The Challenges and Prospects of ChSA``70/30 GUIDELINE`` implementation on the performance of NGOs’ in Ethiopia - A case study of Food for the Hungry/Ethiopia (FH/Ethiopia)

Abstract

Charities and Societies, and national and international Non-Governmental Organizations (NGOs) have been operating in Ethiopia for a long time. A new Proclamation of Charities and Societies (Proclamation No. 621/2009) has been issued in 2009 in order to facilitate and strengthen the effective contributions of NGOs to the socio-economic development of the country as the laws governing their registration and operations which were first drawn up in the early 1950s had become ineffective. The main objective this study is to assess the challenges and prospects of the 70/30 guideline (Article 88 of Proclamation 621/2009) on the performance of NGOs in general which states the annual allocation of budget by any charity or society shall not be less than 70 percent for the implementation of its purposes and not exceeding 30 percent for its administrative activities. To achieve the objectives of this study, the research method used was descriptive case study. Through the use of primary and secondary data sources, the researcher has gathered the necessary information regarding the impact of the guideline. As the findings show, NGOs are having difficulties in meeting the 70/30 requirement and NGOs are forced to compromise on programs’ deliverables quality. NGOs are sandwiched to satisfy donors’ interest by achieving high quality project outputs and on the other being compliant to the guideline by reducing administrative costs. The difficult part is major activities that are required for successful project accomplishments are found in the administrative category of the guideline. Due to this many NGOs are challenged to implement projects with major activities that are considered as administrative even if these projects have huge contributions to the country. iv Therefore, NGOs should continue to raise their concerns about the 70/30 cost category classification amendment until favorable ground is set for successful projects implementation.