World Bank supports Palestinian NGOs

Victor Kashkoush

Since 1990 funding to the Palestinian NGO sector has fallen sharply. The World Bank-designed Palestinian NGO Project is intended to open up a new source of funds. The project is unique in that funding will go direct to an NGO consortium led by the Welfare Association — until now World Bank funding has always gone to governments and government entities.

NGOs are deeply rooted in the culture of the Palestinian people.  Under Israeli occupation, in the absence of any proper civil administration, UN agencies and NGOs, both indigenous and international, were the major service providers in key social and economic areas.

Declining funds for NGO activities

In 1995 the World Bank estimated that there were over 1,200 Palestinian and 200 international service-providing NGOs active in the West Bank and Gaza, collectively providing about 60 per cent by value of all primary health care services and up to half of secondary and tertiary health care — as well as all disability and pre-school programmes and most agricultural services, low-cost housing programmes and micro-enterprise credit schemes.  Since 1990, however, funding for NGO activities has declined steeply; Bank estimates suggest that from the early 1990s until 1996 external support for NGOs contracted from between $140 and $220 million a year to $60 million.

There are two main reasons for the decline.  First, the appalling strains resulting from the Gulf War reduced the capacity of the expatriate Palestinian community to support activities in Palestine itself (300,000 expatriate Palestinians relocated to Jordan alone – a country with a population of under 3.5 million).  Second, the establishment of the Palestinian Authority under the terms of the Oslo Agreement inevitably led to the re-routing of funds from the major international donor agencies to the new civil administration.  Funding for the Authority itself, however, is quite inadequate, with minimal tax revenue from a stifled and impoverished economy.  The Authority has neither the fiscal nor the organizational capacity to undertake all the responsibilities of NGOs; nor indeed does it wish to supplant them in ‘areas of their comparative advantage’.

The Palestinian NGO Project

Following extensive consultation with both the Palestinian and international NGO community, the Palestinian Authority and international donors, the World Bank concluded that a new source of funds was needed.  The Bank therefore designed the Palestinian NGO Project, which opens up new sources of multilateral and bilateral finance and has the potential to tap international corporate and private funds that would otherwise be unavailable to the Palestinian people. On 10 July 1997 the World Bank formally approved this unique project to support and strengthen the activities of Palestinian NGOs in the alleviation of poverty in the West Bank, Gaza and East Jerusalem.

Funding for this six-year project is set initially at $17 million. Of this, $0.7 million is expected to come from local contributors – the Welfare Association has contributed $0.3 million. To date, donors have contributed a total of $14.5 million: $10 million from the World Bank, $2.5 million from the government of Saudi Arabia and $2 million from the Italian government. Two-thirds of the Italian funding will be tied to joint Italian-Palestinian sub-projects (these will, however, need to meet all relevant project qualification criteria).  It will be the task of the World Bank and the Welfare Association Consortium, the administrator of the fund, to seek additional new funding from international, corporate or individual donors and to seek long-term sustainability for the project.

Project design . . .

The Palestinian NGO Project has three key objectives:

  • to deliver services to the poor and marginalized in Palestinian society through NGOs;
  • to improve the institutional capacity of  NGOs receiving grants under the project;
  • to support efforts by the Palestinian Authority and the Palestinian NGO sector to strengthen their working relationship, including support for the development of a positive legal framework for the sector.

Under the project, Palestinian NGOs and Palestinian-international NGO partnerships will be invited to submit their own proposals for grant funding.  Palestinian NGOs active in Jerusalem will be eligible to receive sub-grants, with separate mechanisms to allow the scheme to operate in areas of disputed sovereignty.

. . . and implementation

For a minimum of the first three years of project implementation, the Project Management Organization will be a consortium led by the Welfare Association, a privately funded foundation with deep roots in Palestine and among Palestinians living abroad.  Since its establishment in 1983, the foundation has been a major source of funding for Palestinian relief and development, providing almost $100 million for projects to assist education, human resources and community development, and health care.  The Welfare Association Consortium, which also includes the British Council and the Charities Aid Foundation, was selected by the World Bank after a rigorous two-stage international competition.

The uniqueness of the project lies in the direct relationship between the World Bank and the implementing NGO consortium.  Traditionally, all recipients of World Bank and IDA (International Development Ageny) project funds have been governments or government entities.  This will be the first World Bank project anywhere in the world for which an NGO is both the funds recipient and the project executing agency. It is also noteworthy that the funds are being provided as an outright grant, not a loan.

Future of the project

The project is not without its critics.  Within Palestine itself there are those who would prefer funding to flow through the Palestinian Authority, and there are NGOs, social activists and academics who see the project as merely palliative and a distraction from crucial political and economic objectives.  It will be impossible for the project to meet all the expected demands on its limited resources and it will be difficult to satisfy all the interested parties that grant-making is unbiased and that the criteria for selection, currently in preparation, are the right ones.

The project will be under close scrutiny from many quarters.  Its success or failure could well have an influence on future policies of the donor agencies — and not just in Palestine.

Victor Kashkoush is the Director General of the Welfare Association and the Chairman of the Consortium’s Steering Committee.

For further information contact the Welfare Association Consortium – Tel: +972 2 574 7771.  Fax: +972 2 574 7776.  E-mail:

‘This is one of the most important donor projects in the West Bank and Gaza. NGOs have made major contributions to development and to the vigor of civil society here, and definitely deserve donor support. The project itself is unique – it entrusts the selection of NGO sub-grantees and their supervision to an independent agency, but with the blessing of the authorities. If we can all prove that such an arrangement is both fair and efficient, the implications for NGO–government relations, here and elsewhere, are enormous.’

Nigel Roberts, the World Bank’s Washington-based program manager

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