It could be construed as a cynical twist of fate that just as I left my part time job as financial manager on account of it not being my dream job I was asked to work with a Kurdish NGO in Iraq on their financial management. But in fact it turned out that this assignment combined two things I love: working with people and helping an NGO improve its effectiveness.
For NGOs proper financial management and administration is crucial for their survival in the long run. Everyone – well, almost everyone – can probably get that first nice grant to do a good thing for society. The trick is to keep the money coming in and to ensure that it contributes to the sustainability of the organisation. Of course you need great ideas and a brilliant fundraiser annex networker, but that is never going to be enough if the organisation cannot deliver on the expectations raised with the funder or the private donator.
And delivery is not just the realisation of perfectly implemented activities.
Good delivery includes getting the financial management and administration right, too.
- Spending as planned combined with being able to justify changes.
- Spending according to the requirements and conditions of the funder combined with being able to prove it.
- Ensuring that, without becoming profit-based, the organisation does not in fact incur losses (for instance by not being able to cover costs of work done by the own staff for the realisation of the funded activities).
Underpinning the above are proper budgeting and proper internal procedures.
And that is where we get to the notion that financial management is – or should be – everyone’s job. After all, for proper budgeting the person making the budgets needs to be aware of the situation on the ground, the experiences of the project manager when spending the money and the time need to be taken into account. And there needs to be a match between the budget and the proposal and the donor requirements and conditions: enter the fundraiser annex networker. Without engagement and commitment of everyone the budget will not be realistic, feasible, convincing and in line with donor specifications. Inevitably, this will lead to problems in the implementation phase and in the reporting.
The same is true for procedures. Everyone should be committed to these as they form the basis for the organisation’s capacity for accountability.
Commitment needs understanding: why are these procedures in place, what do they aim to achieve or avoid? Why are they important? Everyone – yes, me too – knows that procedures can slow things down, make things more complicated than seems necessary and consume time that you’d rather spend on something ‘real’. Can we not get that signature later? Why make a contract when everything is clearly agreed? Who invented time sheets anyway?
The trick is to find a way to make everyone see that following procedures is part of their job and part of their responsibility to the organisation and its credibility and accountability. And thus in the long term its sustainability.
As you can see from the above Spiderscribe picture, I was lucky in that department. My group had clear ideas about what improved financial management could contribute to and what the work together could help achieve.
In the first session of the face-to-face part of the assignment, we identified current procedures and everybody’s role in the different steps taken. The main conclusion was that it should be a team effort and that intensive and regular communication and exchange was needed.
Of course this commitment does not mean that everything will from that moment of insight onward be clear-cut and smooth sailing. There will always be hiccups and challenges and things that do not go as planned or agreed. But once everyone is aware of their own contribution to the whole and is aware of what is needed by their colleagues and by the organisation, you stand a good chance of overcoming the challenges you may meet along the road.
Of course we did much more than just conclude that team work was needed. We also worked on accrual logic, budgeting, bookkeeping, etc. etc. And after the face-to-face training we continued working online on these topics. If you are interested in working with me on improving financial management in your organisation, please do not hesitate to contact me!