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SNV Managing Boards response to the 'Process Evaluation of Transformation in SNV'

SNV is diversifying its financial basis to become less dependent on its core, institutional funding it receives from the Dutch Ministry of Foreign Affairs. SNV Latin America (LA) and SNV Vietnam are at the forefront towards self-sustainability (no core funding from 2013 onwards) and have made radical changes in their strategies and operations. In this context, the SNV Managing Board (MB) welcomes the external evaluation (conducted in November 2011 – February 2012) of its LA and Vietnam’s transformation towards a more market-oriented approach. It provides important findings and directives for the change process SNV as a whole is embarking upon.

The MB accepts the quality of the evaluation. The findings are based on analysis of approximately 95 interviews with various internal and external stakeholders and of studies of a variety of relevant secondary sources. The report addresses all evaluation questions and provides some critical and useful recommendations.

On the whole, the MB agrees with the main findings of the report (see the executive summary of the report). However, it believes the report presents the transformation in a rather positive daylight. The evaluators conclude that SNV LA and Vietnam transformed through: a well-conceived, planned and implemented process. […] while still continuing to make a significant contribution towards poverty reduction and economic inclusion. In the countries evaluated, SNV seems indeed to be well positioned, but actual financial viability has not been proven yet. At the same time, the MB acknowledges that a detailed financial and market analysis and prognosis was beyond the scope of the evaluation.

The MB welcomes the evaluation’s recommendations to adopt a sense of urgency towards what the evaluators call the organisationadapting to the post-subsidy world. The evaluators also point to the need for developing aglobal business model around a coherent program producing ’billable results’ and supported by external resources streams. They recommend following SNV LA and Vietnam’s approach, namelyto first assess the local market potential and context for unsubsidized SNV services, and then plan a minimum supporting structure. The adoption of a business plan approach by SNV Vietnam and LA is much appreciated by MB and will be introduced in other contexts. Also SNV Vietnam’s emphasis on positive reinforcement, internal capacity building and strategic investments is much appreciated and will be promoted in the broader organisation.

MB agrees that in the organisation’s search for a viable future more clarity is required on future organisational relationships between SNV countries, regions, and SNV corporate; the‘rules of the road’,as the evaluators coin these, need to be identified. In effect, SNV has started already with revisiting the relationship between the various corporate entities and the corporate organisation. The main purpose of this process is to better prepare SNV for responding to diverse development opportunities within its main sectors: Water, Sanitation and Hygiene, Renewable Energy and Agriculture. The re-design process involves identifying an appropriate governance strategy, a business model, and a corporate structure in support of a sector-focused approach with a more diversified and less vulnerable funding base.

The MB does not agree with the recommendation to implement Inclusive Business (IB) as The Key programme module. As confirmed by SNV LA and Vietnam, MB believes that the viability and usefulness of an IB approach has been proven in many instances, but depends on the strength of the private sector in a certain context, the relationships of other relevant stakeholders, and the institutional and regulatory environment among other things. Moreover, the IB concept is just one of various ways to stimulate economic development that benefits the poor.

An important lesson that the MB draws from the evaluation is the need for more focused engagement and open dialogue between the Head Office, SNV LA and Vietnam. This will promote sharing and active learning from each other’s experiences. It will also promote trust and space for innovation in SNV systems and practice.