As discussed in yesterday’s blog, there is a lack of experience in building a sustainable basis for resource mobilization in transitional countries that are leaving aid behind and moving into middle-income status. A recent review of a Dutch programme from Wilde Ganzen brings together experiences from newly ‘graduated’ middle-income countries such as India, Kenya, South Africa and Brazil.
Since the 1950s, Wilde Ganzen has raised funds from the Dutch public, mainly via a Sunday television/radio slot, in order to match funds raised in the Netherlands by small private groups wishing to support development and welfare projects they identify themselves in the developing world. Using a similar co-funding model, Wilde Ganzen started a new programme in 2007, first in Brazil followed by India and South Africa and a few years later in Kenya (not yet a middle-income country).
The model stressed two elements of co-funding. The first part of the programme supports small poverty reduction programmes at community level where funds would be released by Wilde Ganzen (through a national partner) once the community had raised their matching component (normally 50 per cent of the total budget). The second element was to help an existing national body that would manage this process, as well as engage with donors in their countries to provide matching funds for their own institutional costs and eventually for community projects as well – in so doing replacing the present funds from Wilde Ganzen. In other words the whole programme was an attempt to help groups transition from foreign to local funds, using the co-funding as an incentive for organizations previously dependent on foreign funds.
Despite trying slightly different approaches, all of the participating agencies found that communities were initially almost always more successful in raising their contribution to the co-funding scheme than the intermediary agencies. Although it had been hoped that the need to raise funds locally would lead to poor communities making contacts with local middle classes, either as individuals or through local businesses, this was not always what happened. Often poor communities engaged in events and fundraising campaigns and raised the funds from themselves – although in other cases local businesses and people did support these community initiatives.
One thing that came out of our review was that many local private donors are copying some of the big global players by setting up their own projects rather than fund existing groups. This trend of course undermines the sustainability of almost any programme in the longer term so any gains of short-term efficiency are at the cost of longer-term inefficiency. Programmes will inevitably come to an end and close, whereas investment in local organizations has at least a chance of longer-term impact and survival.
The culture change required from groups that had lived for more than a generation with one dominant model only to find it no longer working should not be underestimated. The first problem is denial, disbelief that the system is coming to an end. This denial runs through the whole system. Hence when interviewed, developing country NGOs would often say that they had no warning, and that the donor’s ‘desk officer’ didn’t believe funding would be withdrawn any more than they did. In some ways it was easier for newer organizations to adapt than those with more baggage from the past.
In Kenya the case we studied (KCDF, Kenya Community Development Fund) has had success in attracting both corporate and individual donors for its programmes, some of which are to award grants to community groups. The importance of this example is that they were able, before the country attained middle-income status, to develop local resource mobilization based on an indigenous culture of giving.
All the countries we reviewed have some tradition of giving, sometimes through faith membership or individual alms giving ( to beggars, outcasts) or through local communities to friends, neighbours or relatives. Different resource mobilization strategies need to be employed depending on the history of giving. One of the challenges is whether such often random giving can be better channelled for greater public good, for example through improved education and health facilities. More challenging still is raising funds for more controversial social issues around rights, alternative resource allocation or anti-corruption programmes, where there may be a clash with local power elites. It is easy for people in a middle-class suburb to identify with the needs of the national cancer hospital, harder to see why they should fund a training programme for locally elected councillors in a poor district, or a programme of child protection for under-aged prostitutes. It is a major challenge for local philanthropists and middle-class donors to back human rights and other issues through appropriate civil society groups. Wilde Ganzen hope that by encouraging a change in the culture of giving at all levels of society, eventually even these more challenging areas will begin to gain support from within their own societies.
Brian Pratt is a freelance consultant, editor in chief of Development in Practice and an INTRAC associate.