This is a post I originally put on the PEPY Team Journal.
What is this “sustainability” you speak of? I do not think it means what you think it means. This word is used so often now in development that it seems to have taken on a huge range of meanings. Are we all spending too much time looking for an imaginary lost city and too little time focusing on other goals that increase the impact of our programs? Has “sustainability” turned into the Holy Grail of development — promising that once you find it, your program can live forever? And perhaps the most important questions are, how is sustainability even possible and should it always be our goal?
Like any overused word, the answer to these questions depends largely on how we define it. “Financial sustainability” is something people involved in any type of business can understand. A business can be financially sustainable if the money coming in is equal to or higher than the money going out, and if the timing of those transactions matches up to allow the group to continue operating. By this definition, sustainability would be the same for an NGO’s micro-loan program as it would for a Swiss bank.
“Financial sustainability” focuses on one variable — money — so it is easier to measure than sustainability in NGOs. Merely taking into account financial factors in order to rate an NGO’s overall sustainability is too limiting. Likewise, rating NGOs only by looking at their overhead to program budget is not a successful way to rank the “best” NGOs. Both of these disregard the main reason NGOs (should) have been started in the first place: the “impact” of their work. (Note: For further disucssion of financial sustainability and how this relates to social ventures check out this posting).
For our own purposes of understanding the impact of our programs at PEPY and creating future plans of action, we needed to do two things: 1) decide how to measure the “sustainability” of our programs, and 2) decide if/when “sustainability” defined as such should indeed be a main goal for each program we offer.
In order to facilitate this discussion with our staff, I drew this diagram on the wall to help us rank and measure the “sustainability” of each program. It looks at two factors: financial sustainability as a factor of program cost and local purchasing power, and impact continuity as a factor of human capacity building. The latter is implemented with regards to the skills, knowledge, connections and ideas invested in people and systems in the area in order to be better equipped to tackle problems.
Note: We picked Human Capacity Building as our impact assessment factor alongside the financial factor, as we would like PEPY’s future programs to be focused on changing human attitudes and actions rather than improving access to material needs. If we were working on programs in disaster relief, programs aimed at providing infrastructure, or were working to give “things” to people to improve their livelihoods, the two factors might have been 1) money needed for upkeep of the items and 2) the ability for those items to increase the potential for greater resource access in the future. The thought process, however, would remain the same. Social ventures and non-profits are different than companies because the goals are not primarily profit-driven. In order to measure sustainability we must look at both factors: financial sustainability and the other areas of impact in which we are looking to effect change.
The first line measures human capacity building. On the far left, there is little to no investment in the skills, abilities or knowledge of the local consumers. On the far right, the people affected by the program have increased abilities, skills and knowledge due to the program. The acquired skills would be applicable for solving similar problems on their own in the future.
The second line measures the cost to the communities the program is meant to support. On the far right, programs require significant external resources. The local communities (be those governments, villages or NGO partners) involved cannot afford these programs on their own. On the far left, the costs are very low and might be deemed “affordable” both in time and money costs by local consumers of the product/service/idea.
How do we use this at PEPY?
We set two goals for PEPY’s programs as means for us to rate, adjust and design our current and future programs. We made our first goal a high level of human capacity building, as the impact of the program would be sustained through the people affected . This would occur even if the program were not financially sustainable. The second goal was to develop programs with very little financial costs that might continue after PEPY leaves.
We pretended that PEPY was ending all programs in three years. If that were to happen, we looked at what might happen to each of our programs. We rated each program along these two lines and decided if they had the potential to:
- Be financially sustainable without PEPY (i.e. monthly teacher meetings of teachers from each grade might continue even after PEPY stopped coordinating the dates)
- Create a lasting impact via human capacity building that will continue after the program ends (i.e. PEPY-sponsored weekly teacher training sessions from paid experts would stop, but the ability of teachers to be better at their jobs would continue)
- Provide access to physical resources but have little impact on increasing skills, knowledge, or positive changes in actions
After evaluating each program, we decided to focus our future goals on programs that fell into groups i and ii and either stop or redesign any programs that fell into category iii.
We then looked at the extremes of the combinations of low/high costs and low/high human capacity building and came up with these combinations:
Option A: The program is not financially sustainable nor is the impact of the program improving the capacity of people to solve similar problems on their own.
Costs = High
Human Capacity Building = Low
Costs (financial or time) in this category are typically higher than people can afford. This is because the item/service is not valued as much, or the ”giving problem” has already taken root: people are waiting for the item or program to be provided to them for free rather than spending their own money or time on these items or services. It is likely that one or more of these things are true. It could also be assumed that the community would have found a way to purchase the good/service on their own. These programs provide little to no improvements in human capacity, effect little to no improvement in the ability of communities to tackle similar problems on their own in the future, and the costs are too high for the programs to be continued by the programs’ constituents once the NGO stops.
Programs that might fall into this category: Disaster relief item distribution, building schools or other buildings, giving away books/school materials/food/wells, and PEPY’s Bike-to-School Program (click here for our analysis of the sustainability of this program) (LINK TO THE SEPARATE ARTICLE ON THE BTSP)
Option B: Financial sustainability possible but little human development.
Costs = Low
Human Capacity Building = Low
Programs in this category with a low human capacity building factor typically involve providing things or services for free or at a very low cost. If the item/service is being sold at actual market costs, then this seems like a perfect opportunity for sustainability. Local business people learn how to make/offer this service, their costs of entry into the market are low and the products are affordable to the target market. If the items are being sold at lower than their actual costs — especially if these things are done with an item or service that already has a low cost to the community — this program might destroy the local economy in this field and discourage others to provide this on their own.
Programs that might fall into this category: PEPY’s water filter sales program, micro-finance programs that provide loans but not training and human development around the topic, etc.
Option C: The impact of the programs is sustainable.
Costs = High
Human Capacity Building = High
The program costs are likely too high for the community to continue the same action on their own, but the ability of the people involved in the local system to complete their job roles or to solve similar future problems on their own is increased. These programs cause improvements in human capacity and will make future actions more successful, even if the NGO programs stop.
Programs that might fall into this category: Resource intensive trainings, study-trips, supplemental education programs.
Option D: The program can be sustained without outside support and increases capacity within the people and systems left behind once the program finishes.
Costs = Low
Human Capacity Building = High
The program costs are low and the idea or concept being introduced is something that, after training and integration into the communities’ practices, can be continued by the constituents it is meant to support. These programs cause improvements in human capacity and the ability of the people affected to continue the programs on their own. They make future actions more successful, even if the NGO program stops.
Programs that might fall into this category: education and training courses that people are willing to pay the full value of, trainings or planned learning sessions that involve collaboration and the creation of systems but do not cost money, true social ventures, which focus on human development.
This does not mean that we don’t think school buildings are necessary, nor does it mean we will never construct a school building again. Instead, it means that we want to focus on human capacity building. We recognize that in order to have the most impact towards achieving our goals of making sure that high quality education is accessible in rural Cambodia, we need to focus on building up the skills and systems that provide that education.
If we follow this path, “sustainability” will come to us in two forms once PEPY stops: programs that can continue operating without NGO support, and programs that empower people to continue to make those changes themselves. We’d love to hear your thoughts on this!