Save the Children (SC) is a leading child-oriented global NGO. Founded in 1919, the organization is composed of ˜30 country members and an international governance body, SC International. Together, they are responsible for managing USD $2Bi worth of annual donations and delivering social programs in 100+ countries impacting the lives of ~55 million children. SC cross-thematic expertise and global presence, from health & nutrition to child protection, makes it a thought leaders in child-related issues.
Overview of Business and Operational Models
Governance model & Organizational Structure
SC operates in a network-ruled consensual governance model, composed of two major bodies. First, country members are responsible for defining the organization’s strategy and how it operates. Second, SC international is responsible for centralizing program management and delivering upon the membership priorities. Decision making processes are flat and consensus-driven between members with SC International subject to member’s decisions.
Organizational structures are mostly function-oriented, both at members and SC international. Typical functions at member level include fundraising, marketing, finance, quality and programs. At SC International, logistics and emergency response are also important functions.
SC taps into all major donor pools to source its funds. However, its income is heavily concentrated on “grants” donations from public institutions (58%) and corporations / foundations (13%). Individuals represent 25% of SC’s income. As a benchmark, World Vision sources over 50% of its funds from individuals.
Fundraising is decentralized at a country member level, from strategy to execution. Although strategy is agreed upon globally, there are limited enforcement mechanisms at a member level. A handful of support functions– such as market intel and growth strategy – are also centralized at SC international.
SC operates both emergency responses, such as Typhoon Haiyan in the Philippines, and longer-term social programs, such as Literacy Boost in Ethiopia. These two operational areas differ specially in terms of functional collaboration, resource requirements and mobilization, logistical complexity, and speed-to-scale. Launching emergency responses, for instance, require the ability to quickly mobilize resources and scale-up / scale-down local operations efficiently.
In addition to execution challenges, SC also faces difficulties to measure and quantify its impact. SC uses the total reach methodology, still unable to measure output (e.g.: # of deaths avoided) or financial impact of its programs. Although impact measurement remains a sector-wide major challenge, several NGOs are investing to develop this capability as a direct response to donor’s increasing demand for more tangible and quantified impact.
Summary of challenges
Although SC faces many challenges, from talent scarcity to overhead public-avoidance, in terms of the alignment between its business and operational models four challenges stand out.
i) Excessive concentration of fundraising on “grants”.
In a simplified manner, NGOs look at fundraising through 3 dimensions: scalability, financial sustainability and operational flexibility. While grants are usually a key scalability driver, they pose financial sustainability risks – large institutions are more volatile to economic downturns – also limiting operational flexibility – more complex and tighter rules on how funds can be used. Therefore, SC’s over reliance on grants poses a threat to the scale and effectiveness of its operation model, suggesting the NGO should target growing its individual giving segment and channels.
ii) Inability to accurately measure and quantify tangible results.
As more and more global organizations, such as the WFP, invest to develop impact measurement capabilities, SC’s business model may face an increasing risk of donor-loss if the organization is unable to keep up with this trend. Given its complex operational model and limited capabilities, SC should explore partnership opportunities (such as WFP and BCG) to prevent this challenge from becoming a source of competitive disadvantage in the future.
iii) Siloed functional organizational structures.
Although “program-oriented” structures are emerging, such as emergency response operational areas, the prevailing functional organizational mindset limits internal cooperation and alignment which results in operational inefficiency. An example is how limited cooperation between fundraising and emergency response teams reduces the scale of resources available limiting the effectiveness of emergency response campaigns.
iv) Inefficient time-consuming decision making process.
Finally, although technically a governance issue, SC’s network consensus-driven governance create challenges for long term operational efficiency. The absence of an overarching global board or a single decision-making point (e.g.: Global CEO) makes decision making and alignment across country members a slow and difficult process, hindering the speed and efficiency of change management initiatives.
Although SC is widely recognized for its impact and thought leadership on child-related issues, the organization faces several challenges related to its business, operational and governance models.
Rather then impediments, these challenges represent opportunities for further differentiation and competitive advantage. In addition, and above all else, they represent opportunities to further scale and efficiency increasing the impact on children’s lives.
 – https://www.savethechildren.net/about-us/our-story
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 – http://www.forbes.com/sites/rahimkanani/2014/03/15/how-to-measure-social-impact-new-research-and-insights/
 – http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=4768#.VmTsuITzhFJ
 – http://zimmerman-lehman.com/importanceofindividualgiving.htm
 – http://www.wvi.org/international/publication/world-vision-international-annual-review-2014
 – http://www.dailymail.co.uk/news/article-2550648/Fury-234-000-salary-boss-Save-Children-Charity-chiefs-huge-wages-reined-say-MPs.html
 – http://documents.wfp.org/stellent/groups/public/documents/newsroom/wfp225966.pdf
 – Professional experience at Save the Children International