One of the fundamental goals for nonprofits engaged in international development is to build local capacity in the recipient country. Most often, however, international development organizations only look at building capacity within the programmatic areas in which the organization is engaged. For example, an organization concentrating on education may find itself only focused on building the capacity of local schools, school administrations, and/or Ministries of Education. However, one overlooked component that international development organizations should also focus their efforts is on building the capacity of their own overseas field offices, especially the offices’ administrative and financial functions.
This concept may seem strange since organizations typically do not receive separate funding for this purpose; however, it should be an inherent feature of an organization’s in-country operations – with funding to accomplish this goal coming from either the in-country programs’ indirect costs (overhead) or imbedded within each in-country project budget. The reason why an organization would want to build the local capacity of its in-country operations is to not only ensure that the in-country financial and administrative operations are efficient and effective, but, as an organization whose sole purpose is to foster development and growth in lesser-developed countries, it is also to make sure that their local financial and administrative staff are adequately trained and possess the transferable skills that will assist them when working in future, locally-owned businesses and nonprofits once the organization closes-out its in-country programs and foreign assistance leaves the country permanently. In other words, the local financial and administrative staff of the nonprofit today will be the office workers of local companies, government agencies, or local nonprofits in the future. In addition, through the experience they gain working at an international development organization, these employees will undoubtedly become the trainers of their country’s financial and administrative staff of tomorrow as well.
The good news is that building the capacity of in-country financial and administrative staff does not need to be a burden. It’s a great way to foster closer relations between headquarters and local staff, and adds a layer of responsibility for headquarters financial and administrative staff who will assist in this training allowing them to feel like a part of the organization’s development process. It also allows financial and administrative staff the opportunity to travel to the host countries and see the organization’s programs in action – a vital component for the organization to obtain programmatic by-in, build program-finance relations, and increase staff morale.
Below are five easy steps in which an international development organization can build the local capacity of its in-country financial and administrative operations:
- Clearly establish who is responsible for what. In many cases, the headquarters office of international development organizations is reluctant to relinquish certain duties to field employees due to concerns over in-country capacity and lack of training. When reviewing who is responsible for each task, staff can begin to see that some of the more complex duties can be delegated to in-country staff – thus alleviating the burden at headquarters while fostering growth locally. For example, many organizations limit their in-country finance staff to recording only expenses in the accounting system. Denying local staff, many of whom may be chartered accountants, the ability to fully utilize their accounting expertise diminishes their importance and hurts morale. Instead, in-country staff should be taught and encouraged to record all transactions, including calculating pre-payments and advances, straight-lining leases, accruing salaries, and developing monthly support schedules.
- Once it’s clear who is responsible for what, focus on professionally developing clear and concise organization-wide training manuals that set-forth these responsibility roles as well as policies and procedures — making sure that the internal control structure is effective under these new conditions. If training manuals already exist, review them to make sure they are up-to-date and rid the manuals of any ambiguity that may have been uncovered since they were first developed.
- Implement one-on-one trainings with in-country financial and administrative staff to review the manuals in detail. Make sure those tasked with conducting the trainings clearly understand the training manuals; can easily explain roles, responsibilities, policies, and procedures; and are friendly and approachable. Training host country staff should be conducted as a peer-to-peer training to be most effective — so discourage a training environment in which the trainer comes across as overbearing. Not only will overbearing trainers discourage the collaborative environment you are trying to build, it might also cause cross-cultural conflicts depending on the host country in which you are operating.
- After trainings are conducted, test in-country staff to ensure understanding. Mandatory testing is an excellent way to ensure staff comprehension and also ensures that in-country staff will be able to further train new, local hires on their own without headquarters involvement.
- Lastly, provide continuous all-staff trainings and encourage local in-country staff to be facilitators during these training events as they perfect their own understanding and gain additional skills. Seeing firsthand in a training situation the local staff leading discussions on policies and how to properly complete tasks will provide the organization with confirmation that local staff is fully trained and that capacity exists in the local office.
Building the local capacity of in-country financial and administrative staff takes time, but it’s not an unattainable goal. Too often, nonprofit organizations engaged in international development forgo the necessary steps to properly train local staff and thus diminish the true potential of their in-country operations. As international development organizations reassess their role in developing in-country capacity, it’s important to remember that some of the assistance the donor organization can provide the host country is within its very own operations. After all, the overall goal of any international development organization is developing local capacity, in whatever context that may be, so that once the organization exits the country, necessary skills and knowledge are in place to ensure the host country thrives in a donor-less environment.
James Willis is a nonprofit finance and operations executive who has worked in the nonprofit field for more than 15 years, holding such positions has Chief Financial Officer, Controller, VP of Finance, Director of Finance, and Budget Manager. He is also the Director of an outsourced accounting and financial services firm specializing in nonprofits. Connect with James on LinkedIn www.linkedin.com/in/jamesawillis