The last few decades have seen a rapid increase in the number and size of non-profit organisations involved in development work, commonly known as NGOs. This growth has not always been accompanied by an improvement in their performance. In fact, there are signs that rapid expansion of the NGO sector may be lowering its quality overall, partly because organisations are stated by people with limited or no experience of the voluntary sector or its principles. For example, in the newly independent states of eastern Europe and Central Asia, as well as other countries previously dominated by regimes which limited space for voluntary action, NGOs are particularly weak. At the same time, there has also been a shift in emphasis in the donor community towards the ‘performance culture’ which dominated organisational thinking in the 80s with the stress on effectiveness, cost-efficiency, impact and accountability.
With the increasing realisation that poor performance may be linked to internal organisational problems, attention is being focused on assessing the organisational capacity of the NGO to do development work effectively.