Download Global Trends and Challenges: Strategic Implications for NGOs

Paper Presented at ISTR Conference, Stockholm, July 2016
GLOBAL TRENDS and CHALLENGES:
STRATEGIC IMPLICATIONS FOR NGOs
John Hailey
Professor of NGO Management
Centre of Charity Effectiveness, Cass Business School
City, University of London
Abstract
All the projections suggest that the character of civil society and the role of NGOs will change over
the next fifteen years. This Paper explores the analysis by international Non-Governmental
Development Organisations (NGDOs) of the global trends and strategic challenges they face. It
provides a structured analysis of these studies of global trends and their implications for NGDOs.
While such studies of the trends and their implications are relevant, timely and well-researched
there is concern that much of the analysis is through the lens of international NGDOs. Evidence
from interviews with the leaders of local NGDOs based in the global South, and the analysis of
specific Southern-based NGDOs suggests a different view of the strategic challenges that local
development organisations face and differing analysis of priority concerns and strategies to be
adopted. This analysis highlights the differing perspective of Southern NGDOs of the consequences
of the global trends they currently face, and that there analysis is as relevant as that prepared by
international NGDOs. What is apparent from such analysis is that Southern NGDOs have a somewhat
different interpretation on the implications of these global trends and different perspective as to
what are the priority issues they face and the implications for the strategies they develop or the
organisational capabilities they invest in
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There is a growing debate as to the role and impact of NGOs involved in development work
and humanitarian relief in an increasingly interconnected and globalised world. Recent
analysis suggests that the character of civil society and the role of such Non-Governmental
Development Organisations (NGDOs) will change over the next fifteen years. This Paper
explores the global trends and strategic challenges they face, based on a structured analysis
of recent studies of global trends and their implications for international NGDOs (INGDOs).
It also reviews the differing perspectives of local NGDOs based in the global South as
compared with those international NGDOs with their global reach. There is concern that
much of the analysis is through the lens of international NGDOs, and that the perceptions
and analysis of local NGOs working closely with local communities is often overlooked.
This paper draws on recent reports and analysis published by INGDOs, as well as evidence
from interviews with the leaders of local NGDOs based in the global South and locally
commissioned analysis of such trends. This includes analysis prepared by ACORD, a Nairobibased Pan-African NGDO, and the research findings of a DFID/IIED sponsored study on
Managing Disruptive Change. Such studies highlight the differing assessment of what are
the priority issues and challenges they face. They suggest that local NGDOs based in the
Global South have very different perspectives on the strategic challenges they face as
compared with those of international NGDOs. This analysis also demonstrates is that the
global context in which all NGDOs operate is changing, and that organisational capabilities
and competencies are needed to ensure NGDOs remain relevant, sustainable and valued.
GLOBAL TRENDS
Interest in the implications of changing global trends have generated a number of recent
studies drawing on current data to make “state of the world” projections and identify
potential “mega-trends” and “game changing trends”. Examples include reports by the
National Intelligence Council (2012), the Oxford Martin Commission (2013) and the World
Economic Forum (2013) examining potential global trends 2030 and beyond. Such reports
highlight such common areas of concern as:- the consequences of climate change, the
impact of resource insecurity, demographic shifts, issues around social mobility and
migration, the implications of growing economic inequalities, increased social activism and
role of civil society, changing geopolitical dynamics, the impact of new technologies and
greater interconnectivity through the web.
Similar analysis has been published reviewing the specific issues about the future of aid and
the new “aid architecture” (Baobob, 2015; BOND, 2016, Heiner, 2014; Hailey, 2016: ICAI,
2016; Kharas & Rogerson, 2012); new development practices (Wild, 2015; IDS, 2013) and
the future of different development institutions (BOND, 2015: Edwards, 2014; Gnarig, 2015;
ICSC, 2014; Crowley & Ryan, 2013). The conclusion of such analysis is that needs are
changing, problems are changing, solutions are changing, funding is changing, thinking is
changing. As a consequence the established models are no longer appropriate for the new
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future. There is also concern at the speed of change or rapid onset of devastating
humanitarian crisis – whether it is an earthquake as in Haiti or Nepal, the unexpected and
dramatic consequences of the civil war in Syria. INGO often refer to Dornbusch’s Law that
“crises take much longer to come than you think, and happen much faster than you would
have thought”.
INGOs: TRENDS & CONTEXT
All the analysis suggests that NGDOs are part of a vibrant, dynamic sector. All the
projections suggest that the number of non-profits, NGOs and charities grows year on year –
estimates suggest that there are over 10 million registered CSOs worldwide. It is estimated
that over 40,000 international NGDOs operate across borders delivering humanitarian and
development support, or actively engaged in advocacy or international rights-based work.
The seven largest INGOs (WorldVision, Save Children, PLAN, Oxfam, etc.) grew there income
by over a third in the five years 2007-2012 to over $8 billion (Baobab, 2015). This is not a
static picture and many new INGDOs are being established. Data from the UK Charity
Commission suggests that over 400 new INGDOs are being registered each year (Hailey,
2016). Growth in the number of NGOs accredited to the United Nations nearly quadrupled
between 1995 and 2012. In India alone the number of registered CSOs exceeds 3 million, an
increase of over a million in a decade. The largest Southern-based INGO, the BangladeshiINGO BRAC, now employs over 125,000 people and operates in eleven countries.
This growth has also been reflected in the development of new organizational formats and
international structures intended to enable INGDOs to scale up, gain global spread and
enhance interconnectivity. Major international NGDOs like World Vision and ActionAid have
opted to develop a global federal model; others like Oxfam or Save the Children have
developed innovative confederal models. Others have created their own networks of
similar-minded organisations such as the ACT network for protestant faith-based INGOs, or
the Caritas network for Catholic INGOs.
This dynamic and changing environment has generated new interest in the way that the
sector needs to evolve and change. There is much talk of need for consolidation, or at least
greater collaboration. There is concern at the consequences of disintermediation resulting
from the reduction in the number of intermediaries between the donor and the final
beneficiary. This is reflected in the espoused strategy of some donors by-passing
international NGDOs located in the North and transferring funds directly to NGOs in the
South. Linked to this are discussions for the need to be more cost-effective, and for NGOs
to work more closely with the private sector or to develop new social enterprise models
(Hailey, 2016). There is pressure for them to adopt new SMART working processes, and
enhance international working through more effective use of the web and digital
interconnectivity and leveraging such technology to enhance programme implementation
(Peterson, 2014).
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GLOBAL TRENDS: ANALYSIS BY INTERNATIONAL NGDOs
This momentum for change is partly based on analysis that international NGDOs themselves
have commissioned or published into the trends and challenges that will affect the sector
over the next fifteen years. These include analysis published by Trocaire, Action Aid, IBIS,
Oxfam; and INGO support organisations like BOND and the Berlin-based International Civil
Society Centre (ICSC). The following framework provides an outline of this analysis by
identifying the global trends that impact on the work of INGDOs.
INGDOs
Trocaire
(2011)
Global Trends Likely to Impact on work of INGDOs are:
climate change, shifting geopolitical power, demographic changes, pressure on
natural resources, widening inequality, and changes in the aid architecture and
international development framework.
ActionAid
(Evans,
2012)
the consequences of such critical uncertainties arising from changing balance of
power, demographic changes, inequality, and new technologies and innovation.
These are seen creating an uncertain future and as a catalyst for transformational
change – INGOs need to be ready to “shoot the rapids”
Oxfam
(Green,
2015)
the shift of power and resources to the South, the changing location and
demographics of poverty (less widespread poverty, more “pockets of poverty”),
growing inequality with most pockets of poverty in middle income countries,
influence of new institutions and organisation types supported new digital
technology
IBIS
(Vilby, 2014)
climate change & environmental degradation, growing refugee problems,
geographical changes in poverty, reducing aid budgets.
BOND
(2015)
climate change, demographic shifts, urbanisation, natural resource scarcity leading to
higher commodity prices and continued marginalisation of the poor, geopolitical
shifts, processes of technological transformation and innovation, impact of inequality
ICSC
(Gnarig,
2015)
Climate change, impact of inequality & endemic poverty, demographic changes,
demands for greater accountability, new development paradigms with arrival of new
development actors (e.g. China) and shift of power to south – disintermediation
Analysis of six recent global trends reports suggests a number of key issues or common
themes most likely to impact the work of INGDOs. These are:- climate change and
associated resource scarcity, demographic shifts, geographical changes in “pockets of
poverty”, the consequences of widening inequality, changing power dynamics between
North and South, and implications from greater access to new technologies and innovations.
Projections of these mega-trends or “game-changers” have lead INGOs to consider what
strategies they need to adopt, and what capacities they need to invest in, if they are to be
“future-fit” and ready to face the challenges they may face.
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The impact on INGDOs of the global trends identified above is the source of much
speculation and discussion. There is general agreement that the challenges facing INGDOs
include changes in relationship between Southern partners and local beneficiaries, changing
attitudes to the work of NGOs and new thinking about civil society, new approaches to
collaboration or co-creation, the influence of digital technologies and new ways of working,
moves to greater transparency and communication, increased fragmentation and
disintermediation, moves to changing growing pressure to demonstrate effectiveness and
impact, and changes to the existing funding models. What is more uncertain is where
INGDOs should focus their investment or what strategies to adopt to cope with the new
future. The framework below outlines some of the alternative scenarios or strategies that
are being proposed.
INGDO
Trocaire
(2011)
INGDO Strategies & Capacities in response to projected trends (see Frame 1)
at a programme level focus on advocacy and engaging in politics and power, building a
global culture of solidarity and the capacity of civil society in the South. At an
organisational level INGDOs need to become more flexible and responsive, ensure
financial sustainability by planning for a new funding environment, develop strong
analytical capabilities, promote the use of innovative technologies
ActionAid
(Evans,
2012)
Oxfam
(Green,
2015)
Invest in ensuring readiness and resilience; build new coalitions; invest in
communications and linking local communities
IBIS
(Vilby,
2014)
BOND
(2015)
building capacity to cope with disruptive change, develop internal mechanisms to cope
with internal contradictions and dilemmas, or resolve contentious strategic choices
ICSC
(Gnarig,
2015)
rethink development role and “business model” - reconsider how INGDOs add value,
reinvigorate activist/advocacy roles, streamline systems and processes to improve
speed of decision making & programming – ensure greater responsiveness and agility,
develop new forms of collaboration and/or mergers, ensure financial sustainability by
incorporating social enterprise models, invest in building brand and reputation
systems thinking and “eco-system management” to cope with new complexities,
building resilience, greater engagement with private sector models, transformational
leadership and focus on managing change (invest in “change capital not delivery
capital”), more flexible and agile, devolved organisational structures and responsive
cultures
build on the diversity of UK-INGDOs and promoting new forms of collaboration or
mergers; shifting from a service provision role to more of an enabling role, greater
emphasis on supporting the capacity development of partners; create and manage
effective partnerships, influencing policy, rebuilding connections with local
constituencies, and investing in leadership that is fit for purpose.
Analysis of these alternative scenarios and strategies identifies some common themes such
as:- the need to streamline systems and processes to enhance agility, flexibility and
responsiveness, and linked to further investment in internal capacity to ensure readiness
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and resilience; the adoption of new models of collaboration and partnership; some urgency
in finding alternative routes to financial sustainability and new business models; more
strategic focus and investment in enhanced advocacy and campaigning capacity; the
recruitment and development of transformational leadership to embrace and implement
change. The implication of such analysis is that over the next 20 years INGDOs needed to
transform themselves and redefine their role. They need to reposition themselves in civil
society and the wider development community by reframing their mission and role (e.g.
moving to more brokering role as investor, knowledge mobilizer, or co-creator), and
potentially restructuring or downsizing their operations in the North and transferring key
management functions closer to the communities with whom they work in fragile states or
low income economies. Implicit in this redefined role is the changing nature of their
relations with an array of new partners and a greater understanding of the challenges that
NGDOs based in the Global South face.
GLOBAL TRENDS: PERSPECTIVES FROM THE SOUTH
In light of the changing relationship between INGDOs and their Southern partners there is
concern that there has been little research into the analysis from local NGDOs in the Global
South of the trends and challenges they face and how they will handle the demands they
may create. Researchers have referred to this as the “missing perspective”, and argue that it
is important to recognise the analytical bias that can result from following a ‘Northern’ or
‘international’ development actor-centred analysis too closely (Buckley & Ward, 2015 p.16).
Too often analysis of the global trends and their implications for the work of NGDOs is
driven by the analysis of international NGDOs rather than local NGOs.
In an attempt to address this issue researchers at the International Institute of
Environmental & Development (IIED) explored the challenges that NGDOs in the Global
South face and how they handle change and address disruption in their external and
internal environment. This analysis of the perspectives of local NGDOs is based on
interviews with a wide cross-section of NGO leaders and commentators based in the Global
South (Buckley & Ward, 20151). The research offers insights into the trends and challenges
facing such local NGOs. Respondents saw the major trends or “disruptors” that were likely
to affect their work in the future as the consequences of endemic poverty, the impact of
climate change and the effects of technological disruption or having access to new
technologies.
However, in many ways these were seen as background trends or “disruptors”, whereas as
more immediate and therefore more important “disruptors” were the consequences of
their relationship with the local communities with whom they worked or the impact of
current funding trends. The work of local NGOs and civil society organisations was seen to
be easily derailed by decisions made by their donors or partners. It was also apparent that
1
The author was one of the Advisory Panel to this programme of research
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other actors in the international development community, including development agencies
and international NGDOs based in the North, are themselves disruptors of local NGDOs’
efforts to tackle poverty and deliver positive outcomes. The study highlighted the
consequences for such local organisations of ongoing funding uncertainties. Numerous
examples were cited of the negative consequences of the “cut and shut” changes in donor
policy, the disempowering side effects of tendering requirements for consortia, and
reluctance on the part of international NGDOs to share scarce funding for organisational
development with their Southern partners. The impact of such policies is felt more acutely
felt in regions and countries where few local NGDOs have endowments or reserves to
cushion operating budgets during periods of uncertainty (Buckley & Ward, 2015).
The study also suggests that the demands on local NGDOs and other civil society
organisations (CSOs) in the Global South are distinct from international NGDOs. This is partly
because of their role as influential actors in civil society as well as their close relationships
with local communities. These have distinct cultural and political dynamics, and the
decisions they make has real implications in terms of the way their staff are treated by the
local community. The study highlighted some of the constraints such organisations faced
including the lack of space in which civil society operates, it also highlights that NGOs in the
South are both diverse and have their own dynamic because of their close relationships with
local communities and involvement in local civil society. Their size also means that they
often feel the impact of disruption more acutely. But on a more positive note many of the
local NGO leaders concluded that such disruption should not be seen as inherently negative,
but should be appreciated for its creative potential — notably the way that changes in the
external environment promotes creativity, encourages new ways of working and seeds
innovation. This analysis supports the conclusions of earlier research into the strategies
adopted by growing NGOs based in the Global South (Hailey & Smiley, 2000).
In general, this study emphasised that local NGDOs operate in turbulent and uncertain
times. They are at the “sharp end” of powerful external disruptors including natural
disasters, emerging technologies, climate change, and the consequences of inequality,
poverty and conflict. The perspective of NGDOs in the South is important because of their
crucial role as local development actors and their close relationships with local communities
they are able to achieve lasting change, and help deliver the SDG commitment to “leave no
one behind”.
In order to assess the validity of this research was compared with the analysis of global
trends undertaken by a particular local NGDO. Each year the Pan-African NGDO, ACORD,
based in Nairobi prepares such analysis for its Annual Assembly Meeting and Members
Learning Forum. Founded over 30 years ago, ACORD is one of the oldest and largest PanAfrican organisations. It works in 17 African countries to promote social justice and lift
Africans out of poverty with specific attention to livelihood development, women’s rights
and peace building. Its programme work is guided by a belief that people themselves are the
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primary actors in their own development, and that through the power of collective action
African citizens have the ability to transform their future.
A review of the papers produced for ACORD’s Annual Assembly and Members Forum
suggest that four stand out trends are apparent. The first is the consequences of changes in
the aid architecture and the changing relations between local NGOs, and INGOs and donors
located in the Global North. There is increased competition between local NGOs and
international NGDOs for a limited pool of aid funds. ACORD’s analysis also suggests that the
traditional North-South development dynamic is being challenged by geopolitical and
economic shifts, the increased focus on investment and trade as the route to economic
development. This is reflected in the growth of foreign direct investment from emerging
economies such as China’s, and the changing focus of donor countries from aid to trade.
Second, is the consequence of web-based and digital communication systems. Access to the
internet, social media and mobile phones means that the power and choice is increasingly
being distributed to the individual. Such social networks and non-hierarchical
communication has shifted the paradigm of the citizen’s experience. In reality several
different realities coexist within the African continent. A young, dynamic Africa, with an
emerging middle class that make technological leaps, and allows individuals to jump several
stages to embrace the latest mobile technologies. This can be contrasted with the digital
divide most apparent in fragile and failed states, such as South Sudan and Central African
Republic, whose populations have limited access to electricity, let alone the internet or
digital technologies.
Third, is that local NGOs, such as ACORD, do not have the resources or capacity to scale up
operations, roll out successful projects to new communities or to operate independently
and “go it alone”. This is in contrast to the resources available to larger international
NGDOs with their global reach and access to untied private donations. Such small local
NGOs do not get the benefits of economies of scale, and are only likely to go to scale by
working in partnership with other development organisations. This would include working in
partnership with private sector businesses if it would mean being able to access new
resources and skills – something that such a traditionally community, solidarity-based
organisation would mean a significant shift in thinking and practices.
Fourth, is the increasingly restrictive space in which local NGOs operate. This is partly as a
result of new regulatory environment and restrictive legislation designed to constrain the
work of many NGOs. New regressive legislation against civic action is being enacted, and, for
example, it is not possible to do the same policy advocacy work in Ethiopia, Burundi or
Rwanda as in Kenya. But the diminished space is also a consequence of the way that many
large international NGDOs have reinvented themselves as global entities with the creation
of local subsidiaries established in many of the countries in which ACORD operates with the
consequent pressure on accessing resources locally, both in terms of funds and staff. It also
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means that the policy space is becoming increasingly crowded which means that small local
with limited research or advocacy capacity struggle to get their voice heard. (AAMP 20142).
What is apparent from this review of recent research into the trends and challenges facing
NGDOs is the different perspective and analysis of what is important and influential.
Whereas international NGDOs emphasise mega-trends, the analysis of NGO leaders in the
South and that of a local Pan-African NGO suggests greater concern with more immediate
trends and challenges. They saw the challenges identified by international NGDOs as
background trends or “disruptors”, whereas the complex political and cultural dynamics of
local relationships, and the negative consequences of current funding policies and practices,
were seen as having more impact on their future and the strategies they need develop.
CONCLUSION
This review of recent analysis by international NGDOs and local NGDOs based in the Global
South has identified the range of different and diverse trends and challenges such
organisations face. It has highlighted the different perspectives of different types of NGDOs,
and identified that we need to distinguish between the influence of “background” megatrends and the disruptive influence of more immediate trends – particularly on the work of
local NGDOs.
This paper has also emphasised the need to undertake further research into the strategic
and organisational issues faced by local NGOs and further analyse the challenges faced by
the leadership of such organisations. There is concern that analysis of such trends suffers
from the “missing perspective” of such leaders, and that too much analysis of global trends
is dominated, or mediated, by the analytical capacity of international NGDOs with the
resulting analytical bias.
Research into the consequences of projected trends needs to acknowledge that the political
and cultural context in which these organisations operate is varied and diverse. The
regulatory environment that NGDOs face is increasingly onerous and demanding. The
governance and leadership traditions in charities and NGOs vary considerably across the
developing world. Staff working for NGDOs of all kinds face extraordinary demands – both
at a personal and organisational level. They work with varied partners, on a variety of
projects and programmes, with limited resources and weak infrastructure, in economicallyweak, politically volatile communities. They are involved in many different humanitarian and
development activities and partnerships in a variety of cross-cultural settings. They have to
manage the intricacies and unfairness of the current aid architecture, as well as navigate
particular legal and regulatory constraints of the country’s in which they work. Any analysis
of the consequences of projected trends need factor in the highly complex and political
nature of much of the work that NGDOs are engaged.
2
The Author is a Board Member of ACORD
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The impact on NGOs of the global trends identified in this paper is the source of much
speculation and, as has been identified, resulted in much useful and timely analysis both by
international NGDOs and local NGDOs in the Global South. There is general agreement that
the challenges facing the sector will result in significant changes. These include changes in
relationship between Southern partners and local beneficiaries, different funding
relationships and models, new approaches to collaboration or co-creation, the influence of
digital technologies and new ways of working, and increased fragmentation and
disintermediation.
In organisational terms this will result in strategies to enhance flexibility and responsiveness,
the development of new streamlined systems and processes to enhance organisational
agility and further investment in internal capacity to ensure readiness and resilience. To
ensure that NGDOs, both in the North and the South, stay strategically relevant and futurefit they will need to invest in key organisational capabilities and in developing associated
competencies, including: value-driven, relational, knowledge, responsive, innovative, and
transformational capabilities. It is also projected that new models of collaboration and
partnership will develop, and new business models and alternative routes to financial
sustainability will evolve (Hailey, 2016).
This paper has reviewed the array of challenges and changes facing NGDOs. Clearly this is
diverse and changing sector. One of the implications of this analysis of these trends is the
recognition that over the next twenty years international NGDOs will need to develop
appropriate organisational capabilities to handle such change and reposition themselves in
civil society. Implicit in this will be the changing nature of the relationships across the sector
with a new array of partners – many of whom will have different values, come from
different cultural traditions, and consequently have differing perspectives on the impact of
global trends or what are the development challenges we face.
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