Candidate number: 90528

Sustaining Rural Livelihoods in Developing Countries – Essay Two

Very Small NGOs: Comparative Advantage, Effectiveness and Scaling Up

In 2007 I spent a month volunteering in Nicaragua with a very small Northern

Non-Governmental Organisation (NNGO); the Santa Rosa Fund (SRF). I was
there to help teach computer skills to teachers in their main ‘partner’
organisation, the Colegio Santa Rosa school, in the capital, Managua. I was also
able to travel around the country a little to see other areas where the SRF had
made contacts with Nicaraguan organisations. The SRF supports these
organisations by providing funds channelled from its ‘supporter’ donors in
England. It has a network of 250 or so of these donor individuals and households
built up through word of mouth, and providing a total of £10,000 per year. The
fund has no paid staff, but provides this money principally to the Santa Rosa
school which the fund has been linked to since its creation in 1988. Since 1997 it
has also funded the Beriz nuns who work with the poor further north in the
Cosigüina peninsula. The money they provide to each of these ‘partners’ comes
in the form of a lump sum that they supply to use at their discretion. There is also
the possibility of extra funding for specific projects, that the Nicaraguan partners
can raise to the SRF, to be approved by their small board of trustees, funds
allowing. One such project was the building and supplying of a computer room at
the Santa Rosa school in 2007, and I was lucky enough to be involved in the
training of the teachers to use the computers. In essence the SRF acts to provide
an additional source of funding to partners that it knows well in Nicaragua,
linking them to relatively well off, concerned individuals in England with the aim
of aiding work that is relevant to education and poverty reduction. The benefits of
its work can be seen materially by any one who visits these partners, but when
volunteering for them I couldn’t help but wonder whether such work, at such
small scales, could truly be said to contribute significantly to the goals of
international development and poverty alleviation.

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 Candidate number: 90528

Introduction

This paper is an attempt to explore the impacts of such very small NNGOs as the
Santa Rosa Fund, and their role in the wider picture of development. There has been a
lot of discussion as to the role of NNGOs in the development literature, but the
majority focuses on somewhat larger organisations, those as small as the SRF
commonly not registering in overviews (Hudson, for example, describing NNGOs
with an annual budget of £100,000 as ‘tiny’1). As such, this paper groups SRF-sized
NNGOs with the bottom end of the common scales used. It is important to make clear
that this paper is not about the SRF itself, but is a general discussion on the nature of
very small NNGOs, based on extrapolating from the literature. It is also important to
clarify that the text frequently mentions small or very small NNGOs, where drawing
conclusions on these specifically, but also commonly mentions NNGOs in general,
where discussing the literature on NNGOs which rarely makes this distinction. These
terms are not interchangeable in the text. Due to their low profile it is very hard to
ascertain how many of such NNGOs exist, however a very crude estimate is possible
using the British charity commission’s website Guidestar’s search engine. This gives a
total figure of around 2,652 British charities working in the developing world with
annual budgets up to £10,000, and 4,808 with budgets up to £100,000, out of a total of
around 5,906, so these NNGOs actually form the majority of British overseas
NNGOs2.

Small NNGOs generally act as providers of funds for work in the South, as does the
SRF, or implement their own projects. Their small size means that individually their
impact will often be smaller than that of other forms of development work. Whether
their work can be said to be particularly valuable comes down to whether they have
any specific ‘comparative advantage’ that other types of work do not. NGOs are often
described as having such an advantage; they are seen as being better able to develop
stronger links with the communities that they work with than other, larger and more
cumbersome forms of development organisations, making them highly sensitive to
local needs and better able to produce effective work. Such closeness allows them to
directly empower their beneficiaries, and be particularly successful at finding and

1
Hudson, 2002.
2
Guidestar UK, 2008a; 2008b; 2008c; 2008d; 2008e.

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 Candidate number: 90528

targeting more effectively the poorest people in the area. In addition, they are often
seen as able to draw on highly motivated voluntary staff, a greater degree of
innovation, and be more cost-effective and sustainable through the use of volunteers
and local resources3.

However, since the 90s these ‘comparative advantages’ have been increasingly
scrutinised. This paper argues that NNGOs’ ‘comparative advantage’ is frequently an
ideal rather than the reality, but that there is a great deal of heterogeneity between
different methods and outcomes from NNGOs, such that some still maintain an
advantage. The smallest NNGOs are better placed than most to generate real positive
outcomes, owing to their relative simplicity and flexibility.

This paper will first discuss criticisms of NGOs’ ability to develop the truly close and
equal ‘partnership’ relationships that are the basis of their supposed advantage, and
then look at the practical evidence which suggests that NGOs in fact tend not to
produce the positive results these advantages should bring about. However, it will
draw attention to the fact that generalisations cannot necessarily be made between
NGO practices and situations, and give as an example the very small NGO ‘Apnalaya’
in India which appears to have been relatively successful in achieving quality
relationships with its beneficiaries and results, through its small size. In order to
explore further whether small size is necessary to maintain such advantages, this
paper will then discuss the options for scaling up, demonstrating that simply
expanding operations is likely to disrupt the quality of development ‘partnerships’.
However, such a discussion does present the possibility of NNGOs scaling up their
impact through shifting roles to advocacy or the support of Southern social
movements, or through integrating such activity with their current operations.

Partnership in theory and practice

The fundamental part of NNGOs’ apparent comparative advantage is in the strength

of their relationships with the Southern organisations they work with and their ability
to cooperate with them with mutual respect and sensitivity to their wishes. Such

3
Bradshaw, Linneker and Zúniga, 2001; Clarke, 2002; Hudson, 2008; Potter et al, 2004, pp. 311-313;
Streeten, 1997.

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 Candidate number: 90528

relationships are increasingly described as ‘partnerships’, aiming at equality and

reciprocity between the two ‘partners’. The goals and action of a partnership are
supposed to be developed in tandem between the NNGO and their Southern partners,
rather than being imposed by the NNGO, leading to significant ‘ownership’ by the
Southern partner. Partnerships involve the building of long term, transparent
relationships, so that both partners can understand the goals and restrictions of each
other, but also initially require a degree of mutual understanding and agreement on
such goals, as well as ideologies and methods. Ultimately such a relationship is
valuable in itself for empowering the Southern partners and ensuring that the action of
the partnership is based on the local needs and realities as perceived by the Southern
partners4. Partnerships are seen as generating particularly legitimate forms of
development, that are truly needed and valuable for their beneficiaries.

The key to mutuality is that NNGOs are accountable to their Southern partners, as
well as the Southern partners being accountable to them5. In practice, it is often the
case that NNGOs lack downwards accountability to their Southern partners, and
decision making responsibilities and control are often not shared equally6. NNGOs are
legally accountable to their trustees, and very few have Southern representatives as
trustees7. As such a distance is often maintained between the Northern and Southern
partners, and it is generally the funding and expertise of the Northern NGO that ends
up directing the work that they do. Close, complicated accountability arrangements
and full participation of the Southern partner in decisions can conflict with
institutional and management imperatives, leading to ‘participation paralysis’ where
management decisions are slowed or halted waiting for consensus between all of the
required partners8. NNGOs are often created with specific goals or values in mind,
and as such are unable to be entirely flexible to their Southern partners9. Agendas for
sustainable environmental practices and gender are particularly frequently cited as
leading to conflict with the values and lifestyles present in beneficiary communities10.
Equally NNGOs may often choose to ignore their partners’ preferences in order to

4
Edwards and Hulme, 1996b; Fowler, 1998; Fowler, 2002; Lewis, 1998; Streeten, 1997.
5
Fowler, 2002.
6
Ebrahim, 2003; Lewis, 1998.
7
Edwards and Hulme, 1996a; Manji, 2000.
8
Edwards and Fowler, 2002; Harrison, 2002.
9
Clarke, 2002.
10
El-Gawhary, 2000; McDaniel, 2002.

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 Candidate number: 90528

avoid their operations mirroring political divides in the Southern communities they
work with. When such factors are taken into account, NNGOs may justify
compromises over the participation of their ‘partners’11.

NNGOs may receive funding from various sources that may alter significantly the
relationship they have with their Southern partners. The more involved the donors
who provide funds are in the development process the greater demands they are likely
to require for accountability to them, and likely the more restricted the NNGO will be
in taking into account its Southern partners’ wishes12. Upwards accountability often
imposes imperatives on maintaining monitoring and evaluative procedures that may
influence the direction of a partnerships’ work. It is easier to measure quantitative
criteria such as the number of people reached with a service, or money spent, than to
measure the qualitative development of a strong relationship, or the empowerment of
NGO beneficiaries, that partnership involves. As such these longer term processes are
often overlooked by donors, and targets are imposed for short term impacts that
negate more equal, and potentially more beneficial, relationships13.

Ultimately, problems arise in partnership relationships because of the imbalance in

power inherent in NNGOs’ positions as providers of funds, and Southern partners’
dependency on these funds. NNGOs and donors are rarely accountable to partners
beneath them on the aid chain because there is little pressure that partners receiving
aid from them can exert upwards14. As such there is often an unavoidable difference
between the ideal of equal ‘partnership’ and the operational reality of funding
inequality, and many criticise the use of the term at all as inappropriate and obscuring
these flaws15. Southern partners often see such relationships in much more pragmatic
terms as simply funding relationships16, and may adopt the rhetoric of partnership
simply in order to maintain this funding, just as they may have to adopt Northern
agendas and performance criteria. This means that even where NNGOs believe that
they have established an equal ‘partnership’ with an organisation in the South, and

11
Desai and Howes, 1996; Streeten, 1997.
12
Fowler, 2002.
13
Desai and Howes, 1996; Edwards and Hulme, 1996a; Mitlin, Hickey and Bebbington, 2007; Ritchey-
Vance, 2002; Roche, 1992.
14
Edwards, 2002a; McDaniel, 2002.
15
Clarke, 2002; Harrison, 2002; Manji, 2000.
16
Lewis, 1998; Mageli, 2004; McDaniel, 2002.

5
 Candidate number: 90528

especially when such partnerships are new, if their partner does not have a sense of
responsibility for their goals, it is likely that this ‘partnership’ is imbalanced17. Equally
if their partners are dependent on resources from the NNGO, they may hide problems
or not raise issues they feel might jeopardise their relationship18.

Performance and comparative advantage

Having explored the difficulties faced by NNGOs in achieving the sorts of

relationships they are supposed to be good at, we must also ask whether, regardless of
such problems, they have been able to produce results matching expectations of their
‘comparative advantage’. The use of local resources and volunteers is supposed to
make NNGOs more cost effective. However, in reality NNGO projects may be cheap
because of small scales, but actually have higher costs per beneficiary than, for
example, government projects. Much of this may be due to high start-up costs in
developing close relationships, as well as lack of returns-to-scale. NNGOs are
supposed to be good at targeting the poor which tends to involve high costs, so this
may conflict with their cost-effectiveness advantage19. However there are also
multiple examples questioning NNGOs’ impact and focus on poverty20. In one study
of 16 NGOs in Bangladesh only one quarter of the projects studied benefited the
poorest, while another study of hundreds of Bangladeshi NGOs found that they
tended to focus on more readily accessible and urban areas, to the exclusion of the
rural poor21.

In general, the deeper the involvement of an NNGO in an area the easier it can
understand the dynamics of the ‘communities’ it is working with, and if it manages to
involve the poorest in shaping its strategy it stands a better chance of targeting them22.
However, forming partnerships always presents the risk that they will be with an
unrepresentative or relatively well-off group, and too close a partnership can risk an
NNGO’s operations being ‘captured’ by those that the Southern partner represents23.

17
Fowler, 2002; Igoe, 2003.
18
Clarke, 2002.
19
Edwards and Hulme, 1996a; Robinson, 1992.
20
Dawson, 1992; Streeten, 1997.
21
Fruttero and Gauri, 2002; Robinson, 1992.
22
Desai and Howes, 1996; Gazi et al, 2005.
23
Dawson, 1992; Mercer, 1999.

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 Candidate number: 90528

There is also the risk that Southern partnership organisations may be fraudulently
created only to serve the interests of their own members, without any true
‘development’ aims, which is particularly likely in areas with a high influx of NNGO
money24. Another area that NNGOs are supposed to be particularly good at is
sustainable development, through empowering their beneficiaries to a point that they
can continue NNGO projects after they leave. However, as has been shown, even if
NNGOs do benefit and empower their targets somewhat their relationships frequently
come down to providing funds for projects. In fact, assessments of NNGO projects
commonly say that there is no chance of them continuing once these funds are
removed25.

It appears that the idea of a general NGO comparative advantage is often flawed.
However, it is important to realise the significance of context in determining
outcomes from NNGO projects. Outside factors, in particular the level of stability in a
community or region, the overall surrounding economic situation and stability, and the
degree to which the government cooperates or interferes in NGO work can be critical
to success26. Of course, it is an NGO’s job to deal with these factors, but some projects
will get an automatic boost from favourable conditions regardless of how they work.
Internally as well, there is great variation in the skill and commitment of NGOs, and
the degree to which they choose successful methods, such that in reality it is difficult
to generalise between them27. While the partnership model clearly has some flaws,
some NNGOs have been able to negotiate power imbalances with Southern partners
better than others. Again this comes down to the time and degree of openness put into
building these relationships. As the smallest NGOs require smaller quantities of
money to work, they are likely to draw larger proportions of their funding from
private individual donors who impose fewer requirements on accountability than large
funding bodies and governments. Also they have less inflexible institutional
complexity to manage. As such they should be the best able to generate flexible
partnerships28. Desai and Howes give a rare case study of a very small NGO, that of
‘Apnalaya’ working in slums in Bombay with an annual budget of US$45,000. They
24
Clarke, 2002; Kiondo, Hayata and Clayton, 1999.
25
Clarke, 2002; Fernando and Heston, 1997; Robinson, 1992; Roche, 1992; Streeten, 1997.
26
Bradshaw, Linneker and Zúniga, 2001; Dawson, 1992; Edwards and Hulme, 1996a; Edwards and
Hulme, 2000; Roche, 1992.
27
Robinson, 1992.
28
Edwards and Hulme, 1992b; 2000.

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 Candidate number: 90528

describe Apnalaya’s success at maintaining downward accountability through

meetings with the parents of children in the schools it runs and from staff members
being community members. With Apnalaya’s long term involvement in their area, the
organisation has gradually become aware of more marginalised groups and been able
to extend its reach29.

However, Desai and Howes also state that Apnalaya’s impact in their area was likely
small in comparison to the problems abounding in Bombay’s slums30. Any serious
NGO would naturally want to increase its impacts as much as possible31. In order to
fully appreciate whether small size is really necessary for an NGO’s comparative
advantage, this paper will now look briefly at the options for ‘scaling up’, to see how
they are seen to affect this advantage.

Scaling up

Scaling up in its simplest form involves the ‘additive’ expansion of current operations
by replicating them and their organisational structure in new places or for new
recipients32. Many writers have noted that such expansion risks eroding NGOs’
flexibility, by making more complex their institutional structure and ultimately
applying pressure for sustained increases in resources, that demand additional donors
and accountabilities33. Igoe gives an account of such pressures in Tanzania leading to
overworked executive staff in previously successful NGOs imposing ever tighter top
down control and the break-down of development goals under the strain of getting
more funds, ultimately resulting in the loss of donor confidence and funding34.

However, many writers have encouraged the use of ‘multiplicative’ or ‘diffusive’

methods of scaling up, that seek to widen NGO impacts without necessarily extending
their organisation a great deal, or even requiring many more resources. These
fundamentally involve advocacy and the support of social movements, and are aimed

29
Desai and Howes, 1996.
30
Desai and Howes, 1996.
31
Edwards and Hulme, 1996b.
32
Edwards and Hulme, 1992a.
33
Edwards and Hulme, 1992b; Edwards and Hulme, 2000; Fowler, 1998; Mitlin, Hickey and
Bebbington, 2007.
34
Igoe, 2003.

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 Candidate number: 90528

at having an impact on wider social structural and political issues that maintain
poverty, beyond individual projects and small ‘partner’ groups. Their encouragement
largely stems from the realisation that such small-scale focused operations haven't and
will not address the wider issues that maintain these problems, and so are only dealing
with symptoms, not causes35. Advocacy involves working to apply pressure on
political actors to change policies that affect development issues36. NNGO support for
social movements often involves advocacy on their behalf to communicate their
demands to the relevant groups, but also involves directly supporting their work, in
the hope that Southern-born action will be able to produce its own change37. There
have been successes from such work38, but so far not a great deal owing to the
enormity of change that they are aiming to produce and the powerful actors that they
are generally up against39. Success again often relies on the degree of cooperation that
can be achieved with the targets of the advocacy; especially governments, but also
private businesses engaged in poor labour practices, and so on40.

NNGO support for social movements can take numerous forms, but commonly they
act to link movements into international networks of support, raising awareness of
their struggles which helps apply pressure on the institutions they are mobilising
against, and provide funds41. However they can also act as ‘knowledge banks’,
providing information to the movements on opportunities for action and external
threats, as well as on political methods42. With general advocacy as well it is seen that
local knowledge and development skills are necessary to provide direction and
authority to NNGOs, and as such many argue that this kind of NNGO work still calls
for a strong operational role for NNGOs to build such knowledge43. However the
highly political work involved in advocacy and social movements may fundamentally
conflict with operational work, by generating hostility and resistance from those in
power that undermine projects44.
35
Edwards and Hulme, 1992a; Edwards and Hulme, 2000; Mitlin, Hickey and Bebbington, 2007;
Potter et al, 2004, p. 313; Streeten, 1997.
36
Dawson, 1992; Hudson, 2008.
37
El-Gawhary, 2000.
38
Bradshaw, Linneker and Zúniga, 2001; Hall, 1992; Lopez, 2005; Panda and Pattnaik, 2003.
39
Mitlin, Hickey and Bebbington, 2007.
40
Clark, Friedman and Hochstetler, 1998; Edwards and Hulme, 1992a; Spar and La Mure, 2003.
41
Edwards, 2002b; Edwards and Fowler, 2002; Hall, 1992; McDaniel, 2002; Potter et al, 2004, p. 118;
Streeten, 1997.
42
Hall, 1992; Mitlin, Hickey and Bebbington, 2007.
43
Edwards and Hulme, 1992a; Hudson, 2008; Mageli, 2004.
44
El-Gawhary, 2000; Robinson, 1992.

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 Candidate number: 90528

NNGO roles

As has been demonstrated, the question of scaling up also suggests the possibility of
shifting NNGOs’ roles into new areas. Very small NNGOs that have developed
through operational partnerships may be unfamiliar with such new roles. Whether
they maintain a grounding in operational work to supply knowledge or not, these new
roles involve becoming more active at different levels of influence, and forming
networks of support for their Southern ‘partners’. Another source of pressure for such
a shift is the rise of Southern NGOs as project implementers and as direct recipients of
Northern funding which would have once gone through NNGOs45. Zetter
demonstrates that such SNGOs display the true comparative advantages that are
traditionally associated with NNGOs as well; they are inherently closer to and
integrated with their communities, and don’t have to spend years building such
closeness46. Hudson on the other hand, highlights that NNGOs continue to have a
legitimate advantage over SNGOs in advocacy roles, and that some SNGOs
themselves have asked them to capitalise on these. For advocacy, NNGOs are
inherently closer to Northern and international networks, and their more global view
allows them to suggest more successful avenues for action from their Southern
partners47. As such it may be that a shift in NNGOs’ roles may be forced in order to
maintain their legitimacy.

NNGO managers are unlikely to want to change the entire role of their organisations,
especially as they commonly have vested interests and pride in their operations48, as
well as expectations from Southern partners for operational work. However, it is
important to point out that just as there is a great deal of variation in actual methods
and outcomes adopted by NNGOs, there can also be a great deal of ambiguity in the
roles that they adopt. Various writers highlight the importance of integrating advocacy
into all levels of an NGO for its success49. The most flexible NNGOs – including the
smallest – are unlikely to pass up opportunities to advocate on behalf of their

45
Edwards, 2002a.
46
Zetter, 1996.
47
Hudson, 2008.
48
Mitlin, Hickey and Bebbington, 2007; Streeten, 1997.
49
Edwards, 2002b; Edwards and Hulme, 2000.

10
 Candidate number: 90528

operational goals and partners if they come up and don’t produce too much political
resistance that could damage them. Small NNGOs such as the SRF who get their
funding through private sources are also generally involved in spreading news of their
work further afield in the North to attract more donors, a role commonly attributed to
social movement NNGOs50.

Conclusion

This paper has argued that notions that NNGOs have a comparative advantage that
makes them particularly valuable for Southern development work are often not
supported by the outcomes of their work. In particular, this work is frequently not as
cost-effective, sustainable or good at reaching the poorest as has been assumed.
Increasingly it appears that they have more legitimate advantages working with
networks in the North and linking them to local, Southern operations. Fundamentally
the ideal of strong relationships that would give them such advantages is often not
fulfilled in practice due to continued inequalities, and the notion of ‘partnership’ may
actually obscure these problems rather than fixing them. However, this paper has also
demonstrated that these trends are not universal. Context is often vital in determining
whether an NGO’s strategy will work, and furthermore it is not out of the question for
relationships to develop which go some way to achieving equality. Inequalities of
relationships are based on the fact that the NNGO is generally providing funds which
their Southern partners require, whereas the NNGO rarely needs anything material
from their Southern partner. However, where the fund transfer is small and the
‘partnership’ well understood on both sides, and where there are not long chains of
monitoring and accountability upwards from the NNGO to donors, strong, high
quality relationships can be built. Such criteria are more likely for the smallest
NNGOs, and as such these are more likely to be able to maintain a traditional
‘comparative advantage’ for Southern operational work even when this has been
discredited for the majority of NNGOs.

It remains the case that very small NNGOs working in the South have very limited
impacts, concentrated in the areas that they work. However, this concentration is
necessary and fundamental to the building of the relationships that allow their work to
50
E.g. Edwards, 2002a.

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 Candidate number: 90528

be particularly effective; as such the high quality of their work cannot be dismissed as
irrelevant because of its limited coverage. On the other hand, NNGOs should be
flexible and willing to branch out into work in wider networks of influence where
appropriate to the needs of their Southern partners. Through such work, very small
NNGOs may in the future be able to maximise their impact and comparative
advantages beyond the limits of focused operational work.

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 Candidate number: 90528

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