Exploring donor-CSO relationships, power shift and accountability linkages

May 27, 2022

 

 

 

During a recent interview with Eszter Filippinyi, deputy director of the Transparency and Accountability Initiative (TAI), a donor collaborative promoting citizen empowerment and government openness, we talked about how donors are dealing with CSO power shift and mutual accountability.

GS: How do TAI and its members address power shift by empowering local CSOs in international development and humanitarian assistance? How do accountability relationships come into play in these efforts? What kind of accountability? and whose accountability to whom? 
EF: TAI members are mostly US-based private foundations which have already been supporting local CSOs, grassroots organizations, and frontline activists. During our TAI steering committee retreat last April, a recurring term was around localization of funding. This involves transferring a larger volume of funding to local civil society actors, as well as encouraging the establishment of local funding mechanisms such as Fundo Casa in Brazil or Fondo Socioambiental Emerger in Colombia, and rethinking the role of INGOs as not just re-granters but accompanying local CSOs. While there is a clear trend towards shifting funding to local organizations from the Global South, there are ongoing conversations about what shifting power truly means and how to get it translated into practice.

These conversations also entail discussions around particular terms: What does ‘Global South’ mean? Is it only a geographic reference, or should we speak about those privileged and underprivileged – regardless of wherever they are located? How do we define which organization is considered a local one? These are important questions when aiming to shift power.

In this regard, we often hear statements like ‘indigenous communities are the best guardians of the forests’, meaning we recognize that local people will be best placed to propose and implement solutions. Yet, funding local indigenous communities is very different from supporting a capital-based NGO with English speaking staff.

One of the first and most important issues for a donor is to recognize its position of privilege while also approaching partners with humility and openness. When building collaboration with groups in specific local geographic areas, we will most certainly come across different cultures, norms and values, as well as power dynamics. Investing time in understanding them and listening to partners will help to build the trust which is necessary for any fruitful relationship.

Trust might also contribute to donors becoming less controlling. A series of case studies demonstrated that unrestricted funding strengthens CSOs’ legitimacy and efficacy to hold their governments to account. In addition, these cases evidenced that CSOs were able to react to emergencies and be more responsive to local needs rather than concerned primarily with donor interests (which can be problematic particularly because donors are not, themselves, accountable to local governments or citizens). Unrestricted support will also enable local groups’ participation in global spaces on their own terms. Global norms that are rigid and unresponsive to, or demand that local cultures and values be abandoned in order to adjust to the dominant global culture, are more likely to meet resistance and thus be less helpful.

When donor organizations speak about grantees’ accountability, they often think about their internal financial systems and reporting standards. Having strong administrative systems does not necessarily relate to one’s capacity to implement solutions, but rather serves as a prerequisite for partnering with international actors. Donors, including TAI members, are thinking about ways in which grantmaking can become more trust-based, simplified, flexible and adapted to specific local contexts. For instance, some donors have been discussing (and testing) participatory strategy design – which of course comes with its own challenges.

Experiences such as Ford Foundation’s Building Institutions and Networks (BUILD) initiative, the organizational effectiveness programs at the William and Flora Hewlett Foundation and the Packard Foundation, and True Cost initiative of the McArthur Foundation show that providing supplementary and dedicated funding that targets CSO organizational health explicitly gives grantees the focus, resourcing, and accountability needed to address key  issues. In the case of the MacArthur Foundation, it increased CSO indirect costs rates from 15% to 29% on project grants.

GS: Given the lessons learned of transferring power to other sectors (for instance, local governments during the decentralization processes in the 90s in Latin America), how can this be accompanied by holding accountable those newly empowered actors – in this case CSOs from the Global South?
EF: Studies show that local partners, especially those that are community-based, tend to operate with higher levels of accountability, both internally (due to more democratic structures) and externally (as representatives of their own communities). So, when one talks to a community-based organization, as opposed to a think tank in a capital city, the underlying accountability relationships differ significantly. The resulting legitimacy can be helpful at multiple levels: such groups can be well positioned to advocate for policy and structural changes within their own political contexts.

Funders engage in mapping organizations and, when this is done with the aim of providing resources and – if needed – building skills, it can help organizations to become more effective, transparent, sustainable and accountable.  For instance, a potential area for funders is to support discussions about what appropriate local governance and board functions look like that combine accountability and that are responsive to local context. Tools like the Global Standard for CSOs Accountability can be a useful tool in this process, yet the extent to which it can be implemented more successfully will vary depending on a CSO structure and size, so it will require to be tailored to the particularities of an organization.

At the same time, local organizations feel increasingly frustrated by the amount of administrative burden from donors. They also speak up about inequities and demand accountability of the philanthropic sector. One such recent reaction came from FRIDA that received USD 10 million donation from McKenzie Scott, saying: “We acknowledge the source of MacKenzie Scott’s wealth and its association with one of the most exploitative companies in the world… And we are returning this funding to the communities” Money is political — FRIDA | Young Feminist Fund

GS: Given the increased shrinking civic space across a wide range of countries, to what extent can CSO accountability contribute to a stronger civic space? How can TAI and its members encourage a stronger civic space?
EF: As the passing of laws to restrict rights to freedom of association, assembly and expression has increased significantly during the past few years, there is more need than ever to build strong solidarity networks. The organizations that have been working with their constituencies, while also being accountable to them, enjoy greater solidarity and moral support in restrictive environments. In addition, CSO transparency can become a key element for accountability when confronting restrictive civic spaces, as illustrated by the example from the Egyptian Initiative for Personal Rights.

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In this Strength & Solidarity podcast, Gasser Abdel-Razek told host Akwe Amosu how – in a moment of crisis – professionalizing his organization actually helped keep staff safe.

In November 2020, Gasser Abdel-Razek, Executive Director of the Egyptian Initiative for Personal Rights (EIPR), and two colleagues were detained by the Egyptian authorities and charged with spreading false information and working for a terrorist organization.

Interestingly, Gasser Abdel-Razek felt calm during the interrogation. He later said: “I was comfortable talking about the structure of our organization because it was all known”, while also adding, “Everything, the funding, the contracts were published – I didn’t feel like I was giving them any secrets.”

Therefore, EIPR’s decision to build a strong, transparent governance structure in the wake of the 2013 coup ended up being time very well spent.

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Also, given existing funders’ support to platforms like the Open Government Partnership, OGP can be encouraging inclusivity and truly local representation. The rapid growth of the OGP Local Program is an interesting experiment where this issue can be addressed, in particular, CSO accountability towards their primary constituencies or communities in which they operate.

GS: How can donors collaborate with CSOs to promote common minimum standards towards mutual accountability? 
As donors channel more funds to local civil society, they may need to explore collaborating with local fiscal sponsors, who accompany and support local civic organizations. Strengthening these intermediary mechanisms for local civil society support through familiarizing them with minimum standards of accountability could have multiplying effects. It may also require easing administrative burden on local CSOs through simplified reporting or/and aligned reports.

In addition, the power shift requires that the philanthropic sector also becomes more accountable to the civil society organizations supported. In this regard, there are some efforts such as the toolkit on transparency and accountability in philanthropy and private social investment developed by the Worldwide Initiatives for Grantmaker Support (WINGS). Yet, there is ample room for improvement in the near future. Even though much of human rights and environmental philanthropy claim to be progressive, there seems to be lack of diversity on their teams and boards, and even at the top levels of the leadership of US grantees. According to an articlepublished by Alliance, not only do black-led organizations receive on average 24% less revenue than white-led organizations, but black-led organizations also own 76% less in unrestricted assets, with unrestricted funding as the ultimate sign of trust. Further, for all the attention being placed on supporting Indigenous Peoples’ rights, less than one half of one per cent of philanthropic funding goes towards supporting Indigenous Peoples.

In philanthropy, we talk a good talk about the need for systemic change, but we are hesitant to do that important internal and external transformation that is imperative to making those strides. That means we need to stop talking about supporting groups with diverse and representative leadership and just start doing it. For example, it might entail like actively seeking out and supporting black, indigenous, and people of color-led organizations in their work to hold corporations and parts of the financial sector accountable for continuing to fund, insure and invest in the oil and gas industries to the detriment of people and the environment.