Defining Organizational
Effectiveness
George Mitchell
Transnational NGO Initiative, Moynihan
Institute of Global Affairs, Syracuse University
April 6, 2010
Organizational Effectiveness: Overview
• Lack of simple, accessible, relevant and
credible information about NGO effectiveness
• Stakeholders, such as donors, forced to rely on
incomplete, poor quality information
• How can NGOs help provide more meaningful
information?
• Outline
– Part I: definition
– Part II: disclosure
2
Why Definition Matters
• NGOs want to be effective and to communicate
their effectiveness to stakeholders, such as
donors.
• Donors want their contributions to support
effective NGOs.
• But if stakeholders define organizational
effectiveness differently they will employ
different criteria and reach different conclusions
• The question of organizational evaluation (and
therefore reputation, etc.) depends upon the
question of definition
3
Evidence from the Transnational NGO Interview Project
DEFINING NGO EFFECTIVENESS
4
The Transnational NGO Initiative
• Face-to-face, in-depth interviews with 152
leaders (mostly presidents and CEOs) of
international NGOs rated by Charity Navigator
• Topics included governance, goals, strategies,
obstacles, transnationalism, effectiveness,
accountability, communications, partnerships and
collaborations, leadership, etc.
• About 209 hours of digital recording transcribed
and coded (quotations and statistics)
5
TNGO Data on Organizational
Effectiveness
• Interviewer: “Let me ask you about the concept of effectiveness, which is
something we all have trouble defining. How does your organization
define effectiveness?”
• The (non-mutually exclusive) categories for leaders’ open-ended
responses:
–
–
–
–
–
–
–
–
–
–
Resources
Flexibility
Innovation
Expertise
Contacts
Staff/peer competency
Stakeholder satisfaction
Goal achievement
Evaluation
Other (omitted)
6
Organizational Effectiveness: Overall
Results
7
Organizational Effectiveness
8
Two Main Definitions of Effectiveness
9
Two Definitions of Effectiveness
Outcome accountability
Overhead Minimization
•
•
•
•
•
•
•
“Well I mean ah, for us to be effective is to
achieve the programmatic or strategic goals
that we’ve identified.”
“We define it as whether or not we are sort
of getting the tasks achieved that we set for
ourselves.”
“We set important goals and, and we achieve
them.”
“if we’ve done the work that we’ve said we
would do, that’s...that should be one level of
effectiveness.”
“It’s the commitment you make to doing
what you said you were going to do.”
“it’s when you are doing what you’re saying
you’re doing, that you’re serving your
mission...and that you’re able to show that
you’re serving your mission…”
Goal attainment,
promise-keeping,
program evaluation
•
•
•
“to be effective in [DELETED] is to deliver
services and assistance to the people of
[DELETED] at low cost”
“The uh, amount of money that’s actually
getting to the, to the field dedicated to the
programs…and secondarily the actual impact
of projects that you can quantify.”
“…we can’t determine the outcomes, so we
measure products. We, we measure outputs.
What is sent over you know, what its purpose
is, where it goes. We don’t necessarily know
how many people it will effect…you can
measure success primarily by your outputs.”
“our best ace card is our efficiency in terms
of how we, we have a low overhead”
Functional expense
ratios, accounting
for outputs 10
Effectiveness as Overhead
Minimization
• Why?
– Reaction to external pressures (internalization,
marketing)?
– Underlying cultural belief that low overhead
corresponds with organizational worthiness?
Evidence? (Urban/Indiana study)
• Who?
– These leaders are three times more likely to be from
larger NGOs (professionals, economies of scale).
– These leaders are ten times more likely to be from
“amelioration” NGOs (accounting for outputs).
11
Two understandings, two possible systems
ASSESSING ORGANIZATIONAL
EFFECTIVENESS
12
Communication Breakdown?
Your organization is
ineffective! Your
overhead is too high!
But we
accomplished
everything we
promised…
13
The Disclosure Problem
• Stakeholders make judgments based on the
credible information available to them
– In lieu of meaningful “effectiveness data,” ratings
based on financial data and checklists have
become increasingly popular.
– Many users implicitly assume such ratings have
something to do with effectiveness.
• Many donors are forced to rely upon very little
information… (anecdote)
14
Two Definitions, Two Possible
Disclosure Systems
Outcome accountability
• Definition: demonstrable
goal attainment or promise
fulfillment
• Disclosure: states ex ante,
goals or promises, states ex
post
Overhead minimization
• Definition: maintenance of
normal functional expense
ratios, etc.
• Disclosure: financial
information, much of it
relying on discretionary
classification
How can NGOs disclose more helpful information
about organizational effectiveness to stakeholders?
15
The Wrong Format: Statement of
Program Service Accomplishments
16
A Disclosure Format for Outcome
Accountability
Indicator
State
Goal or
Ex Ante promise
State Ex
Post
Percent
Percent
Learning
Achieved of Budget
Water access
(avg. time)
60 min. 30 min.
45 min.
50%
100%
Local water
contaminated
∑ab=50%
17
Evaluation Challenges
• Although most NGO leaders associate organizational
effectiveness with goal achievement and evaluation,
according to Charity Navigator less than 10 percent of
NGOs implement meaningful evaluation systems…
• At the end of the day, are NGOs held accountable for
outcome achievement?
• The basic principles of outcome accountability
– Articulate specific goals and identify appropriate indicators
– Evaluate progress as rigorously as feasible
– Credibly and systematically disclose results
18
Conclusions
• The TNGO Initiative website:
http://www.maxwell.syr.edu/moynihan_tngo.aspx
• Subscribe to the blog.
• Email: gemitche@maxwell.syr.edu
19