NGOs 'squander' donors' cash on vehicles, says report

Many NGOs are wasting donors' money by failing to manage their vehicle fleets efficiently, according to Jacana, an NGO based in USA and Mozambique.

Its new report, Fleet Management and Responsible Efficiency, Jacana claims that NGOs are rarely aware of all of the costs involved in using their vehicles, and failed to properly consider procurement, maintenance and training options.

“All of the money wasted while attempting to navigate corruption in the supply chain pales in comparison to money squandered due to inadequate fleet management,” the report says.

Jacana concluded that NGOs could save money by purchasing and importing vehicles from non-profit dealers abroad and disposing of vehicles at the right time. It also suggested that they could achieve a 7 per cent saving in interest rates for vehicle financing by pooling their purchasing and arranging bulk-leasing schemes.

Failure to do so can be “functionally equivalent to placing $10,000 into the jaws of a paper shredder”, says the report, which is based on surveys of NGOs over the past year.

Matthew Bader, co-founder of Jacana, said: “Many well-known organisations have efficient centralised purchasing schemes, but those that use them are few. The American organisations tend to sit in their offices assuming things are getting done in the field, whereas the Europeans are more in touch with what is actually going on the ground.”

Michael Whiting, an international logistics consultant and member of UK disaster relief charity RedR, said that budgeting was a problem for several NGOs.

“Without the data to support the long-term cost effectiveness of spending money in the short term, few middle managers will put their jobs at risk by requesting a doubling of Fleet Management budgets,” he said.

Steve Hollingworth, chief operations officer at US-based NGO Care International, said: “One major problem is funding availability. This means that at times we have to retain vehicles beyond their best periods. This is an unfortunate financial reality in some country offices and requires more attention to maintenance and repair.”

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