Benchmarking transparency in Spain’s NGOs

 

Perhaps the recent scandals that have rocked the Spanish third sector are to thank for the high number of NGOs that have chosen to participate in the Fundacion Lealtad’s Transparency Guide 2008, presented in Madrid on June 30th.

When the president of rights organisation Anesvad ended up in prison accused of pocketing 5 million euros and shortly after development NGO Intervida hit the spotlight for fraud worth a supposed 45 million euros, the Spanish third sector thought its credibility was at stake. But Csr managers claim that Fundacion Lealtad’s guide may help to restore trust to a sector still struggling to maintain its credibility.

If in 2001 only 27 NGOs asked to participate to the first Transparency Guide – an analytical report that benchmarks the activities of non profit organisations against nine standards of transparency and good practice – this year 122 NGOs signed up to the report; 73 from the social field, 43 from the development field, and 5 from the environmental field. Together the 122 NGOs involve more than 1,200,000 members, 40 thousand volunteers and 16,500 employees, and their projects affect over 90 million people. The results of the report are reflected in a transparency report (download in Spanish available here) that informs NGO compliance with each of the standards.

Salvador Garcìa-Atance and Igancio Garralde, the presidents of the Fundacion Lealtad, whose mission is to increase society’s confidence in non profit activities, presented the results of this years Guide in Madrid on June 30, saying that: “Professionalising this sector is no easy task but the positive results we receive year after year are encouraging”. Both presidents, whose backgrounds are in finance, dream of a non profit sector no longer dependent on State funds but modelled on the Anglo Saxon third sectors, that are more dependent on funding from private sources. According to Garcìa-Atance giving up state funding is the only way out of the third sector’s economic crisis.

The guide: findings for 2008

100% of the NGOs analysed are transparent when it comes to funding; the fact that most NGOs make their financial balances public voluntarily is, according to the Fundacion, already a sign of transparency. The second most commonly achieved standard concerns the clarity and advertisement of the goals and mission of organisations, met by 99.2% of the organisations that participated to the Guide, while 95.1% of NGOs also met the standard that calls for promoting volunteering. Finally, the guide shows that most organisations have improved both their planning and communication activities, demonstrated by a high incidence of fully up to date websites.

When it comes to the diversification of funding sources, however, Spanish NGOs fail to meet the test and turn out to be excessively reliant on government funds. Despite efforts to diversify their incomes, most of the participants fail to even meet the minimum standards set by the Guide: to fund at least 10% of their activities through donations from the private sector.

Another discouraging result regards the relationship between governance and active involvement in the organisation’s mission and strategy: only 68.9% of organisations meets the standards set by the Guide, that require those in charge of governance to be accountable, to be able to demonstrate their commitment to the organisation’s goals and to prove that all operations be carried out efficiently. However, Garralde points out that there has been an improvement since last year’s figures, which is encouraging.

Responsible Giving

“These last years have been decisive in making donors conscious of the concept of ‘responsible giving’, which means becoming informed before and after the act of giving to a non profit organisation, to find out where your money is going and checking the impact of activities you are financing”, said Salvator Garcia-Atance. The impact of responsible giving on the performance of NGOs is highlighted by the fact that: “59 NGOs that participated in past years have improved their abilities in demonstrating control over the use of funds substantially: last year only 86.8% met our standard, while this year 92.3% of organisations have, proving that they have implemented what they learned from their past mistakes” said Ignacio Garralda.

Transparency

On average transparency has increased. Of an average result of 88.3% last year, 2008’s average is 88.7% . Garralda concludes that: “This overall improvement confirms that transparency in management is a strategic objective for NGOs, that have learned and incorporated their new knowledge to achieve higher standards each year”.