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GIK Strategic Decision Framework

GIK Strategic Decision Framework . Moin Islam PhD Candidate Georgia Tech. 2012 PQMD Educational F orum | Oct 16 th , NY. Agenda. Defining GIK program success GIK management challenges Framework to measure GIK GIK decision matrix Example Mapping donor relationships

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GIK Strategic Decision Framework

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  1. GIK Strategic Decision Framework Moin Islam PhD Candidate Georgia Tech 2012 PQMD Educational Forum | Oct 16th, NY

  2. Agenda • Defining GIK program success • GIK management challenges • Framework to measure GIK • GIK decision matrix • Example • Mapping donor relationships • Strategic donor management • Conclusion 2 | 2012 PQMD Educational Forum | Oct 16th, NY

  3. Ready for SMS Poll ? Step 1. Please save the number : 650-515-3033 Step 2. SMS your “choice code” to this number when asked Step3. We can all see an instant poll from the audience ! 3 | 2012 PQMD Educational Forum | Oct 16th, NY

  4. 1. Defining GIK program success Q1. How do your organization measure GIK program success? • Total GIK revenue /donation in $ • Total donation units (by quantity, weight etc.) • Total number of beneficiaries served • GIK fundraising efficiency ($ of GIK revenue/ associated cost) • Capturing and publishing GIK impact stories • All or some combination of the above • None of the above (others) 4 | 2012 PQMD Educational Forum | Oct 16th, NY

  5. 1. Defining GIK program success (SMS Poll) 5 | 2012 PQMD Educational Forum | Oct 16th, NY

  6. 1. Defining GIK program success Q2. What is the “Unit Of Measure” for your next year’s GIK target ? • Cash equivalent (in $) of GIK revenue/ donation • Total quantity of GIK donation received or distributed • Total number of beneficiaries served • Number of geographic locations served • Number of GIK impact stories published • All or some combination of the above • None of the above (others) 6 | 2012 PQMD Educational Forum | Oct 16th, NY

  7. 1. Defining GIK program success (SMS Poll) 7 | 2012 PQMD Educational Forum | Oct 16th, NY

  8. 2. GIK management challenges Q2. What is the most important factor in evaluating a GIK offer ? • Product /service appropriateness • $ value of the donation • Logistics cost of processing the donation • Regulations (in foreign countries) • Existing relationship with the donor • Other (not listed here) 8 | 2012 PQMD Educational Forum | Oct 16th, NY

  9. 2. GIK management challenges Q2. What is the secondmost important factor in evaluating a GIK offer ? • Product /service appropriateness • $ value of the donation • Logistics cost of processing the donation • Regulations (in foreign countries) • Existing relationship with the donor • Other (not listed here) 9 | 2012 PQMD Educational Forum | Oct 16th, NY

  10. 2. GIK management challenges (SMS Poll) 10 | 2012 PQMD Educational Forum | Oct 16th, NY

  11. 2. GIK management challenges Q2. What is the thirdmost important factor in evaluating a GIK offer ? • Product /service appropriateness • $ value of the donation • Logistics cost of processing the donation • Regulations (in foreign countries) • Existing relationship with the donor • Other (not listed here) 11 | 2012 PQMD Educational Forum | Oct 16th, NY

  12. 2. GIK management challenges (SMS Poll) 12 | 2012 PQMD Educational Forum | Oct 16th, NY

  13. 2. GIK management Challenges GIK Intermediaries Directly Distributing NGOs • Product Appropriateness • Existing relationship with the donor • Logistics cost of the donation • Size of the donation • Whether other NGOs will be able to use it or not • $ value of the donation • Product Appropriateness • Whether other NGOs will be able to use it or not • Logistics cost of the donation • Size of the donation • Existing relationship with the donor • $ value of the donation (Ranked list based on 2012 NGO GIK survey) 13 | 2012 PQMD Educational Forum | Oct 16th, NY

  14. Review GIK program success means getting: • Programmatic Impact: Appropriate in-kind donations • Relationship Benefit: From strategic partners • Operational Benefit: Low operational expenses • GIK program success is measured by: • Total GIK revenue/ donation ( in $ value) • Total donation units (by quantity, weight etc.) • Total number of beneficiaries served • GIK fundraising efficiency 14 | 2012 PQMD Educational Forum | Oct 16th, NY

  15. 3. Framework to measure GIK Relationship benefit (donor relationship) Who ? Revenue Logistics cost Capacity What ? Programmatic impact (appropriateness) Operational Benefit ( Revenue for NGO, tax and others for donors) 15 | 2012 PQMD Educational Forum | Oct 16th, NY

  16. 4. GIK decision matrix High The matrix can classify GIK donations easily based on the donor and the appropriateness Relationship Low Appropriateness High 16 | 2012 PQMD Educational Forum | Oct 16th, NY

  17. 4. GIK decision matrix Relationship Appropriateness (Alwaysaccept) (Cost-benefit analysis) (Formal Review) 17 | 2012 PQMD Educational Forum | Oct 16th, NY

  18. 5. Example Defining the framework: Requires clear definition/criteria of the following terms: Scale Relationship Standpoint Strategic partner (e.g. > $10 M giving, high level of program alliance, board members etc.) Valued donor (e.g. > $1 M but < $10 M yearly giving, 3 years or more relationship, etc.) Undefined donor (not defined by other three) Non-qualified donor (e.g. companies engaged Tobacco business ) 3 2 1 0 Scale Appropriateness Standpoint Necessary(e.g. relief supplies that are purchased otherwise) Valuable donation ( will help the program but will not be purchased otherwise) Undefined donation (not defined by other three) Non-qualified donation (e.g. items which do not pass due diligence) 3 2 1 0 18 | 2012 PQMD Educational Forum | Oct 16th, NY

  19. 5. Example • Donor XYZ is a regular donor to your organization • XYZ makes a donation offer of used bio-medical equipment • Your organization does not operate any clinic directly • However, you can donate this equipment to local government health clinics • XZY values this equipment at $1 Million. • Your logistics manger estimates a total of $35,000 for door to door logistics Evaluation: Donor Relationship: Valued donor Appropriateness: Valuable product Donation type: Supplementary ( Accept if benefit /cost is acceptable – over the threshold) X 19 | 2012 PQMD Educational Forum | Oct 16th, NY

  20. 5. Example GIK Transactions: Valued - $ 12,000 Supplementary - $ 75,000 Opportunistic - $ 50,000 Total $ 137,000 20 | 2012 PQMD Educational Forum | Oct 16th, NY

  21. 5. Example ( Q : which one is better ?) Donor A Donor B Donor B donated $20 million last year. Most of which came from a large donation of $15 million of product P, which was partially used by our program and rest of the donation is still sitting in the inventory. However, their earlier donation of product Q (valued at $ 2 million) was very helpful for health projects in Haiti They also donated $ 3 million worth of product R which was not in usable condition because of the mismatch in specifications. We don’t know what to do with that yet. • Donor A donated $17 million last year. • Out of which, A donated much required product X , valued at $ 4 million. • It also donated 1 million doses of product Y, valued at $12 million which was partially used in the program and later distributed through partner NGOs • However, their donation of product Z ( valued at $ 1 million) was not a very good match for our program and was later donated to another NGO in the field. 21 | 2012 PQMD Educational Forum | Oct 16th, NY

  22. 5. Example ( Which one is better ?) Appropriateness score: = 2.17 ( weighted avg.) Appropriateness score: = 1.95 ( weighted avg.) 22 | 2012 PQMD Educational Forum | Oct 16th, NY

  23. 6. Mapping donor relationship Donor D Donor X Relationship Score  3 Donor C Donor Z Donor E Donor Y Donor A Appropriateness score  1 ($ 17 million) 2.17 1 2 3 23 | 2012 PQMD Educational Forum | Oct 16th, NY

  24. 6. Strategic GIK donor Management How to Improve donor Score? • Relationship Score: • Building long term partnerships • Getting more donations ( both cash and GIK) • Leverage existing relationships to build new ones • Track progress of the relationships and prioritize efforts Appropriateness Score: Use GIK as an alternative sourcing strategy instead of buying goods/services Reduce opportunistic donations Only accept donations with identified purpose Do not use $ value of the donation as primary decision making factor 24 | 2012 PQMD Educational Forum | Oct 16th, NY

  25. 7. Strategic GIK donor management Relationship Score  Donor D Donor X 3 Donor C Donor Z Donor E Donor A Donor Y Donor A Donor A Appropriateness score  1 2.2 1 2 3 25 | 2012 PQMD Educational Forum | Oct 16th, NY

  26. 8. Conclusion • This matrix can provide a basis for GIK program measurement besides the total $ value ( in most cases, only measurement of GIK programs today) • It helps to make operational decisions and can guide strategic evolution of donor relationships over time • Measurements can ensure better GIK management for NGOs and hence higher programmatic impact and organizational benefits over long term. 26 | PQMD Educational Forum | Oct 16th, NY

  27. Thank You ! Contact Info: Moin Islam mislam6@gatech.edu 26 | PQMD Educational Forum | Oct 16th, NY

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