By Lee Green, Margot Fahnestock, & Jason Blau
Tewodros Melesse became director general of the
International Planned Parenthood Federation
(IPPF) in September 2011. The organization was
then in the midst of an ambitious effort to boost
the performance of its member associations—to encourage and enable them to deliver more
services to more clients in more parts of the world. The initiative
was only about a year old, but Melesse felt a keen sense of urgency.
Previously, while serving as director of IPPF’s Africa region, he had
learned just how important performance was to the future of the
organization and its clients. In his home country of Ethiopia and in
other parts of the region, performance lapses by IPPF associations
could mean that thousands of people would not receive crucial
care.
So he set an audacious goal for the federation: By 2015, it would
increase the number of sexual and reproductive health services that
it delivered to 176 million. That figure would represent a doubling
of the number of services that IPPF had delivered in 2010.
In mid-2010, IPPF leaders had seen the need to tackle a major
federation-wide challenge. Indeed, IPPF was at risk of entering a
period
of potentially terminal decline. Some IPPF member associations
had failed to evolve as the world around them had fundamentally
changed, and as a result IPPF’s value proposition to funders had
eroded. “We had to take a look at how we operated and drive more
productivity for each donor dollar. We had to boost our performance.
If we didn’t, we were in danger of failing vulnerable groups often
forgotten by other organizations,” says Melesse. Perhaps the most
daunting task for IPPF leaders was to persuade member associations
to improve performance. A push to retool the organization for the
21st century would work only if every association bought into it.
Today, Melesse looks back with pride at what IPPF accomplished
over the past four years. Not only has it greatly increased its level
of service delivery around the world, but it has also nurtured a new performance culture. In fact, performance has become a focus of
conversation throughout the federation—from the IPPF boardroom
down to clinics in remote parts of the world. As a result, member
associations can better articulate their value proposition to funders,
and they’re able to make more-informed management decisions.
Performance-based funding, capacity building, delivering “value
for money”: These have become hot topics in the fields of philanthropy,
foreign aid, and international development. In an age of austerity, organizations
are feeling pressure to do more with less. IPPF’s experience
suggests that even large, diverse, and complex global institutions can
succeed in this new environment. They can do so by working from the
ground up—by matching carefully designed incentives with practical
tools in a way that fits their organizational culture.
Facing a Risk-Filled Future
IPPF, founded in 1952 and based in London, is a global organization
whose mission is to improve women’s reproductive health. Its
grassroots member associations provide family planning services,
sexual health care, comprehensive sexuality education, and access
to safe abortion. They also promote sexual and reproductive
health through their advocacy efforts. Member associations work
with hard-to-reach populations in some of the world’s toughest
environments—post-hurricane Philippines, war-torn Syria, refugee
camps in Uganda, and brothels in Bangkok, for example. In many
places they are the only provider of sexual and reproductive health
services. Their mission involves serving some of the world’s most
marginalized groups: the poor, young people, sex workers, men who
have sex with men, people who inject drugs, and prisoners, among
others. In fact, according to IPPF, four out of every five people who
use its services belong to one of those marginalized populations.
By 2010, a combination of factors was putting the future of IPPF
and its member associations at risk. As a result of population shifts,
some well-established IPPF clinics had become significantly less
able to serve potential clients. Kampala, Uganda, for example, saw its population more than double over the course of two decades
as migrants streamed into the city from rural areas. As the city
grew, some women found that they had to travel farther to access
IPPF services; many of them, unable to make the journey, were left
without
basic reproductive care. The international development
community,
meanwhile, had given less and less emphasis to issues
such as family planning and safe abortion access. The initial version
of the Millennium
Development Goals (issued in 2000) made no
reference to sexual and reproductive health, for example.
Those challenges, moreover, came to a head just as the funding
landscape for IPPF was beginning to change in profound ways. In
the early 2000s, several important donors switched their attention
from reproductive health services in general to the treatment of
HIV/AIDS in particular. The US government, for its part, cut funding
for IPPF because the federation provides abortion counseling
and abortion services.
During and after the recession of the late 2000s, aid agencies
came under intense pressure from taxpayers to stretch every
penny. In 2008, the UK Department for International Development
(DFID) launched the Independent Commission for Aid Impact, a
watchdog group that evaluates aid projects for their effectiveness
and value. Other aid agencies took similar steps. The US Agency for International Development began disbursing some funding
for health in developing countries on a pay-for-performance basis,
and the director general of the Swedish International Development
Cooperation Agency announced an effort “to introduce a more
results-based approach to management.”
In addition, donors expressed concern about the variability in
performance across the federation. “At the central level, there’s no
question: IPPF is excellent. But at the country level, it’s very uneven,”
one funder noted. Another funding partner observed, “There are
some member associations that are great, while others are not so
good.” Pressure from donors sent a strong signal to IPPF leaders
at both a central level and a regional level. “We were operating in
a funding environment that was dramatically different,” Melesse
recalls. “We knew that if we didn’t up our game, we were in danger
of falling. We had to act and act fast.”
Designing for Flexibility
The federation encompasses 152 independent member associations.
Those associations employ more than 30,000 staff members, and
they provide services in 172 countries in six regions (Africa, Arab
World, East and South East Asia and Oceania, European Network,
South Asia, and Western Hemisphere). The performance of those associations was highly uneven: Each of them had a different level
of capacity and offered a different array of services.
Some associations were models of effectiveness. The association
in Bolivia, for example, had implemented a sophisticated enterprise
technology solution to manage its operations in real time. It set annual
performance standards for clinics, and it held frequent meetings to
identify opportunities to increase efficiency and financial sustainability.
Other associations, however, still operated much as they had for
several decades. They had limited resources to invest in new systems,
relying instead on large metal file cabinets that overflowed with paper
records. In that kind of environment, shortages of contraceptives and
limited service options were the norm.
The focus within IPPF on serving hard-to-reach locations further
complicated efforts to monitor performance. Tracking clinic-level
data, for example, could be particularly challenging when the “clinic”
was a tent in a refugee camp or a box on the back of a motorcycle.
Staff members at that level often struggled to report the number
or kinds of services that they delivered. Lacking such data, associations
found it difficult to make informed management decisions or
to present a compelling case to donors.
IPPF has a 24-member governing council and six regional directors,
along with a central office in London that includes the director
general and other executives. In addition, there is a secretariat,
which encompasses the central office and the six regional offices.
Together, those entities set policy for the federation. But each member
association has its own leadership, its own governing board,
and its own history. A for-profit corporation as large as IPPF could
simply order its branch offices to implement a new policy, but as a
federation, IPPF faced a much tougher challenge. Its leaders had to
persuade each association to implement any new federation policy;
they couldn’t dictate that policy from above.
During the period when IPPF began to confront its performance
challenge, its director general was Gill Greer. (She served in that
role until her five-year term ended
in the fall of 2011. That year, the
IPPF governing council appointed
Melesse to take her place.) Greer
and her colleagues saw that many
potential solutions to that challenge
would be deeply painful to
implement. IPPF could, for example,
push financial responsibility
down to individual associations,
making them fully accountable for
raising funds and therefore more
sensitive to donors’ demands for
performance. But doing so would
run the considerable risk that some
associations might simply fail.
More drastically, IPPF could expel lower-performing associations from its network. That approach would
drive greater accountability and increase the network’s average performance.
But going that route would also impair IPPF’s commitment
to underserved women, undermine its ability to speak with a truly
global voice, and threaten the very nature of its federated structure.
Greer and other federation leaders concluded that they needed
to adopt a flexible approach. What worked for Bolivia wouldn’t work
for Bhutan, and what made sense in the Netherlands wouldn’t make
sense in Nigeria. Equally important, the federation had to accommodate
the dedication of its member associations to helping those
trapped in dire situations and to advocating for reproductive rights
and quality health care. Unlike other aspects of association performance,
those activities are not readily measurable.
In August 2010, in response to the external and internal challenges
that IPPF faced, Greer created a task force whose mandate was to build
a performance culture from the ground up. John Good, finance director
of IPPF, led the task force. Joining him were staff members from
the secretariat in London and people from each of IPPF’s six regions,
along with several external consultants. (Redstone Strategy Group, a
consulting firm that works with clients in the social sector, provided
technical assistance, analysis, facilitation, and project management.
The William and Flora Hewlett Foundation, a longtime supporter of
IPPF, funded the design and pilot-testing phases of the effort.) As the
task force got under way, Good summarized the core challenge that
it would seek to overcome: “We’ve not tied our investments and outputs
together. We need to deal with the culture of the organization.”
Mounting a Principled Response
One significant form of influence that IPPF has over its member
associations is its control of centralized funding. Each year, the
federation raises more than $100 million that it then distributes to
associations around the world. Over time, it had come to dispense
much of this funding on the basis of how much money each association
had received the previous
year. As a result, the link between
performance and resource allocation
had become tenuous. The
most successful associations (such
as those in Cambodia, Ethiopia,
and Indonesia) raised all or most
of their funds on their own. But
many associations had grown
comfortable with receiving an
annual grant from the secretariat,
regardless of how well they used
it. Those associations had little
incentive to make performance
improvements.
Developing a new funding
system—one that would use incentives to drive performance improvements—was therefore a
primary goal of the task force led by Good. Such a system would require
a set of tangible, verifiable indicators that IPPF and the member
associations could clearly track. But Good and his colleagues knew
that simply rewarding member associations for the quantity of services
that they provided would not work. Any performance-based
resource allocation system would need to honor the values of IPPF.
So before designing the new system, Good and his colleagues
hammered out a set of overarching principles to guide that effort.
The system
would need to make it easier not just for the secretariat
to make funding decisions, but also for individual associations to measure
their own performance. In creating the system, IPPF needed to
be sensitive to the circumstances of each local environment, and it
could not assume that different associations in different regions could
achieve the same results. The federation could not let financial incentives
compromise its mandate to provide high-quality services to those
who need them most, and it needed to ensure that performance in the
areas of advocacy and comprehensive sexuality education
would be
on an equal footing with more easily quantified results. (See “IPPF
Performance Indicator Design Principles” below.)
Agreement on these principles allowed staff members and stakeholders
from all parts of the federation to discuss and evaluate a
wide range of performance indicators. By April 2011, the task force
had drafted a list of indicators: “number of HIV-related services
provided,” “number of couple years of protection,” and so forth.
That spring, Good and other task-force members traveled around
the world to pilot-test those indicators. They made site visits, for
example,
to the associations in Bolivia, Cambodia, Ghana, India, and
Uganda—associations that covered different IPPF regions and represented
different levels of organizational scale and maturity. During this phase, they worked to align the
draft indicators with IPPF’s goals and
principles, and they identified and resolved
obstacles to making the indicators
work in various local contexts.
Following a series of region-level
meetings in Africa, South Asia, and the
Western Hemisphere, the task force
was able to finalize a set of 10 indicators.
IPPF had previously established a
strategic framework that is built around
“five As”—adolescents, AIDS, abortion,
access, and advocacy—and the
task force aligned the 10 performance
indicators with those five strategic priorities.
(One of the indicators related to
“adolescents,” for instance, was “provision
of essential elements in sexuality
education program.”)
Embracing Incentives
Despite the effort by Good and his team to build a system that
would be broadly acceptable, that system did not win immediate
approval
from all quarters. The task force reported receiving “strong
pushback” from some parts of the federation. At a handful of larger
associations,
for example, people resisted the idea that they should
have to conform to standards designed for smaller and often less
effective associations. IPPF, in short, faced a challenge that is especially
acute in a federated structure: It wasn’t enough just to know
the best way forward. Now the federation had to earn the support
of leaders at the association level.
Toward that end, IPPF leaders planned to conduct a multi-year
pilot of the performance-based funding system. They would launch
the pilot in late 2011 with 8 member associations. The following year,
they would expand it to include 25 to 30 associations, and in 2013 they
would roll it out federation-wide. Varun Anand, operations and finance
director for the South Asia region, largely attributes the success of the
system to this staged rollout: “The staggered approach and the group
consultation in the development stage secured complete buy-in from
regional and member association boards and senior management.”
Along with giving IPPF leaders a chance to fix any kinks in
the new system, the pilot had another benefit: It created a cohort
of early champions. Anand notes that a “great boost” in support
among leaders at the association level occurred once they were
able to see the system in action. Many of them, Anand explains,
had worried that a quantitative system would undermine IPPF’s
commitment to “providing rights-based services, information, and
programs.” But observing how the IPPF task force had balanced
quantitative with qualitative indicators helped put that concern to
rest. Ultimately, then, the task force had succeeded in laying the groundwork for widespread adoption
of the new system. “By deciding to develop
the performance-based funding
system from the bottom up, visiting
a variety of member associations and
regions, and enabling local management
to make a strong contribution,
we ensured a robust system with good
buy-in,” Good says.
The new system creates an incentive
to improve performance by disbursing
additional funds to associations that
make progress in how they score on
one or more of the 10 indicators. Any
association, regardless of its starting
level, that achieves a year-over-year
improvement receives additional funding
both for that improvement and for
its contribution to performance gains
made by its region. (If an association
outperforms all other associations in its region, moreover, it will
receive a larger reward.) By using a diverse array of indicators, the
new system strikes a balance between serving IPPF goals and giving
associations flexibility in how they meet those goals. An association
that excels at providing services to adolescents, for instance, would
be rewarded for its performance in that area while also being encouraged
to start building a more balanced portfolio of services.
IPPF leaders have structured the incentive system to ensure that
variations in funding levels are not so large as to create management
problems. To prevent large fluctuations in funding, the federation
limits
any increase or decrease in disbursements to 10 percent per year.
Yet even relatively small financial rewards can foster a performance-based
culture. Such funding allows associations to expand their services,
it enables them to create specific performance standards, and
it brings the issue of performance to the top of managers’ agendas.
Retooling a Global Federation
By the summer of 2012, it was clear that the pilot was succeeding.
Participating member associations were paying much greater attention
to the collection and accurate reporting of performance data
than they had previously. Melesse, now serving in his first year as
director general, was eager to continue the initiative that Good’s task
force had begun. He proposed rolling out the new performance-based
funding system across the entire federation by the end of 2012—a full
year ahead of schedule—and the IPPF board approved his proposal.
Yet it was not enough merely to create an incentive system. Many
associations wanted to improve their performance but lacked the
capacity for doing so. IPPF leaders recognized that the federation
had to match the new demands that it was placing on associations
with a commitment to helping them meet those expectations. Various resources to assist member associations were already in
place. The federation provided targeted funds to support capacity
building and technical assistance, for example, and it had recently
implemented a management information system that standardized
the collection and transmission of service data.
What was lacking, however, was a system that would serve not
just the needs of IPPF leaders in regional offices or in the secretariat,
but also the needs of leaders at the association level. For many years,
performance measurement within IPPF had primarily taken the form
of reporting by member associations to regional offices and then to
the secretariat: Associations gathered service data under difficult
conditions and sent that information up the organizational chain,
but they received little in return for their effort.
In the fall of 2012, Good and his task force colleagues began rolling
out a new instrument called the Branch Performance Tool. Through
a series of workshops held in various regions, task force members
showed association leaders how to use the tool, gathered feedback
on its design, and steadily built support for it. Designed exclusively
for the benefit of member associations, the Branch Performance Tool
allows association leaders to review clinic- and branch-level performance
and to identify opportunities for increased efficiency. Using
easily available data, the tool provides simple ratios—clients per staff
member per day, for example, or services per dollar—that enable
leaders to compare the performance records of different branches.
Leaders at Reproductive Health Uganda (RHU), for example, used
the tool to discover that effective volunteer recruitment had helped
one branch keep its costs very low in comparison with other branches.
Member associations now have an incentive to improve their data
collection. In doing so, of course, they help the federation with its
data collection efforts. But association leaders are in charge: The tool can guide them, but it doesn’t dictate to them. In fact, it empowers
them. It identifies clinics that are weaker than comparable clinics and
offers options for making those clinics more efficient. A clinic might
shift some of its work from highly trained medical professionals to
support-staff members, for example. Or, in a more extreme case, an
association might relocate a clinic to an area where demand is higher
or where costs are lower. The association in Thailand, for instance,
found that the savings from moving one clinic to a lower-cost location
would free up funding for an additional clinic. Association leaders,
Anand notes, are now “able to take proactive decisions.”
Organizing data through the Branch Performance Tool enables association
leaders to clarify the true cost of various activities and the
trade-offs inherent in choosing one strategic path over another. That
kind of information helps leaders make better decisions, and it also
helps them demonstrate to board members and funders the value that
their association provides. “We must constantly ask ourselves: Have
we achieved what we need to [achieve] with donor funds?” says Lucien
Kouakou, director of the Africa regional office. “We need reports
that show donors our performance and show that we are improving.”
Talking About Performance
By the fall of 2013, Good and his task-force colleagues knew that
their effort had paid off. “The federation has seen a strong improvement
in performance over the past couple of years,” he says.
“Performance-based funding and the introduction of tools such as
the Branch Performance Tool have really helped to support this.”
Over the previous four years, IPPF had doubled the number of sexual
and reproductive health services that its member associations
provided to clients—from 68.5 million in 2009 to nearly 137 million
in 2013. The federation was well on its way to reaching the goal for
2015 that Melesse had established when he took office as director
general. Indeed, so impressive were IPPF’s performance gains that
Melesse decided to set an even loftier goal: Starting from the launch
of the performance initiative in 2010, IPPF would aim to triple its
level of service delivery by 2020. In just 10 years, it would go from
providing 88 million services to providing 264 million services.
No doubt better data collection accounts in part for these higher
performance numbers. Association leaders, after all, are now more
likely to record all the services that their organizations deliver.
“Across the federation, we have seen an improvement in data collection
and data quality, which have had some impact on our service
statistics,” says Good.
Yet IPPF’s new performance culture surely had a much greater
impact on its ability to generate gains in service delivery. That cultural
shift was evident in a growing enthusiasm for the new funding
system. “Many member associations used to complain about the nonscientific
approach to their annual budget allocation,” says Paulin
Tra,
performance and knowledge manager for the Africa region. “Now
they support the allocation process, because we are able to promote
transparency through the performance-based funding system.” Association leaders who initially doubted the value of data collection
also changed their view. Today, Tra says, they are “using evidence to
do better.” Anand notes that a similar shift has occurred in his region:
“Member associations, at the most senior level, started looking at their
data more closely and started questioning their outputs.”
Achievements at the association level show just how significant
the performance gains across IPPF have been. Consider RHU, the
Ugandan association, which participated both in the pilot of the
new funding system and in testing the Branch Performance Tool.
After analyzing its service record, RHU dramatically increased the
number of mobile clinics that it deploys to remote communities
and refugee camps. Since 2009, RHU has tripled its reported level
of contraceptive service delivery, and it has eliminated the multiday
waiting lines that were once a feature of some of its clinics. The
Branch Performance Tool “helps us to focus on efficiency, it helps us
to focus on outputs, and it is a motivation to do more,” says Jackson
Chekweko, executive director of RHU.
Another association, the Reproductive Health Association of
Cambodia (RHAC), responded to IPPF’s new performance culture by
initiating several big strategic changes. It closed two low-performing
clinics, moved its clinics to locations that are closer to women who
need its services, and expanded its service offerings. Partly as a
result, the number of services delivered annually by RHAC nearly
doubled from 2009 to 2012.
By promoting increased efficiency and by capturing data on all the
services they deliver, IPPF and its member associations are better
able to demonstrate their effectiveness to funders—and funders have
taken note of that change. In October 2012, a London-based consulting
and research firm called Social Development Direct issued a
report on IPPF for DFID in the United Kingdom. The firm gave the
federation high marks, citing “good evidence for cost effectiveness
and value for money in specific cases that can be generalised across
the Federation.” Other donors, including the US government, have
also boosted their funding of IPPF.
“The way we talk about performance has really improved,” Tra
notes. Member associations now see that by embracing a performance
culture, they can serve more clients and serve those clients
better—and the better they serve their clients, the more funding
they receive. Today, with added funding and new tools, associations
are relocating branches to improve accessibility and to reduce
costs, they are conducting community outreach to raise awareness
of what they offer, and they are training and hiring staff members
so that they can provide additional services.
For Melesse and other IPPF leaders, that outcome demonstrates
that it’s possible to manage performance—even within a federated
structure. “We needed our member associations to buy into this
process, and in order to achieve that fundamental goal, we needed
to show we could succeed,” he says. “By any reckoning, this was a
substantial culture change, and its effects will be felt for years to
come as we work to help many more women and girls.”