Parameters to measure performance of an NGO in India

 

Pritam Kaushik^1,3, Jagrat Jaggi¹, Yash Jadhav¹, Badri Narayan Goswami^1, Aditya Dhuri²

¹MBA Student, Symbiosis Institute of Management Studies-Pune.

²Founder, TMB Consultancy Products and Services-Pune.

 

ABSTRACT:

Over many years in the past, together with inputs, outputs, results, impact and sustainability, non-governmental organisations (NGOs) had always been caught in some values. This process requires a complete know-how of how NGOs monitor and measure performance, and what performance components result in good overall economic results, performance, and quality. In this paper we provide an overview of the distinctive concepts and mechanisms for assessing and monitoring overall performance in the NGOs sector.

 

 

 

1.    INTRODUCTION:

It goes without challenge that for any organization, the overall performance is deeply rooted by its Strategic plans, ideas, and objectives. This brings us to the company's task, values, and goals in phrases that facilitate the accessing of its performance, i.e. Planned v/s Actuals. It consequently, will become crucial to identify and express the ‘mission’, ‘values’, and targets of NGOs keeping in view their Development agenda and the hints of appearing in front of the anticipated standards. And indeed, the listing of Performance Standards underneath needs some prerequisites such as statements about the Mission, Values and Objectives of NGOs and is going directly to sign the methods of performance that are considered necessary for managing NGOs to the expected popular.

 

The control improvement in any NGO revolves mostly around stating the relevant requirements of the performance for all tiers of control, given the relevant managers takes the accountability for his or her employees who directly impact at the best of any NGOs’ offerings or obligations. This approach that is ‘Performance Standard’ led, is predicted to provide a focus for managers at any NGO to observe what they're in search of to acquire and to allow them to develop commonplace know-how of the nature and reason of NGOs. These requirements are statements that set out what NGOs’ Top, middle and Operational level managers are predicted to recognize, fully understand, and successfully be able to meet their and organizations goals.

 

2.     SYSTEMATIC LITERATURE REVIEW:

2.1 Management Practices and Measurement of Performance of an NGO’s:

After reading the Standards of performance of NGOs in the studied literature, it reveals various empirical investigations and frameworks mostly theoretical, that show off that the Measure and Manage approach for overall performance in NGOs isn't best a tool for making plans that assist those agencies to evaluate the overall impact they have created. It thus seems to be the principle manner to correct procedure and cope with records inside NGOs and to release it to the worried stakeholders that is described in later a part of this paper. The performance measurement and control concept in any NGO is an extremely crucial part since it boils down these companies inside the use of the relevant performance data sets for their decision-making gear and frameworks. So, we can easily point out that dealing with and gaining access to the overall performance is taken into consideration to be a mandate for Ngo's strategic planning groups in enhancing their features. Also, it is closely related to the price range device internal NGOs, since those agencies are considered to be in one or the opposite way fundraising-oriented. Another essential parameter that proves the importance of overall performance dimension in NGO’s and their control is required for clarity and the responsibility towards the stakeholders who are involved in the organisation. It has been explicitly taken in the scope of this paper as nicely.

 

In the studied literature, we found number of definitions given by many authors have provided measuring overall performance and an examination (which is thoroughly investigated) of the literature, it can be easily taken up with a belief that performance signs will add-on to the calculated performance of NGO is shown up below:

 

Table 1: Summary of the performance measures in NGOS literature

 

2.2 RESULTS:

The systematic literature seeks discovered 31 articles on elements influencing NGO performance. The administrative information of those articles has been analysed and are provided in this study. It is found throughout that through the years, there’s a regular growth in the wide variety of ‘academic articles’ on this specific topic (Figure 1). The in-addition evaluation suggests that simplest three articles were posted among 1996 and 2000, which later extended to a total of eleven articles via 2004 and to an elevated parent of 31 articles with the aid of 2008. So really visible, most studies (20) have been published among 2005 and 2008 as highlighted within the graph below:

 

Figure 1: The number of articles published between 1996 and 2008 on factors influencing the performance of NGOs

 

2.3 Publication outlets:

The above mentioned 31 articles have been published in approx. 20 journals. The most frequently used journal for publishing in this subject matter related to the research were ‘World Development’ with five articles, accompanied by using three articles each in development in Practice, journal of health management and non-profit and voluntary sector quarterly. The journal of development Studies published two articles.

 

The above-mentioned journals where the articles which got published can be further divided into categories, six in number, which are totally on ‘Centre educational’ areas. The maximum favoured articles have been from development studies journals with over 1/2 of the articles (Total are 18). The intermediate choice has been discovered for assessment and responsibility, and ‘health journals’ (4 articles every). And amongst those the least favoured have been the journals in politics (3 articles) and facts in technology and regulation journals (One article each). This simply concludes that ‘improvement studies journals’ were utilised continuously over time, with some boom considering 2001.

 

2.4 Study methods:

Out of the 31 studies, 26 of them have been based on primary data, and some tested secondary records. The research utilised both qualitative techniques (together with consciousness institution discussions and workshops and interviews and so on.) and quantitative techniques (majorly questionnaire surveys). The pattern length taken for primary exam additionally had variant inside the pattern sizes that have ranged from the exam of 1 organization to various national surveys of different NGOs.

Table 2 Frequency of study location and locations of authors of articles published between 1996 and 2008 on factors influencing the performance of NGOs

 

3.    METHODOLOGY:

3.1 Strategy used during search:

The search method is aimed to become aware of and summarise the papers that have been published in simplest ‘English’ (only) language educational journals, that gift outcomes on or round our subject matter of research i.e. Elements influencing NGOs performance. The literature evaluates and searches to pick out relevant posted research, retrieve it and document this process. Effort become made to minimise the systematic mistakes or any bias.

 

3.2 Methods used during search:

Google scholar searches with the key seeks terms used includes numerous diversifications of NPO, NGO, development management and overall performance, effectiveness, responsibility, and assessment. Once we found all the relevant publications, their ‘references of references’ have been examined and accompanied to find any linked applicable articles for an in-intensity SLR.

 

3.3 Exclusion and inclusion criteria used:

The inclusion standards were:

·       Published articles in the period are from 1996 to 2019, which are from scholarly journals.

·       The research articles are specifically in handiest English language, of the NGOs involved from lengthy improvement paintings everywhere within the international.

·       Studies that tested one of a kind improvement NGOs or no longer-for-earnings/non-earnings companies which include countrywide, nearby or NGOs which are run internationally, enterprises which are running in civil-society, organisations of community-primarily, ground root companies and societal-based firms.

·       Empirical proof or analysis of the facilitators and constraints which are used for analysis of performance of NGOs with.

 

The criteria which has been excluded:

·         Expert opinions/editorial view of the journals, e-book opinions, various reports, newspapers and different styles of ‘grey’ literature.

·         Articles pertaining to public and personal sector or corporate organizations.

·         Articles pertaining to NGOs in the field of humanitarian and emergency alleviation; on companies that focus on the views of enterprise interests and academic institutes; on people in any NGO, on NGO theories and fashions.

 

3.4 System used in Appraisal:

In the search and choice technique, a standardised machine changed into installed to systematically take delivery of articles to be able to reduce the risks of mistakes in judgement. In all, 1043 titles have been checked thoroughly to make sure that the studies have been associated with improvement; Total 785 papers has to be excluded as they catered to the domain (private and public) organisations working in the NGOs in improvement paintings, if it had been related to emergency areas in preference to the development. Finally, probable 258 applicable articles, were retrieved and studied out of which 178 researches had to be left out as they focused only on assessing NGO leadership and interventions. The variations seen in the eighty research papers; it had been thoroughly examined. The similarly seen in 49 papers were removed: Two of the were seen in non-income foundation of the university; eleven analysed the problems in assessing NGO performance, in comparison NGO paintings to different improvement parties. 22 examined how NGOs grew over time and the outcomes. Eventually we ended up with only 31 articles which passed our inclusion standards.

 

4.     MAIN BODY OF PAPER:

4.1 About NGO’s:

NGO’s are companies who perform socially essential responsibilities which governments perform inadequately or on no account. Examples are the Red Cross, which affords (amongst different matters) essential catastrophe relief. Or the American Cancer Society, which increases money and sponsors research for the treatment and removal of cancer. There are many different medically-orientated NGOs. There also are provider golf equipment, including Rotary International and Lions International. These corporations have applications of community development, vocational help and education, literacy, blindness prevention, easy water, agricultural resource, care of orphans, struggle comfort, and many different such activities. There are NGOs which give attention to animal protection and welfare, such as the Humane Society of America. Others work on adoption of homeless animals. There are many unique hobby NGOs, which include the National Rifle Association. They work for, amongst different matters, secure and accountable use of firearms. NGOs along with Doctors Without Borders bring medical groups to (normally) lesser developed international locations, to offer life-saving or lifestyles-sparing or existence-improving surgical procedures, without cost to the beneficiaries.

 

Figure 2: Role and Functions of NGO

 

 

There are heaps and lots of NGOs, which together have raised the usual of living and progressed the excellent of lifestyles in the course of the sector. They have averted wars, and aided the sufferers of wars, and helped carry wars to an give up. The NGO can justly be considered to be one of the best and maximum crucial inventions of mankind. NGOs are gambling multidimensional position. The position and capabilities of NGOs in rural development in the changing context of globalization is depicted in figure 2 above.

The Government, having recognized NGOs superb contributions in distinctive fields, had invited them for a lively involvement. It recognized the position of NGOs within the following areas:

·       To supplement government efforts if you want to provide the agricultural terrible, the alternatives and alternatives.

·       To be the eye and ears of the humans at the village degree.

·       To set an example. It is feasible for NGOs to adopt easy, innovative, bendy, and inexpensive means with its limited sources to reach a bigger variety with much less overhead and with more network participation.

·       To spark off the shipping device and to make it powerful on the village degree in response to the felt desires of the poorest of the poor.

·       To disseminate records.

·       To make groups as self-reliant as viable.

·       To teach a cadre of grassroot workers who agree with in professionalizing volunteerism.

·       To mobilize economic assets from within the network so as to make communities self-based.

·       To mobilize and arrange the terrible and create attention to demand fine services and impose a community gadget of accountability on the overall performance of village stage government functionaries.

4.1.1 The classification of different types of NGO’s are as follows:

 

4.1.2 Different types of NGO according to world bank are as follows:

 

4.1.3 Different types of NGO according to Benefits are as follows:

4.1.4 Different types of NGO according to activities are as follows:

 

4.1.5 Healthcare Service NGO:

So, here we will be explaining the performance parameter of a Healthcare NGO, as we have been a part of the cancer awareness club in our college named Yoddhas.

 

4.1.5.1 Why we have chosen Healthcare Service NGO:

India has made fast strides within the fitness area because independence. However, various eye-commencing information from NFHS actually imply that get admission to healthcare nonetheless remains a undertaking. Healthcare sector has most of the underprivileged, which is currently the need of the hour which is a desperate need, which still remains unaddressed.

 

 

4.1.6 Different classification of Healthcare NGO are as follows:

 

 

4.2 Measurement of Performance:

To keep the research on track and make the donor want to test the degree and efficiency of different agencies. The full success of the NGO can be measured by beautifully fulfilling the visions it has for itself. The primary characteristics of performance assessment which needs to be made sure that institutions are audited on the basis of their performance and movements; and lastly, to help them gain knowledge of and enhance performance.

 

Measuring an NGO's success can be broken down into economic and non-economic indicators. Such a holistic view will offer a complete hyperlink between several areas within an NGO (from the useful unit of the era of capital to the unit of application control). Such a full system is driven on fantastically. (McFarlan and Epstein, 2011)

 

Financial statements of companies are a crucial thing to determine in the quantitative parameters. (Lewis, 2009) These reports provide stakeholders with a view to promoting large-scale preparation and monitoring of the organization's economic situation.

 

It is the obligation, with the aid of donor funds, to be able to justify and make the use of funds readable, as well as the use for restricted sources. Clearness, then, is a vital obligation condition. NGOs aim to support their donor interest and build a committed organization internally. Most NGOs decide proactively what extra details they should give the shareholders.

 

Lots of NGOs apply the reporting system of international accounting standards to boom the excellent documents. Such economic statements structured the use of uncommon accounting standards worldwide could help donors and other dependent parties better understand and assess the company's monetary situation.

 

Key Stakeholders for NGO:

·       Employees: Employees are the people who works for the NGO on salary basis they provide the service to them in return for a salary. Mainly they are concerned about the work culture in the organization, working hours, various other Employee benefits etc.

 

·       Ex. Usually the man or woman starts off as a Research person depending upon his/her professional qualifications And Climbing up the ladder he/she will be able to become institution chief and later team leader.

 

·       Members: In most cases the founders are also the NGO members they work to manage the finances. They are most concerned about whether or not the NGO is able to meet the targets it has been set up for and if there is an issue because of which they are unable to meet the goals that members are trying to remove.

·       Volunteers: These are the people who are not in the NGO's payroll and they work for their jobs without having any payment. These are the people who work in good faith, without any selfish motives.

 

·       Beneficiaries: These are the main Recipient of the benefits provided by the NGO. In our case these are the people suffering from various health diseases. These people are concerned about whether the NGO is making them self-reliant or making them dependent on the NGO.

 

·       Ex. In our case the NGOs not only provide free medicine to the diseased person but also teaches them about hygiene and cleanliness factor that will reduce the future occurrence of diseases.

 

·       Donors: These are the main source of the income for the NGO they provide financial support to the organization. These people want to support NGO but they do not find time to work for it directly so they provide financial support to the NGO the main concern to them is that there should be   proper usage of funds.

 

·       Close community: To increase network (Professional as well as social).

 

·       Other non-income: Organizations should be working with different charities rather than competing with them

 

4.3 Financial measures of performance:

4.3.1 Why Financial Statement analysis is required to understand which NGO is better:

If we refer to the 2013 Delhi High Court ruling: “99% of them are "fraud" and "merely money-making devices", we can conclude how important the financial transparency parameter becomes for analysing any NGO. The disclosures or Transparency inside the financial sheets are better and anybody from wherever within the world is capable of understand the monetary statement then the objective of transparency is completed. Financial assertion evaluation gives insights into: (Lewis, 2009)

 

4.3.1.1 Grants and donations received:

As there has been many criticisms regarding the sources of funding received by the NGO it is very important for the NGO to give proper information of their sources of funding.

 

More detailed information must be provided in the Grants and donations received shown under income side of the income and expenses account. This will provide the general invertors to have a transparent picture of the NGO. 

 

 

Most of the stakeholders of NGO are concerned about Grants and Donation which makes it a very important measure to study for understanding its Performance.

 

·       Employees: Employees are most concerned about their salary other facilities which they will get from Income of the NGO the main source of income for NGO is Grants and Donation hence for an employee it is very important indicator. Every year grants and donation must be greater than the employee expense requirement. If it is not then the NGO will not be able to pay their employees.

 

·       Beneficiaries: These parties which are dependent on the NGO for their fulfilment of needs. Their future will be in danger if the NGO doesn’t have sufficient funds to provide them the services. Hence for beneficiaries also Grants and donation is very important measure of study.

 

·       Donor: Every donor or investor before investing its money wants to know whether the NGO is transparent of not, they will look at the Grants and Donation measure to see were all this NGO is getting money and after analysing it they will invest their money.

 

·       Members: The founders of the organization are also called its member these members may provide financial help to the organization or they help in getting the finance from other parties and when they do this, they are concerned about the amount they have received. They can check this in Grants and Donation.

 

Why this Grants and donations parameter have been selected:

The main source of income is in the form of Donation and grants they received. Which is why it is very important to understand the source of this money.

 

For what purpose it is obtained?

Defining the purpose of the organization and the reason for which the funds were raised is significant. Like another organization, the target would be profits, but the aim for NGOs could be to support the community and expand its scope by elevating the poorer sections of society.

 

4.3.2 Analysis of Ratio:

Because not-for-profit agencies exist for functions aside from earning a return for equity buyers, measures generally used to evaluate business companies are not nicely suited for evaluating them. Furthermore, despite the fact that they're usually represented as a unmarried class of company, fantastic variety exists inside the mission and price range of no longer-for-earnings businesses. While many no longer-for-earnings rely closely on contributions, others derive most of their sales from the sale of services or club dues. Because of varying missions and investment sources, there are no region-extensive norms to manual managers and board participants.

 

It is regularly tough for not-for-profit managers and governing boards to plan for the enterprise’s monetary destiny due to a reliance on contributions and the dearth of predictability of demand for his or her services. The future can be daunting if a no longer-for-earnings does now not have a robust draw close on its financial role. A not-for-income can, however, help preserve its economic sustainability by means of following prudent financial management standards and tracking monetary ratios. Financial control standards help a no longer-for-earnings screen its finances, cash waft, resource usage, and revenue resources. Properly completed, ratio evaluation can help an agency perceive negative developments, examine itself to comparable companies and consciousness its interest on the troubles as a way to determine the employer’s endured achievement.

 

Survival Ratio: (General Reserves/ Income (Total)):

Survival ratio tells us how long company will continue to exist if all of its expenses are cleared up and no funds are obtained over the year. In simple phrases it would mean that the organization can last fifty-two weeks or 365 days with the maximum profits generated, if all daily activities and the earnings earned are spent then what number of weeks or days might the business enterprise maintain with its resources available.

 

This is a hypothetical ratio that's a trademark of the way long can the agency live on if all its budget is dried up and there aren't any donations obtained at some point of the 12 months. In simple phrases it might imply if with the full income generated the corporation can live to tell the tale for fifty-two weeks or three hundred and sixty-five days.

 

Employees:

An employee is concerned about getting his salary on time no matter what in that case he will look at the organization capacity to provide the salary even if the organization is not getting the Income. The survival ratio will help the Employee to know whether they will have constant income even when the NGO is not getting it.

 

Beneficiaries:

The whole point of uncertainty causes a fear in the minds of Beneficiary that whether they will be getting the services of the NGO in the future or not when their source of income is hit. To find the answers and to be prepared they can look at the Survival ratio.

 

Members:

The members want to prepare themselves from upcoming uncertainty for that they want to know how long they can survive without the outside income flow. Hence Survival ratio plays important role in it.

 

Corpus Fund to Check the Funds Ratio:

This is the ration that compare the corpus fund and the minimal NGO budget. It is on both sides should not be unduly lopsided any more.

 

Corpus Fund is a fund raiser to support the organization, i.e. the essential funds required for the organisation's life and survival.

 

Earmarked funds are funds that are kept aside for a specific purpose or for a certain project especially when used for a certain congressional setting.

So, this ratio is very important from an NGO perspective as it will show that how much more corpus fund is there as compared to the earmarked fund. It will show what part of corpus fund is earmarked fund.

 

Beneficiaries:

If beneficiaries know what is the total corpus and what are the earmarked funds for them which will help them expect the service which they will get from the funds. If they don’t know the earmarked funds then they always expect too much for them and in reality, they don’t get the service. So, it’s better they know the reality beforehand. The beneficiaries will have a look that what is the amount of earmarked funds that are given to them under a certain header. Beneficiaries will consider that this earmarked fund are making them independent.

 

Donor:

The donors who are donating to the organisation should actually know that what corpus is the NGO generating and in which areas the fund allocation is being taken place so that they are assured of their money being in the safe hands. The donor who is donating the funds is keen on evaluating the annual report he will see that 20 percent of the fund is allocated for tree plantation activities then he will ask that what is the number of activities that you would be doing under the tree plantation activities. What would be the amount of fund used in each activities this documentation is necessary for proper transparency to the donors.

 

Volunteer:

The volunteers are the people working in an organisation without any salary. The NGO for whom the volunteers are working are working in diverse areas like, child support, cancer support, aids support. So, a particular volunteer will be working in a particular domain for which they should know the earmarked fund for that domain, for example a volunteer working for child support should know that what is the earmarked fund for child support from the corpus that the particular volunteer can give his proper inputs.

Why this Corpus Fund Ratio parameter have been selected

For example, CRY is an NGO which is working for child labour, malnutrition, poverty etc. So, the corpus fund for them would be the fund raised overall for all the projects but the earmarked fund for all the projects would be different like , child labour would be having a certain part of the corpus, malnutrition would be having a certain part of the corpus, poverty would be having a certain part of the corpus. So, if the total corpus 100 lakhs and poverty project is of Rs 5 lakhs then the ratio would be 20 which shows that corpus have enough money to fund the project.

 

According to annual report of 2018 this ratio is 0.6968

 

Current Ratio:

Current ratio is the ratio for the donor or the investor who invests in the NGO. This ratio shows that is the NGO in debt or having more assets than its debt.  This ratio is very necessary as it will show the proper functioning of the organisation. Ideal ratio is 2:1, which shows that the liabilities of the NGOs are less and assets more to fulfil the liabilities. A donor if he knows that the NGO performance is up to the mark that the liabilities of the NGO is not that great, they have great amount of assets to back the liabilities then the investor or donor are tending to invest in the NGO.

 

According to the Annual report of cry the current ratio of cry is around 1.037 for the year 2017-18.  Which is a good current ratio and any investor can particularly invest in them as it is greater than 1.

 

Total Expenditure/Total Income = Utilization Ratio:

It is the ratio is really essential to show transparency to the stakeholders. Total income is the income which is basically a corpus fund, which is raised by the NGO for their investments in various projects that they are doing. Total income is generated with the help of donors and this is shown by NGOs in their annual report that how much fund is raised from which sources. That how much expenditure is spent in particular fields so that proper planning could be done by the NGO itself and also the donors would trust the NGO that where the funds are being used.

 

Employees:

This ratio is an indicator of the transparency in the organisation. If the employees who is working in an organisation know where does the income utilization occurs in an organisation then they will trust the organisation fully and if any question arises from outside that how is the income utilisation then they can properly defend the organisation. For example if the NGO has told the employees that 15 percent of the total expenditure is to be spent on child welfare by the NGO then the employees should devise a structure in which there should be a breakup of each and every percentage of money utilised in which activities to be done under child welfare.

 

Donors:

They are  main source of income to the NGO’s, if a donor knows where does the funds come from and on which activities they are used upon he will be willing to invest on other activities as well as he will be assured that the NGO follows ethical practices and there are no malpractices as far as the funds part is concerned. In the same way if an NGO clearly mentions that what percentage of amount is spent in each activity then donors will clearly know about the amount of funds used in each activity.

 

Beneficiaries:

This are the people on which the funds are utilised, if for example the funds are not utilised properly in certain areas then the beneficiaries can actually suggest that our needs are not getting fulfilled so they can actually suggest a framework so that needs of the beneficiaries are fulfilled. This Framework will be actually making the beneficiaries independent as the total expenditure that is being used is for the beneficiary itself. For example, a person who is taking help from cry will actually see the expenditure on activities and will see how much money is invested for them to make them independent.

 

Why this Income Utilization Ratio parameter have been selected

For Example: -

Total Income of CRY in 2018 is 3230 lakhs

Total Expenditure of CRY is 883 Lakhs

Therefore, total income for deployment is 2347 

 

The ratio is 0.273. The ratio is less, the better which shows that the company is managing their expenses very well.

 

4.3.3 Tax Benefits for Contributors and NGO in Income:

An NGO through getting itself registered u/s. 12A of the Act within 365 days from the date of its established order can avail exemption from the rate of tax united states11 of the Act.

 

A resident of India having a taxable profits and a non-resident having an Indian passport can claim for blessings within the event that they have got made a donation to an NGO this is registered with the Income Tax Department and holds tax exemption repute u/s. 80G, 80GGA, 35AC (iand ii) and (iandiii;) of the Act (Pattanaik and Chaudhury., 2011)

 

 

 

 

Registration u/s 80G:

The charitable groups additionally want to use for registration u.S.80G of the profits tax act. It gives deduction even as computing the overall profits within the palms of the donor. If the registration is granted below phase 12AA, it does no longer imply that segment 80G approval is to accept i.e. Registration beneath phase 12AA will now not provide automatic approval underneath section 80G. These each registration are completely separate. Further, segment 80G applies most effective to charitable trusts or organization. It does not follow to spiritual agree with or institutions.

 

No deduction will be allowed to the done beneath phase 80G in recognize of donation of any sum exceeding INR 2,000 unless such a few is paid by using any mode other than coins.

 

Rule 11AA of the Income Tax Rules’1962 provides procedure for searching for approval below section 80G. The software for approval of any organization shall be made on-line thru e-submitting account in shape no. 10G. There is no requirement of renewal of registration beneath phase 80G i.e. The perpetuity of approval has been supplied until the commissioner withdraws the exemption i.e. There is no need for periodical renewal underneath gift law.

 

Registration under FCRA:

NGO’s that get hold of overseas contribution or donation from overseas assets are required to obtain registration underneath Foreign Contribution Regulation Act, 2010. This is regulation is regulated by way of Ministry of Home Affairs (MHA). There is a situation that at the same time as applying for FCRA registration, NGO needs to be in lifestyles for a minimum of three years.

 

Application for FCRA registration is made in Form FC-three online through the FCRA portal. When issued the registration is valid for a period of five years. A software for renewal of FCRA registration may be made 6 months previous to the date of expiry, to hold the registration valid. The registered entities are required to make annual and quarterly compliances of FCRA.

 

4.4 Are the Non-Financial Performance Measurement Important?

ROI and RI both are recognised as important measures for evaluating the overall performance of a department. However, those and different financial measures are not considered fully ok to assess the performance of a duty centre.

 

Also, those techniques are quick-term measures and division managers/NGO’s may be tempted, consequently, to derive brief-term benefits (through the usage of these measures) on the cost of lengthy-time period gain of the corporation. Hence, it has been argued that extra non-monetary measures have to be used to evaluate a department’s performance except using ROI and RI strategies.

A nonfinancial overall performance degree expresses overall performance in a measure other than cash. For example, airlines use on-time overall performance, percent of bags misplaced, and variety of consumer lawsuits as nonfinancial performance measures. Such measures are regularly used to evaluate the time, first-rate or quantity of a business pastime. So, one of the mechanisms through which Non-Financial parameters can be clarified is through the use of control levers which might be the following.

 

4.5 Five Levers of Management Control System:

The Five Levers of Management Control System has the following:

·       Belief Systems

·       Boundary Systems

·       Internal Control Systems

·       Diagnostic Systems

·       Interactive Systems

 

Simon’s Lever’s of Control*

Safeguarding Information and Assets

*Adapted from Kaplan & Norton, Figure 13-1, p. 349. Original source, Simons, p.159

 

4.5.1. Belief Systems:

When we talk about any NGO, the first thing that we want to look at is the Beliefs of that particular NGO. Belief drives the whole organization with a sense of purpose and also describes the essence of that NGO and the areas it wants to target upon. Belief systems help foster a sense of stability and continuity, but when managers use them to introduce new goals or principles, they can also allow organizational change (Bruining et al., 2004). Within the framework of the proactive environmental approach, structures of interpretation are used to create commitment to accepted environmental plans via a code of conduct or code of ethics and to motivate regulation of environmental practices by the workers (Arjaliès and Mundy, 2013). Nonetheless, the inclusion of those code of ethics in decision-making strategies is intended to promote moral judgments based on the values found therein (Besio and Pronzini, 2014). Belief systems are also used to decorate the company's administrative understanding of ethics, insisting that moral principles be applied while making enterprise decisions (Lopez-Gamero et al., 2008). Nonetheless, the control role is critical in establishing the ethical norms and expectations of an organization (Chang, 2011). Relates to employer's core values. Definitions of this class include statements of challenge, and statements of imagination and foresight.

 

4.5.1.1 NGO’s Mission:

As non-earnings, non-sectarian, charitable, growth-oriented organisations, the NGOs ' task is to work towards achieving the national development goals within the scope of the government's defined and stated guidelines and objectives and in cooperation with the government and vast local groups.

 

4.5.1.2 NGO’s Values:

Strategic plans of NGOs are infused with values which guide all of their activities. Therefore, the price of NGOs is: -

a.     strengthening local groups

b.     solidarity with the needy, the disadvantaged and the vulnerable

c.     close cooperation with their partners

d.     social equity and justice

e.     efficiency and effectiveness of programs / offers

f.      the maintenance of the sacredness and dignity of all human existence

 

4.5.1.3 NGO’s Objectives:

a.     The general goal of NGOs, as expressed in Vision 2020, must be to enable each Gambian citizen to have a stake in society. In addition, NGOs need to extend their limited personal objectives to enhance the livelihoods of their local communities and their surroundings (depending on the assignment of NGOs and their values).

b.     Basic goals should be: -

·       Introduce, implement and exploit sustainable development sports that meet identified community and country wide priority needs build the capacity of the neighbouring communities they paint with you to recognize certain needs for change and to accomplish this through a participatory methodology.

·       In order to achieve their goals, NGOs should actively cooperate with the respective government ministries and ensure that the continuous wide-ranging, active participation of their stakeholders in all their significant sports promotes and guides neighbourhood and country-wide collaboration schemes between business employers and academic / school establishments.

·       Domestically create stable, usable resource bases that allow them to deliver efficient and powerful programs / offers.

 

4.5.2 Boundary systems:

It describes constraints in terms of worker behaviour, i.e., forbidden movements Top managers are using boundary mechanisms to define specific limits and policies that must be followed. The boundary control lever is defined with the aid of a specific collection of organizational meanings and parameters, usually expressed in weak or minimal terms (Simons, 1995). Managers use strategic limitations to talk to sports of staff that are deemed appropriate or off limits Ensure the workers do not waste the sources of the company (Arjaliès and Mundy, 2013). In effective environmental strategies, prison or voluntary requirements form strategic restrictions that can be regulatory (i.e., forced, such as community laws limiting air, water or soil pollution); normative (prescribed by accreditation or certification, like ISO 14001) or the Global Monitoring Initiative (GRI); or the cultural cognitive (mimetic commonplace values, practices and common sense of movement including adherence to the UN Global Compact) (Scott, 2001).

 

4.5.2.1 Governance Performance standards:

The NGOs ' jail visibility is as, but somewhat unclear. There are as such no tools and policy papers that express their duties and responsibilities comprehensively. However, for an agency in The Gambia to be eligible for NGO repute it must meet the twelve standards indexed inside the “Code of Conduct” for NGOs (NGOAA, no date).

 

In addition, NGOs must abide by the "Protocol of Understanding" made between themselves and the Gambia government. Among other items, the "Articles" within the "Protocol of Agreement" allow each NGO to deposit with the NGO Affairs Agency:

(a) a ' detailed plan and price range of its annual paintings programme.

(b) a comprehensive annual file "highlighting progress on year-round sports.

' The criminal system (to be permitted) is predicted to: • create the manner in which the business of the NGOs is to be carried out:

• indicate the powers of the Board of Directors to decide the business of the company (including the offering of programs / offers and the collaboration with the local industry and/or community communities in large numbers of cooperative organizations).

•suggest the gender composition of the Board, and the illustration of civil society on it.

 

4.5.3 Internal control systems:

Internal control as a technique designed and effected by way of the top management to make certain achievement of the Organization’s purpose by way of complying with the preset governance.

Key goal of ICS is: -

·       Effectiveness and operational performance

·       Economic reporting reliability

·       Compliance with relevant legal guidelines and regulations

 

A collaborative effort through a group of companies (COSO Funding Organizations Committee) developed a structure and steering to minimize business chance, improve internal management and prevention of fraud in a rather decentralized version of business enterprise.

Components of COSO built Internal Control Machine are:

·       Control Environment: Business guidelines for proper governance and high productiveness.

·       Risk Assessment: Identify capacity threat place

·       Control Activities: Define matrix to measure the threat.

·       MIS: Generate reviews to capture deviation and examine

·     Monitoring: Periodically check the chance location.

 

4.5.4 Diagnostic systems in MCS:

Theoretically, when a system is in control or out of manipulation, provide data. Diagnostic control structures (DCS) are structured feedback mechanisms which are used to track organizational effects and correct deviations from pre-set performance standards. Progress on strategic objectives is measured against performance measures that include a combination of short-term and long-term measures, Data on overall performance against key economic and non-financial targets, and competitive comparative data (Lisi, 2015; Nilsson, 2002). In the environmental method, managers may use DCS to measure the agency's overall environmental performance against each internal or externally derived goal through reporting mechanisms like the greenhouse gas emissions dashboard (Arjaliès and Mundy, 2013; Journeault 2016).

 

4.5.5 Interactive systems:

Focus on speaking and implementing the agency's method. The cause of an interactive device is to sell debate related to the assumptions underlying the business enterprise's strategy and, in the end, to sell learning and boom.

 

Interactive manage systems (ICS) are formal systems utilized by pinnacle managers to involve themselves frequently and personally in subordinates’ decision making. The reason of creating a control system interactive is to awareness attention and force speak and mastering all through the organisation (Bisbe and Otley, 2004).

Managers use ICS to facilitate discussion of the underlying movement strategies that guide the activities of an organization, and to gain access to community information about strategic challenges that can be used to improve strategic plans (Bedford, 2015; Shapiro, 2016). The implementation of the four management levers (Simons, 1995) offers an advantageous structure that could enable the creation of environmental abilities that provide aggressive advantages. Nonetheless, the common uses of the four control levers allow sustainability principles to be integrated within the organizational system (Gond et al., 2012) and have a significant impact on the moral thinking processes of employees (Goebel and WeiBenberger, 2017). On the one hand, Simons shows bidirectional relationships between functional and notional systems, and on the alternative, boundary and diagnostic systems. Nonetheless, interactive / belief systems allow organizational learning, build fine and motivating strengths, and provide direction and inspiration to staff (Journeault et al., 2016), while boundary / diagnostic frameworks limit and ensure compliance with inner or external targets (Bedford, 2015; Simons, 2000). Diagnostic and notional systems promote awareness of organization while interactive systems strengthen the long-term link between creativity and overall performance (Bisbe and Malagueno, 2009; Shapiro, 2016).

 

5.    CONCLUSION:

Measuring performance is a significant tool for enhancing the work of NGOs because these organisations are faced with complicated difficult circumstances in the delivery of their programs and services. This helps Organizations optimize their social effects and achieve end goals. The paper was aimed at updating concepts and frameworks of overall performance size and control in NGO's. Especially the specific performance assessment systems and the important overall performance indicators cited in the literature were emphasised.

 

6.    LIMITATIONS:

Although the literature shows various concepts and performance aspect and management methods in NGOs, there is still no common consensus about what are the primary components and measures that need to be implemented to assess overall performance of NGOs. This is been seen as being due to the misunderstanding of performance terms in NGOs. The literature reveals too that organizational and inner signs had been partially addressed in the overall performance dimension and management frameworks. The majority of the frameworks highlighted mainly the packages / mission overall performance and overlooked by hook or by crook the organizational strategies and features. Consequently, there may be a rigorous need to focus on a structure covering all areas of NGOs. Such a system can be best applied by identifying targets, defining overall performance indicators, gathering data, analysing the signs and eventually reviewing them, and if necessary, taking corrective steps. As shown above depicts a detailed performance size and management structure that involves clean measures to evaluate overall performance in NGOs, defining main performance metrics to be used to determine overall performance in NGOs.

 

7.    REFERENCE:

1.     Arjaliès, D. L., and Mundy, J. (2013). The use of management control systems to manage CSR strategy: A levers of control perspective. Management Accounting Research, 24(4), 284–300.

2.     Bedford, D. S. (2015). Management control systems across different modes of innovation: Implications for firm performance. Management Accounting Research, 28, 12–30.

3.     Besio, C., and Pronzini, A. (2014). Morality, ethics, and values outside and inside organizations: An exemple of the discourse on climate change. Journal of Business Ethics, 119(3), 287–300.

4.     Bisbe, J., and Otley, D. (2004). The effects of interactive use of management control systems on product innovation. Accounting, Organizations and Society, 29, 709–737.

5.     Bisbe, J., and Malagueno, R. (2009). The choice of interactive control systems under different innovation management tools. European Accounting Review, 18(2), 371–405.

6.     Bruining, H., Bonnet, M., and Wright, M. (2004). Management control systems and strategy change in buyouts. Management Accounting Research, 15(2), 155–177

7.     Chang, C.-H. (2011). The influence of corporate environmental ethics on competitive advantage: The mediation role of green innovation. Journal of Business Ethics, 104(3), 361–370.

8.     Epstein, Marc J., and F. Warren McFarlan. "Measuring the efficiency and effectiveness of a nonprofit's performance." Strategic Finance, vol. 93, no. 4, Oct. 2011, p. 27+. Gale Academic OneFile, Accessed 6 Mar. 2020.

9.     Goebel, S., and Wei Benberger, B. E. (2017). The relationship between informal controls, ethical work climates, and organizational performance. Journal of Business Ethics, 141(3), 505–528.

10.  Gond, J.-P., Grubnic, S., Herzig, C., and Moon, J. (2012). Configuring management control systems: theorizing the integration of strategy and sustainability. Management Accounting Research, 23(3), 205–223.

11.  Journeault, M. (2016). The influence of the eco-control package on environmental and economic performance: A natural resource based approach. Journal of Management Accounting Research,28(2), 149–178.

12.  Lisi, I. E. (2015). Translating environmental motivations into performance: The role of environmental performance measurement systems. Management Accounting Research, 29(4), 27–44.

13.  Lopez-Gamero, M. D., Claver-Cortes, E., and Molina-Azonrin, J. F.(2008). Complementary resources and capabilities for an ethical and environmental management: A qual/quan study. Journal of Business Ethics, 82(3), 701–732.

14.  Nilsson, F. (2002). Recent advances in performance management: The nordic case. European Management Journal, 20(3), 235–246.

15.  Pattanaik S.K. and Chaudhury S. K. (2011), Taxation of Non-Profit Organizations in India in Changing Scenario: A Reform Experience, Asian Journal of Management, Vol. 2(3), pp. 141-146

16.  Scott, W. R. (2001). Institutions and organizations. Thousand Oaks: Sage Publication.

17.  Shapiro, B. (2016). Using traditional narratives and other narrative devices to enact humanizing business practices. Journal of Business Ethics, 139(1), 1–19.

18.  Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic renewal. Boston: Harvard Business School Press.

19.  V. Terry Lewis (2009): Practical Financial Management for NGOs-Mango (Management Accounting for Nongovernmental Organisations)

 

Accepted on 18.04.2020           ©AandV Publications All right reserved