GLOBAL AID TO CIVIL SOCIETY REACHES $21 BILLION

New data just released by the OECD confirms that, despite the pressures on global aid budgets, total aid via civil society has reached US$21 billion for the first time in 2013, a rise of 2% in real terms over 2012.

Other headlines from the newly released data are:

  • With further rises in aid channeled through civil society from the UK and EU in 2013, these two donors, together with the USA, now account for more than 50% of global official aid via civil society
  • Eight donors have now passed the threshold of $1 billion per annum of aid via civil society, compared with four in 2011. In addition to the USA, UK, EU, and Netherlands, this group now includes Sweden, Germany, Norway, and the Global Fund
  • Myanmar has shot to the top of the list of global aid recipients in 2013 (from 62nd in 2012), as donor support for the political changes in Myanmar has kicked in. However, civil society is so far attracting only 3% of this increased aid
  • 2013 also saw a big jump in aid channeled through civil society in response to the humanitarian crisis in Syria, now totalling US$565m, making Syria the fourth largest recipient of aid via civil society
  • A growing share of global aid via civil society is going to health programmes, which now receive 43% more aid than in 2010. By contrast, food aid channeled through civil society has dropped by 64% over this period, as the USA has scaled back its food aid programmes
  • Despite growing interest from some donors in funding southern NGOs directly, less than 10% of total global aid via civil society is being channeled directly to southern NGOs

For more information and insights, you can read our new Baobab Briefing, Civil-Society-Aid-Trends-2015 (5 pages with charts, pdf)

 

SLOWLY STRANGLING LOCAL CIVIL SOCIETY?

In a thought provoking new article in the Stanford Social Innovation Review,  Michael Kleinman and Thomas Wheeler argue for a rethink of how international NGOs (and donors) work with national and local civil society organisations.

“Too often we define success in terms of capacity building workshops held or the number of CSO members trained. Instead, we should focus on whether funding is enabling an organisation to grow its domestic constituency.”

“We should be ready to invest in the difficult, long-term process of speaking directly to groups that already have a large constituency of popular support but often disagree with us on important issues.”

You can access the complete article here

THE CHANGING FACE OF FUNDING FOR DEVELOPMENT

The new OECD Development Cooperation Report for 2014 is now out, and focuses this year on mobilising resources for sustainable development. The Highlights document is a good overview of the changing face of funding for development, and of the evolving range of sources of funding available to developing countries. They report that, while official aid is growing again (for details on implications for civil society see our briefing here), it now represents only around 15% of the total international resources available to developing countries. Foreign Direct Investment (FDI) makes up the largest share of the total, at around 30%.

As the report points out, official aid is a much more important source of funding for the least developed countries, who will not have the same access to FDI, but unfortunately most of the data in the report is only presented at aggregate level, which makes it difficult to interpret the extent to which the poorest countries are still reliant on aid.

You can find the Highlights report (30 pages, with a two page Executive Summary and a nice info graphic) here.

AID FUNDING FOR NGOs REACHES $20 BILLION

There’s been quite a lot of pessimism in the sector over the past few years about the prospects for future levels of international aid, and the likely implications for government funding of the work of development and humanitarian NGOs.

Until recently, it has been difficult to build up a coherent global picture of the trends in government aid funding for NGOs. However, as a result of recent changes in aid reporting through the OECD, it is becoming possible for the first time to identify and quantify trends in this global market.

This week, Baobab publishes a new analysis of this data, identifying the key global trends in government funding of civil society organisations. The analysis shows that government funding of civil society organisations has grown steadily in recent years, despite the flattening of global official aid budgets.

Based on our discussions with major donors, we believe this reflects three major factors:

  • A growing recognition amongst most (but not all) major donors of the importance of funding civil society as part of a balanced country aid programme, both to promote innovation and to strengthen national civil society’s capacity to hold their government to account
  • Greater donor focus on fragile countries, where the capacity of the government to use aid effectively is limited, and donors are likely to channel more of their aid via civil society and operational multilateral agencies
  • The improving capacity of some leading INGOs to deliver larger scale programmes effectively, to show evidence of what they are achieving, and to advocate for improvements in national policies as a result of their experience

 

Other key findings from the analysis are:

  • The proportion of global aid funding that is channeled through civil society has risen steadily in recent years, and now comprises 13% of total aid
  • In 2012, total global aid for civil society rose by a further 3% in real terms, to reach  US$20.2 billion. Almost one third of this total comes from the US government.
  • There is a wide diversity in the proportion of aid that different official donors channel through civil society – from 31% by the Netherlands government, to 2% by the French government.
  • Some major donor governments are rapidly increasing their aid to civil society – UK, Australia, and the Global Fund all increased their aid via civil society by more than 60% in real terms over the four years to 2012. In 2012, the UK replaced the EU as the second largest donor to civil society, and the Global Fund overtook Germany, Sweden, and Norway to become the  fifth largest donor to civil society
  • While some donor governments (e.g. Spain, Norway, and Netherlands) have cut back their aid to civil society as part of general cuts in aid budgets in recent years, most have reduced their aid to civil society by less than the cut in total aid
  • The proportion of aid funding channeled via civil society varies widely between recipient countries. In countries with stable governments trusted by donors and/or weak national civil society (e.g. Vietnam), the proportion of aid channeled through civil society can be as low as 2%. In more fragile countries, or where the government is less trusted by donors, or where national civil society is strong, aid channeled via civil society can often be 20-40% of the total.
  • While Afghanistan still receives more aid via civil society than any other country, it has reduced significantly since 2010. On current trends, DRC may be about to replace it as the largest recipient of aid via civil society.
  • Most of the growth in aid via civil society in recent years has been in the social sector, which now accounts for nearly 60% of the total. Within the social sector, the fastest growth has been in the health sector, where aid via civil society has grown by 37% in the last three years

 

You can access the full Baobab briefing here: Civil Society Aid Trends 2014.

 

 

 

THE RACE SOUTH

Strengthening Southern Voices in Global NGOs

By Adrio Bacchetta

Over the past decade, an increasing number of large INGOs have embarked on strategies to ‘southernise’ their organisations, increasing diversity both in terms of formal composition and of how power is distributed. The paths chosen have not been easy ones. In this blog, I reflect on what has been driving these initiatives, some of the approaches being taken and some lessons emerging.

In terms of drivers, organisations seem to have been seeking one or more of the following…

  • To consistently apply their social mission values internally as well as externally. (For example, rights based organisations that seek to empower people in their community, also empower those people inside their organisation. Others may be driven by religious or other cultural values)
  • To increase the legitimacy and impact of in-country programming through increased local ownership and connectedness. Going from ‘supporting’ to ‘being’ part of local civil society.
  • To increase global legitimacy and impact by having international campaigning or advocacy positions rooted in strong, locally owned programs, fronted by people from the affected the countries.
  • To respond to shifts in funding patterns; both institutional and emerging private funding opportunities.

In translating these ambitions into action, approaches I have come across vary from being pragmatic to being deeply value based.

The pragmatists tend towards a gradual expansion of their geographic coverage, using similar criteria to those they have used in the past, focussing mainly on emerging economies. This means that new affiliates primarily appear in BRICSAM or G20 countries.  While such approaches add diversity, they still leave people from poorest, or most crisis ridden countries absent from the table. Real change tends to be slow in coming and real power often stays connected to those with money.

Value based approaches are much more equitable in so much as they seek to empower all stakeholders; however, the practical challenges  ramp up accordingly. Ensuring robust governance structures on the ground, in resource poor settings and achieving consistent quality standards is no easy task. Coming up with an equitable international management system is also a significant piece of work. Those seeking to make the leap of both addressing power and ensuring resources are aligned with their global strategies have gone as far as to start separating money from the power of individual member institutions.  Again, this is important, arguably essential, but no walk in the park in terms of design and implementation.

Unsurprisingly, governance presents a challenge for all approaches.  In the past money and programs could be managed with top down structures (albeit using nicer language than this!). This changes when independent structures are created in program countries and accountability relies even more on horizontal rather than vertical mechanisms (The Baobab website has more on this, see www.baobab.org.uk/knowledge-hub/). The challenge increases further when well-intended plans for organisational change are implemented quickly, based on differing expectations having not taken sufficient account of the culture shift necessary for success. In my view getting the behaviour right is far more important than a comprehensive slick bureaucracy.

There are also management challenges. It is one thing to have equality, or balance in governance structures, but achieving interdependent management systems between affiliates, improving synergy and avoiding duplication, brings its own set of challenges. In turn, this coherence agenda must be balanced with ensuring space for contextual adaptation and innovation. Space for very different perspectives and references when making decisions; having both funding and programming members at the table means that resources such as money, knowledge, local understanding and global understanding must be considered of equal value when making choices. Shifting from the traditional money-talks mind-set takes quite some effort.  (For more on operational interdependence see www.baobab.org.uk/knowledge-hub/building-operational-interdependence/).

So, what are the lessons emerging as more organisations tread this path? With a view to providing food for thought and stimulating debate, here are some of the things I have taken away so far…

  • A focus on culture and new ways of working is as, if not more, important than processes and rules. Especially in terms of developing governance bodies and in terms of making the dual local-global identity something that actually lives.
  • Live the values. Diversification is more than just inviting people to the table. It is about inviting and giving power to different ways of thinking that may significantly change the way an organisation makes its choices.
  • Shifting power and increasing diversification needs to go hand in hand with clear resource sharing agreements. If power is hard-wired to money, those without money will never become equitable partners.
  • International governance and management must reflect the diversity of members, but must balance inclusivity with being lean and agile.
  • A culture or delegation and trust, supported by a robust mutual accountability system are essential. These must be designed to
  • Investing in interdependence is key. Finding ways for north-south, east-west members to rely upon and support each other is heart of a global organisation; not bilateral relations with a global centre alone.
  • Last and not least is that it takes time to achieve the technical, political and cultural shifts necessary for success. Being too cautious risks that real change never comes, but being too rash may prove expensive in terms of time, money and reduced mission impact.

These are initial thoughts on the issues and trends emerging. I hope this will help stimulate debate within the INGO community. If you’d like to comment or contribute other perspectives, you can do so below. (Subject to moderation, all comments will be in the public domain).

Thanks for reading!

Adrio Bacchetta

Sandstone Consulting

For more information about Adrio and contact details, click here

GLOBAL AID RISES AGAIN

Today, the OECD published the preliminary aid data for 2013, with the very positive news that global aid is on the rise again, after two years of modest decline in 2011 and 2012, and has hit a new all time high of US$135 billion. This is a 6% rise in real terms on the 2012 total.

If non-DEC members are included, the total of all reporting countries rises to US$144 billion, which is a 10% rise on 2012.

The growth is led by big increases in aid from the UK (up 28% to reach the UN 0.7% target for the first time), Japan (up 37% due to exceptional levels of debt relief and concessionary lending), and UAE (up five-fold due to exceptional aid to Egypt).

Amongst the other major donor countries, it is a more mixed picture, with real increases in aid from Norway (16%), Sweden (6%), Germany (3%), and USA (1%) offset by reductions from Canada (-11%), France (-10%), Netherlands (-6%), and Australia (-5%)

While the data on the share of aid via civil society has not yet been published for 2013, our analysis indicates that aid channeled via civil society, which held up better than total aid figures in 2011 and 2012,  is likely to have grown again by 5-7% in 2013, to over US$20 billion.

If you would like more information on the latest aid data, please see our  BBAidBriefingApr2014

Ken Caldwell

BAOBAB BRIEFING: ICSO GLOBAL FINANCIAL TRENDS 2014

Save the Children and MSF setting the pace on income growth

This new Baobab Briefing is the first published analysis of recent trends in income and expenditure amongst seven leading international civil society federations. Drawing on recent improvements in the financial data published by leading ICSO federations, this report provides an overview of global financial trends amongst leading ICSO federations, and compares recent financial performance amongst them.

To read this report, click BBICSOFinTrends2014

NEW REPORT ON BUSINESS PARTNERSHIPS

In December, the Canadian-based Network for Business Sustainability published a new report on the findings of recent research on the key factors that influence the success of partnerships between businesses and non-profit organisations. Based on over 200 case studies, it identifies different types of business-nonprofit partnerships, and the factors that influence their success. Written primarily for businesses, the report provides useful insights into what businesses look for in their partnerships with non-profits, which will be useful to ICSOs considering new forms of business partnership.

The Executive Report (15 pages) is available here

 

BOOK REVIEW: BUILDING A BETTER INTERNATIONAL NGO

This book was put together by two authors with considerable practical experience in the area of organizational transformation in both the private and NGO sectors. Recognizing that many large development INGOs are facing similar challenges in their organizational development, this book provides a timely attempt to pull together and deal with many of the key elements.

The introduction of the book outlines three main messages;

1)    Each INGO needs to take stock of the shifting external environment and re-evaluate its role and contribution to the development process

2)    Each organization has the opportunity and the obligation to modernize its organization and management at the international level

3)    While efficiency and effectiveness are important parts of any organizational change, the real prize is in the discovery and exploitation of major breakthroughs, removing blockages and exploiting new possibilities in the fight against poverty and injustice

The book does a great job in translating learning and evolution of private sector organisations into useful templates for the NGO sector. It presses many of the key buttons relating to challenges faced by large NGOs both in relation to internal dynamics and in terms of responding to disruptive changes in the external environment. The authors are clear in their view that if INGOs fail to respond and continue with business as usual, they risk becoming obsolete. The book balances new tools and concepts with giving advice on using/revising traditional processes such as strategic planning.  It also succeeds in the difficult challenge of giving concrete advice, tools and even strong warnings without pontificating or oversimplifying. Chapters are smoothly linked, but also stand up well on their own as go-to locations for specific issues, each with an impressive degree of granularity.

At face value, the book may underplay aspects of culture. This is a difficult topic to make concrete, but as people’s behaviour is probably the single most important factor in achieving change, it needs to be met head on. The use of private sector language (eg business, products etc) has some real objective value, but the degree to which it is used may serve as a barrier between some readers and the important messages being communicated. Not all.

I think the book is excellent work and have little doubt that it will  be well thumbed by senior managers and board members looking for inspiration and usable tools, whether they are at the point of considering change, or up to their armpits in implementation.

Adrio Bacchetta, Sandstone Consulting and Baobab Associate

Building a Better International NGO: Greater than the sum of the parts (2013) by James Crowley & Morgana Ryan; Kumarian Press. Available from Amazon and from other good booksellers.