What being “SMART” forces local organizations to do

A guest post by Rasha Musleh.

Donors have become smarter and more savvy. They have started to ask more questions and put more restrictions, which is a good thing.”

This is what one of my fellow classmates in International Development Communications class said last semester. I was a bit shocked, confused and even angry.

No, this is not a good or a positive thing. No, this has not improved international development efforts.

In my experience, what it has really done is make people more motivated to cheat and maneuver. It has only reduced funding opportunities to parties that are actually transparent in their spending.

How do I know? Because I have been in the non-profit sector for nearly seven years and have seen how donor restrictions have affected nonprofits in Palestine. During those years, I moved between three organizations, both international and national; two of them have been operational for more than 25 years. Major aid donors, it seems, are more and more reluctant to provide “core funding,” which is funding for managerial and administrative costs. Although this sounds reasonable at first, it isn’t.

My own clash with NGO practices

I was first exposed to this a couple of years ago. I was requested by my supervisor to only provide 90% of the donations to the people benefiting from the project I was implementing and to “return” the remaining 10% to the organization. I refused, as it was not in the project’s agreement.

tumblr_nin9tuYbuW1sjf6dxo1_500That is when my manager called me to his office and explained the “changes.” It seems that the organization had stopped getting core funds. And now, despite having income generating projects, they could not cover all administrative support expenses, not even the ones needed for this project. Therefore, the organization started using this method. As I continued on, I learned that most local organizations receiving international funding are driven to do the same.

Many organizations, like the one I used to work for, were established as relief organizations. This means that they do not have any source of funding other than donations. Their goals and objectives do not include establishing income-generating projects for the organization, or requesting payment for their services. The ones that do have some source of income usually have much higher costs than they can cover.

More transparency and “results” must be paired with more flexibility

At the same time, donors have become very specific in their demands; they want every penny to be spent in the place they determine or approve. They refuse for the money that they dedicate for a project to be spent on anything other than the preapproved costs, too few of which are operational. Not only this, some donors – most noticeably USAID – request an unrealistic number of proofs, forms and reports that prove that money was spent accordingly.

Most organizations are then faced with two options: shutting down due to lack of resources or finding a way to re-route the money sent by donors without informing them. Usually, the latter route was taken for the survival of the organization.

This unfortunately creates a culture of lies and deception. Now, the most proficient organization becomes the one that can pretend to be transparent while at the same time misuse money received from donors. This can lead to a higher opportunity for embezzlement of funds for personal reasons.

Not everyone has the ability to refuse to follow wrongful practices like I did, as not everyone has the financial stability to be unemployed. That is why I do not believe that changes undertaken by donors have been positive; I see them as destructive.

Organizations have to be well-prepared to ensure their ability to handle independence, gradually over a period of time. Rigidity in spending must be traded for a more studied and flexible approach that takes into consideration the needs of organizations and their beneficiaries. Exceptions should be allowed for core funding and other issues, if a strong reason exists such as an organization providing essential and unique services but is unable to support itself.

USAID, EU, and many donors might think they are being ”SMART” about results, but in reality, their policies and practices make local accountability even harder than it already is.

Local organizations have had to learn to do what they have to do to keep the funding flowing and the doors open.

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Check out the Dalia Association’s campaign to reform aid here. (See also their video: International Aid Hurts Palestinian Civil Society.)

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Rasha MuslehRasha Musleh is a Fulbright Scholar and a Masters degree candidate at Georgetown University’s PR and Corporate Communications program. She has seven years of experience in the Palestinian nonprofit sector. Her expertise areas include project management, PR and communications.

She has worked at the United Nations Relief and Works Agency for Palestine Refugees in the West Bank’s Relief and Social Services Programme, where she helped in enhancing communication, planning, and reporting. Prior to that, she managed two projects, one funded by the World Bank and the other by the government of Luxemburg. In both projects she worked with local grassroots organizations.

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  1. Pingback: Saturday Morning Reading #34 | A Pett Project

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