BDO’s 8th Annual Nonprofit Standards benchmarking survey provides an overview on International Non-Governmental Organizations. The report identified top challenges:
- 54% the respondents reported revenue increases last year and anticipate increases next year, while 28% reported a revenue decrease, compared to 14% last year.
- 84% plan to expand or shift their mission next year in response to pressure from the board (50%), funders (50%) and evolving geopolitical, environmental or social factors (36%).
- INGOs are shifting to localization, with 42% establishing regional structures and delegating authority to regional offices.
- 74% have at least seven months of operating reserves. Some are holding these reserves to invest in structural adjustments, such as a regional model. The report found that INGOs are saving to take advantage of higher interest rates and to wait and see what the new administration has in store for USAID.
Decentralizing and establishing regional platforms is a common method to support localized structures. However, recovering costs associated with these support platforms can be challenging. Managing the allocation of direct and indirect costs to a regional platform requires careful oversight. International NGOs (INGOs) with Negotiated Indirect Cost Rate Agreements (NICRAs) will need to update their structure and accounting policies to ensure transparency and donor acceptability. And of course, they should be prepared for audits.
