Value for Money: More Than Just a Number
“Value for money” is a phrase that shows up in almost every funding application, strategy review, or board meeting but what does it really mean in practice?
At its core, Value for Money (VfM) is about achieving the best possible results with the resources you have.
But this is not simply a matter of cutting costs or showing low overheads on a budget sheet. True VfM is about delivering meaningful, measurable impact in a way that is efficient, effective, and equitable.
Our work with non-profits focuses on helping them move beyond spreadsheets and financial ratios, towards telling a stronger, evidence-based value story that funders, boards, and communities can believe in.
The four E’s of Value for Money
A comprehensive VfM approach considers four interconnected dimensions:
- Economy – Are we purchasing the inputs we need, such as staff time, materials, or services, at the right price, without compromising quality?
- Efficiency – Are we using those inputs in a way that produces the maximum possible outputs, while keeping waste, whether time, money, or materials, to a minimum?
- Effectiveness – Are we actually achieving the outcomes we set out to deliver, and do these outcomes align with our strategic objectives?
- Equity – Are we ensuring that our work reaches the right people, especially the most marginalised, and that benefits are distributed fairly?
By measuring all four, we gain a holistic picture of how much was spent, but of also of what was accomplished, for whom, and at what cost.
How MEL Supports VfM
Monitoring, Evaluation and Learning (MEL) plays a critical role in demonstrating VfM by:
- Tracking indicators that measure cost per outcome, not just cost per activity, to better reflect the real value created.
- Gathering qualitative data that shows how programmes are experienced on the ground, and whether they are meeting genuine needs.
- Supporting reflections on alternative delivery models that could improve efficiency, extend reach, or enhance equity.
Telling the Story
VfM is ultimately a narrative, not just a number.
Funders want to understand:
- Did we make the most of limited resources?
- Did our investment lead to real, measurable change?
- Would this be a smart place to invest again?
With a well-designed MEL system, you can answer these questions with both confidence and evidence, showing that value for money is not just about spending less, but about making every resource count where it matters most.