INTRODUCTION:

By and large, NGOs are considered effective alternatives to bureaucratic government machinery (Brinkerhoff, 2002; Lipsky and Smith, 1989; Young, 2000). Nonetheless, effectiveness of Non-Governmental Organizations (NGOs) vary across organizational type, scope and objectives. Researchers have shown considerable interest in NGO effectiveness because as compared to for-profit organizations, it is relatively difficult to measure NGO effectiveness. By virtue of their origin, for-profit organizations exist to generate profits for shareholders. Calculating financial metrics like return on equity, asset-liability ratios, earnings per share, etc. is far easier and offer a quantitative and true picture of an organization’s performance over a period of time.

On the other hand, NGOs have multiple, ambiguous, uncertain, and hard-to-measure goals, and produce intangible services like social security, child education. These intrinsic properties of NGOs generated interest among researchers and practitioners to explore effectiveness of NGOs.

What is an effective NGO? This central question has invited attention of NGO practitioners and researchers over the last four decades. Some researchers (like Balser and McClusky, 2005; Drucker, 1990) argued that the extent to which an NGO achieve / attain its mission determine its effectiveness. On the other hand, financial efficiency in raising funds and administrative expenses have been associated with an effective NGO (Callen, Klein, and Tinkelman, 2003). However, it will be unfair to call an NGO effective if it serves its mission but cannot sustain adequate funding for future. Additionally, mission statements of NGOs are generally stated in abstract terms like ‘social upliftment’, ‘sustainable rural development’, ‘generate awareness’, and ‘enhance gender equality’. Lastly, in some cases, target group of an NGO like children, mentally handicapped persons are not in a position to evaluate quality of services of NGO. This leads one to question if a set of indicators exist to measure an NGO’s effectiveness. It is an interesting and challenging task to assess, even with a moderate degree of certainty, mission accomplishment of NGOs.

The underlying motive of existence of NGOs is ‘social good’. The span of NGOs cut across diverse themes (like environment awareness, consumer rights), approach (like relief and rehabilitation, rights-based), geographical areas (village to international issues), and structures (minimal to high levels of organizational hierarchy). In the same vein, NGOs work in a dynamic environment where priorities of donors as well as society keep on changing.

Few models of NGO effectiveness have been proposed while considering these issues of NGOs. The models of NGO effectiveness are discussed in next section.

Models of NGO effectiveness:

A review of literature on NGO effectiveness reveal four models, viz. goal attainment model, systems resource model, reputational model, and multiple constituency model; although Herman and Renz (1997, 1999) argued that most of the research has focused on goal attainment model. Goal attainment model, that emphasize achievement of organizational goals, has been used in various studies (like Byington, Yancey Martin, DiNitto, and Maxwell, 1991; Green and Griesinger, 1996; Lillis and Shaffer, 1977; Sheehan, 1996). Using systems resource model, which emphasize organizational system and control, Yuchtman and Seashore (1967) proposed NGO’s effectiveness as its ability to exploit environment through fundraising. Researchers like Crittenden, Crittenden, and Hunt (1988), Miller, Weiss, and MacLeod (1988), and Provan (1980) have also used systems resource model to assess correlates of NGO effectiveness. Herman and Tulipana (1985), and Smith and Shen (1996) used reputational model of NGO effectiveness, which associates NGO effectiveness with perceptions of key stakeholders (Forbes, 1998). Bradshaw, Murray, and Wolpin (1992), Cameron (1978, 1981, 1982), Siciliano (1996) used multiple constituency model of Organizational Effectiveness (OE) which highlight judgements of stakeholders (D’Aunno, 1992; Herman and Renz, 1998; Kanter and Brinkerhoff, 1981; Zammuto, 1984).

Although many studies on NGO effectiveness used goal-attainment model, the approach is not particularly suitable for NGOs with abstract goals. Application of goal-attainment model in NGOs result in foundational problems like subjectivity and difficulty in comparison between NGOs. Herman and Renz (2008) and Lecy, Schmitz, and Swedlund (2012) highlighted potential of multi-dimensional models such as competing values framework (Quinn and Rohrbaugh, 1981), and balanced scorecard (Kaplan, 2001). Against the background of ecosystem in which NGOs operate, multiple constituency model can potentially lead future research on NGO effectiveness. Competing values framework can guide NGO effectiveness measurement that involve both for-profit organizations and NGOs (Rojas, 2000). Sawhill and Williamson (2001) suggested a model to measure success of an NGO through assessment of three dimensions: impact, activity, and capacity. However, despite these theoretical models of OE, “the practical challenge of measuring organizational effectiveness persists” (Mitchell, 2013, p. 3).

The resource dependency theory suggests that NGOs depend on limited resource providers for survival (Froelich, 1999; Pfeffer and Salancik, 1978). Studies on resource dependency theory suggest that board members can play a vital role in resource acquisition by serving as community representatives and linking NGO with constituent groups that can provide resources (Miller-Millesen, 2003). Empirical studies suggest that size and composition of board members vary with increase in uncertainty and complexity in external environment (Boyd, 1990; Dess and Beard, 1984; Pfeffer, 1972, 1973; Pfeffer and Salancik, 2003). As uncertainty and complexity in external environment increase, board members recruit more members that result in increase in board size (Pfeffer, 1972, 1973; Provan, 1980; Siciliano, 1996). Additionally, NGO boards will comprise of members from diverse backgrounds with access to critical resources (Harlan and Saidel, 1994; Zald, 1967).

The models of NGO effectiveness have been applied in evaluation and correlation of NGO effectiveness with other dimensions of NGOs. Some of these seminal studies are discussed in next section.

Research on NGO effectiveness

One of the earliest studies on NGO effectiveness conducted by Webb (1974) on churches (n = 5) used factor analysis. The study found four organizational characteristics that can improve OE, viz. cohesion, efficiency, adaptability, and support. A study by Lillis and Shaffer (1977) used economics approach of input-output analysis to measure effectiveness of a university. The study revealed a positive impact of university grant on income and employment of state’s economy.

Goal attainment model, one of the earliest approaches of NGO effectiveness, was used by Glisson and Martin (1980). The study found that centralization and formalization positively affected productivity and efficiency of NGOs (n = 30). The results reflect role and influence of top management (board members and chief functionary) on mission accomplishment and outcomes. However, contrary results emerged while multi-domain approach was used in a study on university effectiveness. Cameron (1982) (n =41 colleges and universities) found faculty unionized colleges and universities were less effective than nonunionized ones with regard to academic performance and resource acquisition.

Gradually, research on NGO effectiveness started to shift towards the role of top-most decision-making authority of an NGO: board members. Research on board effectiveness dominated most of the research on NGO effectiveness. Early research on board influence used reputational model of NGO effectiveness. Herman and Tulipana (1985) found no relation between influence of board on NGO effectiveness (n = 7 NGOs).

Later research on NGO effectiveness focused on a set of dimensions rather than a single criterion of NGO effectiveness, like input-output ratio. Herman (1990) indicated that an absolute conception of NGO effectiveness as unlikely and proposed workable effectiveness measures for both charitable service and advocacy NGOs. Workable effectiveness measures for charitable service NGOs were financial indicators, constituent satisfaction, outcome indicators, and reputational measures, while for social movement and advocacy NGOs were constituent satisfaction, reputation, and documentary coding.

Using multi-dimensional approach towards NGO effectiveness in a study of 417 Canadian NGOs, Bradshaw et al. (1992) found positive relationship between certain aspects of board process (like use of strategic planning techniques, existence of a common vision) and financial, and reputational measures of organizational performance. Specifically, board involvement in strategic planning, meetings and committees contributed to the perception that board had a positive impact on organizational performance.

A study on nonprofit arts organizations (n = 19) by Kushner and Poole (1996) suggested four components of effectiveness: satisfying audiences, donors and volunteers; identifying and obtaining financial and human resources; efficiently organizing resources into technologies; and achieving arts program objectives. Study also found that highly effective arts organizations exhibited high level of engagement of organizational members in monitoring abovementioned components of OE. Thus, the study highlighted critical role of internal stakeholders in operations and organizational management.

Green and Griesinger (1996) (N = 16 NGOs) used goal-attainment approach and found strong correlation between board performance and NGO effectiveness, and between OE and board activities like policy formation, strategic planning, program monitoring, financial planning and control, resource development, board development, and dispute resolution. Sheehan (1996) (n =101 NGOs) also used goal-attainment approach to measure mission accomplishment and found that while most NGOs had clear mission statements, only 14 per cent reported impact measures with respect to mission accomplishment. Thus, it can be inferred that organizations were not in a position to assess whether their activities addressed organizational strategy or not, and to what extent. Another study (n = 240 NGOs) conducted to explore reasons behind effective board performance revealed that effective NGOs had delegated strategic planning to a board subcommittee (Siciliano, 1996). Thus, research on NGO effectiveness has focused on board effectiveness and most of the studies found positive association of board participation with increased levels of OE.

As NGOs have a diverse group of stakeholders like funding organizations, target group, society, individual donors, employees, volunteers and board members, they may perceive effectiveness differently and include dimensions based on their understanding and role in organization. A study on health and welfare NGOs (n = 64 NGOs) found that stakeholders of NGOs varied substantially in their judgments of effectiveness of same organization (Herman and Renz, 1997). However, all stakeholders perceived ‘board effectiveness’ as a common dimension of NGO effectiveness. Another study by Herman and Renz (1998) highlighted that effective NGOs had effective boards (as judged by various stakeholders), had board members with high social prestige, used practitioner-identified correct management procedures, and employed change management strategies. Although most of the research concluded that board effectiveness lead to NGO effectiveness, Jackson and Holland (1998) found that board effectiveness was a cause of NGO effectiveness. Nonetheless, review of literature on board effectiveness and NGO effectiveness highlight that board members play a strategic role to drive NGO effectiveness.

Some studies (like Garain, 1998) have focused on one of the management system and explored sub-dimensions that relate with NGO effectiveness. Garain (1998) studied NGO effectiveness through the perspective of NGO-employee relationship in Indian NGOs and found five dimensions of NGO effectiveness: perceived OE, job characteristics, organizational commitment, job involvement, and work involvement. Since this approach is focused on one of the management systems, findings have limited application on only one dimension of NGO effectiveness.

Review studies provide a macro view of evolution of concept over a period of time. A review of literature on NGO effectiveness studies by Forbes (1998) grouped NGO performance studies into three categories (in order of evolution of concept): evaluation studies (like Lillis and Shaffer, 1977), correlation studies (like Crittenden, Crittenden, and Hunt, 1988; Green and Griesinger, 1996; Siciliano, 1996), and process studies (like Herman and Renz, 1997). Thus, researchers now focus on organizational systems and processes, and how these correlate with NGO effectiveness.

Herman and Renz (2004) proposed NGO effectiveness as a multi-dimensional hypothetical construct. The authors proposed nine dimensions of NGO effectiveness viz. financial management, human resource management, public relations, funds raising, program delivery, community collaboration, working with volunteers, government relations, and board governance.

Based on social movement perspective of NGOs (n = 40) working on environmental and ecological issues in Orissa (India), Panda and Pattnaik (2005) developed an index of NGO effectiveness. The study found six dimensions of NGO effectiveness: (a) awareness building among masses, (b) mobilization of masses, (c) mustering support from political parties, other voluntary organizations and the media, (d) benefitting the people through their participation in various projects/schemes run by NGOs, (e) influencing policies and programmes of the government or that of similar bodies in the corporate sector (advocacy role), and (f) empowering the people through their participation and creating grassroots level popular institutions.

Baruch and Ramalho (2006) reviewed empirical studies of OE published between 1992 and 2003, and found that criteria used to assess effectiveness varied by type of organization. In case of business organizations (n = 100), majority of studies used multiple criteria and 42% of those studies used financial criteria. In case of NGOs (n = 21), nearly all studies used nonfinancial and financial criteria with efficiency (input-output ratio) being the most commonly used criterion.

Shiva and Roy (2007) proposed a model of NGO effectiveness by conceptualizing programme outcome as a proxy of NGO effectiveness. The model included four dimensions, viz. transformational leadership, management capacity, programme capacity, and management outcome. The model was modified and tested to study effect of transformational leadership on organizational culture, which in turn lead to NGO effectiveness (Shiva and Suar, 2012). Study found positive effect of transformational leadership on organizational culture, which further positively affect NGO effectiveness. Thus, leadership of top management play a crucial role to create an enabling environment, which help an NGO perform effectively.

Lecy, Schmitz, and Swedlund (2012) reviewed 64 papers on NGO effectiveness. Review demonstrated that 43 out of 64 articles did not provide a definition of effectiveness. While some articles discussed NGO effectiveness in the context of influencing other actors, some defined effectiveness as employing management techniques to minimize costs. Review highlighted resource dependency model as some articles stated effective boards as those that provide fundraising support.

Willems et al. (2012) (n = 52 NGOs) developed a 38-item NGO governance quality index. The index was validated quantitatively through Structural Equation Modelling (SEM). The index comprised of five dimensions of NGO governance quality: external stakeholder involvement, consistent planning, structures and procedures, continuous improvement, and leadership team dynamics. Liket and Maas (2013) proposed a 26-item scale of determinants of NGO effectiveness. The items were grouped in nine themes (like reporting, strategy, evaluation) which were further equally divided in three pillars of NGO effectiveness: transparency, organization, and program.

Mitchell (2013) interviewed 152 NGO leaders of the United States and asked them how their organization defined effectiveness. Results revealed that 82% of NGO leaders defined effectiveness as “outcome accountability” while 15% defined effectiveness as “overhead minimization”.

The review of studies on NGO effectiveness suggest little agreement among academic community, while board effectiveness is one of the common dimension found in the review. While early research (pre-1990) focused on assessment of NGO effectiveness, contemporary research (post-2000) focused on processes and outcomes. Few conclusions may be drawn from these studies. Firstly, NGO effectiveness is a multi-dimensional construct that include an organization’s vision, mission, strategy, systems, operations and so forth. Research on NGO effectiveness require a holistic view of all dimensions of NGO. Secondly, mission accomplishment is a central theme in NGO effectiveness studies. However, measurement of the same require both quantitative and qualitative methods. Thirdly, it is not possible to develop a comparable standard for NGO sector because NGOs work on diverse themes, issues and approaches. It is not possible to compare outcomes of such diverse NGOs. Fourthly, board members play a crucial role in an NGO’s effectiveness as effective boards contribute to NGO effectiveness. Fifthly, as the concept of NGO effectiveness is based on social construction, multiple constituency model is likely to dominate future research in this domain.

The concept of NGO effectiveness has dominated research on NGOs over the last four decades, and is still a matter of debate. Though this debate has given direction to NGO stakeholders, funding organizations do not have sufficient time and expertise to conduct an in-depth evaluation of a large number of NGOs and take funding decisions. Funding organizations and individual donors require easily accessible, plausible and comparable information of NGOs to take informed decisions. A number of watchdogs are working in USA, India and elsewhere to support funding organizations and individual donors. These are discussed in detail in next section.

Watchdogs in United States:

For potential funders, the rating agencies are an important source of information. The primary focus of watchdogs is on NGO’s operating efficiency and mission attainment. Next section provides a brief overview of different metrics used by these watchdogs to assess NGOs. Watchdogs rate NGOs on a number of criteria and assign summary ratings. While the stated purpose of all watchdogs is to provide useful data, approaches and criteria differ.

Charity Watch:

Charity Watch use financial records and cross check information from state and federal filings (“Criteria and Methodology,” 2015). It grades NGOs as: A=excellent, B=good, C=satisfactory, D=unsatisfactory, F=poor, ?=insufficient info. The assessment is based on NGO’s efficiency calculated through percent of total expenses spent on charity, and cost to raise $100 (“Criteria and Methodology,” 2015).

Better Business Bureau Wise Giving Alliance:

The Better Business Bureau (BBB) Wise Giving Alliance use 20 standards to monitor operations and financial stability of NGOs and use “pass-fail” system of grading (“How we accredit charities,” 2015). These 20 standards like board compensation, effectiveness report, budget plan, donor privacy are categorized across four dimensions: governance and oversight, measuring effectiveness, finances, and fund raising and informational materials (“How we accredit charities,” 2015).

Charity Navigator:

Charity Navigator rate NGOs on organizational efficiency and capacity metrics on a star-based system of one to four stars (“How do we plan to evaluate results reporting?,” 2015). Charity Navigator collect data on five elements: (a) alignment of mission, solicitations and resources, (b) results logic and measures, (c) validators, (d) constituent voice, and (e) published evaluation reports. Each elements is operationally defined with attributes like “does the charity publish feedback data from its primary constituents?”, “does the organization report back to its primary constituents what it heard from them?” (“How do we plan to evaluate results reporting?,” 2015).

Criticism of American Watchdogs:

Watchdogs provide ratings of NGOs in a comprehensive and comparable manner to help funders collaborate with suitable NGOs. Although widely consulted, approach of watchdogs has been criticized by many as flawed (Hager and Flack, 2004; Lowell, Trelstad, and Meehan, 2005; Wing and Hager, 2004a, 2004b). Firstly, watchdogs do not answer: how much good does an NGO do, what an NGO actually accomplishes? Supposedly a donor knows that an NGO spend 90 percent of every rupee given on program implementation. But what is the ‘social good’ or ‘social benefit’ generated out of that 90 per cent? Funders may get preoccupied with an NGO’s financial condition and may neglect more difficult issues of evaluating NGO’s intention and impact.

Secondly, watchdogs do not assess stakeholders’ perceptions or organizations’ programme achievements into account (Mitchell, 2013). This is a critical aspect because target group is in a better position to share effect of a programme than anyone else. Thirdly, watchdogs are themselves NGOs and depend on foundations, memberships, and private donations for their funding – just like the organizations they evaluate. Hence, accountability and partisanship is questionable.

Fourthly, unusual emphasize on financial efficiency of NGOs is unnecessary. It is quite possible that an NGO may have relatively high cost of administration and overhead expenses but working effectively towards its mission. This may be explained through a for-profit example. A mutual fund scheme may have high administrative cost but give higher net return than a mutual fund scheme with lower administrative cost. The investor will ultimately gain as high administrative cost will be offset through high net return. In fact high returns may be due to high administrative investments in software and qualified employees. Similarly, undue emphasis on financial metrics of an NGO is an inappropriate approach.

Watchdogs in India:

India’s NGO sector has realized the need for accreditation and rating. Although India’s watchdogs are in early stage as compared to matured watchdogs of the United States, the efforts are worthwhile. Next section gives an overview of metrics used by India’s watchdogs.

Credibility Alliance:

Credibility Alliance follow an aaccreditation process that contain two sets of norms for rating NGOs: minimum and desirable (Credibility Alliance, 2015). Credibility Alliance seek above said information on various indicators in a format filled by the NGO. Minimum norms, that Credibility Alliance expect all NGOs should follow, include assessment on five dimensions namely (a) identity, (b) vision, aims, objective and achievements, (c) governance, (d) operations, and (e) accountability and transparency (Credibility Alliance, 2015). Desirable norms are next level of norms meant to enhance good governance and public disclosure. These include two dimensions, namely governance, and accountability and transparency.

Karmayog

Karmayog publishes an annual report titled ‘Karmayog CSR Ratings’ with a focus on Corporate Social Responsibility (CSR) initiatives of 500 largest companies of India. Rating provides an overview of how different kind of companies (government, private, multi-national) from different industry sectors deliver their social responsibility. Companies’ CSR initiatives are ranked from level 0 (lowest) to level 5 (highest). Level 0 include companies that make liquor, tobacco, genetically modified crops, while level 5 is awarded if innovative ideas and practices are developed for CSR.

Criticism of Indian Watchdogs

The rating by Karmayog is based on publically available documents of companies. The information is not cross checked, which pose a question on reliability of rating. On the other hand, accreditation of Credibility Alliance is based on documents and systems in place. However, the quality of systems in place is not assessed. Additionally, it is not ascertained if organizational systems contribute to NGO’s mission attainment and ‘social good’. In other words, both Credibility Alliance and Karmayog are focused more on accountability and governance system than on holistic analysis of organization. As NGOs undertake diverse programmes, work with diverse stakeholders, criteria for measurement of effectiveness need to be selected based on organizational properties. However, this is not undermine the importance of NGO’s vision, accountability and transparency mechanisms. It is suggested that the focus of watchdogs should be on a holistic analysis of organization.

Based on this discussion, and as integral part of larger discussion on NGO effectiveness, next section provides a brief overview of NGO Accountability.

NGO accountability

Edwards and Hulme (1994) defined accountability as “the means by which individuals and organizations report to recognized authority or authorities and are held responsible for their actions”. Broadly, NGO accountability can be categorized as internal and external. Internal accountability pertains to board members, employees and volunteers, while external accountability to government, society, target group and funding organizations.

The chief characteristics of NGOs involved in development issues (like education, sanitation, etc.) are that they mostly operate at local level (villages and slums) and seek funds from external sources (like corporate, state, multi-lateral and individual donors). In other words, NGOs act as a bridge between target group and abovementioned external agencies of funding. This relationship of NGOs with target group and funders result in emphasis on NGO’s governance, and specifically on accountability systems.

While NGOs have also been criticized for lack of accountability systems in place. Weidenbaum (2009) contended that NGOs attempt to hold different constituents of the society (e.g., government, large corporations, etc.) accountable while they themselves seldom establish governance mechanisms or systems where by their stakeholders can hold them accountable. At the same time, with increase in funding to NGOs over the last few years, there is high interest in NGOs’ accountability (Unerman and O’Dwyer, 2010) and performance (Lewis and Madon, 2004). The issue of governance and accountability of NGOs become more important as the domain of operation and resource generation is largely in public sphere and not private (Biswas, 2009).

Since NGOs seek funds from external sources, funders expect NGOs to be accountable in both financial and non-financial metrics. However, NGOs are also accountable to target group (downward accountability) because NGOs exist to serve target group. In practice, NGO accountability to funders (upward accountability) dominate downward accountability because of three reasons. Firstly, funders can use power and dominate NGOs to provide desired information and hold them accountable while target group lack power and authority to make NGOs accountable (Christensen and Ebrahim2006; Edwards and Hulme1996; Kilby 2006; Young 2002). Secondly, it is far easy for NGOs to fulfil accountability requirements of funders as it is a structured process and every funder has pre-defined metrics (like audited statements, annual report) (Ebrahim 2003a). On the other hand, methodology to prepare and report downward accountability is relatively less structured and more qualitative and subjective in nature(Howard-Grabman 2000; Kilby 2006).

DISCUSSION:

Assessment of performance and effectiveness of NGOs remains a central topic of debate (DiMaggio, 2001; Forbes, 1998; Herman and Renz, 1999, 2004). The concept of OE has long been used as an indicator for organizational success in the NGO world. Researchers such as Cameron and Whetten (1983); Forbes (1998); Herman and Heimovics (1994); and Holland, Chait, and Taylor (1989) proposed that since there are such vast differences among NGOs it is not clear (and still debated) how they can understand their own effectiveness. This especially concerns those they serve, those who volunteer, and those who donate. The concept of NGO effectiveness has troubled theorists and researchers for years as it is a powerful yet problematic concept (Forbes, 1998). Effectiveness assessment can be a useful tool to critically evaluate and enhance work of organizations (M. E. Taylor and Sumariwalla, 1993), while it can be problematic because it can mean different things to different people (Kanter and Summers, 1987) and there are many alternative ways to measure OE (Herman, 1990).

An NGO’s service quality, management practices, operations, financial metrics, organizational efficiency and so forth contribute to survival of organization. These dimensions are equally crucial for effective performance of an NGO (Duan, 2010). The review of literature suggest that a focused and holistic view of an NGO is required to determine effectiveness.

Review of models and studies suggest that, due to diversity among NGOs, a universal measure of NGO effectiveness does not exist. Assessment of NGO effectiveness need to be modified as per organization’s mission, approach and sector. Although funders expect NGOs to demonstrate effectiveness, many NGOs, especially grassroots- and community-based NGOs, lack organizational strength and skill to design necessary organizational systems (Carman, 2010). Additionally, NGOs lack financial resources to design and implement accountability, self-assessment and evaluation systems. Hence, most efforts of NGOs are limited to input-output analysis (Carman, 2007, 2010). For example, Herman (1990) proposed that NGO performance comprised of four dimensions: peer reputation, resource acquisition, client satisfaction and outcomes. While resource acquisition can be easily measured, other three dimensions are subjective and perception based. An NGO will require resources as well as expertise to assess its reputation among peers, degree of satisfaction of its clients, and outcomes from its activities. Similarly, Scott and Davis (2007) suggested four broad categories to measure effectiveness: (a) outcomes, (b) processes, (c) structure, and (d) financial. While financial can be assessed easily, other dimensions require an in-depth study. Additionally, the results will be hardly comparable because outcomes are specific to particular NGOs. It will be unfair to compare, for example, 15% increase in school enrolment with 10% increase in water table. Therefore, assessment of performance and effectiveness of NGO remains a topic of debate (Dimaggio, 2002; Forbes, 1998; Herman and Renz, 1999, 2004).

Review also highlighted the utility of resource dependence model in assessing effectiveness of NGOs. Despite its advantages, excessive focus on resource accumulation rather than NGO’s mission and strategy can negatively affect brand image, which in turn will affect effectiveness over a period of time.

Although role of board and its effectiveness is highlighted in various studies as crucial and integral to understand and assess NGO effectiveness, some studies criticize the same. Taylor, Holland, and Chait (1996) described effective governance by NGO boards as a “rare and unnatural act” (p. 36). In attaining truly effective boards, according to these researchers, only boards with strategically minded individuals harnessing efforts to advance the institution’s mission and long-term welfare should form board of an NGO. However, in practice, board members engage in low-level activities with an executive who does not share sufficient information. On the other hand, some boards do not involve themselves in governance while some boards have little accountability (Taylor et al., 1996).

CONCLUSION:

For organizations like NGOs which have multiple stakeholders, a multiple constituency model seems appropriate to understand NGO effectiveness. Also, since a number of dimensions like client satisfaction and peer reputation are abstract, multiple constituency model can potentially address the inherent problems of assessment of NGO effectiveness. Since this model presents a holistic view, the assessment is representative of OE. The results from this process will be a social creation of various stakeholder constituent groups with each stakeholder’s understanding contributing to different judgments of effectiveness of same organization.

Financial metrics is one of the important dimension to assess an NGO’s effectiveness, but it is not a measure of mission accomplishment. Since NGOs exist to serve societal needs, mission attainment will remain the central dimensions around which the concept of NGO effectiveness will build.

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Received on 03.03.2015 Modified on 12.03.2015

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