House of Commons - International Development

Select Committee on International Development Eighth Report

The Civil Society Challenge Fund

53. The new Civil Society Challenge Fund replaces the Joint Funding Scheme, an instrument by which DFID provided 'matched funding' for projects outside its bilateral country programmes. NGOs could apply to the Scheme for up to 50 per cent of the funding required for a project, and, at the end of the funding period, could apply for further resources to continue the project. Around £37 million annually has been distributed through the JFS for the past three years.[45]

54. The first resources through the new fund are due to be distributed in July 2000 (with possible backdating of funding to April 2000). Explaining the purpose of the new Fund, Frank Black said "the Civil Society Challenge Fund ... is only one of several mechanisms which we administer with the aim of broadening and deepening the engagement between DFID and civil society in the UK with a view to building on the links which civil society in the UK has with civil society in developing countries and strengthening that civil society in developing countries ... the idea of the Civil Society Challenge Fund has been to move beyond discrete development projects and to attempt to give increased voice to the poor, increased empowerment, by making them more aware of the issues that keep them poor, which will give them more influence over decision-makers which affect their lives at all levels".[46]

55. Resources under the Civil Society Challenge Fund will be allocated, from April 2000, according to priority themes. DFID has stated that "Good initiatives which meet the general criteria of the Civil Society Challenge Fund will continue to be funded, but preference will be given to initiatives in the priority areas".[47] For the 2001/02 funding round, the priority themes are:

(a) "initiatives which seek to enhance the capability of poor and marginalised people to participate in public policy formulation at local, national or international levels, including budget processes. Initiatives could either be aimed at developing the skills and know-how of poor people to interact effectively with decision-makers, or those which seek to develop poor people's understanding of local and national policy and budget formulation processes to enable more informed debate"; and

56. BOND welcomed the new Civil Society Challenge Fund in written evidence as a move which reflected "exciting new strategic priorities for DFID's funding of civil society organisations and [which] could offer significant benefits to the world's poor people".[49] We agree. We welcome the establishment of the Civil Society Challenge Fund as a special fund which has a remit to strengthen civil society in developing countries. We consider this an important element in DFID's overall programme.

57. DFID is hoping, through the establishment of the new Fund, to attract applications from NGOs which have not previously worked with DFID. Frank Black told us that "about eight per cent, roughly, of applications [were] from totally new groups, which we felt was not bad for the first round".[50] BOND was concerned about the potential increase in competition for funds, because of these efforts to attract new applicants for DFID funding, and because the new Civil Society Challenge Fund absorbs into it a number of other channels of funding which had previously been administered as separate from the Joint Funding Scheme (including the Worker's Group Development Scheme and funding for projects in Central and Eastern Europe).[51] The 2000 Departmental Report shows a planned increase in the total budget of the Civil Society Department (which also includes DFID's support to volunteer organisations) from £63.5 million in 1998/99 to £69.8 million in 2001/02. Given the priority themes for 2001/2002 funding under the Civil Society Challenge Fund, we recommend that DFID substantially expand its traditional NGO list so as to include more trade unions, labour organisations, local government organisations, private sector interests, and southern-based NGOs.

58. We invite DFID, in the light of the allocation of funds in the 2000 Spending Review, to comment on future levels of funding for the Civil Society Challenge Fund, taking into account the increased competition for funds resulting from the amalgamation of three channels of funding into one and of DFID's attempts to attract new partners. We further recommend that DFID, as suggested by BOND,[52] maintain records of sound projects which are not awarded funds as a result of lack of available resources, in order that a possible case for increasing the volume of resources available through the Civil Society Challenge Fund may be properly assessed.

59. Some witnesses expressed reservations about the administration of the new Fund. One concern related to the removal of special terms for the funding of sexual and reproductive health projects. Under the Joint Funding Scheme, where organisations were required to match funding provided by DFID by raising funds themselves, there was special provision for 100 per cent funding for sexual and reproductive health projects. Frank Black explained that this provision had been introduced "in 1976 at a time when population concern was perhaps paramount in development thinking ... and at the same time — and it may be indicative of the way society has moved on — it was considered very difficult to raise funding for the provision of contraceptive advice or the offering of contraceptive devices ... You could argue that the world has changed somewhat since then, and I would say under the old Joint Funding Scheme we do have projects with a very significant reproductive health element in them where no application has been made for 100 per cent funding and they have been funded under the 50 per cent normal JFS funding".[53] It was now, he argued, "very difficult to identify one category of projects above others"[54] which would warrant special treatment in this way.

60. International Family Health described the removal of 100 per cent funding for sexual and reproductive health projects as "a severe blow for small, specialist NGOs",[55] and pointed out that the projects mentioned by Frank Black in evidence might be run by larger NGOs with a more general remit which did not suffer the same difficulties as smaller specialist NGOs in raising funds. DFID has responded to these concerns by allowing a phasing-out of the 100 per cent funding provision, rather than an immediate halt. Funding for new projects will be provided at up to 85 per cent of the total requirement for projects starting in 2000/01, up to 70 per cent for 2001/02, and up to 50 per cent from 2002/03 onwards.[56] Furthermore, Frank Black pointed out that "the funds that we administer centrally through this [Civil Society] department are by no means the only funds going to this kind of work; funding continues to be made through our own country programmes, through our contributions to international organisations and so on. There has been more DFID funding made available to reproductive health as a matter of policy. There are also funds run by our Health and Population Department, particularly for innovative work, which supplement, if you like, the funding available through [the] Civil Society Challenge Fund".[57]

61. We consider the assertion that "the world has changed" and it is no longer difficult for specialist NGOs to raise funds for sexual and reproductive health projects to be a naive and incorrect one. It is our view that there continues to be a strong case for the provision of 100 per cent funding for innovative or catalytic projects in this field. It may well be the case that the new Civil Society Challenge Fund is not an appropriate instrument for such funding, and we are reassured by the fact that there are other channels through which it may be obtained. We request that in its response to this Report, DFID provide details of the level of funding available through these additional channels, what is the process for applying for funds, and by what criteria they are allocated. Overall, we would not wish at this stage to see a net reduction in the levels of resources available for non-governmental sexual and reproductive health projects.

62. We recommend that DFID conduct and publish an early analysis of the difficulties in raising funds for sexual and reproductive health projects compared to projects relating to other policy areas, and that, on the basis of that analysis, DFID review its funding mechanisms for NGOs running such projects. More generally, it would be wrong for the funding mechanism to have as a result that support is skewed to causes which find it easier to raise funds from the public. We look forward to learning from DFID how it intends to prevent such distortions and ensure that its development objectives are met.

63. Whereas under the Joint Funding Scheme it had been possible to apply for a second tranche of funding for a project, there will be a five-year limit on the duration of funding for projects under the CSCF. Frank Black explained that "[in coming to a decision] we recognised development, particularly the kind of capacity-building we are talking about here, takes a long time, it is not a short-term process. You are talking about attitude-changing and so on ... We had to balance an awareness of this with maintaining funds for new applicants for new projects".[58] We recommend that DFID provide details of other funding channels which may be used by NGOs which have received funding under the CSCF for a project, and wish to apply for further funds to continue the project.

45 DFID, 1999 Departmental Report Back

46 Q. 181 Back

47 Evidence p. 63 Back

48 Evidence p. 63 Back

49 Evidence p. 113 Back

50 Q. 189 Back

51 Evidence p. 114 Back

52 Evidence p. 114 Back

53 Q. 182 Back

54 Q. 182 Back

55 Evidence p. 99 Back

56 Evidence p. 63 Back