Operations research to improve financial sustainability in three Bolivian NGOs.

Many NGOs providing reproductive health (RH) services are facing reductions in donor funding requiring them to generate more of their own resources. Prosalud CIES and APSAR Bolivian NGOs wanted to build skills in costing and market research to support efforts to improve financial sustainability. Staffs attended a one-week workshop followed by implementation of three operations research (OR) studies designed to reinforce skills and generate information for decision-making. The Prosalud and CIES studies included the calculation of unit cost per service; measurement of client willingness to pay (WTP) higher prices for services and a market segmentation assessment in selected areas where Prosalud clinics are located. The APSAR study focused on cost estimation exclusively. Prosalud had very high levels of cost recovery (83 to 109 percent depending on the service) CIES had lower levels of cost recovery (38-46 percent depending on the service) and APSAR only 10 --25 percent depending on the service. The WTP studies conducted by both Prosalud and CIES found that clients rejected the idea of paying higher prices for clinical services; and the market assessment also suggested that it would be difficult for the organizations to increase prices. Two potential avenues for increasing financial sustainability were identified for Prosalud: (1) investing in new services that can be sold at a profit and will attract new clients and (2) investing in new approaches that will result in selling more revenue generating services to existing clients. Both alternatives will be examined in a second round of OR studies. An experiment to test the cost recovery of a new service package will be tested and a model for estimating costs and revenues of new services under consideration by Prosalud will be developed. CIES had very high costs especially fixed costs and their priority should be costcontrol. APSAR does not recover its variable costs indicating that every additional client served will result in greater financial loss. Unless it is possible to increase prices the organization will be unable to increase its financial sustainability. (excerpt)