Data envelopment analysis as a benchmarking application for humanitarian organizations

Humanitarian aid organizations are under tremendous pressure and competition for donor funds to sustain their operations. However, donor contribution levels have remained relatively stagnant over the past five years and are unlikely to grow in the foreseeable future. Additionally, donor policies and mandates have added pressure on humanitarian aid organizations to comply with new and more complex requirements. Many humanitarian aid organizations work in some of the most challenging areas of the world, where conflict, famine, environmental, economic, and cultural challenges are prevalent. Given all these factors, a novel form of performance and efficiency measurement is needed to evaluate the performance of humanitarian aid organizations. This study addressed the possible use of Data Envelopment Analysis that measures the efficiency of an organization’s country programs. Limited funding from donors, competition, and the humanitarian imperative to reach people in need requires humanitarian aid organizations to become better and more effective stewards of donor contributions. This study used a mixed-methods approach to compare and evaluate the efficiency of the country portfolios of a humanitarian aid organization using DEA. The DEA models used are CRS and VRS using an output orientation. This study used an explanatory sequential design. First, a quantitative approach using DEA was employed to compare the efficiency of an organization’s country portfolios. Second, a qualitative effort consisted of a focus group of DEA researchers who have performed DEA on humanitarian aid programs. The focus group addressed the views, perspectives, and issues of conducting DEA within the humanitarian sector. The DEA study was conducted in three phases. A sample of 19 country portfolios was used in this study. The results showed that 10% of the countries were efficient in the aggregate under a CRS model, and 20% using a VRS model. The focus group provided insights and perceptions of DEA from a practical perspective. These were categorized from technical requirements and communications with a client. The challenge in the humanitarian sector is that DEA is not a well known methodology. An explanation is often required on what DEA can do for an organization and its limitations. Additionally, an explanation was often needed for a client to understand how decision making units (DMUs), variables, and DEA techniques can be used to support a humanitarian aid organization