A successful project to wean southern civil society organizations off aid

August 10, 2016

     By Duncan Green     

I’ve previously lamented the aid industry’s lack of interest in building up the domestic fundraising capacity of local

Soul City Institute, South Africa

Soul City Institute, South Africa

organizations and suggested we need a ‘Fundraisers Without Borders’. Turns out something along those lines is already happening. A note in a recent edition of Development in Practice by Robert Wiggers of the Dutch Wild Geese Foundation (WGF) describes its Action for Children (AfC) programme in four countries (Brazil, India, Kenya, and South Africa). Here’s how it works:

First the rationale: ‘Local fundraising contributes to the financial sustainability of an organisation and spreads financial risks: with different sources of income an organisation can cope better with donors that withdraw, or other setbacks. In addition, it provides a better guarantee that local priorities, instead of those of donors, prevail: research has shown that all too often, donors’ priorities dictate where the money goes and thus, which problems are solved and which not. Local fundraising also contributes to organisations being better embedded in the local community: it increases the need to involve all, not only as beneficiaries, but also as active citizens, such as fundraisers, potential donors, or volunteers. And it gives legitimacy: the broader an organisation’s support base, the stronger its right to voice the interests and concerns of the community it serves.’

Using a subsidy from the Dutch government and its own private funding AfC first identified big local partners in the four countries to lead the project. ‘At the core of the design was the presumption that over the course of the programme, the Dutch government subsidy and WGF’s contribution would decrease while the contribution of the national partner organisation would increase. Thus, foreign funding would be gradually replaced by domestic funding.’

Smile Foundation, India

Smile Foundation, India

The lead partners were CESE (Brazil), Smile Foundation (India), Soul City Institute (South Africa) and the Kenya Community Development Foundation. AfC then worked with those big national partners to do the same with local groups – use grant funding and technical support to help them build their ability to raise local funds and wean themselves off aid. See the inevitable Theory of Change diagram.

The DiP paper presents the results for 2011-2015 and finds ‘national partner organisations approved a total of 903 local projects from local community-based organizations (CBOs) and NGOs that successfully raised funds at the local level. Only a handful of organisations, after receiving training and coaching, were not successful in raising their share of the necessary funds…. Usually, CBOs and small NGOs, after training on local fundraising given by the national partner organisations, were able to raise half of the funds they needed for their projects.’

Both the big national partners and the grassroots organizations improved their fundraising, but the big guys had to work harder:

‘It is more difficult to raise funds for these types of interventions as potentional donors, be they middle-class individuals or companies, like elsewhere in the world, prefer to donate to concrete projects and programmes. It takes time to gain their trust and to convince them to also donate to cover the costs that come with any development activity, and especially for a model that involves a large amount of capacity strengthening.’

Useful lessons for other would-be Fundraisers without Borders?

It takes time: ‘At the start of the programme, in 2006, it was estimated that 10 to 12 years would be needed for the CESEprogramme to attain full independence from foreign funding. At the start of the second phase, in 2010, this was adjusted to between 12 and 15 years.’ That is tough in a world of 3 year project funding cycles.

There can be internal resistance: staff in the Brazilian partner felt they were being pulled away from their previous focus on rights to the grubby business of fund raising. I guess they had previously led a sheltered life where the northern donors raised the funds, and they could just do the fun stuff…..

A lot of the skills needed are in short supply in developing countries, because they have previously largely happened in the North: delegated project funding and everything that entails, like attracting applications, project selection, monitoring and evaluation; capacity strengthening of local CBOs and small NGOs; advocacy; communication and PR, including the media; and local fundraising with different types of donors (corporate, middle-class individuals, local government). To fill the gaps, AfC invested in exchanges between the national partners and funded new hires, consultants and training, but it still took a long time.

As for where the domestic resources actually came from, Robert replied to my email saying it was all ‘really local, local sources’. For both national partners and the grassroots organizations ‘the proceeds of events in their own communities and contributions from local companies… Nothing from governments or aid donors’ national offices.’

However one major actor failed to step up – the emerging middle class.

KCDF logo‘The greatest difficulty, according to all three evaluations, lies in mobilising funds from the national middle class. In societies where most of the funding for poverty alleviation used to come from abroad, the perceived need to donate was low…… There are political and cultural barriers to overcome, and understanding these better might require more academic research. There are also practical obstacles to overcome, such as an absence of laws and regulations that help create an enabling environment for donating, such as tax exemptions. Successfully inviting middle-class individuals to donate or to donate more perhaps also requires more training in the different fundraising techniques that exist worldwide than AfC was able to provide.’

Fascinating – would love to hear of other similar experiences

August 10, 2016
Duncan Green