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ActionAid Value for Money Pilot
Update
May 2012
Origins of the VFM Pilot
- Measuring cost effectiveness approved in
September 2010 as part of the new Global M&E
System Requirements. Will become core
component of monitoring of all ActionAid
programmes from 2013.
- Original Aim of Pilot - define cost effectiveness
in the ActionAid context as well as test
appropriate methodologies and create
recommendations for wider implementation.
In the Beginning…
Cost effectiveness defined as an analysis of the
relationship between effectiveness and costs (or
inputs)
As a charitably funded organisation we know and
can show that we are achieving maximum results
for reasonable cost
Being able to demonstrate cost effectiveness
in a way that upholds our mission and values
should enable us to build a case that we
represent value for money
Ripping Up and Starting Over
BOND VFM Group helped us debate:
- What about Value for Money? Who decides
Value?
- What about cost efficiency?
- How do we understand and apply within our
accountability system (ALPS)?
Cost Effectiveness Pilot becomes the Value
for Money Pilot
Agreed Definitions
Cost efficiency: Maximising the output with a
given level of inputs (this could include financial
and economic costs, such as volunteer time).
Cost effectiveness: Ensuring that you achieve
your intended objective/outcome with optimal use
of resources. Need to specify outcomes and link
M&E framework to financial and economic costs.
Agreed Definitions
Value for Money (VFM):
- Umbrella term, looks at how to manage costs,
improve efficiency, and how to demonstrate
that what we are doing is the right thing to do
- ‘Value’ viewed in terms of what stakeholders,
most notably rightsholders, value in terms of
what we have promised to deliver – thereby
ensuring accountability towards rightsholders
as well as donors/public
- VFM is about building and presenting a case
Value for Money in Programme flow
Managing CE Improving CE Demonstrating CE
Appraisal
& Inputs &
Activities
resources Outcomes Impact
Strategic & outputs
(costs)
Planning
Appraisal,
ALPS process
programme Implementation Implementation Review/Evaluation
development, & monitoring
baseline
Application – Cost Efficiency
Application – Cost Effectiveness
Plan for Integration
Include Key Questions in:
• HRBA 2.0 – Programme Framework Guidance
• Global Monitoring Framework
• Revised ALPS
• Evaluation TORs
Ensure Key Questions are addressed – compliance
Build capacity and cross-check systems
What about Assessing Value for Money?
Assessment methodologies and processes:
- Need to build on existing organisational
participatory approaches
- Evidence-based, rigorous
- Aligned with mission and values
- Help to prove ‘Theory of Change’
- Not just assessing traditional programmes
But how? And with whom?
Partnership with the New Economics
Foundation
- Agree a common understanding and definition
of Value for Money as it applies to ActionAid
- Understand and be able to test methods for
measuring cost effectiveness and cost
efficiency, using tools adapted for ActionAid
- Understand how to create a narrative using
the results that would build the VFM case
- Understand how to engage stakeholders in
the assessment process – thus giving us the
ultimate VFM
Tools for Assessment
- Social Return on Investment (SROI): Cost effectiveness methodology
that contrasts outcomes with full economic costs, incorporating
externalities for all material stakeholders and using participatory
approaches
- Adapted SROI: analysing economic costs against outcomes. Not
creating ratio but creating a narrative. Include existing data
- Cost Efficiency Analysis (CEA): Measurement of outputs relative to
costs
- Cost Effectiveness Analysis: Measurement of single outcome relative
to costs
- Adapted Cost Effectiveness Analysis: Measurement of outcomes
relative to costs. Creating a narrative.
- Multi-criteria Analysis (MCA): A (participatory) decision making
approach designed to quantify and assign weighting to competing values
and criteria of different stakeholders when considering different courses
of action
Adapted SROI Template
Adapted SROI – analysing full costs against benefits. Not creating
ratio but creating a narrative.
- COST BREAKDOWN
- Financial costs
- Economic costs
- ELABORATION OF BENEFITS (IMPACTS)
- Key outcomes
- Tangible
- Intangible
- An estimation of outcome incidence
- Deadweight
- Attribution
- Displacement
- External/indirect impacts
- Benefit period
Pilot Testing Through December 2012
Country VfM methodology Work stream
MCA light
Policy scenarios in strategy
MCA plus
Australia Productive resources
SROI (Agri+land) (via
Kenya/Uganda)
Cost effectiveness light or cost
Australia/UK Campaigns (tax justice)
efficiency
SROI Schools, education, youth
Undetermined (within
UK
SROI light strategy and existing M&E
framework)
Costs General
Denmark
SROI light M&E framework
Template report (VFM
International secretariat Across the board
programme cycle)
Nigeria SROI light LRP (empowerment)
? (project with quality
Ethiopia SROI
quantitative data)
Afghanistan SROI Women’s rights/advocacy
Cost-effectiveness light or cost Existing emergency
Pakistan
efficiency evaluation
AAI Finance, Regional office,
Estimating economic costs Finance - general
Thailand
