How can the government and civil society do the best possible job together? We’re now coming toward the end of a review of this very subject, focused on the £1.4bn it spends with and through civil society organisations (CSOs).
As the patterns of power around the world change, it is not going to be “business as usual” for CSOs. These organisations need to change in response to the environment in which they operate which could lead to more agile ways of working, new business models, and organisational restructuring or mergers. Some CSOs are already making these fundamental changes. EveryChild, for example, is leaving traditional business models behind and moving to become a global network.
But many others are caught up in a cycle of seeking grants to fund short-term projects. The struggle to secure funding makes it hard to address fundamental questions of organisational purpose and value in a rapidly changing world, as set out in reports such as Bond’s Tomorrow’s World (pdf) and Fast Forward (pdf). Funders like the Department for International Development (DfID) want transformative change. But how they can incentivise this through their funding to foster risk-taking, innovation and the development of new business models?
DfID needs to adapt too. The department has been challenged by organisations like the Organisation for Economic Co-operation and Development’s development assistance committee and the International Commission on Aid Impact to create together a statement of the principles and values underpinning its relationship with civil society. The review will be a chance for DfID to communicate how it allocates funding and why. DfID knows the benefits of a diverse civil society and broad partner base, but this has to be supported by a level playing field, with open information about grant and contract opportunities. The desire to get the best possible value for every pound of taxpayer money must be matched with the best use of funding and policy levers to encourage positive change, and reward impact.
Everything about DfID’s relationship with CSOs is being reviewed but one of the recurring themes raised by Bond members has been DfID’s funding, specifically Programme Partnership Arrangements (PPAs) which end in December 2016. DfID is looking at whether such funding should continue and if it does, how it should change.
This will involve balancing potential benefits with the need for accountability. PPA evaluations in the past have highlighted benefits like the freedom to adapt on-the-ground work in rapidly-changing contexts, taking risks that make NGOs stronger and the ability to raise more money on the back of strategic funding. In order to compete with private sector suppliers better, CSOs must get better at coming up with realistic pricing, ensuring they understand and confidently account for their full costs. CSOs will also need to improve their ability to sustain themselves by increasing their range of funding sources.
The international development secretary, Justine Greening, has talked about how she has brought together private sector suppliers and challenged them to offer better collective value beyond the services DfID has bought from them. DfID also intends to develop and pilot a supplier relationship management approach for civil society. The department is keen to encourage collaboration across different sectors to bring together a range of skills and approaches to solving problems within development.
This means that CSOs will have to get better at demonstrating value for money. Greening has argued that organisations like those working to prepare vulnerable people for disasters must develop better methods to measure preventative work such as training families and communities on what to do in emergencies. They need to clearly show the value of long-term benefits with stronger data and evidence to strengthen their business cases.
Bond’s submission (pdf) to the DfID review broadens this idea out to describe a “Results 2.0” agenda. A narrow results agenda risks over-emphasising success stories at the expense of more honest reckonings of what works and what doesn’t, and quick fixes at the expense of deeper, more long-lasting solutions.
NGOs who have traditionally relied heavily on DFID for funding are likely to feel the effects of the changes. DFID is likely to deploy a greater percentage of their funds directly to civil society in the global south. There probably will also be bigger contracts, more funding for consortia and partnership and continued outsourcing of grant processes to fund managers as DFID must distribute large sums of money with a smaller in-house team. DFID is also keen for more innovation and new solutions; this is likely to mean that they will want NGOs collaborating with others; and more funding will go to the private sector, social enterprises and entrepreneurs. NGOs that are most likely to get funding from DFID in the future are ones that already have a good track record in delivering results; can demonstrate the value that they bring, are forward thinking and are agile enough to adapt to the proposed changes in innovative ways.
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