Adrian Poffley, chief administrative officer, human resources at the World Bank looks at how to make your charity run well and efficiently.

Public and non-profit organisations, whether they are major government departments, small community-based charities, schools, or organisations such as the World Bank face a common challenge.

Under increasing scrutiny to justify their raison d’être, they have to account for the results they achieve, how they choose to operate, and how they manage the financial resources placed in their trust by others. All public and non-profit organisations are on the hook to demonstrate how they add value. “Is our organisation having as much beneficial impact on those it exists to serve as it should be, given the resources available to it?” is a question that should pre-occupy board members, senior executives, managers, and employees of all public and non-profit organisations across the world.

The current stringent economic climate – with all the talk of ‘cuts’, ‘efficiencies’, ‘rationalisation’, and ‘achieving more with less’ – just adds to the pressure. So does uncertainty. Organisations have to be ready to adapt – not easy, particularly when resources are tight. It places those charged with responsibility for managing the organisation’s financial resources at the very centre of its leadership and management function. This increases the relevance of the finance function but it also raises the bar, of which more later. The challenge of converting the financial resources available to the organisation into meaningful and sustained social impact becomes critical.

The task of converting income to impact can be helpfully depicted using a results chain The task facing every organisation is to move along the chain as effectively and efficiently as possible.

High return organisations plan from outcomes downwards and implement from inputs upwards. By doing so, they convert income into impact efficiently and effectively generating high returns. Unsuccessful ones don’t. Their conversion rate is low.