Consumers International Sustainable Consumer Organisations Top-line Survey Results
BACKGROUND Objective 2 of the CI Strategic Plan commits to “support the development of the consumer movement to articulate, serve and defend consumer rights across the world”. Supporting the sustainability of consumer organisations – particularly in strategic parts of the world where consumer protection is weak – was also identified as a major target in the CI Organisational Empowerment (OE) strategy and the work is being taken forward under the auspices of CI Consumer Justice and Protection programme. In order to tackle this in a measured way we have launched a project to gather information from members so that CI can:
Map existing business models and assess their sustainability based on a classification approach, to establish a solid knowledge base of the strengths and weaknesses of CI members; Prioritise and target CI OE and development support more effectively; and Share ideas, sustainable models and innovative practices to help developing organisations
This paper presents the overall findings and a summary of top-line results of the Sustainable Business Model (SBM) Survey 2012. THE SUSTAINABLE BUSINESS MODELS SURVEY Consumer organisations (COs) are assumed to be sustainable when they can continue their activities into the future based on the way they create, deliver and capture value in the following components:
• Value proposition: refers to what the CO offers to beneficiaries such as consumers, individuals or society, donors or governments. • Resources: refers to staff, technology, facilities, etc. • Processes: includes everything from budgeting and planning to educating consumers, testing, policy making, advocating, etc. 1
• Revenue generation mechanisms. The 2012 CO SBM Survey was distributed to CI members from 28 September – 1 December 2012 with: - 1st response deadline on 14 October 2012 - 2nd response deadline on 1 December 2012 Main objectives of the survey were to: • Understand the processes and strategies that members use in their operation and development; • Provide information and build a database on innovative best practices of CO models and establish key dimensions of CO sustainability that can be shared with members; and • Tailor CI OE resources The methodology included: - Desk research and literature reviews - Historical Data (CI 2009 Member Survey) - SBM Survey The questionnaire was sent out to 206 Full and Affiliate members of CI. In total, 136 COs completed the questionnaire. The response rate based on targeted members (Full and Affiliate members with valid responses) was 66%. The response rate was significantly higher compared to previous CI surveys (2009 Survey was 56%). Survey responses were received from all 4 CI regions of CI offices with Europe & North America (ENA) contributing 28%, Asia Pacific & Middle East (APME) at 27%, Africa (AFR) 20% and Latin America & the Caribbean (LAC) 20%, while 2% responses did not their locations. Breakdown of respondents based on membership category shows 59% of respondents were Affiliate members and 41% were Full members [See Figure 1 and Figure 2]. Within the Full membership category, the response rate was 68%, and 65% within the Affiliate membership category. Figure 1: Breakdown of COs based on regions
Figure 2: Participation of Full and Affiliate Members 100% 90%
LAC, 20%
80% Europe & North America, 28%
70% Unknown, 2%
Affiliate 59%
60% 50% 40% Africa, 22%
30% 20%
Full 41%
10% Asia Pacific & Middle East, 27%
0%
TOP-LINE RESULTS OF THE SBM SURVEY
Overall sustainability of CI members 2
The survey shows that 87% of COs were either ‘overall sustainable’ (OS) or ‘fairly sustainable’ (FS) [28% OS and 59% FS]. 13% COs were found ‘fairly unsustainable’ (FUS) *see Table 1 below, also Figure 3]. This data provides a clear focus for CI OE to be targeted at the FUS group and COs in the FS group, which can be considered as ‘at risk’ COs. Table 1: A summary of sustainability profile of CI members based on survey respondents. Category GROUP A GROUP B GROUP C
Description Overall sustainable (OS) Fairly sustainable (FS) Fairly unsustainable (FUS)
Overall percentage 28% 59% 13%
Notably, the OS category was dominated by Full members (71%), whereas the FUS category was dominated by Affiliate members (94%). [See Figure 4.] Figure 3: Overall Sustainability Profile of COs
Figure 4: Overall Sustainability by Membership Category
100%
100%
90%
90%
80%
80%
70%
70%
59%
60%
FULL 71%
AFF 65%
60%
50%
50%
40%
40%
30%
AFF 94%
28%
30%
13%
20% 10%
FULL 35%
AFF 29%
20%
FULL 6%
10%
0%
0%
GRP A
GRP B
GRP C
GRP A
GRP B
GRP C
Full members sustainability Within the Full membership category, OS and FS COs were almost at par, with 48% Full members being OS and 50% being FS. Only 2% of Full members were found to be FUS. [See Figure 5] Figure 5: Overall Sustainability Profile of Full Members 100% 90% 80% 70% 60% 50%
48%
50%
40% 30% 20%
2%
10% 0% GRP A
GRP B
GRP C
Conclusion: Full members are relatively well established and sustainable as expected based on CI membership selection processes. This also suggests that OE efforts should be focussed on Affiliate members and on bringing these members to the level of Full CI membership.
3
Affiliate members sustainability Within the Affiliate membership category, 65% of members were found to be FS, and 21%, FUS. Only 14% of the Affiliate members were categorised as OS. [See Figure 6.] Figure 6: Overall Sustainability Profile of Affiliate Members 100% 90% 80%
65%
70% 60% 50% 40% 30% 20%
21% 14%
10% 0% GRP A
GRP B
GRP C
Conclusion: This suggests that Affiliate members are relatively weaker compared to Full members in terms of their establishment and functions as COs. Specific attention and OE programming is needed to boost their efficiency towards becoming more sustainable and ultimately becoming CI Full members.
Regional sustainability profiles The survey shows that – not surprisingly – the ENA region has the most OS members (41%) followed by APME (32%). ENA also recorded the least number of FUS members (5%). AFR recorded the most FS members at 81%. LAC recorded the highest number of FUS members (21%) followed by APME (18%). [See Figure 7a-7d.] Conclusion: This data strongly contributes towards further planning, prioritisation and a regional-based focus of CI organisational empowerment efforts. It is clear that specific attention needs to given to the LAC region in terms of language in relation to the CI asset library. It is also equally clear that the ENA regions should not be the immediate priority for our OE efforts.
4
Regional Sustainability Profile ASIA PACIFIC & MIDDLE EAST-Overall Sustainability Profile Figure 7a: Asia Pacific & Middle East (APME)
Figure 7b: Africa (AFR) 100%
100% 90%
90%
80%
80%
70%
70%
60%
50%
32%
40%
30%
30%
18%
20%
20%
10%
10%
10%
10%
0% GRP A
GRP B
0%
GRP C
GRP A
EUROPE & NORTH Overall Sustainability profile Figure 7c: Europe and North AmericaAMERICA(ENA)
GRP B
GRP C
LATIN AMERICA & CARIBBEAN-Overall Sustainability Profile
Figure 7d: Latin America & Caribbean (LAC)
100%
100%
90%
90%
80%
80% 70%
70%
54%
60%
54%
60% 50%
81%
60%
50%
50% 40%
AFRICA-Overall Sustainability Profile
50%
41%
40%
40%
30%
30%
20%
20% 5%
10%
25%
21%
10% 0%
0% GRP A
GRP B
GRP C
GRP A
GRP B
GRP C
5
Institutional, programmatic and financial sustainability In the context of assessing what a sustainable CO is, CI members were assessed and grouped based on the following three key dimensions of SBM: - Institutional strength - Financial sustainability - Programmatic impact Institutional sustainability profile The Institutional Sustainability dimension addresses the operating and development nature of the CO. This includes management structure, organisational skills, strategic planning, decisionmaking process, roles and responsibilities, human resources, etc. Main components of Institutional Sustainability include: • Legal environment • Organisational capacity • Value propositions • Risk management strategy • Level of operations (establishment structure) Based on institutional dimension, 92% of the COs were found to be OS and FS. Only 8% of the COs were found to be FUS institutionally. [See Figure 8.] The majority of members that were FUS (Group C) institutionally were Affiliate members (91%). Similarly, in Group B (FS), the majority of members were Affiliate members (65%) compared with Full members (35%). [See Figure 9.] Majority of FUS members were found in APME and AFR regions, as well as in LAC region. No FUS member was found in ENA region. [See Figure 10.] Figure 8: Institutional Sustainability Profile of COs
Figure 9: Institutional Sustainability by Membership Status
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
46%
46%
50%
50%
40%
AFF 91%
AFF 65%
FULL 53% AFF 47%
FULL 35%
40%
30%
30%
20% 10%
FULL 9%
20%
8%
10%
0% GRP A
GRP B
0%
GRP C
GRP A
GRP B
GRP C
Figure 10: Regional-based Contribution within the Institutional Sustainability Groups ENA 37%
40% 35% 30%
APME 29%
APME 25%
25% 20%
APME 36%
AFR 16%
AFR 27%
ENA 25%
LAC 18%
AFR 36% LAC 27%
LAC 22%
15% 10%
ENA 0%
5% 0% GRP A
GRP B
GRP C
6
Role as CO - Specifically, members were found to be functionally strong in two main areas: o Consumer education, information, and legal advice (90%); and o Lobbying on policy formulation and decision-making processes (82%) representatives in councils, boards, committees or task-forces. - Improvement can be made in strengthening capacity of CO in two particular areas: o Representing consumers in seeking redress (49% of COs); and o Research, testing and publishing (50% of COs) Strategic Planning - Majority (38%) of COs carried out their strategic planning “at least once a year”, whereas 36% did so “as and when necessary”. Strategic planning seemed to receive low importance among 26% of COs (18% with “once in three years” and 8% “yet to develop”). [See Figure 11.] Figure 11: Frequency of Strategic Planning Meetings among COs At least once a year 38%
Once in three years 18%
Yet to develop a plan 8%
As and when necessary 36%
Conclusion: The area of institutional sustainability is the area where CI members are relatively strongest indicating that it is an area where CI should not devote specific resources but rather focus on providing generic resources (such as toolkits) in key areas such as strategic planning, management structure, leadership and human resource development. The area of value proposition is the exception and requires specific attention to enable COs to understand their growth potential as well as their role or contribution in ensuring consumer protection. This is very closely linked to financial sustainability.
Financial sustainability profile This dimension looks at the means by which the CO sustains itself financially and is one of the vital areas for sustainability. Some of the main components addressed in this dimension include: • Financial management and control systems • Funding sources and strategies (types of funding, including unrestricted funds) • Financial reserves
7
- Based on the financial dimension, 72% of COs were either OS or FS, whereas 28% were found to be FUS. [See Figure 12.] The survey further shows that the Full members (67%) dominated the OS category, whereas Affiliate members (74%) dominated in the FUS category. [See Figure 13.] Most financially FUS (Grp C) members were found in developing regions (AFR, APME and LAC with combined percentage of 84%). [See Figure 14.] Figure 12: Financial Sustainability Profile of COs Financial Sustainbility Profile of CI Members (n=136)
Financial Sustainability of CI Members by Membership Status Figure 13: Financial Sustainability of COs Based on Membership (n=136) Status
100%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
90% 80%
68%
70% 60% 50% 40%
28%
30% 20% 10%
4%
0% GRP A
GRP B
AFF 74%
FULL 67%
AFF FULL 54% 46%
AFF 33%
FULL 26%
GRP A
GRP C
GRP B
GRP C
Figure 14: Financial Sustainability Based on Regional Contribution within(n=136) Groups Financial Sustainability: regional contribution within group 40% 35%
APME 33%
ENA 33% APME 27%
30% 25% 20%
ENA 32%
AFR 17%
LAC 17%
AFR 18%
APME 29% LAC 23%
AFR 34%
ENA 21%
LAC 16%
15% 10% 5% 0% GRP A
GRP B
GRP C
Financial management processes - The majority (48%) of COs have dedicated and well-established and maintained accounting system. 23% of COs have only a basic form of financial management systems and documentation procedures, whereas the remaining 29% have relatively sound financial management with regular monitoring but without dedicated personnel or team. [See Figure 15] Figure 15: Financial Management Processes With dedicated team/person to handle, maintain and monitor complete finance work and accounting system 48%
With basic financial transactions, accounting and documentation 23%
With accounting system and regular monitoring, documentation and audit of financial transactions 29%
8
Types of funding - The majority (58%) of COs depend on both restricted and unrestricted types of funding. Only 8% of COs operates solely on unrestricted types of funding, which are considered to be the most sustainable as the COs’ activities are not specified or predetermined. 34% of COs are found to be dependent on restricted types of funding (typically project funding). This means that the funds are to be used for specified purposes only, which imply limited potential for exploring other development areas using unrestricted funds. [See Figure 16] Figure 16: Types of Funding
Restricted 34%
Restricted and Unrestricted 58% Unrestricted 8%
- Responses on sources for unrestricted types of funding include: o Conference revenue o Office and administrative services (eg, fax, telephone, photocopies) o Court cases o Selling services o Intergovernment agencies (eg, EU, AusAid, etc.) - Responses on sources for restricted types of funding include: o Full funding from government o Intergovernment agencies (eg, EU, UNICEF, etc.) o Universities o International financing bodies o Foundations Contingency reserves - The majority (68%) of COs set aside less than 5% of their total income for contingency reserves. Only 5% of COs has more than 16% of their total income set aside for contingency purposes, whereas the remaining 27% set aside between 5-16% of their total income. [See Figure 17] Reserves act as a buffer or safety margin when needed to pay off immediate debts, for contingencies, emergencies or un-budgeted expenditure.
9
Figure 17: Percentage of Total Income Set aside as Contingency Reserves Between 516% reserve 27%
Less than 5% reserve 68% More than 16% reserve 5%
Project recovery - The majority (30%) of COs included less than 10% of project recovery cost in their project costing, whereas 27% of COs did not usually include this cost in their project costing at all. Project recovery anticipates full-cost recovery by securing funding for all of the costs involved in running a project. It is one of the most important financial indicators in assessing the sustainability of an organisation, especially those that are project-dependent. A good practice for recovery rate should be set at more than 15%, which is being adopted by 23% of COs. [See Figure 18.] Figure 18: Percentage of Project Recovery Included in Project Costs 100% 90% 80% 70% 60% 50% 40%
30%
30%
23%
20%
27%
20% 10% 0%
Less than 10%
Between 10-15%
More than 15%
Not usually included
Project Recovery rate
Conclusion: Financial sustainability is the area where CI members are most in need of OE. The opportunities for organisational empowerment are especially linked to fundraising activities and project income, where OE focus should be targeted on COs in the FS and FUS groups, considered to be ‘at risk’. One of the focus subjects of OE should be project costing understanding and guidance, stressing on the importance of project recovery mechanisms and contingency reserves for sustainability.
10
Programmatic sustainability profile This dimension looks more closely into the functions of an organisation. The main components of the Programmatic Sustainability dimension are: • Advocacy • Service provisions • Communications and networking Based on the Programmatic dimension, 83% of COs were found to be OS or FS, whereas 17% were found to be FUS. [See Figure 19.] The survey further shows that Full members (65%) dominated the OS category, whereas Affiliate members dominated in the FUS category (91%) and FS category (65%). [See Figure 20] Members in the ENA region were found to dominate in the OS category (38%), whereas the FUS category was mainly attributed to member performance in the APME region (30%). [See Figure 21.] Figure 19: Programmatic Sustainability of COs
Figure 20: Programmatic Sustainability Profile Based on Membership Category
100%
100%
90%
90%
80%
80%
70%
70%
FULL 65%
AFF 65%
60%
60%
48%
50% 40%
AFF 91%
50%
35%
40%
30%
AFF 35%
FULL 35%
30%
17%
20% 10%
FULL 9%
20% 10%
0%
0%
GRP A
GRP B
GRP A
GRP C
GRP B
GRP C
Programmatic Sustainability: regional contribution within group (n=136)
Figure 21: Programmatic Sustainability Based on Regional Contribution within Group 100% 90% 80% 70% 60% 50% 40% 30% 20%
ENA 38%
APME 35% AFR 15%
LAC 13%
AFR LAC APME 28% ENA 25% 26% 22%
APME AFR 30% ENA LAC 26% 22% 22%
GRP B
GRP C
10% 0% GRP A
Advocacy campaigns - The majority (80%) of COs were able to conduct at least two advocacy campaigns in 2011. 7% of COs, however, reported that they were not able to conduct any advocacy campaign in the same year. [See Figure 22.]
11
Figure 22: Number of Advocacy Campaigns Carried Out by COs 100% 90% 80% 70%
COs
60%
41%
50%
39%
40% 30% 20%
13%
7%
10% 0% Less than 2
Between 2-4
More than 4
Unable to conduct
Number of advocacy campaigns in the last 12 months
Organisational capacity to influence policy processes - 57% of COs was able to influence policy-making processes through a permanent consumer representation role. 26% of COs was able to influence policy processes even though they did not have permanent representation in relevant government-initiated platforms. The remaining 17% of total COs surveyed indicated that they have had less than five engagement activities with governments. [See Figure 23.] Figure 23: Capacity to Influence Policy Processes in the Last Three Years
With more than 5 activities or occasions to engage and having permanent representation 57%
With less than 5 activities or occasions to engage 17%
With more than 5 activities to engage without permanent representation 26%
Consumer (beneficiary) reach-out capacity Based on COs work in the last 12 months, 44% of COs have been able to deliver services or programs that benefited more than 25,000 consumers. 32% of COs recorded less than 5,000 consumers benefiting directly from their programmes or activities, whereas 24% recorded between 5,000 – 25,000 consumers benefited from their services, which includes, eg, consumer education or complaints handling. Conclusion: This survey suggests that OE should focus on Affiliate members to enhance their programmatic sustainability and so enhance impact. Knowledge exchange, building stakeholder relations and enhancing/establishing consumer representation will be key focus areas in enhancing programmatic sustainability. Focus should also be placed on ‘at risk’ FUS and FS COs that were able to carry out few, if any, advocacy campaigns.
12
Types of consumer organisation models - 39% of CI members were identified as ‘Network by Association’ consumer organisations. Respectively, 27% of COs identified themselves as ‘Service Delivery’ COs; 14% as ‘Publicprivate partnership’ and 2% as ‘Entrepreneurial’. Notably, 18% of COs did not provide an answer, which may also imply that the COs were not able to identify with the choices of models offered. [See Figure 24.] Figure 24: Types of CO Models Skipped question, 18% Entrepreneurial , 2%
Service delivery, 27% Network by association, 39%
Public-private partnership , 14%
- Description on the types of CO models is summarised in Table 2 below: Table 2: Types of CO models Models
Network by association 39%
Public-private partnership
Description CO is an umbrella organisation (or a network/federation) formed through an association of civic organisations that democratically adopt special standards for governance, disclosure or fundraising. The CO may have branches and assist local-based NGOs. The development of the CO may involve the establishment of separate or individual centres or units based on product/services differentiations or functions, which become affiliated to the network. Each member of the network/federation has its specific functions that complement the functions of the other members. Members conduct their own fundraising and contribute in kind or share costs for collaborative activities on consumer protection. CO is involved in forging formal and mutual cooperation or collaboration with another party either a private corporation or government or university, whereby the partnership creates value for both the CO and the partner. The partnership is said to be ‘facilitated’ as it would bring about mutual benefits that are specifically agreed upon. This facilitated partnership may take place for a stipulated time frame, from short-term to long-term.
14% The ‘mutual benefits’ may not necessarily be motivated by financial support, but can also be in terms of technical or professional services that are useful for either party.
Service delivery 27%
CO carries out one or more of its vital functions as a CO and charges fees for its products or services provided in order to generate income. The CO thrives to be relevant to specific groups of consumers where the CO believes in empowering its beneficiaries (targeted consumer groups) by providing specific information and knowledge, offering specialised products/services, which may be in the form of niche publication (magazines), product testing, or product information that is sought by the targeted beneficiaries or consumer segments. Fees are specifically imposed for the functions or services that are provided either through membership, research, subscription, licensing, consultancy
13
(eg, court settlement, product testing, publications on research findings or reports, etc.)
Entrepreneurial 2%
CO ventures into developing its own business entity that produces and/or sells goods or services for the blended purpose of generating income and at the same time carrying out its CO function to serve consumer’s interests whether socially, culturally, and/or environmentally. A socialenterprising CO can exist as a co-operative, mutual organisation, a social business, or a charity organisation.
CONCLUSION AND RECOMMENDATIONS For the first time, CI now has a comprehensive picture of the strengths and weaknesses of the consumer movement as well as a unique baseline against which we can measure the effectiveness of our OE in the future. Overall, the majority of CI members who responded to the survey were found to be either OS or FS but 13% of the responding members are FUS. It is clear that CI should focus its limited resources on building the capacity of those 13% in a targeted manner and via the up and coming CI asset library. The vast majority of CI members in need of OE are Affiliate members and the focus will need to be on helping these members strengthen their capacity – including becoming Full members of CI. The survey also revealed that the dimension most in need of attention is that of financial sustainability with targeted resource and guidance needed in areas such as resource mobilisation and project design – but also in areas such as financial planning and forecasting. Full members who are OS and FS in these areas may be able to provide relevant assistance, support and leadership for OE. Regionally, focus for OE may also be geared or tailored to ‘easy-win’ organisations, particularly in Africa and Latin America. The survey was able to clearly provide supportive information that: - The focus for OE should be targeted at CI members in the FS and FUS groups, where they could be ‘at risk’ of moving down on the sustainability spectrum. - The focus for OE should recognise the significance of the ‘easy-win’ characteristics of the COs: o Affiliate members in the FS group that have the potential of becoming Full members; o Full members in the FS group with the potential of moving up to the OS group or are ‘at risk’ of moving down the sustainability spectrum; and o The stronger Affiliate members in the FUS group. Development and prioritisation of the CI OE plan requires tailored efforts and programmes. Moving forward, CI will develop and implement a targeted implementation plan in support of our members. With the results of the survey, we now have a unique starting point for prioritising our limited resource and really helping members where it is most needed. We are currently developing the CI asset library which will be the first concrete step in helping our members – the asset library will be launched in April 2013 and will be the first major step in addressing the challenges and opportunities that have emerged from this report.
14