In defence of NGO overhead costs

Graham Heaslip, a lecturer at NUI Maynooth, recently published an article in the Irish Times, attempting to clarify some of the challenges facing aid agencies.

The article, entitled “Key funds for NGO administration often neglected in rush to get aid to victims“, illustrates how aid agencies are effectively discouraged from investing in quality control by pressure from the media, fuelled by the myth that overseas aid must be based on good intentions and not incur the dreaded “overhead costs”.

However, in overseas aid, as in most other areas of life, quality comes at a price.

(See also: Why do we expect overheads at fast food restaurants but not in aid?)

Admittedly, it is often difficult for people in Ireland to assess the quality of NGO work, for the simple reason that much of it takes place thousands of miles away. But that can be no justification for taking a false indicator of effectiveness (overhead costs) as a proxy.

The amount an organisation spends on administration is no indication of its quality. In fact, the opposite is more often the case: if an organisation fails to invest in research, needs assessments, evaluation and professional quality control, it is unlikely to make much of a positive impact.
(see also this blog on judging NGOs by their administration costs)

Irish NGOs have developed clear criteria and views about what “effective aid” is: it must be carefully targeted, and must be based on the real needs of the people and communities it is trying to serve. Aid must be focused on helping people in developing nations achieve long-term self-sufficiency, and must be managed along the highest standards of professionalism and accountability. Good intentions simply are not enough.

(Click here if you want to find out more about NGO quality)

Mr. Heaslip reminds us all that we as donors to Ireland’s aid agencies have a right to demand professionalism, accountability and “value for money” from aid agencies, and that we have a duty to encourage them to be as effective as possible. For if we are bad donors, we encourage bad NGO behaviour.

Earlier this year, Sarah Carey pointed out in the Irish Times (the same newspaper that printed Mr. Heaslip’s article) that we must learn to ask critical questions of charities. Hopefully this blog will encourage us all to make sure we ask the relevant questions.

– See also:

• How to recognise an Effective NGO
• Might it be time to stop talking about NGO Administration Costs? (April 2012)
• Why NOT to use overheads ratios as a way to compare NGOs (March 2010)
• Aid myths busted (May 2012)
• In defence of NGO overhead costs - http://dochasnetwork.wordpress.com/2010/08/18/in-defence-of-ngo-overhead-costs/
• Key questions to ask any charity - http://dochasnetwork.wordpress.com/2010/12/15/key-questions-to-ask-any-charity/
• Good intentions are not enough - http://goodintents.org/
• Where to get donor advice - http://philanthropy.ie/index.php/philanthropy/want_to_give/

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