VA
Insights

Introduction: For slightly over 6 years since it was first founded, a grant-making NGO in the Pearl River Delta area has dedicated to support grassroots NGOs and community’s commonweal innovation. Its area of involvement has been extended from pure community poverty alleviation to 5 other areas including floating population care and environment protection. While the organization is striving to cover a variety of charitable areas, various issues have been exposed due to inadequate resource allocation. The limited human, financial and time resources created obstacles for knowledge storage; and hence the grassroots NGOs’ demand for network collaboration, academic, and government resources under common topics cannot be resolved.

A large number of Chinese NGOs have invested in a broad range of areas in order to meet more social demands from project diversity. However, at the same time of pursuing to well cover all kinds of social demands, NGOs and their projects often achieve less effective impacts than expected. Confronting the stronger social demands and rising industry competition, NGOs gradually realized that being well rounded is not a sustainable solution of their effective and long-term development.

The hundred-year-old Rockefeller Foundation has told the public that “The most important task of our job is to say ‘No’”. Bill & Melinda Gates Foundation gives specific criteria to say “NO”: projects related to developed country’s healthcare, sponsorships or donations to specific individuals, and 3 other topics are not considered. While the trend is rising for NGOs to refuse being well-rounded and optimize themselves via strategic specialization, the key solution is to find the right focused areas suitable for the NGO’s development. NGOs can achieve strategic specialization and impact optimization via the following procedure:

Step One: Determine the area to focus with 4 “do” questions

A renowned Chinese family foundation (“the Organization”) had devoted efforts to engage in 6 large areas, included more than 10 specific streams. Due to the significant difference among its impacts to the 6 areas, this organization found the necessity of strategic reform, which is a process to answer the following “4-Do” questions to derive the strategy.

1. What might we do?
Research showed that Poverty Alleviation & Disaster Relief, and Medical Aid are the two areas that received the largest portion of charitable funding from both government’s public expenditures and philanthropic donations. On the other hand, what could be a concern was that Education has been receiving diminishing charitable funding per annum; Environment Protection was also less of charitable funding’s focus. Therefore, Education and Environment Protection were 2 areas in urgent needs of NGO involvement. Considered the fact that many social and environmental issues were lack of resolving plans, Education and Environment Protection became the Organization’s 2 focused areas.

2. What should we do?
What came next was to assess public expectation: what have people expected the Organization to do? 90% of approximately 260 effective questionnaires answered by public-spirited citizens gave strong opinions to support the Organization to focus on Child & Youth Education and Environment Protection. Thus, specializing its involvement in these two areas perfectly matched public expectations.

3. What can we do?
Now let us take a look at the Organization’s capability to heavily devote its effort in Child & Youth Education and Environment Protection. From 2010 to 2012, the Organization ranked top 10 among both of all the Pre-school Education related NGOs and both of all the Environment Protection NGOs. Its investment in Pre-school Education was almost the equivalence of the sum of the other 9 organizations on China’s Pre-School Top 10 list. The Organization has accumulated rich experiences and extensive resource network: it was certainly one of the top among all Chinese NGOs engaged in similar topic areas.

4. What must we do?
The Organization’s values make significant emphasis on the cultivation of “the future” and the spirit of “Continuation of legacy”. From such a perspective, strategically specializing in Child & Youth Education and Environmental Protection is definitely mission driven; and this action would be the most proper extent of the Organization’s core value. From the assessment and matching of the external needs, public expectations, internal resource and capability, and core value, the Organization successfully found the areas of strategic specialization that fits its characteristics.

Step Two: Specify market to narrow down the project categories

NGOs can pursue the most effective impact via thorough planning, project screening and resource allocation once the direction of strategy specialization is set.

A public-raising foundation (hereafter the Foundation) has been run by government for many years. It was in urgent need to figure out the specific project categories with potential among its high variety of projects to optimize resource allocation and continue to deepen its impacts. The Foundation identified “Potential of Development” and “Contribution to Fund Raising” as 2 main indicators to further dissect the current project development trend. As all the current projects were placed on the 2 dimensional matrix of these 2 indicators (see graph below), we should pay specific attention to the core and mature projects, which made significant contributions to fund raising activities while had strong potential (Zone 2). At the same time, categories with growing projects should also be taken into consideration (Zone 3). After projects were evaluated, strategically focused categories were soon determined and grouped into panels; and implementation plan could be in place.

Once the focused strategic area and project categories are finalized, NGO can start planning profound action plans for the 4 steps of a project’s impact value chain, which consists of Research, Pilot Intervention, Capability Development, and Advocacy. This is an approach that helps accelerate the achievement of strategic aspirations and optimize the project impact to its maximum effectiveness. The coming issues of VA newsletter will give detailed insights on the utilization of impact value chain.

The achievement of precise strategic specialization is directly related to NGO’s self-positioning. Such an achievement is so important that it is the prerequisite of impact optimization. However, NGO’s strategic reforms on specialization also bring us few considerations on the actual implementation and organization’s future development. To be more specific, for example, NGOs should carefully design their action plans for the strategy transition period to hedge possible risks. Also, strategic specialization should not prune all the possibilities and capability for the NGO to change its focused areas in the future. The industry trend of strategy reform on specialization and other topics among Chinese NGOs in recent years is an exciting movement, just like the growing variety of charitable activities for the public to engage.

May the ever-growing Chinese NGOs will continue to raise their effectiveness for better serving the needs