Recently at the BOND website there was a good article on importance of funding local civil society organizations (CSOs) and how the mindset of some funders needs to change.   The Article is entitled “From rhetoric to reality – how do we move beyond intentions when it comes to funding local CSOs directly?”

The article tries to answer the question “Why do donors who support international causes fail to directly fund local civil society organisations, despite championing the benefits of funding locally-led solutions?”

The article notes that:

·         Less than 1% of humanitarian aid goes directly into the hands of frontline organisations.

·         Only 26% of foundation funding for Africa goes to organisations with headquarters on the continent.

The article notes that “We may not be able to offer unrestricted funding, but we can ensure that we are flexible where we can be, supporting CSOs to adapt and respond.”  

CRA’s guidance on foreign activities which I have written about here sets out the basic framework for Canadian charities operating outside of Canada.  Charities can make unrestricted grants to certain qualified donees such as the 600 foreign prescribed universities.  Canadian charities can send staff or volunteers abroad.  Most importantly Canadian charities can work with intermediaries who are not qualified donees.  These intermediaries can be small local organizations or major multinational charities.  It is the Canadian charity that decides.  In many cases using a small local organization can be a cost-effective and appropriate solution.  While the CRA guidance offers the flexibility of using small civil society organizations it is ultimately the board of the Canadian charity that determines how the Canadian charity will allocate its resources.   

For those who don't agree and think that we need changes to the legal requirement of direction and control there is an interesting quote “If stakeholders in the so-called “global north” perceive local CSOs to be lacking in capacity, more susceptible to corruption, or simply too hard to engage with, then all the legal changes imaginable will not increase the likelihood of direct funding.” [my emphasis]  It might be more beneficial for some to spend less time complaining about the rules for international philanthropy which provide a huge ( I mean huuuuuuuge) subsidy for foreign activities and instead focus on the parties that are being contracted with to achieve maximum impact.