Janowitz,Homan,andForeit2008).Box ... One‐weekworkshopscombiningdidactictrainingineconomics‐relatedoperationsresearchwithproposaldevelopmentandsubsequenttechnicalsupportcanbuildeconomicscapacityinNGOs.Institutionalization of skillslearnedinworkshopsrequiresrepeatedpracticethroughsubsequentapplications.Practicerequiresnotonlyresources,butalsocommitmentfromseniormanagerswhomustbeconvincedconductingORtodevelopandtestways of improving financial sustainability isappropriateuse of scarceresources.Asupportiveenvironmentisessentialtonurturenewly‐formedtechnicalcapacitybuiltinaweek‐longworkshop;thisenvironmentismorelikelywhenan NGO hasstrongandsupportiveleadershipandminimalstaffturnover.OnlytwoFSCBIparticipants(ProsaludinBoliviaandCHAGinGhana)movedbeyondthefirstroundtocarryoutsecond‐generationprojects.Inbothcases,substantialtechnicaland financial assistancewasstillrequiredtodevelopandimplementthesestudies.Thissuggestsneedforlong‐termcommitmentto financial capacitybuildinginitiatives(Boatengetal.2006;Meridaetal.2006).FRONTIERSLegacyDocuments Financial Sustainability of RHServicesManagementsupportandcommitmentarecritical.Ultimately,organizationalcapacityresidesinindividualsfreetoleaveforbetteropportunities.Thusitiscritical NGO managersparticipateinandsupport financial analysiscapacitybuildingsowhentrainedstaffleave,skillsareretained.SomeNGOsinFSCBIlostkeystaffduringimplementation,whichstoppedprojectsorreducedlikelihood of resultuse.InBolivia,Prosalud’schampion of testingalternativemarketingplansleftandwasreplacedbystaffwhoassignedlowerprioritytodevelopingnewmarketingstrategies.Asaresult,one of twosecond‐generationORprojectswasdropped,andanotherwascompletedwithlittledirectinvolvement of Prosaludseniormanagement(Meridaetal.2006;Bratt,Janowitz,Homan,andForeit2008).NGOsattemptingtogenerateadditionalincomehadlittlesuccess.Costcontrolandincomegenerationarethetwomainpathsto financial sustainability availabletoNGOs.OrganizationsworkingwithFSCBItendedtoshowmoreinterestingeneratingincomethancontrollingcosts,butincome‐generationinterventionsfailedtoproducemuchadditionalrevenuefromRHservices.ASHONPLAFAinstitutedsystematicscreening1inHonduras,forexample,butidentifiedonlysmalldemandforadditionalfamilyplanningandRHservices;income‐generationeffortsshouldfocusonothertypes of services,suchasdentalcare,optometryservices,andinternalmedicine.InstudieswithChildInNeedInstitute(CINI)andChhetrapatiFamilyWelfareCenter(CFWC)NGOsinIndiaandNepalrespectively,additionstorevenuewereverysmall,indicatinglargeincreasesinvolumewouldbeneededtomakesubstantialimpacton sustainability (Dasetal.2007;Shresthaetal.2007).Donorexpectationsfor NGO financial sustainability arenotalwaysrealistic.Donorsencourage financial sustainability whilesimultaneouslyexpectingincreasednumber of servicestothepoor.However,servingthepoormayinhibitan NGO sself‐sustainingefforts,becausethepoorareoftenunabletocontributetocosts of services.Consequently,NGOsneedtocross‐subsidizesomeservicesforthepoorthroughrevenuesearnedfromprofitableservicesorfromexternaldonorsupport.OrganizationsattendingFSCBIworkshopsfromBangladesh,GhanaandNepalwereseverelyconstrainedbygovernmentanddonorrequirementstheyreducedependenceonexternalgrantswhilekeepingfeeslowand/orincreasingnumber of servicesprovidedtothepoor(Bratt,Janowitz,Homan,andForeit2008).NGOsmaycontinuetosupportineffectiveinterventionsdespitenegativefindings.Itiscommonlyassumedutilizationfollowsnaturallyfromsuccessfulintervention,butinFSCBI,thiswasnotalwaysthecase.Inone NGO, complementary(paired)productssalesdidnotincreaserevenues,buttrainingwascontinuedbecauseitcouldwithoutcost,andseniormanagementcontinuedtobelieveinit,despitenegativeresults(Bruceetal.2006).AsystematicscreeninginHonduraswasscaledupalthoughonly11percent of clientswerescreened(Vernonetal.2005).Trainingin financial researchandanalysiscannotresultin sustainability unlessseniormanagershavestrongunderstanding of theirpurposeandvalue....

... isanother range of tints caused by the effect of electric light. Andnot only do you have the colour of the skin to consider, but alsothe colour of your model’s clothes and of the background ... each other. Next, show a little bit of sky and a moon or sunglowing brightly in the deepazure space of the sky. Make themost of the decorative values of the plant shapes and the animal’s ... red of his coat without attempting too distinct a shape, puttingdark patches of colour on the feet, nose and ears, and leaving quitea bit of white showing around the muzzle and on the tip of...