In a lunch conversation just before the start of the CIVICUS Assembly in Gaborone this year, a group of development practitioners marvelled at the seminal shifts of the last decade, but also reckoned that some things have not changed at all. One timeless issue is the relationship between NGOs and development funders.
In particular, grantees remain relatively powerless to influence the strategy shifts of grantmakers, and the way they enter or exit relationships, programme areas and even countries. Two interesting insights emerged: that market values and thinking have started to erode a previous conception of mutual accountability between development actors; and that a changed conception of sustainability has shifted donor practice substantially.
The tentative conclusion: there is an urgent need to enforce grantmakers’ voluntary codes of practice, so that they do indeed inform strategic and operational decisions.
The new challenges of the 1990s
In the 1990s, the celebration of NGOs as crucial actors in local development work was overtaken by a fascination with a wider and more evocative idea of civil society. It was a period of dramatic societal shifts towards multi-party democracy in many countries of the South and of Eastern Europe, in parallel with an accelerating globalization. This was also the decade when attention turned to humanity’s enterprise of the 21st century: to overcome poverty and inequality and achieve sustainable development. With this challenge, of course, has come the recognition that business too, like the third sector and governments, has to face up to its responsibilities in this enterprise. As a result we see the emergence of new methods of work and concepts of social partnership, and a growing acceptance that accountability is the key to healthy working relationships.
How has this broadening of understanding about what is needed for social change in favour of the poor affected donor practice, and especially ‘exits’? What do we consider to be good practice, and how can this be embedded in the diverse forms of donor/grantee relationship? To try to answer this, we need to examine, on the one hand, what guides grantmakers in making their strategic choices and, on the other hand, the lessons – good and bad – derived from our experiences over the last decades.
How do grantmakers think?
Let us consider the kind of thinking about grantmaking that obtains today (this is of course a perilous exercise because it is extrapolated from contact with a range of different donors, and their reasons for funding development activity differ widely). In a situation where flows of grant money are minuscule when compared with the social problems being tackled, it seems to me that the driving logic/hope in grantmaking is that these contributions will catalyse, or nurture temporarily, extraordinary shifts in particular circumstances; that the intervention will stimulate and enable local activity, commitment and innovation, so that (parts of) that society begins to do things differently. At this stage the grantmaker is able to move the little sprinkle of funds elsewhere. It is only in this kind of conception that the whole idea of grantmaking offers some prospect for systemic change – though of course philanthropy does not have to aspire to this level of ambition.
How do donors know when to leave?
Since exit is a natural and inexorable practice for grantmakers, the question arises of how each assesses the abiding value of its intervention, and hence the timing and the manner of its exit. As a corollary to the sketch of donor ‘logic’, we may discern a notion of sustainability that has three levels. In the first place, there is the sustainability of the individual organization that receives funds (this was the predominant conception in the 1980s). Then there are two further levels of sustainability, both arguably much more influential today: sustainability of the activity – and this often means considering how it may be mainstreamed across society – and sustainability of the wider civil society.
These last two considerations may indeed be at odds with an individual organization’s sustainability, tending as they do to push grantmakers to consider how they might provide support for civil society infrastructural development. Concern with broader civil society strengthening may coexist with decreased commitment to individual partners. Put another way, apparently fickle support for an individual initiative may be deemed justifiable since there is ‘continuity of commitment’ to a place and its people.
The unseen third party
This is where we get to the nub of the issue of donor exit strategies, and here is where there is need to recall conversations from a previous epoch. ‘Exit’ does not affect just a grantee and a donor; all interventions affect a range of actors in a given context. We need to bear in mind that, while we continually reflect on interactions between a donor and a grantee, there is usually another ‘invisible and silent’ party to this dialogue: the citizens in whose name each one acts. Seen in this light, the idea of ‘mutual accountability’ is not merely an ethical principle. It also recognizes the practical interdependence of funder and grantee in carrying out the joint development activities agreed to by the two parties, and a requirement for transparency which should include the NGO’s community partners. Indeed, as ‘good governance’ has become a feature of the discussion of development aid at all levels, the commitment of most donors to its promotion should also mean commitment to a wider public accountability.
Market-style judgements: power to the grantmaker
One of the conversationalists of our opening paragraph suggested that the language of mutual accountability has tended to disappear over the last years, especially with some of the larger development funders. This is possibly one effect of the increased sway of ‘market’ notions, where ‘those investing money determine what they will pay for, and how those being paid will work’, notwithstanding previous views about ‘local ownership’ of development process.
This coincides with some disturbing new practices – again mentioned in our lunchtime discussion – that appear to derive from the way that an abstract idea of civil society can mask the fact that local actions depend on the passion and commitment of real people. In a few cases stronger agencies can be exceptionally assertive of their own readings of what is necessary, and take little account of local insights, sensibilities or wishes in deciding about changes in programme focus. Whereas previously there were implicit agreements between donor and grantee on issues like strengthening the local partner, respecting organizational culture and autonomy and maintaining fluent information flows, it appears that only the explicit terms of contracts are now observed (and these seldom make mention of factors such as these).
This may seem efficient and businesslike, but it also brings a gradual decline in learning, on both sides. The rhythms of evaluation and consultation that were established in previous decades to render external donors ‘intelligent’ and ethical in their decisions may start to be overlooked. Moreover, the more this new ‘power-asserting’ grantmaking culture spreads, the more confident and ‘rooted’ grantmakers will feel, the less they will pay attention to dialogue with their partners, and the more likely it is that they will drop existing partners in pursuit of ‘more impactful’ or important areas of work, or a new strategy!
In contrast to this ‘power-asserting’ tendency, organizations such as the Southern African Grantmakers’ Association and the US Council on Foundations have moved to adopt codes of practice and ethical conduct. While these codes do not deal explicitly with the issue of ‘exits’, a reading of the principles enunciated leaves no doubt that arbitrary, poorly consulted and badly executed ‘exits’ would be considered to be exceptionally poor grantmaking. Such voluntary standards show a commitment by these organizations to a responsible culture and practice concerning the investment of scarce development resources. Widespread adoption of such standards – provided civil society is able to ensure compliance with them – could go a long way to entrench an ethical framework for grantmaking. This might see a flourishing of explicit agreements, necessarily the products of negotiation, between funders and grantees on a range of issues where there were previously only implicit understandings. Written contracts between funders and grantees might reflect the shared values and ethical principles of the two parties, and provisions for an orderly exit when the time comes.
Some ‘exit’ principles
Once we begin to consider grantmaker ethics at all stages of the intervention, then a few principles may suggest themselves relating to the point of exit. The first has been touched on already: the need to pay attention to issues of sustainability. As we have seen, the three-level notion of sustainability could mean that a grantmaker feels content to abruptly ‘drop’ an existing grantee in favour of a relationship with others who might better achieve the effects of mainstreaming an activity or strengthening society’s capacity to do so. We need to consider a mechanism by which the power of donors to unilaterally decide strategy is balanced by consideration of the rights and obligations of both grantees and the citizens in whose interests they claim to work. This suggests a second minimum consideration or principle for exit: involving grantees in discussion about strategic goals and deliverables and programme options.
The best practices from a previous generation of grantmaking are relevant today when considering all aspects of donor interventions, including exit strategy. While it may seem pedestrian and antiquated to some to consider how an ethical framework informs grantmaking strategy, I would suggest that this is still the best way to secure sound development process.
Gavin Andersson is one of the guest editors for this Alliance feature. He can be contacted at firstname.lastname@example.org