Enhancing the Quality of NGO Funding
The author argues for a better quality funding to NGOs which keep in mind the growth and development needs of the NGO, and just concern itself with project implementation. He establishes why its important to support the institutional development costs, that are hidden such as building a condusive culture and climate in the organisation, funding and retaining high quality human resources and setting internal systems for governance and management.
R eaching out to the poor requires the right orientation, flexibility and considerable creativity, which the state on its own usually lacks because of its ‘delivery-anddisbursement’ way of working, dysfunctional procedures and low motivation of its personnel.
Partnering with ‘good’ NGOs is one way of improving implementation; other approaches include decentralization, enhancing transparency and raising the motivation, morale and capacity of the development staff through grass-roots governance reforms. The latter approaches are, in a sense, essential long-term projects. India is fortunate to have a number of good NGOs working at the grassroots level. Many government programmes do indeed partner with NGOs, but tend to treat these organizations merely as low-cost channels for aid delivery. This attitude attracts a high proportion of opportunistic NGOs, which are in the field primarily for the money. The cynicism this has engendered is unfortunate because it overlooks the fact that there are many good NGOs and partnering with these could make a huge difference.
The quality of financial support that NGOs receive is important. Most donors, whether government or private, tend to subscribe to the “dangerous myth…that sustainable development is quick, cheap and easy” (Alan Fowler, 2005, ‘Striking a Balance: A Guide to Enhancing the Effectiveness of Non-governmental Organizations in International Development’, Earthscan, South Asian Edition, London). Funding is largely restricted to programme expenditure, ignoring the crucial role of organizational overheads and process costs. This discussion note summarizes the experience of a well-known NGO, PRADAN, which specializes in creating livelihoods. It looks at how PRADAN was able to innovate and record significant achievements across a number of sectors because two of its early donors (one of which—Inter Church Organization for Development Cooperation, ICCO—became a long-standing partner) were willing to finance the costs of overheads and institutional development.