I recently spent two weeks in Tanzania to help a family foundation find new grantees in the area of water, sanitation and hygiene—a dire need in a country where according to (hazy) official statistics just over half of the 42 million Tanzanians (54%) have access to improved water and less than a quarter (24%) have access to improved sanitation.
In typical NPC manner we had spent weeks on desk research into needs, the sector, funding flows and initial charity analysis, and the purpose of the trip was to now analyse a short-list of NGOs in much more detail. Needless to say, a fascinating project that could take up a whole blog in itself—but what I’d like to tell you about are some of the funding practices of bilateral funders we came across (think government funders like the UK’s Department for International Development), which ranged from outstanding to abysmal, and offer plenty of lessons for thoughtful funders everywhere.
- Joint reporting saves time: one of the organisations we met with is in the fortunate position of being funded by half a dozen bilateral funders—which we thought may be tricky from a reporting perspective, as yes, government funders do have a bit of a reputation for stringency in that area. But, in fact, reporting arrangements seem great: the organisation provides one joint report for all of its funders, which is followed up with one to one conversations to give each funder a chance to ask specific questions. The charity’s director considers this a big time saver, with the freed up reporting time being spent on other work.
- Multi-year funding helps charities plan well and deliver: another organisation we analysed told us that one of its flagship projects had been funded by the same bilateral funder for the past five years. When we nodded approvingly at such a progressive grant length, however, the country director was quick to add that the funding had been made up of five individual one-year grants, which had each been renewed for yet another year at the last minute. This meant year on year the charity was faced with uncertainty and spent time fundraising and contingency planning that could have been more usefully spent on the actual project had the funder given a multi-year grant to begin with.
- Flexible funding helps charities innovate: a third organisation we analysed stood out for its innovative approaches to both rural and urban sanitation. We were keen to understand where these innovations had come from, and found out that a bilateral funder had given the charity a three year grant to innovate in the area of sanitation. The charity gladly used this flexibility to take some time to think through, design and then pilot two new approaches, both of which look very promising and are now ready for scale-up.
- Appropriate funding timescales mean funding can be targeted well: finally, an organisation we met with acts as a funding mechanism for bilateral funders, meaning it receives funds and then gives out grants to organisations fitting certain criteria. This makes a lot of sense as bilateral funders draw on existing local knowledge and networks instead of duplicating efforts. But we were told that in one case an (unnamed) bilateral funder contacted the organisation two weeks before Christmas asking them to give away $4m (yes, that’s f-o-u-r million dollars) by year end. It not only meant that the staff team worked flat out until Christmas eve to find charities to give the money to, but also that the money was most likely not spent in the most effective way.
While these are Tales from Tanzania, they certainly have wider applicability and should be food for thought for any funder. If you’d like to learn more about what NPC thinks good funding looks like have a read of our 2009 publication Granting Success. If you’re interested to learn more about NPC’s international work for funders, get in touch.