This paper is from a session at the Regional Conference on CSRO Accountability & Sustainability -- Critical Lessons from Best Practices, February 18-20, 2002. Text of this paper was prepared by the Philippine Business for Social Progress. Download printable PDF copy (325K) of the entire conference proceedings.
Synergos recently has finished the study on ODA-CSRO Collaboration and with a team of researchers supported by The Sasakawa Peace Foundation. The 6 cases produced, 4 from the Philippines and 2 from Indonesia and the lessons learned from ODA-CSROs collaboration.
As a result of these case studies, policy options of the ODA agencies can be grouped into three broad options. These are attempts developed to channel ODA funds to civil society organizations.
The first option is where you create a program to channel funds from ODA agencies to NGOs and Civil Society Organizations through a small grants program. This is probably one of the most frequent strategies where ODA agencies develop a small grants program for NGOs. Generally, these grants respond to local needs and demands and largely to macro projects many of which are supporting infrastructure.
Under option one is a number of variations:
The second option is to look at where NGO-managed funding mechanism was created, and in turn channeled money to NGOs and CSOs. In some cases, they are created as independent foundations or in other cases, they evolve into independent foundations. These are examples of development assistance programs developed in partnership with local NGOs or consortium of NGOs.
These organizations evolved into permanent organizations when they ended their life upon the completion of program funds. You can see there is a heavy emphasis on CIDA, the Canadian development assistance program. They have been active in developing this particular model of partnership between ODA and civil society.
We will hear from LDI from this panel today. We will also hear from the experience of CRP.
The final option in many ways is the most advanced in terms of sustainable financing for CSOs. It is where and independent foundation or CSRO is created and endowed with the proceeds of a debt swap or other funds from the ODA agencies. This is essentially a new permanent endowed fund that channels grants to CSOs in pursuit of their bigger programs. The endowment is invested and only earnings from the endowed fund and loan programs can cover institutional costs. An example we are going to discuss today is the FPE. We already know quite a bit about FSSI, which is supported respectively by USAID and the Swiss Agency for Development Corporation.
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The Community Recover Program is newly established. It was set up in the middle of 1998 when Indonesia was facing a monetary crisis just like other Asian countries. But Indonesia experienced more than monetary crisis. It faced social and political crises too. It was then very difficult to solve the problem of the poor. Various levels of the community were affected by the crisis and suddenly the number of poor people, those living under the poverty line increased significantly. In 1996, we had 22 million poor people, in 1998, 80 million. In just two years, it increased almost five times the number in 1996. With this condition, leaders of the NGOs in Indonesia and other sectors developed a mechanism to help those individuals who were most affected.
Four donor countries such as United Kingdom, Netherlands, New Zealand and Sweden, gave grants to Indonesia to set up a mechanism to help the most affected members of the community from the socio-economic crisis by way of distributing resources to support the NGOs and CBOs in implementing the program. The grants go to UNDP. Around USD 27 million was transferred to the trust fund of UNDP, and then UNDP made separate accounts to each countries so it is easy for each country to control the money that will go to the program fund.
CRP envisions to be "an organization that could encourage initiatives and ideas of the powerless communities living under poverty line to enable them to help themselves meet their basic needs as well as to break the access blocking and have control over public policies through strategic partnership alliance (NGO, CBO and other civil society organization) so that the goal of a developed civil society and gender equity in socio-economic structure can be achieved."
Its missions are:
Our project is for the poor women and children, the landless and the jobless. At that time, there were 42 million jobless people in Indonesia. We have the principle of non-discrimination in our projects. For instance, a program in Malukus and the Islamic Malukus tried to look at how much support from CRP goes to the Christian community and how much to Muslin community in Malukus. CRP is guided also by the principles of transparency, accountability, participatory and gender equality.
CRP priority programs are food security and basic social services in the first and second years of the program. In the third year, because the poor have a better situation, the program focused on job creation and on income generating projects. After three years, the donor conducted program evaluation, and the identified program weakness are capacity building and advocacy. So therefore, in this year, the concentration is on capacity building and advocacy.
Why advocacy? In the experience of CRP, social justice is important. With the small capital, they buy small generator but income does not increase due to some external factors.
Project proposals come from NGO or CBO and developed/designed together with the community. We have 15 Regional Facilitators and the program covers all provinces in Indonesia. Regional Facilitators were posted because of the concept of decentralization.
The success of the project is assured when there is a good proposal appraiser, someone who would verify if the project being proposed was designed with the community. Sometimes, the NGO sends a proposal without the participation of the community. If there is a good appraiser, there is 50% guarantee that the project will run well and smoothly.
Regional Facilitators send the proposal to the National Council that consists of three members from the government and seven individuals. If the proposal is approved, it is send to UNDP and it is asked to send the money to the NGO, CBO or community. The funds go directly to them and do not pass through CRP. The funds are sent to the account of two persons/entities, the NGO and the leader of the community. Because of this, the community can control the money.
Upon receiving the money, they implement the project and start by setting up a revolving fund. On who manages the revolving fund, it depends on whether the community is strong enough to manage it. Or else, the NGO manages it.
There are three disbursements of funds to the project holder. Every disbursement is monitored and evaluated. Activities are monitored and funds audited. If the project is going well, UNDP is asked to release the next disbursement. If there is corruption, as a social punishment, the corruption is publicized in the newsletter. But before the punishment is meted, they are assisted. With CRP's experience, 80% are very good projects, 30% needs assistance, and 10% fails the standard. About 70 provinces have received support from CRP. They are in remote provinces. The cost of monitoring is very expensive given the frequency of monitoring is three times.
CIDA has existed in Thailand since 1981. After 5 years, CIDA started the LDAP project. LDAP has an office at the Canadian Embassy and had a good relationship with the government. The project review committee included Canadians and government people and one NGO. More NGO representation in the committee is needed because sometimes when a project proposal is approved, the project becomes how the government and the Canadians view them to be. This is why LDI was started.
LDI's mission is "To strengthen the capacity for self-determination among poor communities by enhancing the effectiveness of Thai NGOs in community development for the poor." "Self determination for the poor through the Thai-NGOs." This is how LDI wants to operate.
When CIDA and LDI started the project together, it is an 8-year project, there is a big lump sum that CIDA promised to give to LDI. All the activities geared towards the self-determination of the poor are channeled through the NGOs. So in order to achieve this goal, LDI have to have capacity building for Thai NGO and research to get the correct information. The information centers were set up so whenever anyone needs the information, they are available. The money will go to Thai NGOs in terms of grants and loan fund to the poor.
The composition of the Project Review Committee changed with time. During the LDAP stage, it was comprised of CIDA, Department of Technical and Economic Cooperation (DTEC), Academic Institutions and NGOs. The LDI stage had three sub stages. The first is the centralized stage. Problems such as the main office approving proposals without being able to come down to the community and evaluate the true mission of the project being proposed. This led LDI to propose that decentralization happen in the proposal submission and appraisal. In the decentralization sub stage, LDI is working with about 200 to 300 grassroots NGOs in the country. Some of them work in the four regions. A body, the NGO Coordinating Organizations for Development (NGO-COD), was proposed which will distribute the money for the grassroots NGOs and People organizations in the region.
The process starts with the grassroots NGOs making the proposal and submitting to the Regional NGO-COD. The Regional NGO-COD gathers together the leader of the communities and grassroots NGOs and develops a two or three year strategic plan. The project review committee looks at the strategic plan, and sees if the project fits the plan, then it approves it. The criteria include sustainability of the project, appropriateness to the community, environment friendly, and women's participation. They will submit them to LDI/CIDA, which allocates the amount of grants or loan to each of the regional NGO-COD, which distributes it to the grassroots NGOs.
During the implementation of the projects, a Monitoring and Evaluation team evaluates, gives advices to the project holder. It will give a monitoring and evaluation report to the PRC and say if the project is successful or not.
In 1998, the project with CIDA ended. They left with LDI an endowment fund of B 30 million. Now, from the money from other donors, CRP uses it in four areas; with civil society, which is the main theme of LDI at the moment and for the community business: CRP also provides loans and match grants. CRP also works in environmental protection and social development. The Drug Abuse Prevention Office of Thailand provides funds for drug abuse prevention.
At the moment there are four big issues in Thailand. In 1997, we have the new constitution that talks about decentralization and participation. The government has to organize the authority to the local people, which give rise to the Tambun Administrative Organization (TAO) comprising around 7,000. When they localized authority, the government allocated 20% of budget each year to the TAO so they can plan and use the money.
Before, it was only NESDB, which is the government organization and economy institute that work together and set plan for all the people in the country. But since the 8th plan and now the 9th plan, we have what we call the "bottom up" process. The NESDB has contract with the civic people to do a provincial vision. In Thailand, there are 75 provincial visions in 15 categories such as social vision, economic vision, environmental vision, etc. The visions are submitted to NESDB. NESDB is the government organization, which integrates the provincial visions to the 9th plan. The plan belongs to the people because the people participated in its crafting.
The new Thai Cabinet is promoting the "30 Baht Health for all." This gives medical services to the poor for only 30 Baht.
About the civic movement in Thailand, social contract forum is held, where politicians are invited together with the community, so the community would know their platform on issues affecting the country. There is also the anti-corruption project and the good governance project, which are also a forum for discussion of issues on governance.
The Foundation for the Philippines Environment is a foundation created by NGOs for NGOs and is managing an endowment currently amounting to PhP 700 million or USD 40 million at present rate. It is important to see the creation of FPE in relation to the changing political context.
Enabling Environment: The socio-political situation in the Philippines after 1986, marked by the restoration of democratic institutions and the establishment of new policy reforms, provided the enabling environment that led to the eventual creation of FPE. FPE itself grew from a convergence of efforts and intersecting agendas among US and Philippine NGOs, USAID and the Philippine government.
FPE itself was born out of a shared concern -- not only to assist local environmental action -- but also to strengthen democracy itself, through civil society organizations. The phenomenal rise of NGOs in the post-1986 period gained for them increased recognition by government and donor agencies. This, in turn, enabled NGOs to come forward with more confident development agendas
Negotiation Process: The process of creating FPE took three years, for it was necessary to maintain credibility among a wide range of stakeholders, and to establish consensus among its broad NGO constituency. The process had its conflicts. Yet, negotiations, broad-based consultations, and the participation of stakeholders were seen as necessary in order to establish FPE's transparency, trust and public ownership
Role of Philippine Government: While the overall positive policy environment set the stage for FPE's creation, it was concerned individuals in government who played key roles in the creation of an environmental trust. These individuals served as points for linkage and negotiations among various stakeholders.
FPE was seen as a unique structure that could contribute to national environmental action on a sustained basis. It was created -- not just as an environmental fund per se, but as a means to strengthen civil society organizations. A strong civil society was seen as the best guarantee against political change and official whimsy.
Role of US Government: The policy environment in Washington DC was supportive of an NGO managed initiative, in part because of a successful lobbying by a group of US NGOs with support by Philippine NGOs.
Role of Civil Society: The involvement of key, experienced civil society leaders in the Philippines helped give FPE its initial public visibility and credibility. The lobbying support of the US NGOs under the Philippine Development Forum proved critical in convincing US Congress and USAID to support the creation of an environmental endowment under the control of CSOs.
Q. What is the role of PBSP in the negotiation? What is the relation of PBSP and WWF? Please elaborate more on this.
R. J. Tan: When the conditionality of the grant to establish a foundation was given to WWF, it was met with stiff resistance. But USAID cannot anymore change that because it was part of US Congress conditionality. So the compromise was that PBSP to have an agreement with WWF to co-manage the creation of FPE. It was very clear because there was a Terms of Reference signed by both WWF and PBSP. This spelled out the process that will create FPE including the management of an interim grants program. This was jointly managed by the two organizations. FPE was seconded to PBSP under WWF until 1994 when the fund was completely turned over to FPE. That was a condition then that after two years of managing the foundation, WWF would turn it over to FPE board of trustees.
Q. In my experience, the biggest challenge in working with ODA is that although participation and democracy is always the jargons, we do not have anything to say with regards to their changing of policies or funding mechanism. For instance, the same organization says that environment is very important and should be the cross cutting themes of all the projects that FPE funds, is also the same organizations to say no to supporting the anti-nuclear movement in Indonesia. This is because at the same time it is also the business sector presenting proposals to build a nuclear power plant in Indonesia.
Second is the issue of sustainability. Even though sustainability is usually one among the important aspects in giving funding to indigenous organizations who perform as grant making organizations. Yet when it goes to overhead funding, they say that they give overhead funding for example for a US-based or Canadian organization but not for you. For you we will give operation costs to implement the program and after this program ends, you have to search for yourself. This is also a policy, which is very difficult to tackle. Then we also don't know when they will pull out of the country or when they will reduce the amount being given to a country. I think Julio has explained how Philippine NGOs in collaboration with US NGOs tried to influence the USAID. I would like to know from Benjamas and Zumrotin the experience of CRP and LDI in handling the policies, which we do not have participation in. I also would like to ask Ibu Zumrotin if it is difficult to deal with UNDP than dealing with specific agencies, because with the trend of donor agencies to pool their money to one multilateral corporation. It could be UNDP, WB or ADB. I think this probably is one challenge we could face in the future. I think CIDA also have a document in strengthening aid effectiveness, which actually wants to pull their money to the multilateral corporations.
R. Z. Soesilo: When I came to CRP, the deal was already on board. I think it depends on the relationship with UNDP. Which one is difficult, to deal with UNDP or to deal with bilateral funding? In our experience, UNDP thinks that CRP is a good program so they always fundraise for CRP at that time. They ask me to make a report every month and they go to some countries to do fundraising for our program because in the program, UNDP gets 3% for all the money. CRP just gets 10% from the money disbursed from our activity. This is the incentive of UNDP for fundraising. At that time, we tried to lobby with other bilateral agencies. We thought that if funding from UNDP ends, CRP would die. So we tried to approach the United Kingdom to give the 10% of the funds as endowment fund for CRP. In the first year, we got 10% for endowment then in the second year; we got 30% for endowment fund. So after their phase out, we have an endowment fund.
B. Siriphat: CIDA gave us an endowment. CIDA money was used as a loan fund and when went back to LDI, LDI kept it as endowment. At the end of the CIDA project, we had to do a cash flow analysis and we came up with a good 5-year plan for the cash flow. But after the economic crisis, we had a problem because we cannot invest and we cannot do anything. So the money was kept with very low interest. Anyway, we tried to survive by connecting with the government and we got funding support for different projects. At the moment, we are still okay but in the long term, we have to think hard about our survival.
I. Hadad: I would like to give some information about the question of Abdi Suryaningati regarding CRP. In one way or the other, I was involved in the work of CRP. In the beginning, CRP was designed as a social safety net program because of the crisis and as such, it was for short-term purpose. So the deal with UNDP was that they help CRP fundraise in the form of what they call at that time a sinking fund. We had a target of 20 M, which we raised at less than 4 or 5 months. But the 20 M initially raised was designed only for 3 years. After 3 years, when the program is over and there is still some money left, we will give it back to the donor. That is the concept of a sinking fund.
In the process, not only the crisis continues but also the nature of the program. CRP has a different purpose then and it is evolving from its origin -not only simply as a social safety net and to help in the recovery of the poor's situation but also help CSOs generate income, etc. Which has more long-term perspectives in the activities. Therefore, the arrangement of fund at that time was UNDP was supposed to do two functions: 1) help in fundraising, 2) be in charge of distribution of funds. With the assumption and agreement in a way generally that when the sinking fund generally will be developed into an endowment fund, it was CRP who was supposed to manage it and not UNDP anymore. That was something not clearly said in the beginning. Might be partly because the originator was not quite making the deal quite clear. That is why Ibu Zumrotin currently has problems in redefining both the goal and functions of the CNSDP. In the meantime there are still some changes both in CRP leadership and in UNDP and in the latter development was not clarified and that makes the problem of sustainability and that become issues that currently will be sorted out. I hope I clarified this.
Q . M. Nishida: When I was young, I would join JICA and my father would ask me why? He said that it is not a sustainable organization because of its assistance to poor countries and since it'll be 10 to 20 years hence, JICA will close down. He told me why not join the government. Now the Prime Minister Koizumi and his assistant made a drastic change in the Japanese government. I'm very interested in LDI. JICA tries to collaborate with NGO. This is a very important issue on how we can leave Indonesia so we can go back to Japan. When LDI finished assistance from CIDA, you find other donors such as Nippon. I want to know what is the difficulty when you try to find local resource, when you transfer from CIDA assistance to self-reliance. Were there changes made within the organization, in staff such as hiring more information staff to find clients, etc?
R. B. Siriphat: Talking about the transition, I think compared to the other NGOs, we are lucky. First, because we have an endowment from CIDA. Secondly, because of the strong leadership and popularity of our chair and the board. Whenever we do project proposals and they see our board's names, most donors give funds to us. We also have the skills because of our experience with different NGOs and POs. In addition, whenever we propose a project, we never write in our perspective. We always go to the field, meet with the local people and grassroots NGOs and develop this proposal.
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