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Comparison between NGOs

Evaluation of International Organizations (Part #5)

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The measures of efficiency and effectiveness defined above are mainly for use as an assessment of the progress of a particular organization, An organization may, however, improve on previous years performance, but not be as efficient or effective as other organizations concerned with the same sort of problems. It is important for all groups concerned with the progress of a particular organization to realize any such differences and the reason for them. The executives of the organization, the members, and the potential fund-allocating bodies all need such information.

In the case of commercial organizations, comparison is basod on an analysis of the balance sheet and income statement for each organization. It is recognized that it is not meaningful (except for investment purposes) to compare organizations which operate in different ways, for example, an engineering consultancy firm and a shoe manufacturing firm. It is however useful to compare organizations in the same industry with approximately the same characteristics, e.g. heavy engineering firms, or leather products companies. Such comparison is based on a classification of the organizations and enables individual companies to determine in what respect their operations are better or worse than the average for the other companies in the industry. One isolated attempt to provide some form of analysis for trade associations has been made through the American Society of Association Executives. (Huppelsberg, R., D11). Apart from this, no attempt has been made to develop any such balance sheet analysis for non-profit organizations. The reason given is that the profit criterion is absent. Profit is however only one of the factors which are checked in any analysis. There are many others which are concerned with identifying the internal equilibrium and general health of the company which are not directly related to the existence of profits. In addition, the extent of the loss made, if any, by a non-profit organization does give useful information on the affairs of the NGO even if other criteria are of relatively greater importance.

A list of indexes is given below which could be usefully investigated further as a basis for comparison between organizations using data in their balance sheets.