Sharing overheads – are we walking the talk on equitable partnerships or tinkering around the edges?

Partnerships are at the heart of how Saferworld works.

We implement programmes together with local civil society partners and believe that strong, sustainable and equitable partnerships are built on solidarity, transparency, shared responsibility and accountability. A critical aspect of this is making sure that civil society partners receive a fair share of overheads in every project budget.

Money allocated to overheads (or ‘indirect costs’) is unrestricted and flexible, and it can be used to cover unforeseen costs, investments or fundraising, or to pilot new initiatives. Organisations can use it at their discretion and don’t have to report on where they’ve spent it – it’s their call. This is separate from ‘direct costs’, such as staff salaries, activities, rent or other operational costs linked to the project. This distinction is important because overheads are essential to keep an organisation running, particularly in challenging times.

When partners aren’t adequately supported through overhead contributions, they may struggle to retain staff, invest in new ideas and respond to evolving community needs – challenges that can threaten the organisation’s long-term health and sustainability. Often, due to insufficient cost recovery or donors imposing budgetary restrictions, overheads must be used to cover ‘direct costs’.

Saferworld’s contribution

Five years ago, we made a commitment to share overheads with partners in all proposals, and we developed guidance to support our approach. Our commitment is rooted in values of solidarity and commitments to decolonisation, recognising how critical it is for our partners to build their unrestricted funds in the same way that INGOs do. We all need savings (or ‘reserves’) for those difficult times.

“The main thing we emphasise, both internally and externally, is that there should be no room for not meeting the commitment to contributing to partner overheads,” says Susana Klien, our CEO. “You must be intentional in your road towards a different future and equitable partnerships.”

How our guidance works

We aim to develop programme budgets jointly with partners. We ensure these budgets include sufficient funds for our partners to deliver the project (relevant to the context and needs), including contributions to staff, operations and activities, and a proportional share of overheads. We do not assume what our partners’ costs are.

When Saferworld is the lead applicant on a funding proposal, we manage the overall project and are contractually liable for compliance and risk. To account for this, we retain 25% of the total allowed overheads. Where feasible, the remaining 75% s then distributed to partners based on each partner’s share of the project budget.

In exceptional circumstances where we cannot fully apply our guidance (for example, due to donor restrictions on indirect costs or very low-cost recovery), we aim to include a flexible budget line for each partner for institutional support to help cover their overhead costs.

The impact on partners

Our partners now expect to see their fair share in every budget, and they hold us accountable to this commitment.

The value of this is clear to see. As one of our partners in South Sudan said: “You [Saferworld] have focused on institutional support for us, building our organisations and making them better than when we came together three years ago…You have given us the opportunity to prioritise areas that other donors are not able to support.”

This impact has gone beyond Saferworld, as some of our partners have successfully demanded this arrangement from other INGO partners too.

What about the impact on Saferworld?

The obvious impact of sharing overheads is a reduction in the total amount of overheads (such as fully flexible funding) that we receive. This was an intentional decision aligned to our values and principles because we know how important it is for our partners to be able to build their unrestricted funding to sustain their work, and to adapt and respond.

We acknowledge that it is not an easy decision to share overheads – particularly given the current funding environment, where resources are scarce and donors are drastically cutting their funding. However, we have been in a very privileged position for decades. Supporting the sustainability of civil society organisations does not happen only via projects, accompaniment, mutual learning or trainings – flexible resources are also key.

By using this approach we are proud to have transferred a significant amount of funding to civil society organisations in the countries where we work over the last five years. We have many more steps to take, but we envision a future where civil society organisations, groups, networks, movements and activists can break the ‘starvation cycle’ and fully sustain their work.

Rethinking cost recovery: a call for honest conversations and collective action

INGOs are facing increasing pressure to meet cost recovery demands while also ensuring appropriate overhead sharing. This balancing act is not easy – especially when financial sustainability and values must go hand in hand.

We recognise the tension this creates, and we are actively advocating with donors for a more realistic understanding of organisations’ costs. It’s crucial that donors not only acknowledge these costs but also commit to covering them – consistently and equitably – particularly for organisations from the global majority world.

It’s equally important for INGOs to have honest internal discussions about their commitments to ‘shifting power’, supporting ‘locally led responses’ and ‘decolonising’ ourselves. The decisions that we must take while walking along this road will not be easy. But we cannot prioritise our own sustainability at the expense of our partners, nor continue justifying the status quo.

Providing flexible funding to civil society organisations is the only way to ensure they, too, are sustainable. This is an essential systemic change which is needed to radically transform the colonial aid system.

We’re not claiming to have all the answers or to have been perfect in implementing this commitment, but we are on a journey of reflection and adaptation. We want to contribute to rebuilding a system that is based on justice and accountability, achieved through equitable partnerships.

We want to express solidarity with all national NGOs, groups, networks and movements that are struggling to reclaim the power and resources that belong to them. Hopefully, learning about Saferworld’s approach to sharing resources with civil society partners will be useful to you and spark ideas on how we can all do better.