What Facilitation Can Do

Colourful Dhaka

Colourful Dhaka

In September I was that lucky bastard who had an assignment in Dhaka, Bangladesh. I had two very different things to do there. First of all, I was to perform an audit of the financial processes and financial administration of an NGO. And secondly, I was to work with the NGO staff on organisational management issues.

The main thing to be addressed with the team members was the organisational set up, and the system of in-built checks and balances. Based on written and other information I had received beforehand, my impression was that there was definitely some room for improvement.

The question was how to go about that?

For me, the main aim was not so much to develop a new, better balanced structure on the spot. Rather, I wanted to help the team talk about management issues, checks and balances, division of tasks and responsibilities, and the like. I wanted to assist the team to reach its own conclusions about how they wanted their organisation to be structured and organised.

Of course I did want to make them see certain things. But I did not want to show them as such. I wanted to help them see.

Basically, what I wanted was to facilitate a meeting of the team discussing the organisational structure and management. And that is what I did. I prepared a sort of script and I asked questions like ‘Can you tell me what committees and boards there are in your organisation?’, ‘Do you know what the tasks and responsibilities of this committee are?’ and ‘Who has seen a written decision made by that committee?’ and many, many more (in fact, I had more questions than could fit into the two-days programme I had developed).

Organisational structure emerging

Organisational structure emerging

Step by step it became clear that the organisational structure that had been very nicely presented in a project proposal was basically a mystery to most of the team members. They did manage, in the end, to sketch a rough organigram. They also identified which information was lacking and discovered questions that needed to be asked about the management structure.

At the end of the two days we spent together (covering more organisational management issues after clarifying the organigram to the extent possible) team members said they felt very happy and excited. Most team members found that this joint discussion had created a new level of transparency which they felt to be very important and needed. This made them happy and also excited – because now new steps had to be developed and taken and they had to make themselves part of those.

I, too, was satisfied. Through the seemingly loose Q&A structure of the two-day meeting almost all issues the client had identified beforehand as important had been put on the table and discussed. More importantly, these issues had been identified as issues for concern and change by the team itself – as a result of their sharing of information, experiences and questions regarding the organisational management and structure. The team members present had been empowered by the discovery of information that was either new to them or had never before been put together in a context.

I could have given them the same amount of new information in a training on organisational management, with lots of lectures and presentations about how an NGO should be organised and structured. It might have taken less time, and would certainly have been much easier to prepare and conduct. However, my aim was also to empower and mobilise the team members. And I am convinced that facilitating their own discovery process with self-generated insights was in this case much more effective and powerful than any training could have been.

I-do-not-want-to-show

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Do you know your value?

Value

Value

Do you know the value of your organisation or company? I am not talking about added value, or about values you have in your work. Not even about the value of the sheer existence of your organisation or company to society or clients. I am referring to ‘cold’ financial value. Do you know what you’re worth?

To give you a clue as to where to look: do you know the balance sheet of your organisation? Not by heart, but in general? Most likely, you don’t. At least in my experience of small company owners and NGOs – most of them have no idea. And in some cases they do not even produce a balance sheet at year’s end.

You may wonder what is so bad about that. Apparently, you haven’t felt a need for this to date, so why should you now?

Here is why.

If you are an NGO you may want to see whether you are building up a reserve out of small profits generated by an excess of income over expenditures. This reserve shouldn’t be too big of course – after all you are not working for profit and donors do not provide you with grants to make a profit. But a modest reserve does come in handy, even for an NGO. For instance, if you have a reserve you know that you can bridge a gap in between funder payments or possibly even a gap in between projects. Or that you can make certain investments not covered by any project grant, just because you have an amount of money available to your organisation that is not earmarked for a certain budget line. In short, a modest reserve can render your organisation more stable and can help improve sustainability of your organisation. For this reason, funders in general will not disapprove of you building up some kind of reserve as long as you are open about it and do it right.

Balance sheet

Balance sheet

You can be open about this in your annual financial statement where your balance sheet will show the size of your reserve and your profit and loss statement can show what was added to your reserve in a given year. You can also describe your organisation’s aims with the reserve: what size are you aspiring to and what is the rationale behind that? For instance, you might be looking for a reserve the size of 3 months’ operational costs so that in the event of a loss of an important grant you would have some time to start economising, downsizing, reorganising, etc.

The same is true for small companies, with as added value that having insight into your reserve may also help in case you need a bank credit or are wondering about prospects for your pension.

This is, in a nutshell, why I believe it is worthwhile to know your balance sheet value. And why you might like to invest a bit more time in your annual financial statement at the end of the year to create a balance sheet. It isn’t rocket science, but if you need assistance, do let me know!

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Finance is for Everyone

Sulaymaniyah

Sulaymaniyah

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.

Financial Management Opportunities

Financial Management Opportunities

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.

Steps in a financial process

Steps in a financial process

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.

Result of a joint effort

One of the results of the assignment

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!

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