Scholarships in Africa
A family foundation was supporting scholarship programs in Sub Saharan Africa, providing hundreds of thousands of dollars in programmatic support to help the organization scale up its impact. The NGO was a well-known actor in the space, with a successful track record and professional fundraising team in place. Through our engagement with the NGO, we learned that the financial management of the organization needed improvement and we tried, unsuccessfully, to help the organization.
We had been working with the local NGO for two years already, and it came to our attention that the expenditures of the organization per scholarship recipient were more than double what they advertised to donors – they were, in essence, playing “the shell game” and combining multiple grants to support the same program. We sought to work together with the local organization to remedy the situation.
We worked together with the local organization to better understand the budget and allocation of resources. As we told them, the more that they can understand where there money is going, the better that they could focus their efforts on the things that matter the most.
Unfortunately, the international headquarters of the NGO caught wind of our work with the local organization, and ironically threatened to stop receiving support from the foundation unless we ceased digging too deep. We explained that our client would be willing to provide a special grant to help the local team improve its bookkeeping and operations, but it seemed that the NGO cared more about protecting the reputation it had built from past work, rather than strengthening the operations and creating more impact in the future.
After months of trying to continue our support of the local NGO, and being fought all the way by the headquarters in Europe, we finally could only recommend to our client to stop supporting the scholarships initiative.
The foundation decided to stop its support of the NGO, and we implemented an exit strategy over the next year. While we were frustrated by the lack of transparency, we also did not want to punish the beneficiaries or put the operations of the NGO in immediate jeopardy.
What We Learned
Although our clients thanked us for “catching” this poor management by the NGO, we were dismayed that we could not support the organization to strengthen its operations. Indeed, an NGO with poor financial management and oversight is nothing rare, and in most cases we are able to work together with the organization to make them stronger for the future.
We were reminded that success in the NGO world, with all the trappings of conferences or articles written about the socially innovative approach, creates a fear of failure. This stymies improvement of the organization, and blocks potential funding from the grant makers which could be targeted to help the organization improve.