11. Guidelines for good policy and practice on the part of Governments

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Guideline 1: Creating the right environment

In order to create an enabling environment for NGOs, government should promote voluntarism generally and acknowledge the validity of the role of NGOs in civil society.

Governments should also have appropriate legislation and official procedures for the registration and public accountability of NGOs.

1/1 Definition:

Legislation and official procedures established by governments should enable the formation and operation of organisations which possess the defining characteristics of NGOs:

- voluntary formation and an element of voluntary participation;

- controlled and managed independently, but nonetheless operated within the laws of society as a whole;

- not for the personal private profit or gain of those who control and manage their affairs, and using earned revenues in pursuit of the aims of the organisation;

- not self-serving: aim to improve the circumstances and prospects of disadvantaged people and/or act on concerns and issues which are detrimental to the well-being, circumstances or prospects of people or society as a whole.

1/2 Recognition:

Legislation and official procedures established by governments in respect of NGOs should enable:

NGOs to be independent, while operating within the law;

NGOs to pursue a variety of activities in the course of their work, including: service and project delivery and management mobilising human and other resources research and innovation human resource development advocacy, campaigning and reform;

NGOs to operate at local, regional, national or international levels;

NGOs to operate under legal structures which are appropriate to them, including: private trusts and foundations; not-for-profit limited liability companies; associations, co-operatives, friendly and provident societies;

NGOs to be linked to parent bodies, provided these are

NGOs themselves; and to form subsidiary bodies in pursuit of their aims;

NGOs to secure resources from a wide variety of sources in order to carry out their work, including private citizens, the public sector, the private sector, and grant-giving agencies.

1/3 Consultation and partnership:

Governments should at all times endeavour to work in partnership with NGOs. This should include open information provision and consultation on all matters affecting the work on interests of NGOs, including consulting with them before decisions are made or agreements entered into with other parties which may affect their work or interests; and cooperation on matters of mutual benefit, such as in seeking funds from international and intergovernmental bodies. The development of legislation and official procedures should also be done in consultation with NGOs.

Guideline 2: Frameworks and mechanisms

Governments at all levels should have appropriate frameworks and mechanisms to facilitate communication and consultation with NGOs and to utilise their experience and expertise in the general policy-making process and in the planning and design of relevant government programmes. The frameworks and mechanisms should maximise the use of available resources and ensure reciprocal transparency, while nevertheless maintaining the freedom and ability of both parties to act independently.

They may have any or all of the following features:

- a main focal point for NGO/government relations, in order to facilitate contact between government ministries and NGOs;

- focal points/desk officers for relations in each ministry having areas of common interest with NGOs;

- ensuring NGO representation on relevant government working parties and committees established to advise on matters of common interest to NGOs;

- organising consultative meetings with NGOs, and issuing relevant documentation to them;

- organising fora which bring government and NGO personnel together to develop strategies for strengthening NGO/government understanding and partnership in general.

Guideline 3: Support for NGOs

3/1 Grants and contracts:

In providing grants or contracts to NGOs, governments should:

- adopt the good policy and practice guidelines (12-15) which apply to funders of all types;

- recognise that NGOs can: provide good value for money, since all their resources are devoted to the pursuit of their objectives although they should not be seen as a cheap option for service delivery; pioneer and innovate with new ways of working and deal with needs and problems that governments are unable to respond to as effectively; be efficient and effective programme and project managers, because they can often mobilise human and other financial resources.<>p recognise that different funding terms and conditions should be applied to: grants for activities designed and managed by NGOs; contract fees paid to NGOs for services provided for or on behalf of governments;

- ensure that when an NGO is contracted to deliver services: such contracts are within the capacity of the NGO and do not place a burden on the organisation which is greater than it is capable of absorbing; such contracts do not undermine the independence of the
NGO, nor distort its stated objectives and purposes.

3/2 Other ways of financially assisting NGOs:

Governments should also support the work of NGOs by:

- granting NGOs exemptions from or reductions in taxes and duties;

- facilitating foreign currency importation;

- providing tax relief for donations made to NGOs;

- assisting or giving official support for the production of directories and handbooks which provide information about both government and NGOs and their work;

- supporting and assisting initiatives which aim to improve the work and impact of NGOs, and the technical and managerial capacities and abilities of their staff, volunteers and members/beneficiaries.

Guideline 4: Government-established organisations

Governments may from time to time establish national, regional/state or local organisations outside the mainstream state institutions to carry out certain functions. While these may have similarities with NGOs as defined in Guideline 1, neither government nor the organisations themselves should present such organisations as true NGOs. Governments should, before establishing such organisations or taking over existing NGOs to fulfil the desired purposes, consider, in consultation with relevant NGOs, if existing NGOs could carry out the necessary functions, or if the organisations could be established and operated as independent bodies fulfilling all the defining characteristics of true NGOs.

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Guideline 5: Values

The values which underpin the objectives of NGOs should be based on the desire to advance and improve the human condition. They should be evident in:

- respect for the rights, culture and dignity of men and women served or affected by the organisation's work, taking into consideration their special needs and abilities;

- devoting the maximum possible proportion of resources available to the task at hand;

- ensuring that the organisation remains true to its mission and objectives and that its identity, integrity, methods and activities are not distorted, subverted, taken over or corrupted by external or internal personal or organisational self-interests;

- involving, whenever possible, beneficiaries as partners;

- willingness to collaborate and network with other agencies around issues of mutual concern and interest rather than compete with them;

- maintaining high ethical standards at both an organisational and personal level.

Guideline 6: Transparency

6/1 Information: NGOs should make clearly known who they are and what they do. Information made available by NGOs should include statements of:

- the organisation's mission, objectives and policies;
- its methods, activities and achievements, including evaluations and analyses of them;
- its geographical scope;
- its organisational structure, and in particular how it is controlled and managed;
- its constituency, affiliations and links to other organisations, if any; and
- its sources and uses of funds.

6/2 Means of communication: In order to be transparent about their work, and secure and maintain open relationships with other organisations, as well as the general public, NGOs should:

- publish and disseminate annual narrative and financial reports, as well as reports on particular activities, and on the results of reviews and evaluations;
- use the media as a means of informing the public about their work;
- mount public education programmes where appropriate;
- maintain regular dialogue with government and other relevant organisations;
- participate in NGO networks.

Guideline 7: Legal structure

In order to give them proper legal protection, including defining the powers and/or liability of Board members, NGOs should adopt appropriate legal structures. The legal entity chosen should be that which is most appropriate to the objectives of the organisation and its control and management arrangements.

Appropriate legal structures include: private trusts and foundations, not-for-profit and limited liability companies; associations, co-operatives, friendly and provident societies.

Guideline 8: Governance

8/1 Accountability: The adoption of a legal entity, and/or government regulatory arrangements will require each NGO to have a constitution, by-laws, memorandum of association or similar document which establishes a framework for the governance of the organisation. This should vest control of the organisation in the hands of a Board of Management, through which the NGO is accountable to:

- the public, both in the manner defined in the relevant company, charitable, trust or other law, and through the means of communication set out in Guideline 6/2;

- members and/or beneficiaries of the organisation;

- funders, and those organisations with which contracts are entered into.

8/2 Boards: Members of the Boards of NGOs may be either nominated or elected, according to the dictates of the legal entity adopted. They may delegate responsibility to others, including the paid staff, but must accept ultimate responsibility for governance over all aspects of the NGO. This will include responsibility for:

- safeguarding the vision, integrity, objectives and policies of the organisation;

- ensuring high standards of planning, operation, administration, evaluation and reporting in the organisation;

- ensuring that statutory obligations are met;

- ensuring that adequate resources are available to the organisation for all aspects of its work and administration;

- ensuring that resources provided to the organisation are used for their intended purpose and are properly accounted for.

8/3 Basis of participation on Boards: Members of Boards should work in a voluntary and unpaid capacity but may nonetheless receive reimbursement of expenses incurred.

Guideline 9: Management

The management practices of NGOs should be of a high standard and aim to strengthen institutional capacity and sustainability. Management practices in NGOs should include established procedures for:

- the maximum utilisation and development of the human resource skills and capacities possessed by the organisation, whether by Board members, paid staff, volunteers or beneficiaries and based on the principle of equal opportunities and gender equity;

- the planning and effective management of activities, projects and programmes;

- accountability and transparency;

- continuous monitoring and review of activities, projects and programmes;

- regular and rigorous evaluations of activities, projects and programmes, carried out with the participation of beneficiaries wherever possible, and of the functioning and impact of the organisation as a whole.

Guideline 10: Financial management

The financial management practices of NGOs should be of a high standard and aim to strengthen institutional capacity and sustainability. In managing their financial affairs, NGOs should:

- when negotiating with funders on grants and/or contracts, ensure that the terms and conditions of funding agreements and the procedures and timetable for reporting are mutually acceptable;

- only pursue or accept grants or contracts that: are fully consistent with their mission and objectives and do not cause their identity, integrity, methods and activities to be distorted, subverted, or corrupted; do not compromise their independence; do not place more responsibility on their organisation than they can manage;

- seek to avoid dependence on single, narrow or insecure sources of funding or contracts. Wherever possible NGO income bases should be broad and orientated to long-term sustainability. Other means of achieving such sustainability should include developing and capitalising upon the organisation's specialist expertise and skills;

- ensure that their own fund-raising efforts do not undermine the viability and sustainability of other NGOs;

- in preparing budgets and costings, ensure that the full organisational and administrative costs are recognised and included and adequate resources obtained to meet them;

- have adequate and appropriate procedures for financial review and monitoring;

- ensure that funds provided are always used for their intended purpose.

Guideline 11: Co-operation and networking

NGOs should work to establish and participate in mechanisms, including umbrella and network NGOs, through which joint action, representation of common interests, provision of training and support, information sharing and co-ordination of activities can be pursued. Such common interests may include, inter alia:

- the development of common practices and standards in reporting and accounting;
- the development of common codes of conduct, ethics, policy and practice;
- the development of management practices and standards;
- the development of monitoring and evaluation practices and standards;
- the provision of professional and legal services to NGOs;
- the production of information directories;
- other co-operative activities, including that of monitoring

NGO policies and practices.

12. Guidelines for good policy and practice on the part of NGOs

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Guideline 12: Funding policies

12/1 Partnership:

Funders' policies and actions should be underpinned by a policy and philosophy of partnership, both with those who supply their funds, and those NGOs to which they are made available.

12/2 Consultation:

Funders need to honour responsibilities and be accountable to their funding sources. In formulating their policies, they should, nevertheless, consult with relevant NGOs and NGO networks, with other funders, and where appropriate with governments about:

- overall funding policies, strategies and priorities;
- the social, legal and economic environments in which NGOs are operating;
- the needs of NGOs, their capacities, potential and limitations;
- criteria and practices for funding, including procedures, conditions, agreements and time-scales for the disbursement of funds;
- management, reporting, accountability and evaluation arrangements.

12/3 Research:

As well as consulting NGOs and others in the process of developing their policies, funders should also inform the development of such policies through undertaking appropriate research.

12/4 Communication:

Funders should be transparent by:

- communicating their mission, objectives, policies, activities, geographical scope, decision-making, fund- raising and grant-giving methods and procedures and criteria both to their sources of funds and to potential
NGO recipients;

- producing and disseminating reports on their income and expenditure;

- engaging in regular dialogue with NGOs.

13. Guidelines for good policy and practice on the part of funders

Guideline 13: Funding purposes

13/1 Internal costs:

In formulating their policies and criteria, funders should recognise that as well as requiring funds for their programme, project and service activities, NGOs also require funds to meet the internal and often hidden costs of:

- training and human resource development, including gender equity;
- administration, management and financial management;
- research and development;
- evaluation;
- communication.

13/2 Sustainability:

Funders should also be prepared to consider support which will strengthen the long-term sustainability of NGOs. Such support could include:

- making investment possible by NGOs or by funders on their behalf;
- offering long-term, comprehensive and flexible support rather than short-term, partial or project-specific funding;
- encouragement and support for co-operation and networking among NGOs.

13/3 Umbrella NGOs and NGO networks:

Funders should also be prepared, individually and collaboratively with other funders, to provide financial support for umbrella NGOs, NGO networks and organisations which provide services to support and strengthen the management and organisational capacities of NGOs.

14. Guidelines for good policy and practice on the part of ''North'' and international agencies

Guideline 14: Funding practices

14/1 Procedures and conditions:

The procedures and conditions of funders should:

- not undermine the integrity and independence of NGOs;
- not distort their identity, objectives and activities nor promote division or discrimination.

14/2 Agreements:

When funds are supplied to an NGO, funder and NGO should have a written agreement or other form of formal understanding or contract which specifies:

- the overall purpose of the grant or contract fee supplied, and the methods and activities to be undertaken;
- intellectual property rights, including material designed for fund-raising or educational purposes;
- reporting operational and financial arrangements and general communications procedures;
- a detailed budget, specifying amounts allocated to external activity costs and internal costs;
- procedures regarding visits by the funder to the NGO and activity being supported;
- procedures for periodic review of the grant or contract;
- procedures for grant or contract amendment by either party;
- procedures in the event of a dispute;
- procedures to be used by either party for contract termination.

15. Implementing the guidelines: A plan of action

Guideline 15: Fund-raising

15/1 Standards:

Organisations raising funds from the general public should ensure that the messages they convey accurately describe:

- the work and purposes of the recipient organisations;
- the nature of the problem or need being addressed;
- the contributions made by others, including the people themselves.

In particular, fund-raising practices should avoid:

- the use of messages and images that might be construed as racist, elitist, sexist or paternalistic;
- projecting messages and images of dependency and helplessness or backwardness.

15/2 Monitoring:

Through collaborative arrangements, funders and/or NGO network/umbrella organisations and/or recipient organisations should monitor and review the practices of fund-raising organisations to ensure that agreed fund-raising standards are maintained.

15/3 Organisations established by funders:

While funders (including private sector organisations) may from time to time establish organisations for particular purposes, having similarities with NGOs as defined in Guideline 1, neither funders not the organisations themselves should present such organisations as true NGOs. Funders should, before establishing such organisations or taking over existing NGOs to fulfil the desired purposes, consider, in consultation with relevant NGOs, if existing NGOs could carry out the desired functions or if the organisations could be established and operated as independent bodies fulfilling all the defining characteristics of true NGOs.

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Guideline 16: Operational Policies

16/1 Partnership:

The policies and operations of northern NGOs and international agencies operating in countries other than their own should be underpinned by a policy and practice of partnership with organisations in the country of operation, and especially with relevant NGOs, based on mutual trust and respect.

16/2 Consultation:

In formulating their policies, they should consult with relevant NGOs and NGO networks and with other relevant agencies in the country of operation, about:

- overall policies, strategies;
- operational and management practices;
- the potential and limitations of working with local NGOs;
- actual or proposed agreements with other bodies, including governments.

16/3 Research:

As well as consulting NGOs and others in the process of developing their policies, they should also inform the development of such policies through undertaking appropriate research, including taking account of local research and the prior experience of local NGOs in the country concerned.

16/4 Communication:

They should be transparent by communicating their mission, objectives, policies, operational practices, methods, and activities, and management and decision-making procedures to all relevant parties, including NGOs and NGO networks in the country concerned.

Guideline 17: Conduct

In carrying out their operations and in communicating information about their work, North and international agencies operating in countries other than their own should:

- respect the laws of the countries in which they operate;
- respect the cultures and traditions of the peoples and communities in which they operate;
- at all times act to foster and promote the capacities and abilities of local NGOs, including by participating in relevant NGO umbrellas and networks, and avoiding actions which might cause rivalry or competition with or among local NGOs;
- avoid acting in paternalistic, sexist, racist or elitist ways.