Rethinking Efficiency

This post originally appeared on the Building Markets blog on 27 July, 2011. Read the original here.

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One of the most trendy critiques of the Humanitarian Aid Industry right now coming from cynical insiders and angry self-appointed pundits alike is that aid is not efficient.

There really is no getting around the fact that there is an awful lot that looks really, really damning to industry outsiders and even industry insiders when it comes to the subject of aid efficiency. Those gaggles of expatriate aid workers dominating coordination meetings, for example. Or the fleets of white SUVs in relief zones. Or cushy-looking HQs in cities like Washington D.C., Ottawa, and Geneva. It’s easy to compare the financial value of a relief item with the cost of getting that relief item into the hands of a disaster survivor and draw the conclusion that international relief and development are very expensive, ergo, inefficient.

As a long-term industry insider I can confirm many of the worst fears of many of the critics. There are aspects of the aid industry that make me cringe, and there are secrets I hope no journalist ever discovers. Aid industry beliefs and traditions around efficiency are particularly among those things that I personally believe need to change sooner rather than later.

This confession having been made, I think that it is very important to challenge some of the prevailing opinions about what constitutes efficiency (or inefficiency) in a non-profit relief and/or development context, and by extension the remedies to those supposed and sometimes real instances of inefficiency. One of the most common suggestions for making aid “better” is to make it all more like a for-profit sector business. And sure enough, I along with many others have said that of course there are aspects of the for-profit world that the humanitarian world would do well to emulate.

However, I feel strongly that we need to challenge the prevailing for-profit-sector-centric notion that simply reducing cost will make aid more efficient. I think it is important that we resist being pulled down the path of thinking, for example, that if we could only cut back the budget by X per cent, without a corresponding reduction in outputs and outcome we’d be more efficient. Being good stewards with the donor resources entrusted to us as humanitarians does not necessarily mean doing everything for the lowest possible cost up front.

Proof that aid is inefficient? Or just a way for aid workers to get to work? [photo by author]

Before we all begin wantonly excising the white Land cruisers and expats from our field operations budgets, or before we all go start our own new NGOs dedicated to “cutting through the red tape”, all in the name increasing efficiency, let’s at least consider the following:

1) Re-educate the public about overhead. I am by no means the first person to say this, nor is this the first time that I am saying it. But as long as charity rating websites, institutional donors, and the general public look at calculated overhead as an indication of organizational efficiency, we are and will remain in deep trouble. We’ve spent the past thirty years mis-educating the public (and sometimes ourselves, too) to believe that this is all inexpensive. But now we must un-mis-educate them. As long as individual donors are allowed to believe via NGO marketing that NGO X is efficient and reliable because 95 cents of their donated dollar goes directly to beneficiaries we will never be able to have a rational conversation externally about efficiency.

2) Focus on achieving critical mass, rather than minimum cost. The difference here may be subtle at times, but as we develop strategies, program plans, and budgets our focus should be on what it takes to get the job done and done properly. This, rather than the prevailing practice of trying to do as much as possible for the smallest amount possible. Even our for-profit colleagues comprehend that the least expensive product is typically not the best quality product. In the humanitarian relief and development world, program quality, including durable results (sometimes called “sustainability”) are not or should not be in any way negotiable. Invest in what you really need – people, equipment, maybe even white Landcruisers – to get it done and get it done right. There are no shortcuts. Aid costs what it costs. Get this part right and we’ll have fewer expensive fiascoes down the road. Ergo, efficiency.

3) Organizational discipline in maintaining mission focus. Over the course of my own career, those financial decisions made by my NGO employers which have left me the most disenchanted were those made to expend resources towards things that didn’t really help us achieve the organizations’ mission. I’m not talking about the kind of gross misuse of donor resources that (along with a healthy dose of incompetence) brought us all “Three Cups of Tea-gate.” I’m talking about far more mundane, sometimes difficult to recognize in the moment distractions that cost us. Those in-house pet projects no one quite understands the purpose of, but that get funded every year; those boondoggle junkets to take “major donors” to visit field initiatives you already know they’ll never ever fund; truly worthwhile meetings held at expensive resorts in Bali when they could be held just as easily and far more cheaply in Medan; those scrambles to do one-off projects in places where your employer has no prior presence in a sector your employer has no institutional expertise in. As an industry we spend a lot of time and money on activities that are not bad per se, but that do not really correspond to our core purpose(s) or clearly advance our cause(s). Simply put, we struggle to become and stay focused.

Will these three things save aid and make it immune to criticisms that “aid is not efficient”? No. And of course we are all, as professional humanitarians, behooved to use the resources with which we’re entrusted in a manner that maximizes the benefit to those we try to serve. Where accusations of inefficiency are rightly earned, it is our responsibility to address them and perhaps make changes. However, as we move into a time when the humanitarian world is increasingly under the scrutiny of a general public whose tendency is to impose for-profit sector “business case” thinking around efficiency on us, it is important to be able to respond coherently to that.

Despite some superficial appearances, the non-profit and for-profit worlds have some fundamental differences. It is incumbent on us as humanitarians to know what efficiency means for us and to be able to articulate that to industry outsiders.

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4 Comments

  1. Mission creep!

    Absolutely infuriating.

    Reply
  2. Great post. To which I’d add, speaking as someone who once worked for a French Investment Bank, the idea that the private sector is efficient has quite a strong degree of myth too. Or, at least, efficiency might be the case for small businesses and small stores, but large organisations in the private sector on the other hand – they know how to waste. Or, at least, that was my experience.

    Reply
  1. Rethinking Efficiency | Global Health Hub: news and blogosphere aggregator
  2. Time to un-mis-educate donors about what efficiency looks like « Nonprofit update

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