Value for Money?

Recently, an independent review the effectiveness of the Australian government aid program was carried out.  In the context of the stated intention of the government to increase overseas aid to 0.5% of GNI by 2015, the aid review was commissioned to recommend how, and where, this commitment should be accomplished.

These are exciting times for us here in the development world in Australia, and the final report of the independent review panel is another reason for optimism.  Like many agencies, we here at ChildFund Australia provided a submission to the review panel, and was honored to meet directly with the panel’s chair, Mr. Sandy Holloway.  It was a good, and quick, process.

The panel’s recommendations included “…a fundamental operational principle for the aid program. This is value for money. This principle applies from the highest level strategic design of the program down to the conduct of specific projects and activities…”

I think that everybody agrees that all of us, and every agency, working to overcome poverty must provide “value for money.”  We are entrusted with resources which we have a duty to steward – legally, morally, and ethically – a duty to employ those resources in the best manner, to build better futures for poor people.

What is “value for money”?  For me, there are three elements which add up to “value for money”: we must use resources efficiently, we must use resources effectively, and we must be transparent about our use of resources to our stakeholders: donors, partners, communities where we work, and our teams here, and overseas.

Efficient use of resources means that we have appropriate systems and procedures to ensure that we allocate our human and financial resources explicitly, clearly, and according to good business practices.  Not being wasteful.

So we have budgets which are reviewed and approved; that our expenditures and activities are authorized and controlled and monitored according to agreed protocols; that we support and train our staff so they have the tools and competencies they need; and that we review the use of these resources frequently with an eye towards ensuring that our costs are in line with good practice.  We carefully manage the use of foreign staff in our programs, because we firmly believe that local people have the knowledge, skills, and capacities that are needed.  And external resources are always somewhat more expensive and should therefore be used judiciously.

But our supporters don’t entrust us with resources only to be efficient – they want to make a difference in the world!  That means that we must be effective, make a difference in the world… for us, build better futures for deprived, excluded, vulnerable children.

Effectiveness means working on the causes of child poverty.  We have learned that children are poor because they lack assets such as health, education, and income.  Assets such as clean air and water and access to productive land.  Assets such as the bonds of trust and solidarity in their communities and across cultures.  They are poor also because they, and their families and communities (and even nations) are relatively less powerful than other (children, families, communities, nations…)  And they are poor because they face increasing risks – from other people, from civil conflict, from climate change, and so forth.

So our programs strive to build human, financial, social assets; build the power of poor people to take collective action in the interests of their children; and build protective networks around children.  That’s effectiveness in a nutshell – understanding and addressing the causes of the phenomenon we seek to change, striving to understand the mechanisms through which those causes act, and taking deliberate action.

We can’t deliver value for money unless our stakeholders know what we’re doing, transparently.  So we strive to be transparent by developing our programs together with local communities and partners; by reporting periodically and fully about what we do with, and accomplish with, funds to a wide range of publics; by responding to concerns, questions, suggestions from our stakeholders and the public.  We have a range of processes and procedures to enhance our transparency, but this is not a destination – it’s a journey, through which we seek to continually be more transparent.

“Value for money” is essential – our supporters, the communities we work in, and the children we serve all demand it.  We demand it of ourselves.  Understanding clearly the meaning of “value for money” is the first step towards delivering it.