Designing In-Country Managed Funds

~ Section B | Fund Criteria

community groups or people’s organisations (e.g. village women’s or youth committee)
indigenous NGOs
in-country and NZ-based NGOs
individuals or family groups/businesses
religious groups/churches
government at the national, provincial or local levels
international agencies
the commercial sector, and
business, industry or sector associations

Each development partner will have a greater or lesser capacity to address the needs of the target beneficiaries.

Grants from funds can be used as co-funding with other donors, or with other NZAID programmes.

Primary development focus

Programmes, projects and activities supported under funding arrangements should have a primary development focus. Suitable activities should include:

food security
capacity building and institution strengthening
basic education (literacy, library and school materials)
primary health care (maternal and child or community health interventions, health awareness raising, water, sanitation and environmental health)
appropriate technology
small-scale economic activities or sustainable livelihoods (e.g. agriculture, aquaculture, fisheries, trading) with a particular focus on women and youth, microfinance.
advocacy as in human rights, good governance, peace building/conflict resolution
disability support
small-scale infrastructure (markets, health and education facilitates), and
workshops, seminars and training programmes.

Sectoral or geographic focus

The design stage of the fund should determine which approach (national or focussed) is best for the objectives being pursued. Some of the factors that can be considered when deciding on geographic areas to concentrate efforts include:

areas of poverty or disadvantage
areas consistent with overall bilateral country programme strategies
areas where national and regional development strategies and approaches exist
areas where a previous aid relationship exists either through the official aid programme or through the efforts of NGOs or individuals such as volunteers
areas where New Zealand is well known through strong linkages based on historical, commercial, civil society (including tourism), official, defence or sporting efforts (examples could include regions where New Zealand Police or peace keepers have been stationed or where sister city relationships exist)
areas which New Zealand might expect to have a comparative advantage over other donors by virtue of similar qualities. These could be geographic, industrial, or ethnic similarities (e.g. mini hydroelectric schemes)
areas where there is a demonstrated commitment by national, provincial or district government and administrations to development. Supporting receptive, progressive, reformist and open and transparent government or provincial administrations is more likely to yield better returns.
areas where communities are likely to be responsive to aid efforts, by virtue of literacy levels, openness, gender sensitivity
organisations (administrative and civil society) which are of a size which New Zealand can hope to form cooperative partnerships with
areas where there are few donors and therefore New Zealand’s efforts will not be lost within other donor efforts
concentrations of socially or ethnically disadvantaged groups, communities or minorities

The priorities of each of these factors and their judicious balancing will need to be determined on a case-by-case basis. In some instances need may be an important determinate, while in others previous engagement may be more critical.

Pre-conditions

Ownership and sustainability can be improved if beneficiaries are required to meet certain preconditions, as beneficiaries have a stake in what has been achieved. These can include:

sound development objectives of the development partners along with demonstrable competencies in areas like planning (strategic, programme and annual work plans), management and administrative systems. Capacity to incorporate participation, gender analysis, etc. approaches
a clear consultative process, both with the community and beyond
undertaking of certain training, such as project management or financial systems by the partner government
the provision of a local contribution through the supply of cash, labour, local materials, expertise
endorsement of proposals as being feasible by technically competent experts for, say, agricultural, fisheries, environmental or business initiatives in areas like technical, environmental, financial and commercial viability
availability of technical, environmental and business support and mentoring during implementation. This is likely to be very difficult in more remote areas because of lack of resources
endorsement by national or local government to ensure that the proposal is consistent with national development plans and objectives
allowance for ongoing maintenance and repair costs in budgets for requests involving plant, equipment or vehicles
accountability process in place. No funding should be provided until a suitable accountability process is in place.

Recurrent costs

Community groups need to generate funds for salaries, utilities, personnel development, training and consumables. Funds will need to determine if the programme will assist with core, recurrent or ongoing costs. Will NGOs be able to find these costs independent of government of donors? Are local fund raising opportunities limited and what is the extent to which partner governments will provide assistance to community organisations? Two approaches may be considered:

Overt / explicit assistance may be provided specifically for core costs either as an end in itself or as an identified cost within the budget of proposals. On occasion, a set management fee of, say, 10% can be included as a budget line item.
Including on-costs in the proposal components. Proposals may be drafted which include on-costs as a cost of providing the particular service. The on-costs are not separately identified but are rolled into project component costs.

Unsuitable activities and eligibility of sensitive items/activities

Some activities and items need careful thought on whether they can be supported under the Funds. There needs to be clear guidance in the Fund as to whether they are eligible or not.

Harsh climatic conditions and lack of maintenance regimes can seriously diminish the life of sensitive equipment like computers.
Inadequate funds for routine repair and maintenance of vehicles mean that they can quickly become unserviceable.
Sporting equipment and social infrastructure may have a limited impact on poverty elimination.

When designing the scheme consider whether there will be exclusions.

Examples of activities that usually need specific reference on the grants/criteria of their eligibility include:

vehicles and equipment (e.g. computers, office equipment, chainsaws) other than appropriate technology
consumables (e.g. agricultural chemicals and fertilisers)
domestic or international travel
disaster or emergency relief
religious or political activities, social gatherings or pageants
short-term welfare or charitable activities
major infrastructure
school fees, scholarships
compensation payments

Risk Management

A number of the above areas can be key development needs, without which development activities cannot be implemented.

One approach might be to recognise the risk and to manage it. This could be:

the provision of a motor scooter or bicycle instead of a vehicle
obtaining a commitment or providing training for the on going needs of the item
ensuring that sufficient funds are earmarked for repairs and maintenance, or
ensuring that appropriate secure storage is provided.

Untouchables

There are some activities that cannot be supported under any circumstances. These are:

payment for land
retrospective funding.

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Designing In-Country Managed Funds

~ Section B | Fund Criteria

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