NPO / NGO Management - IESE Blog Community
NPO / NGO Management - IESE Blog Community
NPO / NGO Management - IESE Blog Community
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Prof. A. Garcia Prat<br />
<strong>NGO</strong> / <strong>NPO</strong> in the Health Sector<br />
Critical Success Factors<br />
Prof. A. Garcia Prat, <strong>IESE</strong><br />
University of Navarra<br />
1<br />
University of Navarra<br />
What is a <strong>NPO</strong> ?<br />
Any sort of legal entity (foundation, association,<br />
trust, SA / Gmbh*,...)<br />
– Whose objective is to deliver a service<br />
– And who by founders’ decision and/or mandatory<br />
purpose stated in its constitution or by laws …<br />
– Reinvests all profits<br />
– Sport clubs, schools, charities,…..<br />
– Foundation / endowment<br />
• funds given for the permanent support of an institution<br />
* Gesellschaft mit beschränkter Haftung<br />
2<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 1
Prof. A. Garcia Prat<br />
The Universe of <strong>NPO</strong>s<br />
Funders <strong>NPO</strong>s Beneficiaries<br />
Grant giving<br />
foundations<br />
Public<br />
authorities<br />
Corporate<br />
philanthropy and<br />
sponsorship<br />
Private citizens<br />
Service oriented<br />
foundations<br />
Service<br />
oriented<br />
associations<br />
Persons in need<br />
Society at large<br />
Heritage<br />
Nature<br />
Members<br />
University of Navarra<br />
Member<br />
oriented<br />
associations<br />
Members<br />
3<br />
Critical Success Factors I<br />
• A resounding mission (permanent)<br />
– Emotional appeal<br />
• Poverty, disease, research,<br />
environment, culture<br />
– Scope / Number of possible<br />
recipients/beneficiaries<br />
University of Navarra<br />
4<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 2
Prof. A. Garcia Prat<br />
Critical Success Factors II<br />
• Specific objectives (medium-long<br />
term)<br />
– Need to prioritise / select<br />
• Well targeted programs (operational)<br />
– Satisfying needs / wants<br />
– With / without visibility to public<br />
University of Navarra<br />
5<br />
Critical Success Factors III<br />
• Leadership<br />
– Founder / President<br />
• Accredited motivation / ethical c.v.<br />
• Affected by the cause<br />
• Public credibility<br />
• Whistleblower<br />
• Attractive for media<br />
• Available / successful for fund-raising<br />
• Reputation<br />
University of Navarra<br />
6<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 3
Prof. A. Garcia Prat<br />
Peter F. Drucker<br />
Managing an <strong>NPO</strong><br />
• The ultimate test is not the beauty of the mission<br />
statement. The ultimate test is the right action<br />
• The mission is forever, the goals are temporary<br />
• The task of the <strong>NPO</strong> manager is to convert the<br />
mission into specific goals and actions<br />
University of Navarra<br />
7<br />
…but, by the way, what is success?<br />
• to raise many funds?<br />
• to develop many programs?<br />
• to increase endowment?<br />
• to reach all potential beneficiaries?<br />
• to ease or go around bureaucratic procedures?<br />
• to improve public image?<br />
University of Navarra<br />
8<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 4
Prof. A. Garcia Prat<br />
…but, by the way, what is success?<br />
– to please the Board?<br />
– to satisfy the Recipients?<br />
– to please the Donors?<br />
– to break even ?<br />
In <strong>NPO</strong>s, you deal with balance, synthesis,<br />
a combination of bottom lines of performance<br />
University of Navarra<br />
9<br />
…but, by the way, what is success?<br />
Ralph Waldo Emerson, Success<br />
• To laugh often and much<br />
• To win the respect of intelligent people and the affection<br />
of children<br />
• To earn the appreciation of honest critics and endure<br />
the betrayal of false friends<br />
• To appreciate beauty, to find the best in others<br />
• To leave the world a bit better, whether by a healthy<br />
child, a garden patch or a redeemed social condition<br />
• To know even one life has breathed easier because you<br />
have lived<br />
• This is to have succeedeed<br />
University of Navarra<br />
10<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 5
Prof. A. Garcia Prat<br />
• Just like companies:....<br />
– Opportunities or needs<br />
– Strengths & competence<br />
– AND, on top…<br />
è Commitment<br />
University of Navarra<br />
11<br />
<strong>NPO</strong>s as organizations<br />
• Threats & opportunities<br />
• Strengths & Weaknesses: JCIL, MSF, Banks’, etc.<br />
• Product /service: “organized abandonment”, focus<br />
only on what you are competent to do<br />
• Market / Target group<br />
– Recipients / Donors<br />
– Media / society at large<br />
– Public authorities: regulators & fiscal<br />
• Channels<br />
• Size<br />
• Type<br />
University of Navarra<br />
12<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 6
Prof. A. Garcia Prat<br />
<strong>NPO</strong>s as SERVICE organizations<br />
• Everything you have learned here is applicable:<br />
– Moments of truth<br />
– Managing queues<br />
– Strategy for service delivery<br />
– Loyalty<br />
– Quality attributes<br />
University of Navarra<br />
13<br />
The Board of a Foundation<br />
• A mix of:<br />
– Several persons knowledgeable in the technical<br />
aspects of the mission,... or none (FECEC)<br />
– Expert on legislation<br />
– Financial expert<br />
– Communication expert<br />
– Patients ??<br />
Closely linked to the<br />
President and/or<br />
committed to the mission<br />
University of Navarra<br />
14<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 7
Prof. A. Garcia Prat<br />
Financial strategy:<br />
Conceptual framework & Risks<br />
Expenses<br />
Committed<br />
Moderate<br />
Very high<br />
Predictable/ stable<br />
Unpredictable<br />
Revenues<br />
Low<br />
Moderate<br />
University of Navarra<br />
Discretional<br />
15<br />
Sources of funding (exc. Services)<br />
Founding endowment<br />
Acquired endowment<br />
Recruited donors<br />
Occasional donors<br />
Events<br />
Major gifts<br />
Legacies<br />
Grants & subsidies<br />
University of Navarra<br />
Risk criteria<br />
Scope and<br />
cost effectiveness<br />
Break-even !<br />
Safety level revenue<br />
Mandatory expensing<br />
Increased programs<br />
Increase endowment<br />
16<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 8
Prof. A. Garcia Prat<br />
Objective: 10000 responses at a return on investment of 0.8:1<br />
Reciprocal<br />
Lists Cold Lists Door drops Inserts TV Radio Press Ads<br />
Assumed<br />
average<br />
donation<br />
15 15 18 20 20 20 30<br />
value<br />
Response<br />
rate<br />
6% 2% 1% 0,2% 0,02% 0,02% 0,015%<br />
needed<br />
Volume<br />
needed to<br />
achieve 166.666 555.555 1.500.000 5.000.000 50.000.000 50.000.000 66.700.000<br />
10000<br />
responses<br />
Revenue 149.999 150.000 157.500 200.000 200.000 200.000 300.150<br />
Investment 187.499 187.500 196.875 250.000 250.000 250.000 375.188<br />
Net Year 1 -37.500 -37.500 -39.375 -50.000 -50.000 -50.000 -75.038<br />
Drop 5% 5% 5% 5% 5% 5% 5%<br />
Upgrade 7% 7% 7% 7% 7% 7% 7%<br />
Net 2% 2% 2% 2% 2% 2% 2%<br />
Revenue<br />
year 2 152.999 153.000 160.650 204.000 204.000 204.000 306.153<br />
Maintenanc<br />
e direct<br />
costs 20.000 20.000 20.000 20.000 20.000 20.000 20.000<br />
Net year 2 132.999 133.000 140.650 184.000 184.000 184.000 286.153<br />
.....<br />
17<br />
University of Navarra<br />
Objective: 10000 responses at a return on investment of 0.8:1<br />
Reciprocal<br />
Lists Cold Lists Door drops Inserts TV Radio Press Ads<br />
Easy to<br />
achieve<br />
performance<br />
target Very easy Average Not tested OK at low volumes High test risk New media<br />
Easy to<br />
achieve<br />
volume<br />
needed<br />
Depends on<br />
size of donor<br />
file Very easy Very easy Very difficult<br />
Very difficult<br />
Very easy if<br />
test works Difficult Very difficult<br />
University of Navarra<br />
18<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 9
Prof. A. Garcia Prat<br />
<strong>NPO</strong>s and the Welfare State<br />
• In developed societies Foundations<br />
complement government action<br />
• Governments and private initiative in the<br />
social sector: prejudices. The case of<br />
Catalan local hospitals & INP<br />
• Civil perspective & control<br />
• Fiscal aspects<br />
• Operational aspects<br />
University of Navarra<br />
19<br />
Founding endowment<br />
Acquired endowment<br />
Jose Carreras International<br />
Leukaemia Foundation<br />
Very conservative<br />
criteria<br />
University of Navarra<br />
Financial revenue<br />
Occasional donors<br />
Recruited donors<br />
Grants other JC Found.<br />
Legacies<br />
Events<br />
B.M.D. Registry<br />
Fellowships<br />
Administration<br />
Discretional aids<br />
20<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 10
Prof. A. Garcia Prat<br />
LINKS<br />
• www.charity-commission.gov.uk/<br />
• www.cof.org/<br />
• dsk.de/index.htm<br />
• www.efc.be/<br />
• www.greatergood.com<br />
• www.komen.org<br />
• fdncenter.org/<br />
• www.ksg.harvard.edu/hauser/<br />
21<br />
University of Navarra<br />
THANK YOU<br />
for your interest !!<br />
more info:<br />
www.fcarreras.es/<br />
22<br />
University of Navarra<br />
<strong>NGO</strong>s in the Health Sector - Critical<br />
Success Factors 11