The High Cost of Doing Business - administrative and management overload in smaller NGOs
Non-government organisations (NGOs) that do the heavy lifting during times of crisis need adequate resourcing to cover the growing administrative load they carry – that’s the reality.
Commissioned by NCOSS and conducted by Ask Insight, the High Cost of Doing Business report puts forward practical, common-sense steps – identified in collaboration with our participant organisations – that funding bodies can take to lessen the administrative and management overload and support the sustainable provision of essential services.
According to the report, the major contributors to the administrative burden include:
- Reliance on multiple funding sources (up to 27 separate grants for one organisation) and the different application, acquittal and reporting imposts which accompany them.
- “Discontinuity” costs arising from the short-term nature of funding – including staff recruitment, retention and termination challenges; managing organisational growth and shrinkage; and the impacts on the ability to plan.
- The Overhead Myth – inadequate provision for administrative and “back office” infrastructure in grant specifications, due to the mistaken belief that lower indirect costs are an indicator of an efficiently run organisation.
- Increased, additional compliance requirements – ranging from organisation -wide processes such as accreditation, through to more targeted initiatives such as improvements to data security.
The research recommends some practical steps including:
- Simplify and introduce longer-term funding contracts.
- Streamline financial reporting by using ACNC ‘charity passport’ data.
- Standardise definitions, reporting templates and contract management across government programs.
- Trial combined back-office/administrative hubs for smaller NGOs in key locations.
- Use a centralised NGO prequalification process to demonstrate that threshold requirements have been met.
- Resource NGOs for their frontline role in emergency management, including planning and preparation.