ISTR-L, 25 August 2005

Title: “Improving the Effectiveness of Civil Society Organizations through Better Portfolio Design – Insights from Central America”

Abstract: The present article applies the theory of corporate management derived from the study of for-profit firms to civil society organizations (CSOs). In particular, it attempts to explain and assess the portfolio of issue-areas and geographical/political areas in which Central American CSOs are active. Portfolio design is found to be shaped by the aim to reap synergies within the portfolio, to secure funding, and to take advantage of specific opportunities for value creation. Moreover, portfolio design may be influenced by stakeholder expectations, by bandwagoning phenomena, by CSO leaders’ pursuit of personal interests, and by path dependency.

Several characteristic inefficiencies in portfolio design are identified: insufficient geographical scale, excessive thematic scope, and agglomeration of only weakly related activities. Based on this analysis, the article emphasizes the importance of improving CSOs’ portfolio design and offers recommendations for CSO leaders and donor agencies.

Keywords: civil society, effectiveness, corporate management, portfolio design, diversification, economies of scope, transaction costs.

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