Increasing local ownership, reducing administrative costs
A new report concludes that Norwegian umbrella and network organisations are effective in building capacity in the South, but that some are cost-inefficient and have poor systems for monitoring and evaluations. The evaluation team recommends that an increasing share of the funds should be channeled through funding mechanisms for civil society in the South.
In the 1980’s, state funding for development cooperation increased and the number of Norwegian non-governmental organisations (NGOs) engaged in development cooperation grew dramatically. This caused a strain on Norad’s capacity, and the organization encouraged the formation of umbrella and network organisastions (UNOs) in order to outsource some of its administrative workload. Today, support to a large number of smaller Norwegian NGOs is channeled through eight UNOs.
Commissioned by Norad, Niras and Chr. Michelsen Institute (CMI) have now evaluated the UNO-system. The team’s conclusion is that the administrative costs are relatively high for some of the UNOs, and that a larger portion of public funds should be channeled directly to civil society organisations (CSOs) in the South with a good track record.
Adding costs, not value
Many CSOs in the South are well-established and have a long track record of cooperation with UNOs. According to survey answers, the UNOs themselves perceive their South partners as knowledgeable and actively engaged in all aspects of the projects.
- Many of their South partners now have the capacity to manage funds and interventions effectively themselves. The added value of getting funding through a Norwegian NGO is in some cases limited, says Siri Lange, Senior Researcher at CMI.
What the UNO system does add is an extra link that increases administrative costs. Channeling more money directly to civil society organisations in the South will probably reduce these costs significantly.
Local civil society organisations also have the benefit of deep contextual knowledge. Even though Norad specifies the need for in-depth analysis in their agreements, this is frequently not followed up.
-Any organisation involved in aid or capacity building needs an understanding of the local political and cultural context. This is a major prerequisite for success. At the moment, too many projects without sufficient grounding are launched by UNOs, says Lange.
Need for tighter control mechanisms
The researchers recommend a tightening of several control mechanisms to ensure that projects and interventions are cost-effective and efficient. Currently, many UNOs neither have the skills nor tools to monitor and evaluate their projects and actual achievements. Monitoring and evaluation is also a weak link in many CSOs. This puts added pressure on Norad.
Channeling more money directly to CSOs in the South could increase the risk of corruption. To prevent this, Norad would need to strengthen systems and routines for handling risk management.
*A team of consultants coordinated by NIRAS have evaluated Norad’s support through and to Norwegian umbrella and network organisations.
*The UNOs are diverse. The main role of the umbrella organisations is to administer public funds to development projects in the South through their Norwegian members. The network organisations are to a lesser degree engaged in development projects in the South. They represent their members in different fora, and work towards specific development goals through advocacy in Norway and internationally, and/or through small scale networking projects in the South.
*The evaluation is based on observations of five umbrellas and three networks’ activities, costs and time spent on activities beyond the mere coordination of Norad funds, and included field visits to Nepal and Tanzania.
*Altogether, these 8 UNOs received 5 % of the total civil society funds for the period 2008-2013.