Non-governmental organisations (NGOs) have changed dramatically in the past 20 years. There are many more of them; they are larger; they are more influential; and they are increasingly central to the development debate.

But in challenging economic conditions with profound implications for the developing world, NGOs need to find a way to redouble their impact in tackling the immense problems that exist. This will require a transformation on a scale that many NGOs are ill-equipped to achieve.

From a financial standpoint, NGOs will arguably not feel the full pain of the current downturn until 2010-11, but if they don’t start transforming themselves now, they will be even more affected when the pain does kick in. The transformation needs to centre on collaborating closely and effectively with organisations from the public and private sector. While some progress has been made, our research and experience suggest that NGOs still lack the capacity to engage fully with and influence a new breed of partners, including large corporations.

NGOs are in one of three phases of evolution. The first phase, foundation, is when NGOs invest in the management approaches and organisational competencies needed to operate more effectively. This investment is often piecemeal and tactical rather than strategic. But it creates a basis for them to realise the far greater opportunities in the second and third phases: transformation and collaboration. Few NGOs have reached these latter stages.

In the transformation phase, change starts to be driven by strategic imperatives and spans the entire organisation. We are already seeing the early signs of its impact in the way NGOs work together to reduce costs and improve efficiency. Collaboration is the third and most powerful phase. This involves the creation of tightly integrated, innovative coalitions between organisations from the development, private and public sectors, each applying complementary capabilities to find solutions in areas such as poverty, education and climate change in developing countries.

Working together across different sectors raises challenges. It will require leaders from all three constituencies to support each other, to deliver more together than they could achieve alone. There are some great examples of collaboration including the multisector partnership between Barclays Bank, Care International, Plan International and Accenture. This collaboration will enable 800,000 people in ten developing countries to access community-based financial services. Each partner involved in the programme brings its own skills and expertise to the project.

NGO leaders need to change culture and attitudes to work closer with businesses. They need to persuade their boards, funders and supporters of the need for change. And they need to learn from the best business thinking, skills and capabilities. But it’s a two-way street. Business and the private sector have a lot to learn from NGOs. Change is never easy but the current crisis should be seized upon as an opportunity fundamentally to restructure NGOs for the challenges and complexities of development in the 21st century.

— Gib Bulloch is executive director of Accenture Development Partnerships

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