I work at the bottom of the development food chain, on the ground where people benefit from the money that donors give. Some days I feel sorry for the donors because I see their money being wasted, stolen or misused. On other days I am frustrated by donor policies which make it very difficult to run effective programs.
Here are 10 tips I would give to donors, as someone working on the ground:
1. Explain where your money comes from
When you first fund a program explain exactly where your money comes from. Many people (local and expatriate alike) don’t realise that almost all aid money originally comes from regular people, either through donations or taxes. If people believe that donor money falls from the sky then it makes it easier to justify wasting or misusing funds.
2. Watch out for proposals written by mercenary consultants
Whatever you are funding (HIV, education, agriculture…) people will make up projects to apply for money, even if those projects are completely unnecessary. Watch out for slick applications prepared by mercenary consultants.
There are many times when I have been asked to write a professional looking proposal for a project that does not make sense (I declined). To my horror, most of those projects received funding. It is very difficult to know if a proposal makes sense from a distance. If you can’t visit the country yourself then hire someone locally to investigate the organisation and the proposed project before you fund it.
3. Match the type of funding to the type of program
Fund long term programs with long term funding, and short term projects with short term funding. Don’t fund long term programs with short term funding, even though people will apply for it.
4. Pay your fair share of admin costs
Some donors refuse to pay administration costs (rent, accountant salaries, phone bills, etc.). They think it makes their projects more cost effective. What it really does is force people to hide their admin costs in other account lines, or give a greater share of admin costs to other donors.
Do not refuse to pay admin costs. But make sure that admin costs are reasonable. Ask someone locally to check this for you. An executive director’s salary may seem low by comparison to your home country, but it could be far higher than local standards.
5. Undertake fraud audits with suppliers
Standard accounting audits are not sufficient to detect fraud, even if they are done by an internationally accredited firm. If you want to prevent or detect fraud in a grantee organisation you must randomly audit some of their receipts and deliveries directly with suppliers / beneficiaries.
6. Help your grantees to avoid per-diem abuse
Per-diem abuse is a serious problem in international development / aid. Excessive per-diems, meal and transport allowances can be used by employees to top-up their salary. They can also cause serious problems with government and community partners. I have seen many government staff refuse to perform their regular duties because they are not receiving a cash allowance from an NGO.
Ask lots of questions about allowances, meals, transport and accommodation costs in the budget. Help the grantee organisation to follow our 7 tips for preventing per-diem abuse and make sure you audit them.
7. Make your proposal and reporting forms simple
Most organisations waste a huge amount of time filling in complicated proposal and reporting forms from donors. This takes time away from running the actual program. Make your proposal and reporting forms as simple as possible.
I rarely see reports to donors that accurately reflect what is happening on the ground. Sometimes this is deliberate, but most of the time it’s because what is really happening is complex and difficult to express in the report template. Complement written reports with oral reporting to really understand what is going on. Start with the premise that what you think is going on probably isn’t.
8. Be realistic about sustainability and innovation
Many donors like to fund innovation projects. While some innovations can be revolutionary, there are many that fail. Before you start funding an innovation project ask yourself these 5 questions.
Be realistic about sustainability. Achieving sustainability is extremely difficult. Some programs do need to be funded forever – either through government or ongoing donations. Unless the grantee organisation has a very clear plan for long term sustainability, you can assume that the program will stop as soon as funding stops.
9. Do a thorough evaluation
Evaluating the programs you fund is critical to making sure they are working. Unfortunately many donors allow the grantee organisation to select, hire and pay the evaluation consultant. This makes it difficult for the consultant to provide an unbiased opinion of the program. I have seen cases where the grantee organisation has requested significant changes to the evaluation report before it is sent to the donor.
To get a truly independent report, make sure you hire and pay the evaluation consultant directly (see our tips for hiring consultants). It can be very difficult for a consultant to get a clear picture of a program in only one or two weeks. So be sure to consider their feedback in context.
10. Take left over money back
Don’t push the grantee organisations to spend their entire budget if they don’t need to. This just leads to unnecessary activities being invented. If there is money remaining, take it back.
Photo Pixabay public domain