World Vision UK’s position on Value for Money:
management practices and plans for measurement
Principles,
January 2012
World Vision UK (WVUK) considers the application of a ‘Value for Money’ (VfM) lens to its work as
an opportunity to be more accountable to our public and private donors, to make the case for
investing in the lives of the most vulnerable, as well as to enhance our own impact through increasing
and better allocating resources. There are also risks inherent in the VfM agenda and this position
paper outlines how WVUK will maximise the opportunities and mitigate against the risks so as to
achieve these aims. The paper introduces the:
a) principles that shape our understanding of VfM;
b) management practices we have in place to maximise the VfM of our programming;
c) plans for measuring and further enhancing VfM.
The paper is an emerging position that will be revisited as we develop in our understanding of the
most appropriate ways of applying the concept to our work.
Principles
WVUK’s understanding of VfM is ‘maximising long-term value for the most vulnerable children with the
available resources’. This understanding is built upon a number of principles:
Principle 1: Using a long-term time frame for measuring value
The time-frame for measuring value is critical. The push to demonstrate value for money in the shortterm will tend to encourage interventions that deal with symptoms rather than the causes of poverty.
WVUK seeks to address these underlying causes, and value may only become evident as deeper
changes take root. Likewise sustainability is also only measurable in the longer-term. Thus WVUK
seeks, wherever, possible, to use a long-term time frame for measuring value, reflecting its modus
operandi of long-term partnerships with communities.
Principle 2: Measuring what matters, not what is easy to measure
The requirement of the VfM approach to quantify and monetarize ‘value’ carries the risk of only
measuring that which is easy to measure. This could be just measuring outputs and outcomes, as
opposed to the impacts, or involve only measuring those impacts which are more observable and so
downplaying difficult to measure impacts such as the empowerment of individuals, or the increased
capacity of institutions, which may often be the changes of most long-term value.
Principle 3: Measuring what is of value to beneficiaries
One of the ways of avoiding the trap of only measuring what is easily measurable is to place
beneficiaries at the centre of the process as they are ultimately the best judges of the value of the
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change WVUK contributes. As part of our drive to be accountable to beneficiaries as well as donors,
WVUK will be increasingly involving communities in measuring and validating the impact that we are
claiming to have.
Principle 4: Working with the most vulnerable
NGOs such as World Vision are particularly well suited to reaching the most vulnerable, those often
beyond the reach of state and market institutions. By definition, reaching those at the margins is
costly, with often greater challenges in measuring impact. But it is central to WVUK’s mission to
work with the most vulnerable, many of whom live in such fragile contexts. Where we can we will
highlight the long-term value of preventative work in fragile contexts. Even when this is difficult to
quantify we will not shy away from measuring and reporting on the higher costs. We will not let the
VfM agenda push us towards only operating in easier contexts.
Principle 5: Making the most of the available resources is foundational to World Vision
One of World Vision’s six core values is ‘stewardship’ – reflecting a concern to use the resources
entrusted to us to the maximum effect. As such we welcome an emphasis on being accountable and
responsive to the high expectations of both donors and beneficiaries.
Principle 6: Promoting collaboration rather than competition between NGOs
WVUK will seek to work with others with the same commitment to increase the wellbeing of the
most vulnerable, specifically in collectively facing the challenge of measuring change and in working
together to build capacity on the ground to collect and share data. We will also explore ways of
partnering to reduce procurement costs. We are wary of requirements on NGOs to benchmark in
relation to other CSOs which could create perverse incentives. Benchmarking in VfM has more
meaning and relevance when internal, and externally we will focus on sharing good practice - we see
ourselves primarily as collaborators, not competitors.
Principle 7: Encouraging carefully calculated, and transparently reasoned, risks
Some interventions are based on existing evidence and so the risk is low. More innovative
interventions have a greater risk of failure but also a higher potential for greater impact and improving
practice. WVUK is committed to conducting risk assessment in all programming, being transparent
in decision making and adventurous in attempting innovative solutions.
Principle 8: Taking a portfolio approach to VfM
Reflecting the importance of working in fragile contexts, alongside taking risks, WVUK will take an
overall portfolio approach to value of money, seeking to maximise the value to cost ratio across the
totality of our programming while recognising that some activities will have higher costs than others.
WVUK will also seek to balance risk across the portfolio of programming, with a mixed portfolio
including both proven but also innovative interventions.
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To operationalise the concept, WVUK concurs with the approach of the Independent Commission
on Aid Impact, that of understanding VfM to be a balance between four components - adding a fourth
‘E’ (equity) to the traditional three ‘E’s of value for money (economy, efficiency and effectiveness) 1.
The three traditional E’s cover the following areas in the results chain:
Figure 1: Economy, Efficiency and Effectiveness in the results chain2
Equity
The fourth ‘E’, equity, addresses the extent to which the benefits of programming are shared amongst
all sections of the community, specifically reaching the most vulnerable.
A judgement on value for money is made by looking across all four Es, for in some instances they
may be in tension. In particular a focus on economy (choosing the cheapest inputs) may undermine
the effectiveness of a programme (if the cheapest inputs are imported goods and services, or
inappropriate for whatever reason, this could undermine the local production and employment that
may be critical to achieving well-being).
WVUK also welcomes the BOND Effectiveness Programme publication on Value for Money3, and its
distinction between managing VfM (having good management practices) and measuring VfM (for the
purposes of comparing or demonstrating value). In the following sections of this paper we outline
the management processes WVUK is using to maximise value for money, and then the steps we will
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Independent Commission on Aid Impact (2011) ICAI’s Approach to Effectiveness and Value for Money, page 4,
available at http://icai.independent.gov.uk/wp-content/uploads/2010/11/ICAIs-Approach-to-Effectiveness-and-VFM.pdf
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Based on DFID (2011) Guidance for DFID country offices on measuring and maximising value for money in cash
transfer programmes, page 5 (available at http://www.dfid.gov.uk/Documents/publications1/guid-dfid-cnty-offs-measmax-vfm-csh-trsfr-progs.pdf)
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BOND (2011) Value for money: what it means for UK NGOs, page 8. Draft version
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be taking to better measure value for money, so we are able to more effectively account for and also
improve the way we use our resources.
Managing for Value for Money
This section outlines the practices already in place for maximising the four components of value for
money. NOTE THIS SECTION IS STILL IN DEVELOPMENT
Economy – this relates to ensuring that we get the best inputs for the least money. WUK considers low
cost to be an important consideration but not the only one. Quality, appropriateness, fitness for
purpose (and cultural preferences), timeliness of delivery and convenience are all potentially factors,
as are the wider impacts of selecting particular suppliers –including their levels of integrity and impact
on the local economy. This means that WVUK will choose the cheapest option all other things being
equal, but will pay attention to these other factors and the way they impact on the communities in
which it serves.
All offices in the World Vision partnership have procurement policies, including contract review and
supplier selection procedures. Offices are audited against these procedures to ensure strict protocols
are followed to avoid corruption or poor commercial contracts. Training for WVUK staff on the UK
Anti-Bribery Act has been rolled out and WVUK has developed a policy around anti-bribery which
includes commitments to working with our national offices to directly address the issue in
collaboration with other peer agencies.
In addition WVUK benefits from World Vision’s global reach in a number of ways, including using
framework agreements for high spend and high volume commodities, such as vehicles and IT
equipment, thus enabling economies of scale. As World Vision National Offices often operate in
multiple locations across a country they can learn this experience and use their reach to improve
purchasing power. In addition, WVUK works with World Vision’s Global Treasury Team to hedge
currency to minimize risk and provide certainty to our programme budgets, therefore minimizing
programme disruption. World Vision has also recently moved a number of its centralized back office
finance and IT operations to locations such as the Philippines and Malaysia so as to provide greater
value. Other recent initiatives to increase economy include greater alignment of the support that
various World Vision support offices (such as in the UK) provide to field offices and sharing research
and M&E costs, for example WVUK collaborating with World Vision Ireland to conduct a single joint
baseline study in similar projects sites in Sierra Leone.
A crucial input for our programming is our people, and WVUK’s membership in People in Aid reflects
our commitment to value and support our staff. Generally, World Vision emphasizes local
recruitment, with about 90% of staff working in their home country, which also increases the
economy of our workforce. WV has a global network of technical experts available to WV partners
as internal consultants. Partners can select an internal consultant, balancing their cost and benefit
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against one locally available. This ensures demand-driven requests for technical support with full
transparency thus maximising the effectiveness of technical capacity within the WV Partnership.
Efficiency – this relates to ensuring that inputs are turned into outputs in the most cost-effective way. This
entails the careful selection of the most appropriate inputs. For example, World Vision’s increased
use of low cost virtual meeting software can reduce the amount of international travel in ensuring
that the right people are talking to each other in planning and conducting our programming.
WVUK is also working to ensure a greater proportion of funding is directed to programming, having
improved its ratio of fundraising and governance to programme costs from 21.7% in 2007 to 16.2%
in 2010, a drop of 25.3% in real terms.
Enhancing efficiency implies a close monitoring of how inputs are being used to produce outputs, i.e.
to deliver the proposed activities and of relevance here is how World Vision UK is part of the wider
World Vision financial management system. All World Vision offices prepare project and programme
budgets that are approved annually. Financial reports are produced monthly, with funding offices
reviewing these as a minimum bi-annually. Projects that are higher risk or of shorter duration or that
have significant funding, are monitored monthly or quarterly as documented and agreed at the start
of the project. This ensures all donor funds are spent in line with objectives and reallocated, or
logframes redesigned if necessary to ensure maximum impact of funds available.
Programme and financial data for all WVUK-supported projects is managed through our Programmes
and Resources Information System (PARIS). PARIS incorporates sign-off procedures. WVUK has an
annual external audit. All WV field offices are subject to an internal and external audit. WVUK
reviews all internal audit reports at its quarterly Risk Review Committee meetings. The value of being
part of a global partnership includes benefits of shared learning, having certain functions centralized
to increase efficiency, reduce duplication and build technical expertise. Access to global systems also
enables improved speed of response, not just in UK but as part of a globally.
Effectiveness – this relates to ensuring that the outputs are leading to the maximum outcomes and
impacts, and speaks to whether our programming models and approaches are the most appropriate.
Assessing effectiveness depends on being able to measure impact, and articulate an empirically
informed theory of change so as to understand how outputs contribute to outcomes and then
impacts. Only then can the effectiveness of outputs in contributing to impact be evaluated.
World Vision’s overall programming is increasingly being evaluated against 15 child well-being
outcomes using a compendium of over 100 indicators. This is enabling our impact reporting, which
began publically in 2011, to draw from standardized measures of impact and so allow for comparisons
to be made about what programmes are working most effectively and where. To complement this
World Vision is developing its overall theory of change, currently being fleshed out in sector specific
theories of change. WVUK evaluates all of its long term development programmes on a five year
cyclical basis, and has a policy to evaluate all programmes over £150,000. Lessons learned are
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incorporated into programme redesigns ensuring the most productive and cost effective
interventions are scaled up and new areas of innovation are introduced. Furthermore, lessons are
learned across programmes to enable organisational learning and more effective programming in the
future.
We also seek to maximize effectiveness through allocating funding to national offices that can have
the most impact on the most vulnerable. Given our focus on the most vulnerable, World Vision
allocates funds to countries on the basis of need (using the Multidimensional Poverty Index developed
at the Oxford Poverty & Human Development Initiative). However we also take into account criteria
such as the alignment of our strategic priorities, previous performance, evaluations, management
capacity, economies of scale, audit results and financial performance and management – all factors
that determine their ability to contribute to impact. We review our country priorities at least every
5 years to ensure our portfolio and support for each country is balanced and at an appropriate level
based on weightings given to such criteria. Prior to pursuing any grant funding for a project or
programme, a feasibility assessment matrix is completed to aid decision making. WV’s global design,
monitoring and evaluation system (LEAP) helps projects and programmes deliver to the highest
standard and are closely supported and monitored. WVUK has partnership agreements with all its
WV funding partners, which outline the roles and responsibilities of both parties.
Effectiveness also implies selecting the most appropriate activities to achieve the desired goals, and
WVUK has been increasingly investing in advocacy activities – continuing to transition away from
being primarily a supplier of services to being a partner that works with communities to advocate
with and influence those responsible for the various elements of their well-being. This advocacy work
can thus leverage greater resources from the communities and at the same time strengthen the state’s
accountability to its citizens.
Equity – this relates to whether the most vulnerable benefit from our programming. World Vision’s
commitment to working with the most vulnerable is translated into mechanisms in our programming
that engage the most vulnerable groups in the design, implementation and evaluation of our
programming. World Vision’s newly introduced Integrated Programming approach includes practical
guidance on how this is to be achieved, including through social mapping exercises and the
‘community conversations’ and ‘Identification of and Listening to the Most Vulnerable Children’ tools
at the design stage of any project, and increasingly our M&E systems are being geared towards
measuring equity through disaggregated monitoring of child well-being, keeping in mind always World
Vision’s focus on ‘sustained well-being of children within families and communities, especially the most
vulnerable’.
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Plans for measuring and further enhancing VfM
While these existing processes are a strong foundation, WVUK is determined to better understand
the VfM of its programming, and so enhance it, through the following steps:
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Exploratory study on how VfM can be best measured (based on the case of social
accountability programming). The output will outline an approach to measuring VfM based on
our current M&E system. The study will also provide initial ideas on how to measure VfM in
our advocacy work (May 2012)
Develop guidance notes for programme officers, grant compliance officers and where
appropriate World Vision National Offices, in order to better integrate VfM principles within
WVUK’s existing management strategy, planning, programme design, budgeting, review and
decision-making processes, particularly in regard to projects or activities with significant
financial implications (September 2012)
Public impact reporting – this process began in 2011 and in 2012 our annual report will include
for the first time our full public impact report and for 2013 will include community validation
of impact.
We plan to engage in networks grappling with these issues, including the DEC, the learning networks
for DFID PPA agencies, the Bond Effectiveness Programme, specifically the Technical Working Group
on VfM, and the Big Push Forward thematic cluster on VfM.
For further information about World Vision UK’s plans around Value for Money, contact Angela
Kellett, Evidence & Accountability Manager, World Vision UK [email protected]
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