7 Development Partner strategies
Civil society organisations in Uganda are highly dependent on foreign funding. It is estimated that 95% of all CSO funding comes from Development Partners (DPs). This factor defines the parameters of a relationship, where CSO’s may be seen as dependent on donors’ strategic priorities if they are to receive funding. This is now more of an issue as there are fewer individual funding opportunities with the introduction of a harmonised donor funding approach. At the same time, well-functioning CSOs are becoming increasingly important to DPs in order to provide an independent, qualified responses to the Government of Uganda through their demands for good governance; monitoring government service delivery as well as undertaking service delivery contracts – which is by far the most widespread activity of donor supported CSO’s. A review of the strategies of the DP’s as given below assesses the key features and common trends in the DP-CSO relationships over the past few years.
7.1 Types of DP strategies and funding channels
CSOs supported for monitoring implementation of DP supported programmes: The trend indicates that most DPs utilise CSOs in monitoring the implementation performance of their sector programmes. This typically leads to a focus on capacity development at national as well as local level. The DPs are increasingly concerned about the (lack of) accountability and Government’s seemingly reduced commitment to anti-corruption measures. This is particularly problematic since an increasing part of overall overseas development assistance (ODA) to Uganda is provided through general budget support or budget support to particular sectors. This gives more scope to Government in the way they spend the funds, compared with the more traditional programme or project funding approaches.
Strengthening government institutions: DPs have also provided substantial institutional support to public regulatory institutions or authorities such as the Inspectorate of Government (IG); Anti-corruption commission etc. Despite this, and their reporting and exposure, there is still a lack of accountability as described in Case Study 1.
The DPs increasingly expect CSOs to provide the expertise and resources to step in to assess and monitor government accountability.
Increased harmonisation of funding channels: DP channels of support for CSOs are becoming more harmonised and moving away from own funding mechanism within their Embassies or agencies, with a move towards multi-donor basket-funding with broader mandates. Examples of this include the Democratic Governance Fund (DGF), the Independent Development Fund and the Civil Society Fund. The DGF has the mandate to support the legal sector, human rights and accountability. The DP’s position is that the DGF was created to provide a platform for more effective assistance, with less direct donor exposure. The DGF will provide a common format for applications and reporting. This is expected to reduce the CSO’s time and administration of donor funds, as they will be able to submit a single report (with a common format) and will have to account to one facility instead of submitting reports and financial documents to several donors.
The new funding modalities have the advantage that the potential for duplicate funding of CSOs by DPs will reduce. It is also understood that DPs are moving towards provision of core funding to CSOs. As indicated in this study, CSO’s major constraint has been that DPs have been supporting programme related assignments, in which core funding costs are not eligible for reimbursement, putting at risk the longer term viability and sustainability of the substantial and extensive body of CSO resources that currently exist in Uganda.
7.2 How DPs influence the space for effective CSO policy dialogue
DP consultation with Government: All DPs in Uganda organise formal gatherings to discuss different development issues in the country. The meetings are held as DP Group meetings or Sector Working Group meetings which are comprised of Government and CSO actors. DPs and CSOs cited incidents where they have held meetings to discuss CSO perspectives on various subjects and issues of concern. In this way DPs are able to present CSO concerns to Government in their consultations. Both DPs and CSOs see this as an effective mechanism for facilitating CSO engagement with Government, with a recent example being the case of the amendments to the NGO Act.
Reduction of ODA to Uganda: DPs are increasingly concerned about the narrowing space for CSOs and government response to problems and concerns expressed by CSOs on corruption and narrowing of CSO space for dialogue. Because of these concerns, some DPs, for example Sweden and the Netherlands reduced their development assistance contribution to Uganda. Netherlands reduced support to JLOS and other DPs such as Sweden withdrew their General Budget Support programme. The DPs are also concerned that the Government was not doing enough to strengthen democracy in the country.
Challenges in DP countries: The difficult economic challenges in the DP countries have impacted on the level of funding being provided to Uganda, according to some DPs. Changes in governments in DP countries have led to a reduction in development aid amounts in some countries and changing thematic priorities. Uganda has over the past five years steadily increased its own domestic financing. The proportion of donor support as an overall percentage of the National Budget has diminished from close to half of the national budget to about 25%. The proportional reduction is also caused by increased Government revenue generally as well as by streamlining the revenue collection mechanisms of the Uganda Revenue Authority. It is now Government policy to use external resource resources only where there is clear benefit. A further factor is the discovery of oil reserves which over time are expected to substantially increase government revenue. This may in turn lead to reduced DPs influence on policy dialogue, as Government becomes less reliant on external funding. According to some DPs and CSOs, the expectation of oil revenue by Government is likely to result into a triple jeopardy for policy dialogue- i) decreased DP’s influence on Government, ii) decrease in CSO space for policy dialogue and iii) decrease in DP capacity to mediate with Government over CSOs space.
7.3 CSO perspective of DP strategies
Demands for sustainability: One of the DP’s interviewed remarked that:“We do not want to give CSOs money for a long time because, they will become donor dependent.” Similar views were often repeated during discussions with DPs. CSOs are aware of this perception by DPs that CSOs must be financially sustainable, and yet CSOs are ’not for profit’ organisations and do not generate their own resources like government or the private sector. Many of the CSOs contacted during the study voiced opinions summarised as:
- DPs are highly selective in their support.
- They want to support programmes, but not human resources.
- They want to support specific projects but not core support of the organisation or sufficient operational costs for the project they support.
- They demand separate reports that consume a lot of time to prepare and yet.
- They also demand impact from the insufficient funds that they may give for the project, many of them short-term.
Financial sustainability is clearly an area for concern for many CSOs. The same issue featured strongly during the Stakeholder Workshop for the Study. The participants cited the need for both flexibility in funding and provision of core funding to build institutions, to allow CSOs to pursue their strategic agendas in relation to policy engagement.
Lack of core funding: CSOs also pointed out that DP strategies have constrained the majority of CSOs because of lack of core funding support and investment in institutional growth. They argue that while DPs provide considerable resources to Government of Uganda (which already generates revenue and income from taxes, tariffs etc.), in comparison, they provide meagre resource to CSOs. According to one CSO, DPs would “rather pay a lot of money to hire consultants, rather than provide resources for recruitment of technically competent staff for the CSOs”. Furthermore, one CSO interviewed pointed out that DPs and INGOs have made local CSOs a shopping ground for recruiting competent CSO Staff, give them lucrative jobs at the DP offices and pay them better. CSOs also said that DPs often criticise CSOs that they lacked capacity to analyse and engage in policy dialogue, and yet they did not want to support CSOs to hire competent staff and pay them well.
Most CSOs interviewed said they relied mainly on funding provided for specific programmes, projects or activities. A minority of CSOs indicated that their programme funding was sufficiently flexible to allow then to manage the funds according to their own strategic agenda. There were no examples of CSOs currently receiving core funding, although in some cases it had been provided in the past. This lack of core funding does severely challenge CSOs, who unlike consultancy firms (which would add a margin to fees to cover overhead and profit), would be seeking to cover project costs plus a proportion of direct overheads or administrative costs. For CSOs on the other hand, the costs associated with the maintenance of the office, core staff, the writing of unsuccessful proposals, etc. in most cases go unfunded.
DPs tendency to ’bask in reflected glory’ of successful CSOs: According to some CSOs, DPs were also more likely to engage with CSOs that are already well established, and frequently overlooked newer organisations, or those with an emerging idea. According to the CSOs, some DPs prefer to associate with successful CSOs because the results may be quickly seen, or the success of the CSO may be attributable to the DPs support, even when the DP has come late into the picture. CSOs were able to name a few organisations they perceived as popular with DPs or those that DPs promote in the various sectors, especially in Forestry Governance, Gender Based Violence lobby and on anti-corruption issues. This tendency, according to some CSOs has led to the collapse of some of the CSOs after the funds are stopped or donor interests have changed. Accordingly, some CSOs popular with donors have also collapsed because they grow faster than they should and often collapse due to incapacity to manage the rapid growth.
Changes in DP countries influencing partnership with CSOs: CSOs perceive DPs as having a tendency of moving with ’development trends’ and shifting interests based on changes in their own countries and less on developments in Uganda. One example was cited, where a DP decided to cut off funding for CSOs before the contract period was over, because of change in national priorities in the DP country. Others DPs, according to some CSOs, introduce new terms and conditions, and demands in already existing contracts, for example, demands for extra reporting requirements, new value for money parameters and several others.
Donor harmonisation double edged: On the question of donor harmonisation, the perspective of CSO’s is mixed. CSOs interviewed observed that many DPs have demanded the use of their own reporting format, separate bank accounts and some demand separate audited accounts. The demands for servicing individual DPs, according to those CSOs affected, weigh heavily on the time and administrative overheads of the organisations. Some CSOs and DPs interviewed noted, however, that donor harmonisation, especially as designed within donor baskets in Uganda, should lead to reduction of transaction costs for CSOs because a CSO would be required to negotiate and report to one party, instead of the several donors.
Generally, donor harmonisation, according to some CSOs is seen as a ’one point entry’ which primarily serves the convenience of the donors. DP harmonisation is following a trend where DPs have pre-selected the thematic areas of importance to them and established joint funds against a limited menu of support. The current trend, according to CSOs is for DPs to emphasise areas of governance, rights and accountability in Uganda. Major DPs in Uganda, for example have set up the DGF, whose emphasis is on the broad areas of Governance, with the objective of strengthened democratisation, protection of human rights, access to justice, peaceful co-existence, and improved accountability in Uganda. The potential for improving the effectiveness of DP funding through a joint fund mechanism is acknowledged by CSOs. However, CSOs also have some reservations that too much streamlining by DPs will leave out many CSOs whose interests may not match DP interests. Another CSO reservation is that the CSOs may be driven by the DPs agenda given that the funding is earmarked thematically. Furthermore, small CSOs and NGOs with good ideas may be unable to access funds because of lack of capacity to respond successfully to calls for proposals.
A few CSO leaders interviewed had a perception that with increasing donor harmonisation in Uganda, the potential for agenda setting is very high. Likewise the increased power of the DPs over the CSOs is acknowledged by CSOs because of the perceived influence of collective funders of the DGF. Hence, it is unclear whether the harmonisation will necessarily strengthen CSO power and autonomy or make them less empowered and dependent on DPs. Some CSOs recommended that DPs should make available a funding window to support innovative ideas of CSOs that may not fit in the set parameters for harmonised funds. DPs such as Austria, Denmark and Ireland have retained some funds where they provide support directly to CSOs on strategic areas, for example on women empowerment or HIV. For example, Austria has continued to provide direct support to gender related and Women Empowerment CSOs, Ireland provides support directly to CSOs for a GBV Joint Programme in partnership with the Ministry of Gender, UK supports some Women’s Organisations through UN Women.
7.4 Role of INGOs and UN Agencies
The International Northern NGO’s work in Uganda is typically based upon programmes and funding negotiated at DP headquarters. As is the established practice, many INGOs and UN Agencies do not implement the programmes directly, but work with national institutions and CSOs to carry out the services or support being provided. Thus INGOs such as Care International, Oxfam International, NRC, Save the Children, Diakonia, Horizon 3000 and Red Cross work in various parts of the country in partnership with local organisations. In this case the local branch will implement programmes as mutually agreed. Often, the INGOs programme bias is towards the development priorities set in the country of origin. However, INGOs recognise of course that these priorities need to be aligned to the National Development Plan goals. Thus the parties will have entered into some form of earlier dialogue with Government. On a positive note, INGOs often provide other forms of assistance to local CBOs in addition to funding, for example technical assistance inputs from individual northern advisors to help local CBO’s in providing better services as well as capacity building processes within the project management arrangements.
 Government of Uganda’s Finance Budget 2012-13, and Background to the Budget, FY 2012/2013. June 2012. Uganda will finance 75% of the budget and aims at raising up to 25% from external aid, in 2012-13, http://www.finance.go.ug/
 Stakeholder Workshop for the Study held on 28th February 2012 at the Protea Hotel.
 The Uganda Wildlife Society (UWS) has in the past received core funding from USAID.
 The CSOs are not named in the study in order to protect their privacy.
 The DGF has three main component areas i) Deepening Democracy, ii) Rights Justice and Peace, and iii) Voice and Accountability.
 DFID funds a four-year programme through UN Joint Programme on Gender Equality, through UN Women, which supports some women’s organisations on issues of gender policy dialogue, and strengthening women’s organisations and networks.
This page forms part of the publication 'Support to Civil Society Engagement in Policy Dialogue' as chapter 10 of 19
Version 1.0. 07-01-2013
Publication may be found at the address http://www.netpublikationer.dk/um/11194/index.htm