The newsletter of

No. 44 January 2010

Contents

What next for INGO structures?..............1

INGOs of the future: cohesion andfragmentation ...........................................3

The experience of an organisationaldemerger: some lessons ............................4

The Lion and the Dragon ........................6

In this issue: We look at future directions in thestructures of international NGOs, buildingon debates at a recent INTRAC workshopon this topic. Looking beyond questions of simply INGO structures we initiate a questioning of INGO roles, their position in developing countries, and their interrelationship with civil societies in both developing and developedcountries.

Following an overview of the issues andtrends by Brian Pratt, John Hailey putsforward an argument that there aresimultaneous trends of cohesion andfragmentation in the sector. He outlinessome key lessons from organisational andmanagement research for those dealingwith restructuring, whilst noting thatchange is the norm for organisations, andurging INGOs to embrace change andlook for new opportunities and roles.

The following two articles present somespecific experiences of restructuring, andthe lessons learnt from them. BeverleyJones discusses implementing joint officeworking between three Catholic INGOs inEthiopia – addressing the fact that workingin conjunction with other developmentactors brings up tricky issues aroundidentity. Sue Cavanna looks at theexperience of a smaller INGO de-mergingand helping to set up locally based NGOswhilst maintaining the integrity of theprogramme.

What next for INGO structures? viewpoint

Do INGOs compete more than wecollaborate? Are our structures movingtowards greater international cohesion, orfragmentation into autonomous localparts, or both at the same time? Shouldwe be looking to expand and consolidateour global outreach, or shrink back inrecognition that the structure of the largeINGO has outlived its historical function?Do INGOs still have a social basis in civilsociety for what they do, or are theymerely becoming conduits of funding?How does who we are impact how westructure our work?

These are a few of the searching questionsthat came out of productive debates at theINTRAC workshop – ‘Future Directionsin International NGO structures:Decentralised Management, Alliances andthe Recession’ – held in November 2009,with over 50 senior colleagues fromINGOs attending, presenting anddiscussing.

We set out to revisit debates about theoptimum structures for INGOs; debates

that have taken on a renewed significancein what seems like a period of upheaval inthe sector. We could see how the debateshad changed in the past 10 years sinceINTRAC reviewed the then concern to‘decentralise’ INGO management todeveloping countries through field offices.Some of the participants had gone a longway towards trying to move away fromthe classic model of a northern-baseddonor channelling funding through itsfield offices. Others had doubts whetherwe should have been encouraging INGOsto ‘pretend to be local’ rather thansupporting local civil society groupsthrough a more direct and possibly honestfunding relationship. Many have beenforming alliances and networks, such asthe large scale INGO ‘families’ of OxfamInternational or Save the ChildrenAlliance.

The structural and management debateswill continue to run as there seemed tobe no single correct answer to thequestions we discussed. However, our

Volunteers at an education-for-all event near Bhopal, Madhya Pradesh, India

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debates took us beyond questions ofsimply INGO structures to a questioningof INGO roles, their position indeveloping countries, and theirinterrelationship with civil societies inboth developing and developed countries.There was a recognition that there was aneed to revert to clearer overall goals forour institutions. Are we there to providestate (tax based) funded services oncontract, or to support strengthening localcivil society in the widest sense? Is there avalue in a larger scale organisation becauseit gives weight to campaigning andadvocacy, or should we be more critical ofthe present INGO stress on the idea ofconvergence and growth for efficiency,and remember the strength in the diversityof local organisations and theirconstituencies? What happens as INGOsleave middle income countries, oftendoing so without clear visions of boththeir exit strategies or considering howbest to leave behind a healthy civilsociety?

overheads which will now become moreobvious as growth falters. Twenty yearsago the sector saw itself as flexible,responsive and innovative. Now it is muchslower, less flexible and talk is more aboutstructures that are unchangeable inthemselves rather than innovative ideas.We need to consider our restructuringoptions in the light of an honestassessment of whether our organisationsare fit for their purpose to reduce povertyand inequality whist supporting a localvibrant civil society based on citizens’rights and interests.

The articles in this ONTRAC emergedfrom some of the debates at theworkshop. The first is based on thebackground paper commissioned byINTRAC from John Hailey, one ofINTRAC’s founding Associates, whoargues that there are simultaneous trendsof cohesion and fragmentation in thesector. He outlines some key lessons fromorganisational and management researchfor those dealing with restructuring, whilstnoting that change is the norm fororganisations, and urging INGOs toembrace change and look for newopportunities and roles.

The next two articles look at somespecific experiences of restructuring, andthe lessons learnt from them. BeverleyJones discusses implementing joint officeworking between three Catholic INGOsin Ethiopia. She particularly addresses thefact that working in conjunction withother development actors brings up trickyissues around identity. Sue Cavanna looksat the experience of a smaller INGO de-merging and helping to set up locallybased NGOs whilst maintaining theintegrity of the programme.

We are sure that some of these debateswill continue to develop, as will theexperiences of those agencies who sharedwith us their experiments to meet someof the challenges listed here. We will beinterested to hear from readers of theirexperiences and to monitor some of thesetrends for the future.

Brian PrattExecutive Director, INTRAC

bpratt@intrac.org

Our debates took us beyondquestions of simply INGO

structures to a questioning ofINGO roles, their position in

developing countries, and theirinterrelationship with civil societiesin both developing and developed

countries.

Cutting across our discussions was theissue of recession. Falling incomes, due tochanges in donor policies as well asrecession, has led to some questioning ofstructures and management cultures bornout of years of growth. A key issue wasaround the best use of ‘free’ orunrestricted funds: subsidise externalservice contracts, stay in countries nolonger on donor lists, dedicate space forinternational advocacy, or fund those whofind it harder to gain external support?These are decisions which cannot beignored. The recession has acceleratedthinking on issues such as whetherunaided civil society is becoming moreimportant, and what the transitionstrategies from INGOs to local civilsociety should be.

We now know that restructuring anddecentralisation are not as cheap as hadbeen mythically presented in the past, andwe have created structures with heavy

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Nothing is static, and constantevolution and change is a fact. Weoften forget this in our sector. Manyof our organisational models havedeveloped over the last 10-15 yearsof rapid expansion and growth. Nowwe are seeing a great deal ofrestructuring, and accompanyingtalk and anxiety with it. What arethe drivers behind internationalNGO (INGO) restructuring, whatare the patterns in INGOrestructuring, and what are somekey things to bear in mind as welook towards the future?

Drivers for changes in INGOstructuresThere is an eclectic array of organisationalmodels given the size of the INGOsector. There are unitary models,federations and confederations, andhybrids of these such as loose alliances orjoint office working. What has beenshaping the existence of these differentways of working for INGOs? Therevarious different drivers for change.

Contextual factors have includedgrowing demand, changes in the aidarchitecture, and now recession. I wouldargue that recession has acted as anaccelerator to pre-existing areas ofchange, rather than introducing whollynew dynamics.

Strategic drivers include the shift to anemphasis on local ownership, and anaccompanying change from INGO roles.The sector should think honestly aboutthe consequences of moving from anoperational role in development, towardsbecoming conduits of others’ funding. Aredevelopment agencies now merelydevelopment assistance agencies? Or arethere new roles for us?

Institutional and managerial drivers,aside from leveraging economies of scale,include the move towards the emphasison building common cultures, values andstandards within INGOs and theiralliances. The power of technology,particularly ICT and web-basedtechnologies, should also not beunderestimated as a driver for change.Finally there is also an undercurrent of

criticism and concern as to the impacteffectiveness and accountability ofdevelopment aid that has a provoked arevisiting of the roles of INGOs.

Patterns in INGO restructuringThere is a striking conundrum or paradoxwhich is evident when looking at thevarious ways in which INGOs havechanged their structures; the simultaneousmove towards both convergence andfragmentation. These two trends co-existrather than conflict.

To explain this idea further, we can seeincreasing convergence that is evident inthe move towards common cultures,systems, processes, and shared in-countryprogramming by many INGOs. At thesame time a move to fragmentation isexemplified in the fact that many INGOsare made up of a variety of autonomousentities. This may have occurred throughestablishing national offices, working withlocal partners, or through ‘demerging’ andgiving national offices sovereignty.

These two trends seem to workconcurrently. On the one hand there is astrong logic for convergence aroundcommon values and shared learning.Equally, there is also a strong logic forfragmentation, in terms of building thecapacity and allowing autonomy tosouthern organisations.

The two are linked in that once there is a‘safety net’ of cohesion in strategies andprocesses in INGOs, this allows forfragmentation. From a managerial pointof view, common values and sharedsystems give greater mechanisms forquality control, the ‘safety net’, that mayallow the various limbs of an organisationsome independence whilst avoiding thepotential risks of this.

Learning from organisational andmanagement research As we consider these trends in our ownorganisations, and plan our organisationalrestructuring, we need to take on boardthe learning from mainstreamorganisational and management research.One key lesson for INGOs to take onboard is the need to move beyond anobsession with ‘hard’ structures,organisational planning and control, andto move towards a focus on process,culture and acknowledging permeabilityin the way organisations interface.

INGOs can also learn from the debatesaround how other types of internationalorganisations are structured. These debatesinclude insight into: the importance ofbeing responsive and adaptive, the roleand power of subsidiaries, and the factthat over-complex structures can bedetrimental to cohesion and alienate staff.There is also evidence that overemphasison strategy may be counterproductive.The research also explores the role forexpatriates in INGOs, how cross-culturalfactors impact management, and aheightened concern for ethics andintegrity post credit crunch.

Looking towards the futureWhat might the future hold? Whilstattempting to predict is always a trickybusiness, I would argue that we may seemore hybrid models such as joint officeworking and franchising agreements.There should also be a continuing shift ofpower to the South.

One important critique is that the debateson restructuring are dominated by aNorthern perspective, and we mustcontinue to seek a Southern perspectivein this area as much as others. INGOsmay need to think differently about howthey work through individuals andcommunities. One new possibility is agrowth in INGOs as facilitators forcommunity to community and individualto individual work, playing an accreditingrole as a ‘broker’ or hub for theserelationships, for example as in Tearfund’s‘Connected Churches’ initiative.

It is also likely that INGOs willincreasingly work in networks, alliances

INGOs of the future: cohesion and fragmentation

One key lesson for INGOs is theneed to move beyond an

obsession with ‘hard’ structures,organisational planning and

control, and move towards a focuson process, culture and

acknowledging permeability in theway organisations interface.

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and consortia with a range of partners,including the private sector. There areprojections that there will also be anumber of mergers across the sector.Given the increasingly important role ofsocial entrepreneurs, ‘philanthrocapitalists’,and technologies that facilitate resourcetransfer, INGOs need to see these asopportunities. INGOs should embracenew roles, such as accrediting twinningarrangements, and look for commonground when considering the privatesector. INGOs should also be seeking toshare learning with other non-profitsectors and between North and South.

One thing that we can be sure of is thatthe sector is evolving, and INGOs, likeany other organisations, do change.INGO models are not only responding tothe present context but also based onmessy organisational histories. Change isthe norm, and it has been long arguedthat organisations go through differentperiods in their life cycles. Those workingin INGOs need to embrace change andunderstand that present structures not setin concrete, but instead are permeable.INGO structures will continue to evolve,as our organisations must be adaptable tomeet the strategic demands of a rapidlychanging world.

Dr John Hailey Cass Business School, City University

London and INTRAC FoundingAssociate

john.hailey1@btinternet.com

The experience of an organisationaldemerger: some lessons

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Consulting nomads on national policy – Turkana, Kenya

The current global economic climate hasmade fundraising and survival hard for allNGOs. The hardest hit have been smallerNGOs, with both local and internationalNGOs affected alike. Their costs andoperations are usually already so strippeddown that any further cuts would make itimpossible for them to run theirprogrammes. Shortage of funding triggersNGO structures to change. This structuralchange is frequently called organisationaltransition. A demerger is one of thepossible options.

Over the last 15 years I have myself gonethrough several international NGOtransitions, most of them involving theformation of African local NGOs out ofthe country programmes of international

NGOs. Here I focus on a more recentand more complex experience, thedemerger of an international NGO that involved a triple path to secure the work in Africa. This approachnecessitated:

(i) downsizing the UK operations andcosts

(ii) moving capacity support directly intothe African programme componentcapable of nationalising to an localNGO in the medium-term, and

(iii) finding a sister international NGOwith a programmatic ‘fit’ that wasable and willing to ‘adopt’ a particularpolicy influencing programme as itsown.

Give yourfeedback onONTRACWhat do you think about the topics we cover, andthe articles we print, inONTRAC? What topicswould you like us to cover in future issues?

Email your feedback topublications@intrac.org

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Safeguard the organisation’s work onthe groundAbove all else, when consideringorganisational transition it is essential tofind the solution that best safeguards theorganisation’s work on the ground andholds this concern centre-stage. This isnot as easy as it sounds. Change is not acomfortable process as it challenges thevalue systems of all those who areinvolved. Some of these value systemsmay be in direct competition with eachother. For example trustees may beprimarily concerned with liabilities, andfield staff with their jobs. Keeping to thefore what is in the best interests of thecommunities and how best to protect thework in all key deliberations is aresponsibility that often falls to the seniorprogramme team or the director – whomust be robust in defending this concernat all times. This is a difficult task.

Any transition will be much easier if theorganisation itself has foreseen a possibleneed to radically change the way itoperates. The factors that forceorganisational change are frequently areduction in funding, or a change in theoperating environment such as a war orconflict. A careful organisation will haveassessed these and otherrisks. Any organisationthat is ‘surprised’ by theneed of such a decisionwill not have beenassessing its operatingliabilities regularly. In thecase described here theserisks were assessed on amonthly basis over thetwo years preceding thedemerger, and thetrustees had previouslydecided what levels ofoperating reserves wouldtrigger the decision tochange theorganisational set-up.Once the decision pointwas agreed, there wereno surprises when atrustee meeting put thisplan into action. Carefuland regular risk

management contributed greatly to theeventual success of the transition.

Once the decision was taken to seek a way to safeguard the work whilereducing the risk of running anorganisation with falling reserves,discussions were begun with variousorganisations. In this case three monthswere allowed to achieve this. The triplepath of demerger described above wassuccessfully agreed upon with the variousparties within this three month period.Once the deals were done theinformation could be made public andthe legalities completed. The overallprocess from the trustee decision to afully completed transition took sixmonths. Speed, confidentiality, honestyand thoroughness are of the essence insuch a demerger situation – manytransitions are derailed by not adheringto all of these together.

Minimal loss of employment is animportant factor. In the case describedhere this was achieved with only oneredundancy – that of the director. The employment of all staff in theprogrammes in Africa was safeguarded, as were the programmes themselves.

People are one of an NGOs’ keyassetsA decision such as a demerger is likely tobe the most important decision that theinternational NGO will face in itslifetime. Everyone must be properlyconsulted at the various decision points.One of any NGOs’ key assets are thepeople associated with the work, amongthem trustees, senior employees both inAfrica and at HQ, or collaboratingpartners such as senior governmentofficials. But full consultation with abroad range of individuals can be atvariance with maintaining confidentialityand securing a rapid demerger. From myexperience this is perhaps one of themost delicate parts of the demergernegotiations. Whoever is managing themerger process needs to balance speedand confidentiality with assuring thatproper consultation has taken place. In myopinion the director has a primaryresponsibility to make sure that theopinions from the field are represented atboard room meetings. Unless it works inthe field from a programme perspective,no demerger will be a success.

Sue Cavannasuecavanna@sahelconsulting.org.uk

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Nomads on the move – women on bulls, Kordofan, Sudan

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When we change our structures andthe way that we work, the processstirs up profound questions aboutour organisational identity. Who arewe? What do we stand for? To whomdo we really belong? How does anacknowledgement of our identityfacilitate the building of bridgesbetween us and our local partners –whose own identities are often veryexplicit?

The experience of establishing the firstjoint country office between threeCatholic NGOs in Ethiopia has provokedmany reflections about these issues. Eventhe origins of the idea itself, hatched in2000 when Ethiopia faced a renewedemergency, are rooted in the specifichistories of the countries to whichCAFOD (England & Wales), Trócaire(Ireland) and SCIAF (Scotland) belong.Although all three are Catholic, it was theexistence of the April 1998 BelfastAgreement1 which made possible visiblecollaboration between, in particular, Irishand English agencies.

The most important investment from theoutset was to seek blessing from theEthiopian Catholic Church – not just thescattering of incense, but a genuineconsultation leading to a memorandum ofunderstanding formally blessed at the altarof the Nativity Cathedral in Addis Ababa.This is because this initiative wasdeveloped at a time when the southernchurch was feeling most bruised by thetrend towards opening overseas offices bynorthern church aid agencies.

Blessings matter. Achieving a blessing doesnot have to be rooted in a particular faith,but it does need to be rooted in identity.The sense of ownership which theEthiopian Catholic Church felt over thejoint initiative stood us in good stead, andwas renewed periodically by independentreviews which gave the Church and other

partners the chance to say how they feltabout the joint office living up to thememorandum of understanding.

Top level vision and governanceThe process of restructuring requires toplevel vision and governance. In this case, itis important for promoting cohesion inthe country team which may beemployed by one agency, but representsall three.

We didn’t get the model right at thebeginning. We made the mistake of tryingto move incrementally to one structure,attempting to ‘wed’ different teams in-country with one different representativefor each agency. Such a model is sodependent on individual personalities thatit was doomed to fail! So instead wemoved more quickly to a ‘one leader, oneprogramme, one team’ model. This provedto be much more successful and muchless stressful.

‘Building one identity with many’ provedboth challenging and worthwhile. It was aconstant balancing act to uphold thesimilar values of each agency while alsopromoting the distinctiveness of eachagency’s identity when it mattered most –in relation to the British or IrishGovernment, in relation to Irishmissionaries considered key stakeholders

in Trócaire, and in support of theparticular priorities in each agency’sstrategy.

Attention to identity was needed at alllevels of the joining up process, from highprinciples down to the details ofletterheads and domain names. We choseto keep the identity of each agencyvisible rather than subsumed. We foundthat local actors willingly tied theirtongues around all three names.

In Ethiopia, nationalities matter also. Thealternative would have been to submergeindividual identities into one. Butexperience elsewhere suggests that thisquickly leads to an erosion ofcommitment and identification amongkey stakeholders. It can also lead tomistrust and confusion among localactors.

Relationships with partners keptstrongOnce the technical aspects are dealt with,the consequences of retaining the threeindividual identities of the agencies areoverwhelmingly positive. Relationshipswith Ethiopian partners were kept strongas partners knew where each INGO wascoming from and what values formedtheir work, rather than only coming intocontact with one dominating

The Lion and the Dragon

Children at a small rural school in Bahar Dar, Ethiopia

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1 An agreement made between the Britishand Irish governments, as part of theNorthern Ireland peace process, whichcreated the opportunity to restore adevolved, power-sharing government toNorthern Ireland for the first time since1973.

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organisation. It was also important toconsider how the different positions ofthe various INGOs in their own homecontexts shaped their strategies inEthiopia. Retaining the identity of eachcomponent agency took this into accountand allowed a clearer sense ofaccountability back to home countryconstituencies.

Preservation of individual agencyidentitiesThe preservation of the agencies’individual Welsh, Scottish, English andIrish identities and cultural traditionsprovided specific points of connectionwith local partners. For instance, theinitiative which brought together theresurrection of a Welsh traditional quiltingwith the skills of Ethiopian women hasgenerated an empathy betweencommunities of women in Wales andEthiopia based on the histories ofmarginalised women in both places whoproduced high quality crafts as analternative to sex work.

Irish supporters shared experiences ofconflict and peace-building withEthiopians affected by the fall-out of the2005 General Election. More broadly,faith identity provided a base for sharedexperience and a common ownership of

the work in Ethiopia. This culminated ina co-celebration of priests from the UKand Ireland with Ethiopian Catholic andOrthodox communities at the EthiopianMillennium in 2007.

Overall, this experience led to theconclusion that joint working can workvery well where organisations share asimilar vision and a relatively similarapproach to development. Perhaps oneirony has been that the relative strength ofthe joint office meant that the governancestructure no longer needed to remain sohands-on. In the long term, this, alongwith other factors, may have weakenedindividual organisational commitment tojoint working. The Ethiopia experimenthas not yet been repeated elsewhere.

Convergence with the visionOne lesson which emerged regardingrestructuring was that there was highconvergence at senior management levelwith the vision, and also at teamimplementation level as staff wererecruited into joint working and focussedon outward looking activities. However,there remained low convergence at themiddle management level where it washard for posts with specific responsibilitiesto work collaboratively acrossorganisational divides.

When INGOs join up, an inevitableconsequence is that they appear biggerand more dominating. The creation of a‘single front’ can certainly strengthenINGOs in the face of competition, butusually leads to a concealment and evenloss of component identities.

These are important consequences incontexts like Ethiopia where governmentsare reasserting their sovereignty inchallenging ways – such as the recentlegislation to prevent Ethiopian civilsociety from undertaking advocacy andrights-based work when over 10% oftheir annual turnover is received fromforeign sources. Size, especially too muchof it, really does matter.

This experience from Ethiopia speaks toboth the trend of federalisation andlocalisation which we see in the widercontext. While often regarded as divergentand even contradictory, we feel the jointworking initiative and its attention tomatters of identity demonstrates how itcan be possible to encourage these trendsto converge in more constructive, moreequalising relationships between parts ofthe north and parts of the south.

Beverley Jones Independent consultant and INTRAC

Associatejan.bev@gmail.com

People in Lalibela, Ethiopia, dress in white for a celebration of the day that the Virgin Maryreturned to Ethiopia

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