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Civil Society Partnership Review: weekly focus on effective approaches

Posted by: , Posted on: - Categories: Africa, Asia, Development Debates, Other

The Review, looking at how we will define our future objectives for working with Civil Society Organisations (CSOs), as well as associated approaches and instruments for our partnership model is gathering momentum. We’re now into week 4 of our engagement with you online: we’re focusing this week on effective approaches.

Funding. We know some of the main issues. In previous discussions you have told us that: unpredictable funding makes it difficult for you to plan; guidelines are sometimes unclear and inconsistent; and that often application, due diligence and reporting requirements are too arduous and disproportionate.

Have you seen any improvements  in these?

We must also always keep in sight our accountability to  Parliament and the UK taxpayers, and our duty to demonstrate best value for money and maximum results from the public spend.

Without diminishing the validity or importance of these points, or the challenges they create, it’s time to move the conversation on. So, answers to the following on a postcard, well in the comment section, please.

  • What types of funding models, in which contexts, are best to develop effective civil society that meet DFID and CSO’s common goals?
  • How can we ensure flexible funding models, that are able to evolve with the context?
  • How do we balance the need for accountability with flexibility?
  • Are our rules, regulations and procedures transparent, do they provide clear instructions, and what do you think is unnecessary? Let us know your ideas on what you think is unnecessary bureaucracy, and if we’ll see what we can do.
  • Could we make more use of digital processes for grant application and management? Are there donors who already do this well?
  • Are we making best use of our fund managers and if not how could we structure these arrangements better?

I think it’s best to have a mix of funding models, shaped to suit different partner’s capacities, locations and contexts. For me, these models, whatever they may look like, need to meet DFID/CSO joint objectives, while empowering the partner to deliver. In programmes I’ve managed, I want general reassurance that it is on track, delivering to time, budget and quality. On the occasions when I ask for a brief and succinct update covering progress, issues and risks, and receive a long in depth analysis of outputs, paragraphs upon paragraphs as to how the theory of change is being embedded across the programme, a list of all the meetings attended; all with ‘beneficiary’ interviews and photos…I worry. My ambition for an agile, lean programme management approach is in flames. It feels like Chinese Whispers.

Comment, share and give us your thoughts

We’d love to see your responses and ideas around these questions. Feel free to respond to other comments whether expressing agreement or an alternative view. There’s no survey this week and the first is now closed. However, you can still take the second and third surveys, which are open until 4 and 11 September respectively.

If you’d like to know more about the review check out our webpage, follow @DFID_Inclusive on Twitter and use #DFIDCSPR to get involved. You can also participate in the DFID and Bond co-hosted Twitterchat this Thursday from 13.00 and follow Matt on Twitter.

We won't be able to offer personal responses to each and every comment, however, we can promise they will be read and considered during the review. Please do not submit written submissions concerning the Lines of Enquiry to the review team, as we are unable to commit to reviewing these. For this reason, it is essential to engage with our blogs and surveys embedded in them.

Sign up for email updates from this blog, or follow Matt on  Twitter.

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  1. Comment by Tom Franklin, Think Global posted on

    I agree with you that a mixed economy for funding is best. Each funding approach – core or project grants, contracts, payment by results, etc – has pros and cons. Swing too far towards a contract-only approach, and there’s a danger that CSOs will become risk- (and innovation-) averse: delivering just to contract, with little funding to experiment. Swing too far towards a grant-only approach, and there could be less focus on outcomes.

    In recent times, of course, the shift has been away from grants towards contracts, and I would argue that this has now swung too far: that CSO risk-taking and innovation has reduced as a result, and in the long run, this will be to the detriment of value-for-money. For many of Think Global’s member organisations – from development education – this has made it much harder to try out new approaches.

    To help maintain the balance, I would like to see DfID commit to:

    - Open grants programmes – enabling CSOs to bid for funding pots for specific purposes.
    - Support for evaluation of such programmes – CSOs being encouraged to spend at least, say, 10% of funding on evaluation, so that the sector can learn from the innovation.
    - Support for smaller as well as larger CSOs – some of the grant programmes should encourage smaller applications, from small CSOs. They are the equivalent of the small businesses of the CSO-world…they need nurturing and support, but they are very often where the best innovation comes from.

  2. Comment by Barnaby Peacocke and Andrew Clenaghan - Practical Action posted on

    Flexible funding should play a central role in development. Arrangements can be designed to help partnerships get established, introduce social and technological innovation, test it across different contexts, learn through practice – including failure – and communicate this learning to decision makers and practitioners.

    How this should happens when development partnerships are increasingly looking to address complex challenges that require a systemic response tailored to a particular context is inherently unpredictable. So while effective design does improve the chances of better results and sustainability, genuine impacts are achieved where issues of power and exclusion are addressed alongside the better provision of access to products and service. Addressing this reality requires a range of process, technological, partnering, and paradigm innovations that have seldom, if ever, been funded through individual projects. By allowing development actors to move beyond the high entry costs and inherent unpredictability of short-term project models, flexible funding offers a unique vehicle by which NGOs, the private and public sectors can better absorb risk and explore long-term opportunity.

    Used well, PPA funding has been a good example of this. At Practical Action PPA flexibility has allowed investments in process innovations like ‘Participatory Market System Development’ and given space to learn and refine this and other initiatives. It has enabled investment into establishing long-term partnerships with the private sector in areas like risk financing, and with other NGOs in impact investment. It has facilitated our entry into new contexts to test alternative funding models and our ability to make learning about development practice available to others through knowledge services. PPA funding has allowed Practical Action to invest in the skills of technical teams on the ground and supported our global advocacy in support of the UN’s Sustainable Energy for All initiative. No other current funding vehicle has carried this wide-ranging ability to transform organisational practice.

    DFID can work towards flexibility and innovation in several ways:

    1. Tailor flexible funding to support systemic approaches and on-going adaptation: Access to goods and services depends on effective systems in which a range of public, private and civil society actors work. Collaborating agencies need the flexibility to respond to shifts in the ways social, financial, technological, institutional, environmental and policy arrangements operate in a system when particular actions are taken. It also requires a strong emphasis on iterative learning with constant feedback about what does and does not work.
    2. Create a mechanism that balances accountability and flexibility: this implies a focus on accountability to process indicators like the quality of relationships between partners, as much as it does to measuring target outcomes. Development partners should also be expected to report on areas of learning such new business models and strategies.
    3. Use strategic funding to accelerate organisational transformation. Ensuring flexible funding supports the engine room of organisations will be essential to its success: in building the skills of front line staff to build effective partnerships; empower women and girls; apply effective monitoring and evaluation strategies; capture and share learning will bring both quantitative and qualitative changes in peoples’ lives and a better respond to learning, and; avoid the tendency of project funding models to encourage overly positive reporting on achievements.
    4. Structure flexible funding to encourage cross-sector collaboration: Ensure a proportion of funds are used to target collaborative ventures. Given the importance that partnerships are given in development, it is essential that flexible funds include a strong reporting focus on collaboration performance and learning, across agencies, and technology sectors.
    5. Iterative funding arrangements: rather than apply for sequential project funding, flexible funds can be allocated over the longer term to agencies that show each of the above steps alongside independently verified evidence of success. Through this model, funding tranches can be planned into the medium to long-term under the understanding that specific allocations will be made to successful partnerships and withdrawn where limited success is shown. Overseeing this will require a combination of fund and technical management skills in the donor and implementing partners.

  3. Comment by Liza Stevens, Maveen Pereira & Abigail Bick - Traidcraft posted on

    Firstly, Traidcraft’s experience of applying for funding from DFID has improved. The application forms and guidelines are clearer and there have been some very useful workshops relating to specific funding lines. Our working relationship with the Fund Manager has also got better and better. They have been very helpful to us in terms of thinking through things like project indicators and targets and have been flexible and supportive in response to the need for changes, and we can easily contact them when we need to. It is especially encouraging to see their increasing role in facilitating learning. So, generally speaking, definite improvement from our perspective and we would welcome a move towards a more digital application process.

    What is challenging to deal with is when, like now, a number of major funders (eg Comic Relief, Big Lottery and DFID) all go into lengthy reviews at the same time, taking a significant chunk of funding opportunity off-line for a long period! It would be helpful if review processes did not coincide to such an extent.

    Another source of frustration is the focus of many funding lines on innovation. Innovation is, of course, important but sometimes funding for follow-on projects to extend reach and scale up actually delivers better value for money, especially in the context of 3-year project cycles.

    On funding models, as you suggest, it’s all about the context, the partners involved and the nature of what you are trying to achieve and we agree that a mix of funding models makes sense. Whatever the model, we think there remains a need for flexibility, for room for negotiation and for appropriate timelines for delivery of outcomes – we are usually dealing with complex, messy and systemic problems.

    For interventions that have very clear and clearly deliverable concrete results, models like payment by results (PBR) seem, in principle, appropriate. However, from our experience of being involved (not as the lead) in a PBR project in India, it would be helpful if there was more room for negotiation on the milestones, especially if the work is taking place in very difficult areas. In some circumstances, delivery against an agreed milestone may have nothing to do with your capacity or commitment to deliver but more with external factors beyond your direct control. It also needs to be recognised that for smaller, perhaps more specialist, organisations which don’t have high levels of unrestricted reserves, PBR can cause challenging cash flow problems. In these cases , some payment in advance would help address that challenge – much like you might pay a consultant a certain proportion of their fee up front. In principle, PBR seems a good direction of travel with its focus on outcomes and results, but it can be a difficult journey to go on for many CSOs and more flexibility and support during the transition period would help.

    Having said all of that, we question whether PBR is an appropriate model for many important intervention areas where the specific outcomes or results may be harder to define and concretise. We are thinking especially of programmes that aim to build the capacity of local CSOs to, for example, advocate for changes in policies or practices to the benefit of the poor and marginalised, or that raise awareness amongst citizens and decision-makers in the North of the need for change in policies and practices. The outcomes may be harder to define and to measure; pathways to change are likely to be more complex, far from linear and take a much longer time than a 3-year project cycle allows; and there is a constant need to adapt to a changing context. While we believe it is still important to invest time and effort in the development of clear measurable outcomes and change pathways for such programmes, we think more strategic, flexible, longer-term, adaptive programme funding would be more appropriate.

    With our focus on trade, Traidcraft has a particular interest in exploring how we and our partners can effectively integrate investment financing into our programmes and we have taken proactive steps towards this. However, we believe that combining grants with investments is currently a more appropriate way to support the growth of the businesses we engage with. We work primarily (but not exclusively) with enterprises that contribute to the transformation of rural economies in the developing world. For many of the enterprises we work with (either through our trading relationships or development programmes), while investment would be appropriate, the minimum level of investment offered by most impact investors is too high (often at least £100K) within their current operating models. We want to help enterprises that have the aspiration and the potential to grow to take well-planned business steps towards the position where they can access and benefit from such high levels of investment offered by investment platforms. This includes supporting their access to initially lower levels of investment to help them take identified next steps.

    Even for those that are ready to look for investment of more than £100K, there are costs that facilitator organisations like Traidcraft and our local partners incur to support access to investment finance including: investment of staff time in and direct costs (e.g. travel, subsistence, accommodation) of working with enterprises to develop appropriate capacity and investment plans; and sector-specific consultancy support to assist enterprises with the development of their capacity and business plans for submission to potential investors.

    Grant funding combined with investment finance offered at lower more manageable levels for smaller-scale social enterprises engaged in supply chains that involve smallholder farmers and producers in the developing world would, we believe, more effectively support a transition towards investment rather than grant financing.

    For some supply chains involving lots of small producers, working capital is crucial to make collective enterprise work. We seek financing opportunities to include small-scale investment funds (including revolving loans) within the budgetary scope of our grant-funded smallholder farmer programmes to enable farmer groups to access appropriate levels of working capital to grow and improve the profitability of their individual and collective agricultural enterprises. For example, a group savings and investment model was very successfully tested within our smallholder farmer programme in Bangladesh - this produced excellent results and incentivised the farmer groups to save from their own profits for future financing needs through a matching fund mechanism.

    On the subject of investment financing but at a much larger scale, the private sector is seen as an increasingly important development actor. There is an assumption, we think, that investment in big companies doing business in the developing world will deliver trickle-down benefits to the poor. There is no guarantee of that and we think it important to rigorously evaluate the poverty-relieving impact of investment financing models to ensure that the poor do get a fair share of resulting risks and benefits.

  4. Comment by Tanya Rahman, VSO posted on

    Flexible funding also allows organisations to deliver innovative programmes, with the potential outcome of scaling up successful interventions. VSO’s core grant from DFID allowed us to fund a maternal, neo-natal and child health programme in Ethiopia in local neo-natal intensive care units which led to a decrease in neo-natal mortality by 40%. We are now rolling this out at a regional level.

    The shift towards a more performance-based payment model for funding instruments is not a bad thing per se. Why should the NGO sector be worried about being measured on what we say we are going to deliver? The challenge comes from donors sometimes pushing the sector too fast to meet some of these more demanding requirements, when we have not had adequate resource and time to skill-up to the appropriate levels and to test and evaluate whether these models have had the intended result of increased impact. The NGO sector appreciate and very much acknowledge that we must continue to improve in this area. However, what we require in order to do so, is more support, guidance, resourcing and time from donors to build the capacity of the sector, including key actors and local partners. For example, donors should provide adequate resourcing for monitoring, evaluation and learning activities, capacity-building of southern civil society in technical areas such as quantitative research & analysis, thematic expertise and Value for Money analysis.

    There is definite space and the need for the NGO sector to work more closely with the private sector. They both bring different set of skills and expertise. We need to continue to look at how we can work collaboratively and effectively together – using our skill sets in a complementary manner to maximise impact in communities. For example, VSO has worked with Mondelez, other NGOs and local institutions to increase the productivity of coca farming in Ghana through the “Coca life” programme.

    Working with fund managers can be challenging, but also has certain positives. Some have solid expertise in areas such as financial management and M&E which they can share and build the capacity of grantees. However, they may also lack the in-depth international development knowledge and understanding of working directly with communities. This can result in certain tensions during project delivery. This pressure is then passed on to local partners, who have even less resource to absorb these challenges. Due to their own contractual obligations, fund managers are also sometimes less able to be as flexible as DFID may have been if managing the grant directly. Is there any way that DFID could support more flexiblity from the fund manager? It would be important for a skills-gap analysis to be taken at the beginning of any project and a capacity-building plan to be developed (entirely funded by the grant) and delivered from support from the fund manager. This would build a relationship of trust, mutual accountability and support. As a result, both parties would then able to bring their own strengths to the table and achieve more together in a collaborative manner.

    DFID should continue to support activities and initiatives which allow cross-sectoral sharing and learning, e.g. the PPA Learning Partnerships, learning events for GEC grantees etc.

  5. Comment by James Taylor posted on

    Dear DFID.
    I respond from afar geographically and relationally working in a South African NGO. Over many years I have felt collegially close, having provided services to many of your direct and indirect beneficiaries and to other European official aid agencies. I write out of appreciation for your openness to engage and learn, and out of a shared concern for the impact of our collective endeavours.
    As a first contribution I focus on this week’s blogger’s reminder that: “We must also always keep in sight our accountability to Parliament and the UK taxpayers, and our duty to demonstrate best value for money and maximum results from the public spend”. This reminder is now firmly entrenched in the development discourse in many donor countries, and, I suggest, the in the power dynamic of our sector. My challenge to DFID is to use it with great care and consciousness.
    It is a crucial reminder to DFID and all of us who operate as intermediaries between the sources of societal resources and those intended to be the ultimate beneficiaries. From the perspective of many of the impoverished people in countries like mine, they have for generations contributed much to the wealth that at some point flows through the taxpayers of your country. Those of us who facilitate the flow of resources within this global system are surely accountable to all parties in the system. Our attempts to play this role contribute much to shaping the system. The practices of the development sector impacts substantially in determining how power relations contribute to creating sustainable living systems that result in all elements reaching their fullest potential to contribute (the essence of sustainability).
    My reminder is that development practitioners located in powerful positions in relationship to where societal resources concentrate have a particular responsibility. Our power needs to be used with high levels of consciousness and skill reflected in a depth and quality of developmental practice that is at least meaningfully developmental, at best transformative.
    From my experience the way that the important relational need to account to each other plays itself out in practice is anything but developmental and transformational. What happens is that the need to prove impact to the taxpayers is passed on through the hierarchical power relations of our system untill eventually the final additional burden lands on the poorest of the poor having to prove that they have changed. The power dynamic in the system is used to “facilitate” change in ways that result in those with the most power passing on their need to change to others less powerful. For the systemic change required for our collective development goals to be achieved we all have to change and get a lot better at doing what we do.
    It is an exciting thought that the effectiveness of the practice of the development sector could be measured in the changed quality of the relationship through the flow of information between the taxpayer (who we are choosing to look upon as the ultimate source) and those we tend to look upon as the ultimate beneficiary. Both development and transformation in living systems is about changing the nature and quality of the formative relationships between its parts.
    From our distant perspective and experience, the constant reminding of the need to account to British (and other nations’) taxpayers comes across all too often as the wielding of a very blunt instrument of persuasion and use of ultimate power to get us to conform to agendas beyond our control and not always in our best interest. We sense that taxpayers around the world are themselves grappling with developmental challenges affecting the quality of their lives. As development practitioners we could be building global collaborative learning relationships.
    James Taylor - Development Practitioner – Community Development Resource Association (CDRA) – South Africa -

  6. Comment by Mousumi Saikia - Islamic Relief Worldwide posted on

    IRW believes there is no single funding modality which is best for strengthening or developing civil society. The model(s) adopted needs to be strategic, take into account the context and complexity of development needs. One of the lessons learnt from the OECD DAC peer review regarding partnering with civil society is that it is very important to have an evidence-based overarching civil society policy to guide the partnership, foster understanding, identify common goals and opportunities etc. Further, a recent study commissioned by the PPA IELG on a comparative assessment of strategic funding models adopted by a few select institutional donors in Europe, identified that DFID was the only donor in the select group which did not have a written strategic framework for partnering with civil society. As a starter, DFID might need to consider a well-defined strategic framework to guide civil society partnership prior to adopting any effective funding mechanisms in relation to the objectives they want to achieve i.e. match funding mechanisms with the purpose of funding and follow strategic objectives rather than specific funding mechanisms. Having clear objectives for DFID funding linked to the civil society policy will in turn help determine the most appropriate funding mechanism and the conditions that will be attached. This would ensure clarity on both sides and a better match between mechanisms, tools and expected results. Depending on the context and complexity of development issues, having a mix of funding mechanisms should allow a range of actors of different sizes, capabilities and interests to access funding which contributes to supporting a diverse civil society. The selection of a single funding model or a mix of models should be guided by the fundamental question: what funding model will best decrease the costs of uncoordinated, project-based funding, decrease transactional costs without compromising results and address the multiple and diverse needs of civil society more strategically? DFID should examine innovative and alternative procedures to allow for a more strategic approach to engage with CSOs and offer them capacity development in delivering their new roles as drivers of societal change and governance actors. A note of caution here, as with the ongoing discussion on PbR, selection of a funding model must be supported by sound evidence and insightful evaluation which goes deep into the externalities of the model and the realities of all who are affected.

    For Islamic Relief Worldwide (IRW), for e.g. in the DFID PPA, one of our most pressing challenges has been the sudden and significant changes in our operating environment due mainly to conflict situation (North Eastern Kenya) and significant fluctuations in exchange rates (Sudan) which negatively affected our performance and also the assessment of the PPA. The point here is that some models of funding e.g. the PPA whilst flexible in terms of CSOs setting strategic priorities are not ‘truly’ flexible when it comes to delivering results. CSOs are tied to rigid commitments and could be penalised for not delivering these. It is important for donors to recognise that very often contexts are fluid and changing and to factor this into funding agreements. For e.g. allowance should be made in agreements for reasonable changes in approaches, outcomes and activities due to unforeseen changes in the context or in the circumstances of the CSO. Also if both the donor and CSO agree that some of the original intentions or plans in the agreement are no longer relevant or not of sufficient priority, the plans may be adapted or dropped by mutual consent. Further, both the donor and CSO must have a common commitment to iterative learning so that interventions could be adapted within reasonable means to accommodate the lessons learnt to ensure the best outcome for all stakeholders, most importantly the beneficiaries. This would entail mutual trust, maturity of partnership between donors and CSOs, and moving beyond a simple funding relationship. It is also imperative to recognise and respect the power imbalances in civil society partnerships and not treat CSOs as mere contractors for channelling funding.

    Flexibility and accountability are not mutually exclusive and any increase in flexibility would need to be matched by ongoing accountability. However, increase in responsibility should not be seen as the same thing as heavier bureaucracy. Important to ‘keep things simple” to reduce micro-management. Whilst DFID needs to have an eye on overall management and the delivery of results in its partnership with CSOs, they must not create accountability through too many different mechanisms, thereby increasing complexity and rigidity at the expense of effectiveness in delivery. Also for flexibility to generate effective results, it is important for DFID to further invest in building capacities of CSOs – both personnel (technical, managerial), organisational capabilities (governance and management structures) and fiscal capabilities (adequate resources to carry out responsibilities). There is also the need to develop better performance management systems which go beyond the heavy reliance on setting quantitative targets. Quantitative targets could encourage CSOs to engage in certain activities just to "tick the right boxes" without a real eye to development needs. The debate on balancing accountability with flexibility has preponderance on current donor-recipient relationships which does not acknowledge that imbalances often exist as a result of power dynamics, especially in funding relations. Important for DFID to strive for equitable partnerships and reciprocal accountability - a mechanism is needed to enable all partners to jointly monitor performance and be accountable.

    DFID needs to simplify the administrative and grant-making requirements to achieve an effective, results-oriented partnership. DFID needs to identify and implement measures to simplify and rationalise administrative, procedural, and contractual requirements across the spectrum, from registration to negotiation to implementation audit, and reporting consistent with appropriate standards of accountability and consistent particularly with recommendations 1 & 3 of the ICAI report on the PPA.

    For IRW, our experience particularly with the PPA highlighted that to get full value out of partnerships DFID needs to assign not only fund managers but technical experts/counterparts to each CSO to provide guidance, especially when there is an expectance of risk taking and innovation – policy development and advocacy work, developing M&E systems for HTMB etc. Partnership with civil society should be mutually beneficial and a learning experience; the onus to develop new systems and approaches should not lie entirely on CSOs.

  7. Comment by Clare Walton, GAIN posted on

    We would support the need for different types of funding models for different purposes whether restricted, strategic or payment by results – but our experience is that strategic funding offers greatest flexibility for innovation especially for small-medium CSOs. In terms of flexibility, we believe the funding mechanisms need to match the challenging contexts in which we work and that they need to be open enough for CSOs of all sizes to engage/compete and long term enough for partnerships to be fostered and results achieved. There has been a lot of discussion recently about using adaptive programming. We have found that fitting a programme into a 4x4 grid and delivering yearly results in some contexts can be difficult particularly in rapidly changing situations. For instance in Bangladesh, where are working in an unpredictable context. Here, we may have planned at the start of the year to fortify oil but had to change our strategy completely before the year was out to providing technical advice to the Government at their request. Was this a failure (lack of planning) or a success (in terms of adapting)?

    We think DFID could help by:
    • Creating flexible or proportion of flexible funding for small to medium CSOs in particular and make some elements contingent on learning, sharing, innovation and/or collaboration with others
    • Encouraging CSOs to share more about what didn’t work but balance this with feedback that this will be positively received
    • Providing longer term funding contingent upon mutually agreed points with break clauses

  8. Comment by Michelle Winthrop, Farm Africa posted on

    We understand that DFID is keen to find ways to work most effectively with CSOs, but we also understand that the systems and structures internally don’t always make that easy. I would start by asking why it is DFID might want to fund CSOs in the first place? What do we bring to the table that multilateral agencies, National Government partners or contractors don’t? Well I would argue that we offer the following:
    - A flexible, innovative approach that allows DFID to try different interventions, learn from them, and take the successful ones to scale
    - An ability to genuinely track impact on real people’s lives- some meaningful poverty results that can be relatively easily attributed
    - An ability to put a human face on interventions, which is always useful in communicating to the UK public (and citizens of the Global South too)
    - An ability to bridge the gap between private sector investors and communities. Private sector might want to do the right thing through their activities, but they often struggle in understanding how to work meaningfully with communities. And communities don’t always trust private sector; even when they do, they find it hard to understand and attain the sorts of quality standards that companies demand. We’re well placed to help both communities and private sector in this regard.

    On that basis, then, we would argue that funding mechanisms need to have a strong learning component, need to have factored in plenty of resource and support for good M&E, and need to encourage good communications. They also need to get the balance right between accountability and flexibility of resource deployment- innovation and trying new funding models especially with the private sector can lead to ‘lumpy’ disbursement rates. We are still learning by doing on how to structure support to poverty-reducing investment- but isn’t everybody else? So a combination of adaptive management and flexibility around delivery of outcomes, and the rigorous due diligence and accountability that we’re already used to- is the most useful. And we’d like more and stronger recognition of the role we can and do play in working effectively with the private sector to deliver outcomes- funding structures could be designed a bit more cleverly to manage aspects of risk, set and resource ‘smart’ subsidisation, and encourage appropriate collaboration with government structures. Funding streams could also be structured so they require shorter approval time, in particular to respond to private sector engagement opportunities, which have faster turnaround times.
    Obviously the PPA is a great tool for us to invest in things like our in-house impact function, try out new ways of doing things, and contribute proactively to learning. But sometimes the PPA learning can be hard to get to grips with as we’re such a diverse group of NGOs. I think BRACED comes a bit closer to it- by outsourcing the knowledge and learning, and separately the fund management, we’re not competing for airtime among stretched HMG resources, but rather dealing with counterparts who have the time and space to engage proactively with us. And because we’re all dealing with climate resilience, there’s a greater coherence around the learning- essentially our audience is more interested in the lessons being generated. For the future, we'd be most excited about flexible funding streams that coalesce groups of CSOs with common interests, encourage and properly resource learning processes, and help us to generate solid evidence.

  9. Comment by James Mayers - IIED posted on

    Reinforcing some of the comments made above, here are some further suggestions in response to Matthew’s questions about funding approaches:

     Installing flexibility. Both project managers and their supporters need to expect that change will and should occur – and pay more than lip service to flexibility in programmes and proposals. Use methods for including change, with uncertainty being expressed as a positive element of management – e.g. open sections in planning that can only be filled in after some time in operation. Reviews should welcome changes in activities, coupled with commitment to core objectives. Log-frames should be amenable to wholesale revision in the light of new learning and changes in the situation. “Break points” where the initiative can be reassessed and redirected should be anticipated.

     Learning groups, networks, alliances and platforms. Learning groups and alliances are relatively new in development work but experience is sufficient to show that they can be a very powerful means to getting good ideas into use. Structures and approaches vary but a common focus is on innovation and scaling up in an area of common interest involving facilitation of multiple stakeholders, disciplines and institutional levels.

     Include users and policy makers in proposal review processes. It would be useful to include users and policy makers in the proposal review process – as well as subsequent reviews of outputs – more explicitly. This will help to ensure activities are designed appropriately for end users’ needs and will increase engagement and acceptance of outcomes by such end users.

     Project preparation facilities, capability scoping and inception periods. For some types of theme and approach, where the concept is worthy but the specifics on the issue and institutional role identification are at an early stage, support for project preparation and an inception period is appropriate. Scoping studies prior to full-blown proposals can be an important approach – where a lead partner carries out an analysis of local capability amongst institutions and designs an appropriate strategy with some of them.

     Innovation and flexibility funds. Small proportions of funding programmes (10-20%) set aside for innovative ideas and one-off initiatives that meet programme aims should be considered.

     Between-project funding. Ways in which funding can be made available between projects, to maintain networks in priority areas and avoid ‘feast and famine’ project cycles amongst key institutions, should also be a priority

     Locally-managed funds. Perhaps the most important suggestion we make is to greatly increase emphasis on locally managed funds run by community savings organisations. These have been most proven most in informal urban settlements but there is increasing experience also in rural settings. Local funds can overcome systemic barriers and link government and community stakeholders, bringing improved living conditions that are scaled up through networks of local groups.

    Local funds work when they are grounded in local knowledge, flexible timetables, bargaining power and autonomy. Locally-led decisions are rooted in community priorities, needs and possibilities rather than in technocratic models and standards that may be inappropriate to real situations. Projects are managed on community organisations’ own timetables, not those of donors. The local management team decide on allocations and deadlines. This prevents powerful groups and individuals ‘hijacking’ projects that have to be completed according to the donor timetable. If projects are stalled due to local difficulties, other community groups that have faced and overcome similar problems are at hand to assist — and the funding can easily be delayed a few months until the problem is addressed. Local fund management enables community networks to negotiate with city and national government agencies. They can bring financial and community resources to the table, and identify common goals and synergies. When city development funds are jointly managed by communities and the state, community networks find it easier to maintain their autonomy because resource allocations are public and are made transparently.

  10. Comment by Katie Allen, Women for Women International (UK) posted on

    I agree with Matt and with many of the comments that have been posted – it is inevitably necessary to have a range of funding models that can be used in different circumstances to suit different needs. To respond to a few of the questions in more detail:

    • With regards to what types of funding models work, we have seen many benefits from funds such as GPAF/UK Aid Direct, which have opened up access to DFID funds to a range of new organisations, including many smaller ones. We would recommend the use of even more flexible funds though, which acknowledge that change takes place at many different levels. For instance if funding could be offered both for service delivery and measureable approaches to poverty reduction, as well as less tangible programmes around human rights and policy advocacy, it could result in one fund creating impact at many levels.

    • Balancing the need for accountability with flexibility in essence has to come down to trust and open communication. I would suggest that DFID should do thorough due diligence exercises of organisations it is going to fund (repeated every set number of years, rather than for every new grant), and thorough evaluations. If positive, there then needs to be a high degree of trust between DFID and its civil society partners during the implementation period; trust that the organisations working on the ground have the best understanding of what adaptions to the project might be needed, and will feel free to communicate those to DFID.

    • Rules, regulations and procedures: overall DFID rules/regulations are clearly communicated and seem transparent. Templates have improved in clarity, by providing more detailed instructions. However I still fear that DFID is approaching a point where, like with the EC, grantees need to undertake training courses in order to navigate their grant process (like the capacity building workshops now being provided by fund managers). In this way, there become a cadre of “specialists” with an understanding of managing these grants, who are able to translate for the rest of their organisations. This means it is potentially still very difficult for small local CSOs to access DFID funding.

    • Digital processes for grant applications and management: from the grantee perspective, I would recommend against this. It may make applications and reports easier to review for the donor, as you can be stricter on format and word length, etc. However in my experience, I have always found it to an additional layer of complication, as it makes it much harder to coordinate internal review of applications and there are almost always small glitches with these systems!

    • Fund managers: our experience of working with fund managers has been a positive one, and it seems that DFID are making good use of them. Although there were a number of challenges when we first received funding in this way (in 2013), our feedback seems to have been taken on board and there have been a number of significant improvements. What might benefit from some improvement, is actually the flip side of the coin – making the best use of DFID in the management of large funds! As a grantee, we still often feel very detached from DFID and as though there are limited opportunities for engagement, discussion and lesson learning.

    Finally, I must emphasise that we really appreciate the open approach DFID is taking to gathering feedback for this review, and we do hope this is helpful!

  11. Comment by Juliet Milgate, Sightsavers posted on

    There are certainly DFID funded programmes where the partnership between DFID and its civil society partner is spot on and where DFID is providing an agile, lean programme management approach. It’s all about partnership. Successful partnership working - where there is a shared vision and a strategic focus on outcomes, clarity, open and regular dialogue and where DFID takes a constructive part in resolving difficulties – can lead to quality programme delivery.

    Sightsavers does all of its work through partners and increasingly through coalitions, in particular for our work on neglected tropical diseases. Our DFID funded Global Trachoma Mapping Project (GTMP) Accountable Grant has significantly changed the way that the neglected tropical diseases community operates trachoma programmes in order to deliver far-reaching impact. This project has proven that it is possible, through a deeply committed consortium, to effectively manage a partnership of NGOs, academic partners and the private sector – working closely with ministry partners and experts - to deliver the biggest global disease mapping programme and ultimately provide a pathway toward elimination of trachoma in the next five years. The focus of our engagement with DFID on neglected tropical diseases is getting things done – critical as we approach elimination for some of these diseases.

    PPA funding has been vital to Sightsavers work here. We used strategic funding in order to invest in our own technical capacity and kick start interventions to eliminate these diseases, resulting in significantly expanded programmatic scope. Through the PPA we also invested in our research capacity which allows us to play effective intermediary roles between academic institutes in in the north and south and between academia and programme practise. The PPA helped us set up an Innovation Fund which has supported new partners to find solutions to sector agreed barriers, such as the inclusion of people with disabilities in disaster mitigation projects as a result of climate change. As a medium-sized, first time PPA holder Sightsavers received this support at a critical time in the organisation’s development. And as a result of the PPA, Sightsavers, DFID and people in poor countries have all benefited from this type of long-term strategic support which provides financial flexibility, and promotes evidence-based learning and decision making which leads to adaptive programming. This is where partnership comes in again. With strong partnership between civil society and DFID with regular dialogue, there is opportunity for flexible funding models, such as the PPA, to evolve and for civil society to be accountable for effective delivery – if not always through a log frame but through a less rigid results framework that can take into account the added benefits of strategic funding which may be more effectively described outside of a log frame.

    Beyond traditional grant mechanisms we also welcome a broader mix of funding modalities but we do need to develop a thorough understanding about what works well in which context. We need to be sure that approaches such as PBR are set up in a way that does not stifle innovation or deter support to the most marginalised people or the most complex challenges. We also need to ensure that funding is accessible to NGOs/CSOs that may not have the organisational systems, financing or risk management arrangements that are required to work with more complex funding mechanisms.

    Whatever type of grant or contract you hold, having a direct contact within DFID to have an ongoing dialogue about programme development, challenges and learning in our experience has resulted in a more effective, joined up and dynamic programme partnership. DFID is also very open and transparent with its rules and regulations which is helpful. Sharing guidance, like Smart Rules, with civil society really helps us to understand the department better and the requirements on DFID staff. This openness also improves how civil society works, particularly in areas such as value for money and transparency. And again – helps strengthen the partnership!

  12. Comment by Aoife Black, Trocaire posted on

    We support many of the comments above and would add the following points:

    1) We agree that funding should be flexible, predictable, long-term and adapted to the needs of local Civil Society. At Trócaire, we are increasingly moving towards five-year development programmes as we believe that longer timeframes and funding mechanisms to go with them are needed to bring about sustainable change. For instance, Trócaire is part of the DFID-funded Health Consortium Somalia (HCS) which has a six-year duration (2010-2016). DFID’s flexible and supportive approach to this funding mechanism has enabled Trócaire to provide maternal and child health care, nutrition and primary education to over 200,000 women and children in five districts in the extremely challenging context of Somalia (
    2) There is a trend towards support for larger multi-donor trust funds, consortia and larger grants. Whilst these are welcomed, they should nevertheless be balanced with funding which is accessible for smaller and Southern-based CSOs which will help support diversity and innovation. Funding mechanisms should also provide adequate possibilities to ensure funding of core costs and staff as well as capacity-building of local organisations and promotion of learning and innovation.
    3) Funding mechanisms should be guided by principles of human rights, democratic ownership and tackling inequality. Although economic growth helps foster development, it does not deal with inequalities and power imbalances within society so development funding should continue to promote local capacity-building, good governance, participation and human rights. Trócaire has prioritised these areas under its new strategic plan (2016-2021).
    4) The private sector has a key role to play in development however this needs to be carefully managed to avoid negative impacts for the poor in developing countries. Trócaire’s research report “Where Aid Meets Trade” ( highlights the need for policy coherence between support for private sector investment and development objectives. Thus, we suggest that DIFD’s engagement with the private sector should be guided by robust standards and safeguards to ensure human rights, decent work for all and free access to basic services are protected.
    5) DFID rules, regulations and procedures: we appreciate that there has been increasing flexibility with programme management issues, for example under recent GPAF funding we have received and in our work with the Health Consortium Somalia where the fragile context necessitates constant adaptability. We have found DFID staff at local level very supportive in terms of providing input on programme approaches and capacity-building around issues such as Value for Money and we would encourage the continuation of this type of approach. In terms of transparency and information-sharing, we would welcome more advance notice of DFID strategic priorities and expectations for in-country calls.
    6) Fund Managers: from our experience, an active fund manager can play a key role in bring projects together and facilitating the sharing of learning amongst programme partners. However, the role of the fund manager can vary depending on individual relationships or level of engagement. We would welcome greater clarity on the roles and expectations of Fund Managers to maximise the synergies and the added value they can bring in terms of financial management, planning and other areas. There could also be more use of online platforms to encouraging sharing of learning amongst programme partners.

    Thanks to DFID for the opportunity to comment!

  13. Comment by Michel Gary, Transparency International posted on

    As far as models are concerned, unrestricted funding allows flexibility to adapt, to learn and to innovate. This should be the favoured funding approach, in the framework of a long-term partnership aiming to address long term development challenges. The evidence-based paper recently submitted by the IELG to DFID ("Strategic funding beyond 2015: IELG suggestions on key characteristics of a future strategic funding mechanism in the UK") highlights 10 enabling characteristics for a future strategic funding mechanism, which should be a good reference for DFID. The principles of long-term support, flexibility, and trust and constructive dialogue are particularly important.

    Learning should be integrated into the model from the start. A recent INTRAC study also shows that restrictions and project funding discourage learning (

    Practically, one could imagine a two-pronged approach whereby part of the funding is linked to high-level strategic goals (aligned with organisational strategy and SDGs), and the other part that is completely flexible, allowing the organisation to take advantage of unexpected opportunities, to adapt to changes in the context of its work, to innovate and to integrate what it learns into its ways of working and activities.

    A scheme with a results framework like the PPA makes the work predictable for the donor, and will focus on delivery against a plan. However, to achieve change and impact (and these achievements are not always predictable, and require adaptability), a results framework may not be appropriate, unless it allows for enough flexibility. Again, the IELG submission gives provides more details and evidence on that issue. We also need to ensure that we are able to regularly review our priorities and objectives to adapt to a changing context.

    We would also recommend that the funding model integrates the harmonisation / coordination of approaches with other donors on unrestricted funding, e.g. for organisational reviews, due diligence, etc.

    Accountability and flexibility are absolutely not exclusive. DFID should hold their partners to account by asking them to demonstrate what they achieved and what they learnt. Flexibility, as opposed to a strict results framework, allows agencies to take risks and learn rather than being focused on achieving targets, and being afraid of losing the funding if they don't. The aims that provide the foundation of the agreement could then be more long term and strategic (based on organisational strategy and SDGs). One does not need a programme-level plan to be accountable. The accountability can lie in the organisational plan, based on the strategy, on the quality of MEL systems, and on the quality of reporting. One of the criteria that DFID can also use to establish whether CSOs have used unrestricted funding well is their sustainability (or the sustainability of civil society at large). CSOs can commit to try diversifying their funding and use unrestricted funding to generate sustainability.

    Bureaucracy would be minimised on both sides if the reporting requirements were adjusted by allowing the organisation to report in a way that is appropriate to their structure and strategy. Having to write a specific report for the PPA or the future arrangement is perfectly fine; this enables DFID to tailor the format to their needs. But reporting on objectives that are directly aligned with our strategy and MEL system would avoid extra data collection efforts and duplication. This is not to say that DFID should not require information on specific issues such as MEL systems, gender, etc.

    On the use of digital processes, we are open to it, as long as it does not reduce the space for dialogue.

    And finally, regarding fund managers and the structure of the arrangements, we would encourage DFID to create more space for policy dialogue within the relationship. It already exists, and we appreciate it, but we would suggest strengthening it. Attaching a policy person to the future PPA can be one of the ways of addressing that.

  14. Comment by Rose Longhurst - Bond posted on

    Hi Matt,

    Thanks for your blog on these important issues, and it’s great to see all the useful responses to it.

    It’s great that you recognise, and are working towards improving, the burden that unpredictable funding, unclear guidelines and disproportionate demands can have on CSOs (especially smaller ones.) As mentioned in other responses, we must note is the impact of the fund managers. While I would encourage DFID to streamline processes (for example, introducing CHASE’s NPAC across the board, and avoid Due Diligence duplication across departments), we also must consider the fund managers’ role. They have their own requirements, demands and communications that must chime with your efforts.

    Perhaps we could consider how the Better Delivery agenda could be applied to funding process: could there be some ‘red lines’ in terms of application information requested, due diligence and reporting, but anything additional could be judged on merit? Let’s ask: does this requirement enhance DFID and the CSO’s own transparency, accountability and learning requirements?

    In terms of 'What types of funding models, in which contexts, are best to develop effective civil society that meet DFID and CSO’s common goals?', Bond is creating a ‘donor decision-making tool’ (must think of a more exciting name!) that will offer donors an interactive webpage to help inform and guide their decisions on funding modalities. Donor constraints as well as interests are taken into account, because this really is an area where ‘one size does not fit all’! Let’s consider the evidence about what different funding approaches incentivise, and then let’s make informed, transparent decisions.

    On 'How can we ensure flexible funding models that are able to evolve with the context?', it’s exciting that DFID are considering questions of adaptive programming. Focussing on final results, community impact and learning instead of inputs, outputs or milestones may help. It’s a cliché, but strategic funding really does allow partners with a shared vision to evolve and adapt to meet common goals. Also consider the concept of ‘emergent strategy’ – sounds like jargon, but it’s actually about funding sensibly in complex, changing environments.

    'How do we balance the need for accountability with flexibility?' is such a good question for a publically-funded donor like DFID, but also a question for us all. Reconciling this could be a matter of focussing on what’s needed and necessary, and abandoning the checkboxes that make us feel safe but are ultimately pointless (back to the Smart Rules conversation). Consider the Dutch MFA’s approach to reporting on its Dialogue and Dissent programme, which allows for reporting in many formats, but in doing so is able to receive feedback quickly, and respond as necessary.

    On 'DFID’s rules, regulations and procedures and whether they are transparent / unnecessary?', we should consider what is proportionate. Essentially I think that the more transparent we are, the more we can level the playing field, as we allow all types of organisation to make informed decisions about whether and when to bid. EC and USAID funding may be a bit of a bureaucratic nightmare, with reams of rules and regulations, but at least you know exactly where you are with them! It doesn’t have to be ‘PADOR, PRAG or nothing’ though: implementing the Open Contracting Global Principles would be a good start.

    In terms of 'Could we make more use of digital processes for grant application and management?', I think there are some great possibilities. Online grant applications could simplify things, but beware you may leave out those in areas of unstable internet connection! Reporting online could offer some great gains if digital literacy is improved: IATI open data is an initiative that could be built on. As mentioned in the Twitter chat, there are many current online forums that allow for shared learning, e.g. MyBond. Digital forums may currently privilege those with good online access and skills, but it’s certainly better than only doing things in paper or in meetings in London!

    On the question of 'Are we making best use of our fund managers and if not how could we structure these arrangements better?', this is relevant to all above points. At best, the fund managers can offer a lot of added value, especially when they are sector experts supporting smaller organisations. Bond has undertaken two surveys of DFID fund managed grants, and this is something that CSOs particularly valued about the UK Aid Direct fund manager. However at worst they become an added layer of bureaucracy and a barrier to shared learning, which isn’t really VFM. Having grantee satisfaction levels as a performance indicator could help with these arrangements.

    It’s great to see you end on the point about having a mix of funding models. Strategic funding, commercial contracts and project grants are all appropriate for different intended outcomes. And clarity / standardisation around what DFID does-and-doesn’t want from its CSO partners could help you with your agile, lean programme management approach. Hopefully this will be the outcome of the CSPR process!

    Few final points:
    - Civil society offers a different proposition to multilats, bilats, private sector etc. Treating CSOs as mere ‘suppliers’ limits their potential.
    - A plurality of funding mechanisms is essential to meet a diverse range of goals: transformational change; service delivery; rapid response etc. are all enabled by different funding modalities.
    - Competition is essential, but a level playing field must be established. Acknowledging the potential of smaller CSOs may mean adapting requirements to reflect their capacity.
    - While upward accountability is necessary, we should also focus on community feedback and end-user outcomes. These are the key to demonstrating real VFM.
    - Clarity, transparency and harmonisation of funding processes will help DFID as well as CSOs. Efforts to do so should be designed in consultation with the sector.

    Let’s continue the ideas and conversation the CSPR has started. Bond’s Funding Working Group is a great forum for DFID to continue engaging with a broad range of CSOs.


    Rose at Bond

  15. Comment by Jazz Shabban posted on

    1. In terms of development funding, building in flexibility has to occur at the design through to contracting stages. Flexibility almost by definition also means an increased level of risk tolerance by allowing the project processes to be iterative or evolving.

    This does not mean a loose or weakly-defined project conception and design, in fact the opposite is true. CSOs need to define their projects through Theory of Change design processes, followed by logical framework-based planning processes, which directly addresses the need for projects to take into account how they would change over time and/or respond to external changes. It would also force a much longer-term view in terms of situation analysis and the potential scope of the project response. However the caveat to this is to ensure the log-frame exercise doesn’t turn into a tick-box exercise to identify outputs that are easy to measure, but allow for “softer” outcomes such as capacity building, awareness-raising and a whole host of really important outcomes that are often much harder to measure.

    In the same vein, a definition of flexibility in funding would also be relevant in terms of having different funding devices according to circumstances. For instance, funding programmes follow the evolution of a project from its initial test as an innovation or pilot, to a wider demonstration approach, through to scale-up, should ideally take a different approach at each stage, whilst also taking on board the risks inherent at each stage. It would also require a much longer funding horizon in order to see project processes through to fruition. Where possible, making links between CSO funding programmes and DFID country programmes, could prove decisive.

    At country level this is easier to demonstrate with Dfid with applying a good amount of flexibility in some country programmes. For example the Inclusive Elections project in Somaliland, where elections are constantly being postponed, the direct engage with DFID enables extension in time and revision of outcomes.

    For humanitarian funding, DFID has taken positive steps to enhance the flexibility of the RRF mechanism, allowing for projects to be funded quickly but with the possibility to evolve the approach as more information about the context is gathered/the context evolves. This needs to continue, and also extend to other humanitarian funding mechanisms.
    For chronic or ongoing crises such as Syria, DRC, and others, providing multi-year funding that has increased flexibility is better than the current approach of often providing multiple short-term successive grants that don’t allow for longer-term more relevant approaches in these chronic situations. are constantly being postponed, the direct engage with DFID enables extension in time and revision of outcomes.

  16. Comment by Jazz Shabban posted on

    How do we balance the need for accountability with flexibility? As underlined in the previous response, clarity of accountability will come through clarity of purpose – including arguments around why a given project or approach justifies its stated risks. If a project is clear on why a certain level of flexibility is required, and that the funding mechanism is equally able to articulate this, then a large part of accountability ought to be addressed – at least in terms of direct decision-making processes.

    More broadly, however, meeting a reasonable level of accountability will depend very much on the appetite / tolerance of risk that increased flexibility necessarily means but at the same time ensuring due diligence processes are consistently yet flexibly applied (i.e making DD proportional to grant size and/or CSO size), possibly on an annual basis. This is something that can only really be decided at DFID’s policy / decision-making levels but must be impact-driven and remain pragmatic, and not be unduly onerous.

    A more flexible approach undoubtedly creates certain tensions which have to be managed particularly with regards to a project’s outputs & results framework. A too narrow interpretation of these will make the operating organisation risk-averse and will prevent any flexibility, especially if this has financial consequences (eg: PBR). This is all-the-more the case in terms of tenders / service contracts where the parameters for delivery are defined at the outset where the contractor will have a high level of accountability for meeting deliverables and so have relatively little flexibility once engaged in the project. Flexibility when agreeing log frames would still give accountability for the project whilst allowing it to evolve in unstable situations where exact or concrete outputs are not always certain from the start of the project. Also too- rigidly interpreted outputs in the log frame don’t allow for ‘un-intended’ results or the space to respond to a changing situation.

    RRF is also a good example of where DFID has found a better balance recently, as explained in the previous response.
    It is also worth noting that limited flexibility is then often cascaded down to local CSO partners, who in turn cease to be partners in the true sense, but merely implementers

  17. Comment by Jazz Shabban posted on

    Are our rules, regulations and procedures transparent, do they provide clear instructions, and what do you think is unnecessary? Let us know your ideas on what you think is unnecessary bureaucracy, and if we’ll see what we can do. Broadly yes, amalgamating all the humanitarian guidelines into one common guideline has been a positive step in streamlining guidance. However there’s room for improvement and here are a number of examples will help to explain this:
    GPAF: whilst the various steps of the application, approval, and contracting process have been made clearer, they remain administratively and operationally heavy. For example, due diligence processes are not consistently applied from one funding programme to another; are repetitious; and (where there is likely to be a grant set-up process as well) don’t make enough of a distinction between organisational checks and project content, requiring partners to provide the same DD information sometimes multiple times in the same year to different fund managers.

    ITTs: the overall steps of tendering processes are clearly mapped out and easy to follow if you know where to find the detail. Currently the use of the DFID supplier portal by NGOs / CSOs isn’t that well-known and so favours a select few who know how to navigate their way around. The use of Early Market Engagement is very helpful to initiate dialogue amongst interested parties and would be well worth replicating for grant-making processes. However, the downside of EMEs is that it appears to be a ‘closed shop’ with only the ‘initiated’ being aware of the tender processes. This is a long way from ensuring a local civil society voice – especially not one heavily-filtered by consultancy companies and NGOs – and so ultimately represents a loss for DFID. This loss extends to depriving local CSOs of the capacity development to inform, engage with, and benefit from local ITTs.

    It also limits local CSO engagement once a tender has been successfully contracted. The current procurement structure stops providing information on the process as soon as bids are submitted, Therefore, tenders that involve a strong civil society component it proves very difficult for NGOs / CSOs to know how the project will be rolled out and with whom to engage. DFID could publicise information on easy to access portals, website, etc.

    Payment by results guidance is not clear enough with no template/examples/best practices available to guide programmes. It also appears very heavy handed and doesn’t allow for context and specific programmatic considerations when working with specific beneficiaries.

    However, if there’s a stand-out item where improvement could be made it’s probably due diligence. Whilst the accountability / risk management requirements for it are clearly understood, more thought needs to be given by DFID as to how to make this simpler. A model such similar to the PADOR contract management system used by the European Commision would simplify such processes, whilst also providing a resource across DFID because it allows NGOs to complete due diligence outside of funding processes. It would also allow a more focused version of individual project verification that would focus on the project, its content, and how it fits with the applicant organisation’s processes.

  18. Comment by Jazz Shabban posted on

    Could we make more use of digital processes for grant application and management? Are there donors who already do this well? Application processes based around email submission by a certain deadline are simple enough but DFID might want to refer to Comic Relief’s GEM online application and grant-management system however this would need to take into consideration the often unstable internet connections in developing countries. therefore we would still recommend the ‘direct client contact’ so as not to distance the donor from CSOs as other donors do such as IFA, EU and PRM.

    Also as mentioned above, simplifying due diligence processes and providing a DFID-wide resource similar to PADOR would capitalise the use of digital processes for grant application and contract management as well as making it more accessible.

  19. Comment by Jazz Shabban posted on

    Are we making best use of our fund managers and if not how could we structure these arrangements better? It depends largely on the terms by which individual funding managers have been engaged. Funding manager tenders are not widely publicised and as such their only real accountability is to DFID.

    Assuming that a key part of the FMs’ role is to support fund decision-making and supervise grantees, then we would suggest that DFID tries to collect and share the learning from amongst the FMs and their ‘clientele’ as to how FM practice can be improved.

    Our experience is that there seems to be a broad and varied approaches taken by FMs. Some FMs are very effective at managing iterative processes without losing sight of the need to remain results-focused; whereas others take a very command-based approach, which is the antithesis of partnership, without necessarily being any more effective than the former. Ensuring a more uniform approach to FM conduct would help improve these arrangements – not least by making them more consistent and better able to learn from each other about how to manage their work.

    At times it also feels like Fund Managers are not really adding value over what DFID could do itself (possibly cheaper) – and in these cases it means less money for service delivery/project impact for limited to no added value with a middleman.

  20. Comment by Eamon Cassidy and Sue Dean, Save the Children posted on

    Save the Children appreciates the opportunity to input into the CSO review.

    A mix of funding models
    Accountable grants, service contracts and strategic funding through the PPA are all needed. We note the move from grants to contracts and would caution that in making these more ubiquitous, DFID may lose something in the process. CSOs can offer the view from the ground and a different perspective, which may not match the terms of reference for individual service contracts. Moving away from grants in favour of service contracts would turn more of us into straight service deliverers (with admittedly different perspectives) and dilute the essential diversity and scope for innovation of the CSO “market”.

    We acknowledge that service contracts are here to stay and we have skilled up in HQ appropriately, but orientating our country offices to the demands of these remains a work in progress.

    Service contracts demand “experts” – so DFID are less tolerant of the need for capacity building of partners and expects rigorous due diligence. This forms a barrier to entry for local and smaller CSOs, and means risk is carried by bigger lead agencies, already carrying their own substantial risk. Contractual terms are also more stringent on service contracts. CSOs need to budget in a similar way to contractors, building in risk premiums etc. into our costs, but DFID need to acknowledge that cashflow (payment in arrears) remains a huge issue which CSOs face and contractors do not so much, as they can use their profits as a buffer.

    Payment by results
    In recent years the focus on results has come to be the top priority for many aid donors. This is sensible. First, the whole point of aid is to lead to tangible change for poor people and we should assess the effectiveness of aid spending against such results. Second, with a sceptical media/public to report to, ensuring quick and impressive results is an important part of winning the argument on aid. Third, it is right and proper that agencies working on behalf of DFID should have clear deliverables against which their performance is judged.

    There is a tension here, of course. Because so much of development is iterative and takes time to come to fruition, an over-focus on short term results can actually harm development outcomes in the medium to long term. Building systems, capacity, processes and institutions is at least as important as delivering short term results; a balance must be struck between the two. Based on our experience of working with DFID around the world, we are concerned that at present the balance in some areas is weighted towards short term results to the detriment of longer term development. We recognise that it is not easy to get this balance right, but we would argue that long term systems building, to support an end to aid dependency, should be given equal weight in decisions alongside pressing concerns to demonstrate “results”.

    PBR has pushed risk to suppliers (including NGOs) but has not allowed discretion. The concept should be that as long as suppliers achieve the result, they have freedom as to how to achieve this. Many DFID country teams still do not understand this and continue to demand evidence of actuals (expenditure). Where PBR is applied inflexibly and in high risk countries, it is likely to lead to fewer bidders – not only among CSOs, but contractors.

    We understand that parts of DFID see PBR as a means of improving performance of CSOs. We do not dispute that performance needs to improve (including our own). PBR is though being used a blunt instrument to replace the level of “client” engagement (i.e. being a knowledgeable client) which DFID, because of lower headcount, is less able to provide than previously. The SMART Rules were intended to streamline procedures and focus tightly on better project management. With some exceptions, this is not yet happening in our view.

    Digital processes & reducing bureaucracy – we agree with the comment that winning DFID work has become an art and a science and is more complicated than it used to be. We have no problem with having DFID’s procurement portal. There are a number of things DFID could do:
    • Make the prequalification process and due diligence an annual, one off event, rather than bid by bid;
    • Publish early information on calls for proposal, particularly on frameworks where the proposal period is only 30 days. This tight window has undoubtedly led to fewer bidders and I have fed this back to PCD in the past.
    • DFID needs to speed up its decision making. Teams are assembled for bids, staff are recruited and we may lose these if we are not able to commit to them.
    • To encourage national/local CSOs and prevent the scramble to sign them up (given in some cases there may be only one or two CSOs suitable and DFID knows who they are), name them in the TOR for service contract so that the winning bidder would work with them. This would allow them to take part in DFID work without having to overcome the barriers to entry mentioned previously.

    Fund Managers – proceed, but with caution. We echo the earlier comment about cutting the link between grantees and DFID. Dialogue between grantees is also essential and we have seen good and bad examples of this. Terms of reference for Fund Managers could specify the opportunity for some direct dialogue. Funds should not automatically assume grantees have to compete – where the number of suitable CSOs/suppliers is low, restricted procurement (i.e. by invitation) may be more cost effective and allow greater focus of effort on fewer good CSOs. We would also echo the comment about some fund managers being less flexible than DFID. Sound financial management is a major component of good project management but not to the exclusion of two way technical engagement.

  21. Comment by Mark Butler, Tearfund posted on

    Tearfund would agree with many of the comments posted. There will always be an element of ‘horses for courses’ on funding - by having a range of models DFID is able to accomplish a variety of things.

    A variety of funding forms can be very stimulating. The PBR SWIFT contract has driven output and innovation in our work in DRC, working to different expectations and deadlines has been a dynamic learning experience for staff. However, it has worked partly because it is designed well for the context, partly because of a period of peace and stability in the project communities. The research elements of the consortia are hugely valuable, and further roll-out should be informed by them - at the moment for example, we just don’t know whether PbR will be more, less, or similarly sustainable to a typical grant system. PbR will be suitable for some things and not for others.

    As a way into this discussion, I thought I would look at a gap that exists in DFID funding, and think about models that would address it. The gap is funding for values change programmes through, in Faith Partnership Principles (FPP) terms, ‘Congregational Faith Groups’ and ‘Representative Faith Bodies’. This is different from funding FBO’s, which make up a good chunk of the DEC, the UK development sector, and DFID grantees (although some FBOs like Tearfund, work largely through faith groups and bodies). FBO’s have been well funded by DFID for projects impacting material poverty indices and to some extent governance (this is from looking through the GPAF and UK Aid Direct partners - GPAF was the sole funding stream for FPP). But there are fewer projects which experiment with the transformative impact faith communities can have on self-worth, aspiration, values and social norms (‘changing beliefs and behaviours’ in FPP terms).

    How might this be solved?

    Historically, sectoral funding has worked well for DFID & CSOs (£140m for BRACED, £30m for the Start Fund). A specific fund targeting congregational faith groups, perhaps including the Joint Learning Initiative on Faith and Local Communities (JLI) as a research and learning arm, would re-energise DFID’s faith engagement and behaviour change work.

    Funding models built on ‘capacity metrics’ in addition to ‘outcome metrics’ would work better here. A values shift outcome is for example, that a society no longer tolerates domestic violence. Changes like this happen on too long a timescale to fit with Western donor funding priorities - ministers and the electoral cycle will not allow it. In addition, the output metrics are more meaningless the more the project can control them: e.g. meetings had, resources produced, are easy to measure but unlikely to mean anything; reflections of the values in popular, media, or political culture are more meaningful, but less attributable, and therefore complex for funding reports. Advocacy programmes, which face similar dilemmas, are overcoming this by looking more to capacity metrics - how good is an organisation at taking an advocacy opportunity, rather than whether the advocacy is successful or not in the short term. The argument, and solutions, is well made in this article by Teles & Schmitt called "The elusive craft of evaluating advocacy" (I would also point to Transactions, Translations, Transformations and to the comments by my colleague Joel on the Week 1 blog about the myth of ‘capacity building’). Capacity metrics would also go some way to address your second query, how to make programming flexible.

    Another funding model that DFID could deploy to address this gap would be a peer-accountable fund. Start fund has worked well in making decisions quickly to get money effectively to otherwise neglected crises. A peer-group of agencies working in this field might be better placed to identify good opportunities than an external bureaucracy. Elements of venture capitalism could be brought in through, for example, initial disbursements of tens of thousands to multiple initiatives, with the peer group itself whittling down over time the initiatives, whilst scaling up the funding accordingly.

    Finally, funding learning can be just as valuable as funding programmes, particularly in areas which are uncomfortable for donors to step into. DFID has a good programme of academic and practitioner engagement, and this should be extended - we would recommend the JLI.

  22. Comment by Sam Barker, Tearfund posted on

    On your housekeeping points:
    On Flexibility
    Dutch Government strategic funding often has fewer metrics associated with it. This does possibly make it less obvious up front as to what the deliverables are. But this is outweighed by assessing agencies and the projects on the basis of a solid overall proposal. This could be beneficial for stimulating more open-ended type of programming that delivers more sustainable results, like Self Help Groups (discussed by Alex Evans and Courtenay Cabot Venton in their research for DFID). In business - trust is always faster than bureaucracy.

    As DFID and CSO’s rightly seek to go where poverty is greatest, the proportion of our programming exposed to risk of emergencies will increase. DFID should price this in (reinsurance?), and with more regularity, permit for redirection/reallocation of funding when an emergency occurs in a particular project site. Where possible, more funding should be made available to ensure the original project can still reach its conclusion.

    ECHO provide 100% flexibility within the direct costs as long as we still deliver the same project and can justify any significant movement between budget lines

    DFID should do an assessment of real bid costs to profit margins in its projects. When they don’t align, it means organisations are cross-subsidising projects. For CSOs this usually mean using less, or unrestricted money. That money is hugely valuable for us to do the hard-to-fund stuff that is often the most innovative and transformational - this is a costly externality. If DFID generated a mechanism for funding CSO bid costs, that would create a market incentive to streamline the process at the donor end! For the same reason, well demarcated and funded indirect and non-attributable costs can also add flexibility (on the latter, DFID’s Non Project Attributable Costs (NPAC) for humanitarian response, or USAID’s NICRA for development projects, are good examples).

    On Rules, Regulations, and Procedures
    Across the different bits of DFID (and at different levels of the hierarchy in the same bit) and the fund managers, there are wildly varying reporting requirements or flexibilities within contracts. This is inefficient for us, who have then to design four separate processes for four DFID- funded projects, rather than one process for all. This is very different to USAID or ECHO who have much stronger guidelines, which are updated coherently and in consultation with contractors, and applied consistently across all their grants. It is hard to know whether DFID’s variety adds flexibility as compared with the USAID/ECHO model. A constructive way into this would be for DFID to look at its systems for learning across grantors internally and the fund managers, and how learning is being applied when it comes to guidelines and their interpretation. This should bring the practice closer together.

    Digital processes are good as long as they still have a human point of contact for guidance, clarification and support. They should have:

    Virtual storage for approved proposals, revisions, project reports, baseline surveys, evaluations etc and that keep all the documents for a particular award in one easy-to-access location. This has benefits of minimising issues of version control; and enables ease of comparison between planned and actual achievements. Recall facilities (prior to deadlines) are also useful.

    Offline capacity, useful for field staff working in locations with poor internet access. Functionality across a range of browser is also important.

    Online training modules for the grants system (as with OFDA’s ART system).

    A responsive help desk (as OFDA have).

    The facility to use standard indicators for certain sectors (e.g. ECHO does this) as it helps ensure consistency across agencies and enables the donor to measure impact by sector against money invested.

    IATI is being adopted by other donors, and provides a way to demonstrate transparency in reporting for CSOs and also for where DFID’s money is going. Increasing the simplicity and joining up of as many processes as possible to link with IATI could help all parties to report well and in a timely way for multiple stakeholders. Beefing up devtracker to show outputs and delivery partners would provide more transparency

    There may be value in devolving more decision making and judgement to the Fund Managers. As their experience has developed, and the relationships have deepened, Fund Managers have been organising more regular workshops and webinars on the proposal application process, log-frame refinement, Quality of Evidence, Financial Management and Results and Learning Seminars. Working together over time has helped understanding and delivery on both sides. But signing off end of year reports and final reports has taken too long: follow up questions and requests for clarification lasted, in the case of one project, for more than 9 months despite reports being submitted on time and in line with the reporting requirements. Finalising log-frames and other related project documents is also lengthy, at four and half months. This has impacted project implementation leading to a delay in the undertaking of the baseline survey. If the fund manager had greater latitude, perhaps this could be reduced. But that latitude would depend on the experience of the fund manager in doing development work, rather than just managing funds.

    In some cases fund managers and third parties depend on approval from DFID for their next contract and therefore impose very stringent regulations on the CSO implementing the project to justify the fund manager/third party role. DFID could spend more time up front with prospective and actual fund managers explaining the nature of the funding and to ensure that CSOs are able to deliver appropriately without undue pressure.

    It is clear that the international Development Select Committee and others are beginning to ask very probing questions about the profitability of large grant management. It seems that the margins on a number of both Bilateral funds and Managed Funds are unacceptably high. DFID should do a review of profit margins. Fund Managers should be expected to provide DFID with evidence of value for money in the same way that CSOs are in their applications, including their own overheads and costs.