The Need to Improve Administration in Ethical Organisations
Claire Martin & Emmett Murphy
Claire Martin is the founder
of Crucial, providers of
effective administration for
ethical organisations. Claire
has worked with NGOs in
the field and in head
offices. Her experiences
have taught her the importance of a solid
administrative foundation in all successful
operations.
Emmett Murphy recently
graduated from University
College Cork with a First
Class Honours Master's
Degree in International
Relations. Emmett has
since worked as a freelance
research consultant for the not-for-profit
sector.
Crucial has facilitated the set-up of administration systems for Valid Nutrition's local production of 'Ready-to-Use Therapeutic Food' in Malawi
A central goal for every ethical
organisation is to focus on
maximising the impact of its
programmes. However, very
few have acknowledged the relationship
between this goal and the quality of the
organisation's administration systems
and procedures. Administration has traditionally
been given a low profile in the
formulation of an ethical organisation's
programmes. Inefficiencies in administration
are rarely seriously challenged,
even when they serve to disempower
the organisation's employees. This is
often due to demands from the public
and the media for minimal investment
in administration. There is a need for a
new perspective that recognises that
maximising administrative efficiency is
essential for maximising programme
impact and ensuring the long-term sustainability
of the organisation.
A programme's impact must be seen
as a dynamic interaction between external
and internal factors.1 There is no universal
strategy for dealing with external
influences beyond the organisation's
control. However, every ethical organisation
can empower itself by affording a
higher priority to internal influences,
such as administration. An organisation
that commits to improving the efficiency
and effectiveness of its administrative
capacity will unlock a series of benefits
that will improve its potential for creating
a sustained expansion of impact.
Enhancing cost-effectiveness
Funded organisations face a 'burdensome
level of bureaucratisation'2 that
adds complexity to administration and
reduces the time available for working on
programme implementation issues. The
cost-effectiveness of the organisation and
its programmes can be negated by an
inability to efficiently administer its daily
activities. A careful evaluation of this
deficiency in ethical organisations should
lead to recognition that administration is
the backbone of the organisation, with its
own requirement for specialised systems
and staff. A considered investment in
improving administrative efficiency will
improve overall cost-effectiveness by
introducing a leaner cost structure. Staff will find more time and money available for
focusing on their core competencies, and daily
operations will be instilled with more coherency,
fluidity and prudence.
Cost-effectiveness is particularly vulnerable
to the complexities of coordination. The costs of
coordination are most severe for organisations
that rely on funding from multiple donors or
operate a variety of programmes in different
regions. They face an endless accumulation of
regular internal and external reports, negotiations
and evaluations, which can cause bottlenecks
and delays. This represents an arduous
transaction cost for these funded organisations.
Therefore, an organisation that becomes more
cost-effective by investing in streamlining the
coordination of all of its commitments will gain
competitive advantage over other funded
organisations.
Improving donor relations
This competitive advantage becomes even
more pronounced when considering how
donors decide in which organisations to invest.
Donors always have a preference for working
with organisations that demonstrate an ability
to be efficient in their operations and in their
dealings with donors. Donor organisations,
especially those in the private sector, donate
money where it will make the most on-theground
impact, not where it will be consumed by defraying inefficient support costs.3 It is
important for donors to be able to easily inspect
a programme and review its progress. Ethical
organisations must be sensitive to the need to
manage programmes as rigorously and professionally
as possible. Consequently, efficient
administrative practices make an organisation
far more appealing to potential donors.
Funded organisations may be resentful of
overwrought reporting obligations, while
donors can be frustrated with a funded organisation's
inefficiencies and delays in responding
to queries. An investment in administration can
reward the organisation with improved donor
relations through the introduction of greater
clarity into the relationship and the freeing up
of more staff time for focusing on core programme
activities. Information flows will be
improved, thereby bringing better understanding
to both sides. This will reduce tensions and
increase trust in the relationship.
Demonstrating impact
The ability to demonstrate programme impact
is often lacking.4 Performance information is
especially difficult to manage in larger organisations
that operate in a complex hierarchy of
associated partners and internal divisions, with
multifarious targets and objectives. One of the
main limitations on the ability to demonstrate
impact is a deficient administrative capacity
that restricts the timely flow of information
amongst stakeholders. An improvement in this
capacity will improve information exchange and
access to knowledge, provide new instruments
that make it easier to substantiate achievements
and communicate them effectively, and help to
instil a culture of organisational learning by providing
the resources necessary for reflection and
improving future performance.
Scaling-Up
Ethical organisations need this new knowledge
to be able to demonstrate to donors the need for
institutional development. The long-term success
of an ethical organisation is dependent on
its capacity for growth, an inherent instinct of
any organisation that wants to expand its
impact.5 The sustainability of the organisation
depends on robust administration when scaling-
up, making new partnerships or taking on
new activities. The internal implications
involved in such organisational change cannot
be overlooked. Shortcomings in administration can cripple an organisation that attempts to
adapt to these added organisational pressures
and commitments.
Overcoming uncertainty
Predictability is a crucial determinant of organisational
growth and sustainability for any
organisation. This is even more pertinent for
organisations facing extreme time pressures
and erratic flows of income. Many ethical
organisations work in volatile environments,
where speed of response is paramount, but rely
on short-term funding cycles for their income.
Efficiency in administration can help to remove
some of the uncertainty they face by improving
the flexibility of their organisation. Rather than
be hampered by deadlines and laborious paperwork,
they can be more responsive to evolving
situations and fluctuations in the disbursements
of funding. The long-term success of a
programme depends on an organisation's ability
to provide predictable, flexible and responsive
administrative support.
Empowering employees
Uncertainty can also negatively impact on staff
morale. Employees can suffer from increased
stress and anxiety due to short funding horizons
for their programmes, but also from
administrative ineptitude. The more time an
employee works on administration for a programme,
rather than their area of expertise, the
more that employee's job satisfaction decreases.
Ethical organisations recognise that the skill,
dedication and expertise of their employees is
their most important resource. Therefore, it is
crucial for the long-term success of these organisations
that this resource is safeguarded and
nurtured. An investment in administration that
emphasises the need for specialist administrative
staff, systems and procedures, will result in
a happier and more productive workforce.
Furthermore, the organisation's ability to
recruit high quality employees in the future will
be enhanced.
Conclusion
Administration is the backbone of any wellfunctioning
organisation. Its proficiency should
be of concern to, and emphasised by, every
stakeholder in an ethical programme. An
enhancement of administrative capacity will
induce many benefits throughout the organisation
and help to establish efficiency as a precept
for all internal and external activities. A former
burden and drain on resources can develop into
a competitive advantage, which will enable the
organisation to expand more effectively the
impact it can make and assure the long-term
sustainability of its programmes.
For more information, visit CRUCIAL's website
at www.crucial.ie
1 Edwards, M (1999). NGO Performance - What Breeds
Success? New Evidence from South Asia. World
Development, Vol. 27, No. 2 (1999), pp. 361-374, p. 363
2 Roberts, SM., John Paul Jones III and Frohling O. 'NGOs
and the Globalisation of Managerialism: A Research
Framework'. World Development, Vol. 33, No. 11 (2005), pp.
1845-1864, p. 1850
3 Smillie, I and Minear L (2003). The Quality of Money:
Donor Behaviour in Humanitarian Financing. Feinstein
International Famine Centre, (April), p. 29,
http://hwproject.tufts.edu/new/pdf/donor_behav.pdf 2. The
Need to Improve Administration in Ethical Organisations
4 Davies, R. Monitoring and Evaluating NGO Achievements.
In Desai, Vandana and Robert B. Potter (eds.), The Arnold
Companion to Development Studies, (Arnold Publications,
London, 2002). Also at www.mande.co.uk/arnold.htm
5 Uvin, P, Pankaj S. Jain, and L, Brown D. (2000). Think
Large and Act Small: Toward a New Paradigm for NGO
Scaling Up. World Development, Vol. 28, No. 8, pp. 1409-
1419
Taken from Field Exchange Issue 30, April 2007
http://fex.ennonline.net/30/theneedtoimproveadministration