After decades working with only governments on problems such as environmental degradation, poor access to education, poverty and public health crises, the non-profit sector has a new set of colleagues – corporate executives. As the business world embraces corporate responsibility, companies are working on projects that often resemble those of non-governmental organisations (NGOs) or charities. As a result, non-profit organisations are adopting some of the efficiency and accountability practices of the business world.

Partnerships established between companies and NGOs to help achieve social or environmental goals are also bringing some of the skills and techniques of the business sector to non-profit organisations. “The line between the for-profit and non-profit sectors is getting thinner,” says Daniel Katz, founder and board chair of the Rainforest Alliance, a non-profit conservation organisation that monitors the sustainability of agriculture, forestry and tourism.

Mr Katz sees another reason for the professionalism of the non-profit sector: “We’re now able to find in-house lawyers and other people who could work in the private sector but who now choose to work for an organisation because of quality of life and quality of missions.”

These people bring valuable skills, contacts and concepts with them. And as they do, terms such as “clients” and “performance management” are entering the non-profit world’s lexicon.

For some organisations, management techniques are becoming highly sophisticated. The United Nations World Food Programme has recently executed a workforce planning exercise as well as introducing a career management framework.

Yasmina McCarty, senior associate for strategy and customer insight at Women’s World Banking, a non-profit microfinance organisation working in more than 40 countries, says competition from the business sector is driving management innovations in the non-profit world. “In the markets where our microfinance institutions are working, they’re now competing with the [commercial] banks,” she says. “That’s a huge part of what’s pushing the customer focus – and we didn’t have that in the past.”

Public pressure is also driving change in the sector. As humanitarian crises and global problems such as the spread of HIV-Aids hit the headlines, relief agencies and NGOs are coming under greater public scrutiny.

One response was the launch last year of the NGO Accountability Charter by a group of leading international organisations including Amnesty International, Greenpeace and Oxfam. The charter aims to demonstrate the sector’s commitment to greater transparency.

Signatories must conduct transparent bookkeeping and regular assessments in areas such as environmental impact and ethical fundraising standards. The group is also developing reporting and complaints mechanisms.

“Those of us working with donors’ money have always been held accountable and we are accountable in the countries where we work, so this is not something new,” says Ramesh Singh, chief executive of ActionAid, one of the organisations that helped develop the charter. “But it needs to be visible and held to a standard that other people will respect.”

Another initiative, the Geneva-based Humanitarian Accountability Partnership – which, with members such as Oxfam and World Vision International, aims to make humanitarian action accountable to disaster survivors – is working on a manual that will help organisations develop work plans, good practices and quality management, and provide guidelines on standards and procedures for certification.

While public attention has played an important role in the move towards greater accountability and professionalism, some of the pressure is coming from donors.

Venture philanthropists such as the UK’s Impetus Trust, a grant-making organisation, are bringing venture capital techniques to the voluntary sector by working with charities to improve their management and performance. The Impetus Trust only makes its money available to a non-profit organisation after it has analysed the quality of its operations and senior management.

Robin Murphy, vice-president for external relations at the World Resources Institute, dates this kind of approach back to the late 1990s. “In the days when the dotcom folks in Silicon Valley started piling up money and wanted to give it away, they weren’t happy with what they saw – a lack of accountability and professionalism,” he says. “So a lot of capacity building and system changes seem to emanate from there.”

However, Mr Murphy, who formerly ran a company advising US foundations and non-profit organisations, sees the power of the foundations funding many non-profit organisations as a problem.

“A lot of foundations don’t want to give funds for overheads or longer-term capacity building, but want to give it only to the programmes,” he says. “In the private world you invest in R&D and people from a strategic standpoint, and a lot of foundations do a disservice by not doing this – that’s a real achilles’ heel in the system.”

Case study: Development Executive Group

When Raj Kumar was doing the groundwork for his Development Executive Group – a Washington DC-based organisation providing business intelligence and recruiting services to the development community – he and a group of fellow students spent plenty of time on the road seeing how donor money was being spent.

“We found pretty extensive business and operational inefficiency,” says Mr Kumar, who was then at the Kennedy School of Government at Harvard University. “So we decided to build an organisation to directly serve the people who serve the poor.”

The result is a fee-based for-profit membership organisation that works to enhance the efficiency of organisations – both for-profit and non-profit – in the development world. The decision to operate as a for-profit group was a strategic one, says Mr Kumar. “We need to be close to the people who service the poor, and if they’re paying our fees, we’ll be more client-driven.”

Today, the Development Executive Group is one of the leading hubs of information for the development sector, serving more than 100,000 people in the industry, including 200 executive members such as the American Red Cross, World Vision, Catholic Relief Services and Care.

When fleshing out his ideas for the organisation, Mr Kumar saw several areas of weakness in the development arena. For one, the recruitment process was in many organisations haphazard and lacking any formal strategy or procedures. “People were mostly hiring other people they knew,” he says.

One of the Development Executive Group’s main services is an online recruitment marketplace. Anyone can go on to the website and look for a job or post a cv.

Another big problem for development organisations is to identify funding sources. NGOs and consultancies know that money is available from groups such as the World Bank, the US Agency for International Development or the UK’s Department for International Development. But organisations find it hard to keep track of the projects that are being funded.

The Development Executive Group has 25 researchers across the world keeping track of all the projects emerging from major donor agencies. Those are put into a database so that users can search for projects or sign up to receive e-mail alerts about those that are appropriate to their area of focus.

Part of the reason Mr Kumar believes such services are essential for non-profit organisations is that they are now competing with the business sector for development work. And mainstream corporate names are now among the members of the Development Executive Group. Earlier, the organisations’ corporate clients tended to be firms already in the development sector. “Now we have members like Oracle, SAP, Microsoft, KPMG and PwC,” says Mr Kumar.

But whether his organisation is assisting companies or non-profit groups, Mr Kumar believes the search networking opportunities it provides are essential for enhancing the efficiency of development projects. “We’re the Google of foreign aid,” he says.