Working with Civil Society Organisations
Funding Principles and Practices
The NZ Treasury document Guidelines for Contracting with Non-Government Organisations for Services Sought by the Crown outlines key principles underpinning funding of NGOs (CSOs) and aspects of relationship management that Crown agencies need to take into account. These guidelines are reflected in the funding arrangements offered by NZAID.
In the funding area, NZAID has committed through the Strategic Policy Framework for Relationships between NZAID and NZ NGOs to operating procedures including:
- Allocating resources against clear and consistent criteria;
- Developing funding policies that take account of the roles and objectives of NGOs;
- Consistent and transparent processes throughout the whole funding cycle;
- Recognition of value of multi year funding; and
- Recognition of importance of sound organisational infrastructure and where appropriate the provision of capacity building to support this.
These operating procedures are relevant to funding of non-New Zealand CSOs as well as in-country CSOs.
CSOs which receive NZAID funding are expected to maintain high standards of governance and conduct, and to satisfactorily meet their reporting and accountability obligations.
“Many of our development partners face substantial public and private sector capacity challenges in their efforts to improve macro-economic management and strengthen the environment for further, sustainable, private sector growth. Accordingly, NZAID will place a high priority on institutional strengthening and other capability-building efforts in these areas, for both government and appropriate private sector and civil society organisations (such as chambers of commerce and trade unions). This may involve support from both our bilateral and our wider regional and multilateral programmes.”
Economic Growth and Livelihoods; NZAID; page 26
Monitoring and Evaluation Costs
Evaluative activities contribute to a reflective culture in which NZAID and its partners learn from successes, failures, and the work of others to improve the quality and development effectiveness of programmes. It is therefore expected that NZAID-funded CSO programmes/Activities will include appropriate provision for monitoring and evaluation (M&E), with preference for participatory approaches which strengthen local capacity.
NZAID’s standard figure for contribution to the M&E of a programme implemented/managed by a New Zealand or international CSO is 5% of the Activity budget. This is a contribution towards the costs associated with activities in-country (i.e. costs for consultants to undertake M&E are included, but not payment of NZ CSO staff salaries during M&E visits).
When funding an Activity implemented by an in-country CSO, or a particularly innovative Activity implemented by a CSO as a pilot or for demonstration purposes, NZAID may choose to negotiate a higher figure for M&E taking account of the specific context. This negotiation should ensure that the M&E is cost effective in relation to the overall costs of a programme or Activity; and that the M&E process is adequately resourced to achieve its purpose.
Related Link: NZAID Guideline on Activity Monitoring
Administration and Management Costs
NZAID recognises that it is reasonable for CSOs to utilise a small percentage of the funding they receive, to cover essential costs of running an organisation which are not related specifically to programme delivery.
NZAID’s standard contribution to the administration and management of a CSO is 8% of the total programme costs. This does not apply where NZAID is providing core funding to a CSO (i.e. funding ear-marked for the administration and essential operating costs of an agency).
In some circumstances a higher figure may be negotiated to take account of a specific context. Things to be considered in such negotiation include:
- Strategic fit with NZAID’s programme
- The extent to which the CSO’s stakeholders ‘own’ and contribute to the organisation’s budget
- Assessment of risk
- Sustainability
- An Activity exit strategy.
Where the CSO plays a lesser role in administration and management of an Activity (for example, where a NZ CSO accesses NZAID funds for an Activity implemented by their partner) the administration and management contribution to that CSO should be lower than the standard figure (a figure of 2% may be more appropriate).