Issue 600: Easter, NPOs, Financial Management…

Asgar Bhikoo, monitoring and evaluation specialist at Tshikululu Social Investments, writes that in the current economic climate, the grant funding pool available to nonprofit organisations (NPOs) has shrunk, a situation that requires NPOs to demonstrate how their activities provide a social return while ensuring that their operations are financially sustainable.

Bhikoo discusses the fundamental difference between lean thinking and monitoring and evaluation (M&E) and how they can contribute towards addressing the funding, accountability and sustainability requirements of NPOs. He states that the lean approach focuses purely on efficiency and effectiveness to create quality products (and services) by reducing waste in a value chain. M&E emphasises the need to provide better service so that social programmes can offer better services that could make a differences in the lives of the beneficiaries, he says.

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CMDS, a registered practice acting as accounting officers for organisations that choose not to have an independent audit, shares some insights that may help NPOs to reduce the risk of fraud. CMDS is of the view that EFT payments, just like cheque payments, also require two signatories. It warns that, “Even though the releaser (authoriser) of an EFT may be highly trusted, a single releaser has the opportunity to clear out the contents of the organisation’s bank account with the click of a mouse, either in error or intentionally.” It further states that electronic banking that leaves control in the hands of one individual is relatively inexpensive, adding that in order to implement the control of having two separate releasers for all EFT’s, NPOs will need electronic banking for businesses, which is more expensive.

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