Kevin Kelly & Karen Birdsall CADRE Rhodes University South Africa

1. Indicators for assessing the impact of new funding modalities on civil society responses to HIV/AIDS Kevin Kelly & Karen Birdsall CADRE Rhodes University South Africa Perspectives on Impact Evaluation Cairo, 29-31 March 2009

2. Background • The Paris Declaration on Aid Effectiveness (2005) consolidated a developing trend towards alignment of development aid with government programmes of action. • Concepts of alignment and harmonisation were pivotal. • Basket funds, SWAPs, budget support mechanisms increasingly replaced bilateral programmes of support. (With notable exception of USG) • In AIDS field this was paralleled by the ‘Three Ones’ (2004), which similarly committed to increased alignment with national HIV/AIDS strategies and funding mechanisms and donor harmonisation.

3. Our questions • How have new funding modalities affected the development and effectiveness of CSOs? • What has increase of overall funding for AIDS responses meant for CSOs? • What should be expected in terms of development assistance to civil society? • What indicators would be used to understand the evolution of trends development?

4. Sources - www.cadre.org.za • A range of studies conducted over the past 4 years • Publications www.cadre.org.za under ‘local level responses’ - Community AIDS needs in South Africa (USAID) - System effects of increased AIDS funding (GFATM) - Civil society funding in six southern African countries - Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania and Zambia (OSISA) - Civil society funding environment in Tanzania (Ford Foundation East Africa) - Work in support of AIDS responses in Zimbabwe - Numerous reviews, situation analyses, and programme evaluations conducted over ten years

5. Growth in number of CSOs – Morogoro Municipal* * Data supplied by: Enedy Mwanakatwe, Morogoro

6. Growth of civil society (general) in Tanzania • 17 registered CSOs in 1978 • 1990/1 – 200 • 1994 - 813 • Growth fuelled by donor funding strategies which increasingly channeled aid funds through international and locally based CSOs, considered to be more efficient and less corrupt, and to operate closer to the poor than government bureaucracies • NGOs took up these opportunities • Ranks swelled to 4,000 by 2005 • Estimated 7,000-8,000 CSOs

7. Year in which CSOs started AIDS activities

8. Civil society activities • Only about 30% are exclusively involved in AIDS activities • Proportion of time spent on AIDS-related programmes has increased over time • Some evidence of activity substitution with change of previous mandates because AIDS funding is more readily available

9. Changes in average annual spending by CSOs • 2005 - official sub-granting agencies accounted for only 11% of the total funds received • They are, however, the most accessed source of support

10. Funding coverage • Most medium and small CSOs are functioning sub-optimally and do not have sufficient consistent support to be able to realistically pursue long term plans. • Almost half had less than 25% of their projected budgets funded for the following year. • Funding does not meet the needs of growing organisations. % funded

11. Funding mechanisms for civil society • Government local level funding mechanisms have relatively good reach, but perceived as inefficient and mostly small scale both in terms of funding limits. • Such mechanisms largely rely on INGOs for fund management. • Some short-term funding mechanism for mid-sized CSOs in place – but limited. • Large scale use of CSOs for delivering specific project outputs on part of Global Fund beneficiaries and USG, but outputs highly defined and prescriptive. • Less prescriptive funding options through smaller, civil society sub-granting foundations and networks, favourably received, but scale not significant. • Access to bilateral funders limited and on the wane. But many small scale funders (churches, service clubs, small foundations) in evidence. Their scale is largely undocumented. Many organisations rely on such funding.

12. Effects of current funding environment - 1 • Many long-standing, innovative and efficient organisations are facing new funding crises because of the steady retreat of direct and bilateral assistance. • CSOs are increasingly engaged as service providers with activities closely prescribed. • This compromises diversity, innovation and rootedness. • Many organisations barely develop apart from their ability to render particular services. • Very few CSOs show indications of moving to any kind of sustainability. • Opportunism and competition has negative effects on conduct towards achieving group goals. • Transaction costs of participation in national CSO engagement programmes are high. More time spent in funding activities and more sources of funding. Huge costs incurred by members of CSOs. • The discretionary component of funding support to CSOs is limited, and there is little appreciation in funding discourses of the value of supporting organisations medium or long-term plans.

13. Effects of funding environment - 2 • Civil society is being shaped by the funding environment. Independence and advocacy, traditional hallmarks of civil society, appear to be in short-supply. • Divisiveness created by competitive funding mechanisms. • High attrition rates of CSOs. Many never become viable and cease to exist. • Hand to mouth funding not conducive to strengthening of organisations.

14. Summary • The new funding approaches may limit the contribution of national civil society organisations and ultimately the unique contribution that they make to national HIV/AIDS responses. There is a need for donors and national civil society organisations to take note of the risks to civil society responses in the current funding environment, and to re-engage in supporting the development of strong national NGOs and umbrella bodies. • We cannot think of development effectiveness without referring specifically to civil society. Development success greatly relies on civil society. • There is a need for donors and national civil society organisations to take note of the risks to civil society responses in the current funding environment, and to re-engage in supporting the development of strong national NGOs and umbrella bodies.

15. Conclusions • Large scale programmes use CSOs to get services closer to the ground, but do not make any real commitments to, and show little appreciation in funding terms, for the value of strengthening these community AIDS response assets. • There is very little understanding of the size and characteristics of the civil society sector. • No vision or map for how support for CS should develop and where it is headed. • There is little evidence of any attempts to conceptualise models of how CSO responses may survive in the long term.

16. Recommendations • CSOs need to develop a more united front for engagement with donors, development partners and government. • Donors, funds and development partners should formalise donor and civil society dialogue structures and harmonise mechanisms for civil society engagement and support. • Graded approach to ‘funding risk’ is required. • Recognise CSOs as assets rather than resources to be used, and support their growth and security. • CSOs must participate in the work of thematic and sector-wide associations and in doing so represent concerns and needs of the civil society sector.

17. Indicators useful for understanding impact of new funding modalities on strengthening and effectiveness of CSO contributions • Existence of an agreed set of principles to guide to guide support of development partners and CSO sector. • Endorsement of national funding architecture by civil society organisations. • Existence of longer term funding mechanisms for NGOs working at larger scale. • Credible representation of CSO-identified representatives in partnership forums, thematic and sector-wide partnerships. • Consolidation of splintered national CSO umbrella organisations in key areas.

18. Acknowledgements • The financial support of the Open Society Initiative for Southern Africa (OSISA) is gratefully acknowledged • The primary research reported was funded by OSISA and the Ford Foundation East Africa Office.