actionaid value for money pilot update

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ActionAid Value for Money Pilot Update May 2012

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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. - PowerPoint PPT Presentation

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Page 1: ActionAid  Value for Money Pilot Update

ActionAid Value for Money Pilot Update

May 2012

Page 2: ActionAid  Value for Money Pilot Update

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.

Page 3: ActionAid  Value for Money Pilot Update

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

Page 4: ActionAid  Value for Money Pilot Update

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

Page 5: ActionAid  Value for Money Pilot Update

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.

Page 6: ActionAid  Value for Money Pilot Update

Agreed DefinitionsValue 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

Page 7: ActionAid  Value for Money Pilot Update

Value for Money in Programme flow

Appraisal &

StrategicPlanning

Inputs & resources

(costs)

Activities & outputs Outcomes Impact

Implementation Implementation & monitoring

Review/EvaluationAppraisal,

programme development,

baseline

ALPS

pro

cess

Managing CE Improving CE Demonstrating CE

Page 8: ActionAid  Value for Money Pilot Update

Application – Cost Efficiency

Page 9: ActionAid  Value for Money Pilot Update

Application – Cost Effectiveness

Page 10: ActionAid  Value for Money Pilot Update

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

Page 11: ActionAid  Value for Money Pilot Update

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?

Page 12: ActionAid  Value for Money Pilot Update

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

Page 13: ActionAid  Value for Money Pilot Update

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

Page 14: ActionAid  Value for Money Pilot Update

Adapted SROI TemplateAdapted 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

Page 15: ActionAid  Value for Money Pilot Update

Pilot Testing Through December 2012Country VfM methodology Work stream

Australia

MCA light Policy scenarios in strategyMCA plus

SROIProductive resources

(Agri+land) (via Kenya/Uganda)

Australia/UK Cost effectiveness light or cost efficiency Campaigns (tax justice)

UK

SROI Schools, education, youth

SROI lightUndetermined (within

strategy and existing M&E framework)

Denmark Costs GeneralSROI light M&E framework

International secretariat Template report (VFM programme cycle)

Across the board

Nigeria SROI light LRP (empowerment)

Ethiopia SROI? (project with quality

quantitative data)Afghanistan SROI Women’s rights/advocacy

Pakistan Cost-effectiveness light or cost efficiency

Existing emergency evaluation

AAI Finance, Regional office, Thailand Estimating economic costs Finance - general