What does good funding look like?

2 August 2021

As the UK Government sets out how they plan to deliver the Integrated Review via the International Development Strategy, they will be mindful that cuts to the UK Official Development Assistance (ODA) budget means they will have to do more with less.  

We set out some ideas of how we think they should go about doing this last month, but a huge part of delivering effective humanitarian and development programmes is about how the government funds civil society, as well as the what.  

Funding to civil society should be based on partnership and trust 

UK ODA is best delivered in partnership with local civil society. The UK Government should invest in their relationship with civil society. But what should this investment look like? Long-term, flexible unrestricted funding that gives civil society organisations (CSOs) the power to make decisions themselves and delivers the biggest impact. This funding approach helps CSOs build their own resilience, invest in systems, learning and strengthen their own capacity which leads to better programming and long-term development impact. Long-term funding shows that the funder is committed to working with the community and supports a positive partnership based on mutual trust as well as results, rather than a transactional, project –based approach.  

During the Covid-19 crisis many funders quickly transformed their funding to be unrestricted to give CSOs the flexibility to respond quickly and efficiently to the crisis, whilst also strengthening their partnership with the organisations. Funders are now considering taking this approach permanently as it not only leads to better results, but it also offers better value for money as there is less onerous reporting and lower administration costs.  

Consistent and open sharing of information between funders and civil society is also key. It builds trust and supports a strong relationship between stakeholders and the government, and allows other stakeholders to factor the strategic direction of UK funding into their own plans. When civil society is shut out of decisions, the government loses valuable insight and risks jeopardising the success of its existing relationships and programming. 

Funding to civil society should be long-term 

Recent evidence has found that the termination of long-term, unrestricted funding results in ‘higher planning and reporting costs for CSOs, lower flexibility to adapt to learning and changed circumstances, and limited financial headroom to respond to new challenges’. 

Practically, it takes at least 6 – 12 months to bring partners and communities on board and to set up a programme, and then 2 – 3 years before you will start seeing the real impact of the work. It is even more complex if the programme is trying to change behaviours. Providing long-term flexible funding gives power back to the CSO so that they can design the programme themselves, test different approaches and then scale up what works. This type of funding ensures time is taken to fully understand the context so that interventions address the core objectives. It also supports long-term investment in capacity and leadership within the local community, which will remain once the programme has ended. 

 Social transformation takes time and commitment and cannot be achieved through short-term programming. Whilst there is a place for short programming, longer-term approaches should be the default because we often work in complex and uncertain contexts that require sustained collaboration to see the kind of impact we want to see, be it keeping girls in education or working with communities to support sustainable farming practices. 

The UK Government needs a consistent strategy and should commit to working long-term with communities. A consistent strategy and presence would allow partners, including local governments, communities and other development partners, to align with and build on the success of the initial programme, supporting a strategic cross-cutting approach to development within a region, rather than a patchwork of related but disconnected programmes. 

Financial pressures, limits on capacity and the search for easy solutions can make short-term programming a desirable option. For donors, it also suggests more control and the ability to change tack quicker if needed. But flexibility should also be built into long-term funding and in all of this we must not lose sight of what we are trying to achieve - long-term, sustainable development for the world’s most marginalised people.  

Funding to civil society should prioritise locally-led development and put people and communities in charge 

Locally-led development prioritises the participation of communities by encouraging participatory local governance and citizen engagement. It also helps decolonise development, with local ownership and power in the decision-making process placed at its heart, and recognition of local technical expertise rather than expertise and decision-making from the UK.   

The traditional funding system is not set up to support locally-led development. There are many challenges, from due diligence requirements to project-based programming, so only 0.4% of humanitarian funding goes directly to organisations in-country – the figure for wider development funding isn't much higher. As the Association for Women in Development (AWID) have said, if we really want to achieve gender equality and shift power, we need to support local feminist activists and women’s movements directly by giving resources that are ‘big, agile and cross issue and long term’. The Dutch Ministry of Foreign Affairs is a great example of how this can become a reality. They have moved their funding from a managerial approach to a social transformative approach in their Dialogue and Dissent programme as it gives flexibility to the CSO partners, but also puts local actors and social movements at the forefront of the change. 

Funding to civil society should be evidence-based and focused on results 

With less money available to achieve the UK’s development objectives, decision-making must be grounded in evidence to ensure funding is spent well. This should include an approach that integrates lessons learnt from research, and recognises the value of locally produced knowledge, expertise and the lived experience of people and communities. Through integrating the lessons learnt, not just at the start but throughout the process, the government can maintain a focus on achieving the goals of the International Development Strategy. This should not replace funding pilot programmes and less-tested models which are critical to identifying promising or innovative ideas where further evidence is needed.  

With a reduced budget, the government may feel tempted to broaden out the objectives of ODA funding, with the hope of achieving more with less. But this risks weakening the impact of areas of development and humanitarian programming where the UK has made important inroads to support marginalised communities. ODA plays a unique role in achieving the sustainable development goals and reducing poverty, and the nature of this type of funding when done well is difficult to replace. With so much riding on the international development strategy, we will be keen to see whether ODA remains focused on delivering long-term, sustainable and community-led programmes, for the people who need them the most.  

About the author

Helen Rumford
Bond

Helen is the policy and advocacy advisor on aid at Bond.

Zoe Abrahamson
Bond

Zoe Abrahamson is Bond’s senior funding adviser. She coordinates Bond’s funding stream, acting as conduit between funders and NGOs.