Dr. Tomasz Dyczkowski Wrocław University of Economics, Poland

Transcription

1 Dr. Tomasz Dyczkowski Wrocław University of Economics, Poland Presented at: European Network for Research in Organisational and Accounting Change 2013 University of Jyväskylä, Finland, June 7th 2013 This study is supported with public funds for science in years within the research project Economics of Contemporary Philanthropy (Grant No. 0248/B/H03/2010/39)

2 » Management Information Systems for NGOs The outline 1. The rationale performance orientation 2. NGOs in Poland 3. Information database for NGOs 4. Performance metrics 5. Management information in practise of Polish NGOs (international perspective) 6. Conclusion 2

3 » The rationale (1/3) NGOs are perceived in a WRONG CONTEXT: Charities (from Latin caritas = mercy) are associated with people in need being rescued by organizations which need public support NGOs belong to the nonprofit making category, and thus do not provide their stakeholders with financial benefits» Public benefit organisations contribute to social wellbeing, and the donors are convinced that their social investment pays off in the future» NGOs do generate social value added which can be detected not only in social services provided to people in need, but also in building human capital of a civil society 3

4 » The rationale (2/3) Performance Oriented Management in NGOs Non-profit institutions tend not to give priority to performance and results. Yet performance and results are far more important and far more difficult to measure and control in the non-profit institutions than in businesses P.F. Drucker» What is then a proper measure of success in organisations, which by definition do not generate profit or maximise market and shareholder values? 4

5 » The rationale (3/3) Exchange transactions in commercial and non-commercial organisations financial, material and human resources BUSINESS products and services Owners (shareholders) Managers Employees Customers payment (and satisfaction) payment (and satisfacrion) Founders Donors Volunteers Supporters financial, material and human resources satisfaction NGO Members Managers Employees services and support satisfaction Beneficiaries 5

6 » Non-governmental organisations in Poland (1/2) The historical context» since medieval times: Roman Catholic Church institutions» Post-war Poland: social policy is reserved to public institutions which not only fulfil social needs, but virtually define them» 1980: independent association of trade unions: NSZZ Solidarność is founded» 1980s: reborn social organisations - together with international NGOs - fight with deepening impoverishment» after 1989: NGOs advocate for democratization in public life and for introducing economic and social reforms» 2003: consolidation of the Third Sector (Act on Public Benefit Organizations and Voluntarism) 6

7 » Non-governmental organisations in Poland (2/2) Public benefit status support of the State Measure Fundraising activities Scope possibility to obtain 1% of personal income tax (on general and project-related purposes) Tax exemptions - corporate income tax, - tax on real estate and land, - tax on civil-legal acts - administration and court fees Cost cutting - voluntary service - leasing state-owned properties at special terms - broadcasting announcements and promotion materials in public media out of charge Donors support reduced tax basis by value of donations to PBOs or organisations fulfilling similar activities: - up to 6% of income in case of individuals - up to 10% in case of legal persons 7

8 Finance Social environment» Information database for NGOs (1/3) Area Information needs Reflection in information and reporting systems - demand for social services not covered: some analyses are - scope of meeting community needs made by umbrella organisations - requirements of stakeholders of the third sector, the - available resources: financial and human Department of Public Benefit at - sources for financing statutory activities the Ministry of Labour and - business partners and community Social Policy, or by researchers supporters - available funds, organisation s assets - revenues on statutory activities - donations, income on NGO s properties - cost of statutory activities - administration cost - liabilities - income on fundraising activities and their cost - cost of social programs and projects covered: financial statements of non-commercial organisations; annual accounts of foundations and public benefit organisations (PBOs) partially covered: voluntary extension to foundations and PBOs reporting 8

9 Human resources» Information database for NGOs (2/3) Area Information needs Reflection in information and reporting systems - organisation members covered: annual accounts of - paid staff (incl. office personnel and foundations and PBOs; reports managers) submitted to Central Statistical - personal cost (incl. administration) Office - number of volunteers - statutory tasks performed by organisation members and volunteers - staff qualifications and those of managers - staff training including that of managers and volunteers - staff rotation, sustainability of volunteer support - satisfaction of staff and volunteers - market equivalent of community work partially covered: might be referred to in reporting on tasks contracted with public institutions not covered: some analyses are made by umbrella organisations of the NGO sector 9

10 Donors and supporters Beneficiaries» Information database for NGOs (3/3) Area Information needs Reflection in information and reporting systems - number of beneficiaries (incl. those partially covered: voluntary who pay for services) extension to foundations and PBOs - number of new beneficiaries reporting; might be referred to in - satisfaction of beneficiaries reporting on tasks contracted with public institutions - value of donations covered: financial statements of non-commercial organisations; annual accounts of foundations and PBOs - number of donors (incl. long-term supporters) - social profile of donors - motivation of donors partially covered: voluntary extension to foundations and PBOs reporting not covered: some analyses are made by umbrella organisations of the third sector 10

11 » Performance metrics (1/2) Application problems Problem I» NGOs tend to focus on quantitative, in particular financial, figures which are easy to collect and interpret» The significant part of input and output is non-monetary, though, and is not registered by accounting systems Problem II» The reports on NGO s activity, which include quantitative and qualitative information are integrated in a very subjective way» The integration of monetary, quantitative and qualitative information in a single report require adequate valuation non-monetary input and output 11

12 resources distribution human resources manageemnt Social mission statutory goals strategic planning CENTRAL DATABASE project monitoring and coordination Social programmes ID statutory goals projects time scope promotion, fundraising, and stakeholder relations document flow and internal communication Projects ID objectives time scope tasks funds expenses beneficiaries areas Human resources personal data category competencies Tasks ID type responsible person time scope documents Documents ID type date contents recipients Expenses account amount date responsible person Donors personal data status amount objectives Funds account type amount donor Beneficiaries personal data status problem 12

13 » Management information in practice of Polish NGOs Does the Organisation draw up an annual budget? (1/7) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Yes, this is an obligation. Yes, we believe it is necessary. No, but we try to plan our expenses. No, as we cannot predict our income. No, we focus on our statutory activities. Poland 31,5% 40,7% 25,9% 20,4% 3,7% Germany 37,0% 52,2% 23,9% 6,5% 4,3% 13

14 » Management information in practice of Polish NGOs How often does the Organisation prepare reports for internal purposes? (2/7) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% once a year (as obligatory reports) several times a year each month as a need arises We prepare no reports. Poland 61,1% 24,1% 7,4% 27,8% 3,7% Germany 52,2% 41,3% 17,4% 26,1% 14

15 » Management information in practice of Polish NGOs What control tools / methods are used by the Organisation? (3/7) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% plan vs. performance reports comparisons to other organisations ratio analysis evaluation forms None; we focus on our basic activities. Poland 57,4% 3,7% 38,9% 18,5% 7,4% Germany 78,3% 13,0% 28,3% 8,7% 10,9% 15

16 » Management information in practice of Polish NGOs How are the methods of internal control developed in the Organisation? (4/7) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% We develop them on our own. We base on experience of other NGOs. We co-operate with external consultants. We refer to published best practices. We have no internal control. Poland 51,9% 18,5% 18,5% 18,5% 11,1% Germany 52,2% 23,9% 26,1% 15,2% 6,5% 16

17 » Management information in practice of Polish NGOs Does the Organisation use an IT system (tools)? (5/7) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Yes, a system which matches our needs. Yes, a system which covers all our activities. Yes, a finance and accounting system. No, but we use e.g. spread sheets. No, it is beyond our capacity. Poland 11,1% 9,3% 35,2% 29,6% 22,2% Germany 19,6% 17,4% 50,0% 15,2% 6,5% 17

18 » Management information in practice of Polish NGOs operational capacity (6/7) Performance-oriented management the prerequisites: Human resources Size of the annual budget Information technologies used Perception of influence of control on statutory activities Possibilities for non-profit organisations Poland Germany Criteria met share total share total Full 4 10,3% 10,3% 11,3% 11,3% Significant 3 8,6% 19,0% 22,6% 34,0% Some 2 19,0% 37,9% 35,8% 69,8% Small 1 46,6% 84,5% 22,6% 92,5% None 0 15,5% 100,0% 7,5% 100,0% 18

19 » Management information in practice of Polish NGOs Implementation scope (7/7) Performance-oriented management activities carried out currently: budgeting preparation of internal reports more frequent than once a year realisation of control activities by specialised unit or person targeting of reports at organisation s stakeholders Implementation in non-profit organisations Criteria met Poland Germany share total share total Full 4 1,7% 1,7% 1,9% 1,9% Significant 3 13,8% 15,5% 32,1% 34,0% Some 2 37,9% 53,4% 30,2% 64,2% Small 1 34,5% 87,9% 28,3% 92,5% None 0 12,1% 100,0% 7,5% 100,0% 19

20 » Conclusion (1/2) Ultimate goal MISSION to improve social situation of the people in need Effects EFFICIENCY rational use of human, material and time resources TRANSPARENCY complete information about the use of resources Measure Rationale PERFORMANCE-ORIENTED MANAGEMENT RATIONALITY limited resources unlimited needs IMPORTANCE direct influence on social well-being EXPECTATIONS demonstrated effects and high quality 20

21 » Conclusion (2/2) Non-profit oriented organisations, in particular, require support of sound planning, control and co-ordination of actions not to limit, but to use the potential of civil initiatives to the full 21