IFAD and NGOs, Dynamic Partnerships to Fight Rural Poverty

A booklet introducing IFAD's collaboration with NGOs and civil society, produced by the NGO Coordination Unit in IFAD. May 2000. English version: Download (888 kb), French version: Download (898 kb), Spanish version: Download (899 kb)

This 32-page booklet provides an overview of IFAD’s collaboration with NGOs. It describes the efforts that IFAD has undertaken in collaboration with NGOs to achieve its goal to combat hunger and rural poverty in the low-income, food-deficit regions of the world and to improve the livelihoods of rural people on a sustainable basis. As the booklet also provides an overview of procedures and criteria for NGO selection, it serves as a good introduction for NGOs interested in collaborating with the Fund.

Report on the 10^th IFAD/NGO Consultation Download (210 kb)

This Report documents the discussions and recommendatons of participants on the issues raised by the Consultation's Overview Paper [insert link to Overview paper] on the theme: "IFAD/NGOs/Governments: Tripartite Partnerships for Poverty Alleviation and Food Security, through Projects and Progammes."

Apart from the recommendations on ways and means to create a more effective framework for collaboration in projects, the Report also provides the Consensus Statement that emerged on new partnerships that need to be forged to address the broader poverty reduction agenda and the interantional proverty reduction targets. The domains identified for joint action are:

• grassroots empowerment and enrichment processes;
• policy and institutional development processes; and
• knowledge development and sharing processes.

The Report includes the Agenda and List of Participants, the key addresses of the Opening Session, and the major statements made by participants.

Overview Paper for the 10th IFAD/NGO Consultation

IFAD/NGOs/Governments: Tripartite Partnerships for Poverty Alleviation and Food Security through Projects and Programmes. Download (218 kb)

This analysis of IFAD/NGO collaboration is based upon case studies from Armenia, Benin, Chile, India and Zambia. The paper identifies several positive characteristics of NGO involvement in IFAD operations, with grass-roots institutional development and effective delivery of services being common features in all. This notwithstanding, the overriding conclusion was that the framework within which IFAD, NGOs and governments come together does not permit exploitation of the full potential.

In spite of the importance IFAD attributes to collaboration with NGOs, there is very little operational collaboration in the field directly between IFAD and NGOs. Although NGOs participate in IFAD grant programmes, are periodically consulted on selected policy issues (e.g., through the Consultations) and increasingly take part in country strategy articulation, to date their most substantive involvement relates primarily to the projects and programmes financed by IFAD loans to governments, the latter being responsible for implementation in accordance with modalities agreed upon with IFAD and defined in the project appraisal reports and the loan agreements. Strictly speaking, an IFAD project is a government project funded by an IFAD loan. Cooperating institutions, selected by IFAD, become responsible for the supervision of the projects. IFAD never implements, and very rarely supervises, directly. In practice, in the field, the stated IFAD objectives can be achieved only through NGO collaboration with governments in IFAD-financed projects.

The Overview Paper argues that the framework within which IFAD, NGOs and governments have come together to date does not fully reflect the strategic importance IFAD is increasingly attributing to NGO collaboration. Neither does it always allow for the selection of the most appropriate NGO partners. Perhaps, most importantly, the paper argues that the framework does not always readily enable NGOs to add the full value of their special features and experiences or to mobilize their specific knowledge and resources in favor of the rural poor.

There has been little participation of NGOs in the conceptualization and design of poverty-reduction operations. Most projects involve NGOs as service providers on the basis of approaches and parameters set by design teams. NGOs have yet to assume a role as concept initiators – a term coined by the author of the Overview Paper to indicate independent actors in their own right, who bring to bear their approach and field experience and exercise decisive influence over how rural poverty and solutions to it are understood, and how answers are implemented.

Actual collaboration in the field is based on contractual relations between public managers and NGOs, and contracts tend to specify quantitative rather than qualitative parameters, although the reasons to contract NGOs and not consultant firms or other public or private-sector operators is precisely the difference they make in quality and in such long-term objectives as institution-building and the organizational and knowledge empowerment of poor people. Most contracts are derived from typical public-sector procurement contracts and have not been adjusted to these specific needs. The authority of the implementing NGOs is confined to varying degrees, but sometimes essential parameters having a direct impact on the quality of results, such as the choice of individual villages, activities or target groups, are made by the project authorities rather than NGOs or, at most, in consultation with them.

Collaboration in the five case studies has focused on project implementation alone. NGOs have not been involved in actual management of projects. They have had advisory responsibilities in national or regional coordination committees, but little, if any, delegation or decentralization of authority took place. The paper suggests that, while care should be taken to avoid conflicts of interest, more effective partnership relations can be promoted when governments are ready to delegate some management authority to NGOs.

In relation to the accountability of NGOs, since they must be held accountable for the proper use of public funds, the Overview Paper proposes that this should apply not only to NGOs but to all implementing institutions, as well as to the project authorities themselves. Moreover, the criterion of accountability is something that has to be taken seriously in all its aspects — not least as it refers to accountability to the beneficiaries, the rural poor.

The most controversial issues in the collaboration between projects and NGOs are the financial aspects. Project authorities and governments rightly consider the IFAD loan funds as public resources. However, under public expenditure rules and regulations, the concept of a partnership, with joint decision-making, does not exist, and the tendency on the part of projects to offer only service-provider arrangements is strong, unless this is specified otherwise in the loan agreement. In effect, collaboration with NGOs then becomes a contractual arrangement with a third party to carry out a number of prespecified tasks. Whether this allows the mobilization of the comparative advantage of an NGO’s experience and approach again depends crucially on how the terms of the contractual arrangement are defined. Naturally, all parties in these agreements try to safeguard as much as possible their own autonomy and mandate. Whether the NGO is in a position to do so depends largely on its resource base and its programmatic independence.

The paradox of NGOs with slender independent resources is that association with projects strengthens them materially, but weakens their vision. In other words, from the point of view of projects, contractual relations might weaken precisely what is valued – that is, what the NGO brings to the project as opposed to what it gets from it.

By being inflexible, contracts do not allow NGOs the freedom to adapt their approach in response to local situations necessary to ensure local ownership and sustainability. Insistence on service provision could lead to loss of independence and compromise the NGO position as advocates on behalf of the poor and marginalized. In other words, contractual agreements may contribute to a distortion of the NGO sector, with a rapid growth of NGOs who are encouraged to abandon their own ideologies and programmatic approaches to deliver the services that aid agencies demand. In addition, the pressure to become more "professional" in order to implement contracts efficiently might detract from the desire to develop close and long-term relationships with communities. It might also make it difficult to make the most marginalized people and communities the priority.

Project support may over-stretch individual NGO capacity. Short-term contracts constitute a constraint on continuity, institutional capacity and experience-building and increase staff turnover. Selection processes do not apply agreed-upon criteria, which can lead to inappropriate choices of NGOs and additional expenditures for institutional support. Even when bidding is the basis of selection, tampering with criteria can occur and the wrong choices may be made.

The dangers are not just for NGOs. In some instances, collaboration between governments and NGOs has led to government staff being lost to NGOs, while in other instances, NGOs’ own activities suffer from the impact of project activities on the institutions, their resources and capacities. Therefore, it is necessary to start examining the institutional down side of many existing relations for all partners and think about developing more mutually supporting relations. And there is clearly an urgent need to think carefully about how to create relations that encourage and strengthen independent approaches – rather than stifling them.

Case Studies: Armenia, Benin, Chile, India, Zambia

Case study: Armenia. North West Agricultural Services Project Download (115 kb)

This study analyses IFAD/NGO/government tripartite partnerships, in a case where an international NGO, Armenia Technology Group (ATG) works next to a local organization, SHEN. It states that the very nature of the two types of organizations has a substantial impact on the outcome of the collaboration. Where the international organization has technical expertise, the local NGO has intimate knowledge of the local environment. Where the first has specified a contractual programme of work, the latter has difficulties with the government partners, in spite of good, direct communication, in defining clear lines of responsibility. The study also shows, maybe more surprisingly, that local roots do not ncesessarily guarantee better beneficiary participation.

Case study: Benin. Income-Generating Activities Project and the Microfinance and Marketing Project Download (256 kb)

The purpose of this report is to analyse the IFAD/NGO/government tripartite partnerhips in the context of the Income-Generating Activities Project (Projet d'Activités Génératrices de Revenus — PAGER) and the Microfinance and Marketing Project (Projet de Microfinance et Commercialisation — PROMIC) in Benin. The analysis illustrates how the approach of a specialized local NGO, SYFIPRO, has led to an innovative participatory effort in the promotion of financial services associations, responding strongly to the needs of small rural producers. Such positive collaboration has reduced scepticism towards NGO collaboration at the government level, increased community awareness of governmental initiatives and thus allowed IFAD to reach its objectives. However, the analysis also shows that a relatively weak NGO sector, which includes weak management and limited operational and financial capacity, leads to an unintended dependency by the NGOs on government and donor objectives, technical support and financing.

Case study: Chile. Agricultural Development Project for Peasant Communities and Smallholders of the Fourth Region Project Download (112 kb)

This study identifies and analyses the tripartite mechanisms and relationships among IFAD, the Government of Chile and NGOs in the context of the Agricultural Development Project for Peasant Communities and Smallholders of the Fourth Region. One of the major conclusions is that, with the return of democracy and the recent economic growth, traditional financial support has been rechannelled away from NGOs to government. This, and the competitive awarding of contracts, has led to NGOs gradually losing their identity and abandoning their development objectives and strategies because they have to focus on carrying out government actions built on strategies that are not necessarily identical to theirs. Agricultural NGOs have been relinquishing their leading role in rural and agricultural development and limiting their work to the areas indicated by the public sector, with little space for independence.

Case study: Maharastra, India. Maharashtra Rural Credit Project Download (184 kb)

The purpose of the study is to assess the nature of collaboration between NGOs and the Government in the Maharashtra Rural Credit Project (MRCP), with particular emphasis on the role of NGOs in targeting and empowering the rural poor, especially women. The study situates the impact and comparative advantage of NGOs within the process of interaction in MRCP among NGOs, the Government and IFAD.

MRCP, through NGOs, attempts to inculcate habits of thrift and saving among rural poor women by facilitating the formation of self-help groups (SHGs) and establishing linkages between these groups and banks. Fieldwork was carried out in phase-one villages in the Pune, Chandrapur and Yavatmal districts in Maharashtra where SHG activity is four years old. The work of seven NGOs was assessed through visits to their villages, interviews with beneficiaries, Village Development Committee (VDC) members, Panchayat members and project agencies.

The value added of NGO involvement was assessed by examining SHG group activity in four different models: bank-contracted NGO, NGO contracted by the Women's Economic Development Corporation (MAVIM): a parastatal with the mandate of assisting women for their social and economic progress) — contracted NGO, MAVIM efforts through its field workers (sahayoginis), and bank efforts through field officers/sahayoginis. The benchmarks for comparison were the functional competencies of SHGs (ability to keep records, borrow from the bank, usage of funds for productive or consumption activities); evidence of empowerment (were women vocal in village meetings? Did they act together as a group to pursue social and economic activities? Group activities such as hiring out vessels for marriages, fodder sale, etc.? ); and the ability of SHG groups to function independently of field workers (measured in terms of frequency and nature of contact between the two). NGO-assisted villages were compared with those aided directly by MAVIM and banks. The nature of institutional inputs provided by IFAD and the Government was assessed through a comparison between the villages of an NGO working in MRCP and a German-sponsored watershed project.

NGO performance has been mixed, with a number of NGOs functioning below expectations. The few that have performed well in terms of empowerment, group cohesion and vibrant self-help groups have tended to be either very large NGOs, with manpower, infrastructure and technical resources, or very small NGOs that have worked in one or two villages intensively. Only small NGOs have managed to effectively combine the credit and non-credit aspects of MRCP by empowering members of SHGs below the poverty line to the point of their being able to use credit, engaging in social awareness and environmental programmes and involving the entire village, particularly the Village Development Committee (VDC), in the nurturing process. Self-help villages rather than groups have been the outcome of small NGO activity in MRCP.

The rest, particularly medium-sized NGOs fall between the cracks as a result of stretched manpower resources, over-diversification of activities and inability to effectively manage project implementation. These NGOs are plagued with problems of low morale among their field staff caused by low wages, inadequate backup and training by headquarters, in flexibile procedures and regulations, and rapid turnover.

In Pune, MAVIM and large NGOs such as Chaitanya and Grameen Mahila va Balak Vikad Mandal have turned in good performances with regard to SHG groups, entrepreneurial activities and empowerment. In Chandrapur, banks and MAVIM have outperformed NGOs (except perhaps one large NGO, Ami Amchya Aarogye) in the credit and non-credit aspects of MRCP. In Yavatmal, despite their relatively recent entry, small NGOs have turned in a superlative performance when compared to MAVIM, banks and large NGOs such as Subah.

Collaboration between NGOs and the government has been marked by indifference on the part of the latter and suspicion on the part of the former. NGO involvement in policy and planning has been non-existent despite project design elements that mandated their participation in district-level planning committees and in the core project groups. NGO coordination with banks, particularly in the establishment of VDCs, has tended to vary depending on the personalities of bank staff. Small NGOs have generally managed to establish better relations with banks than medium and large ones because of the personal commitment and performance of the NGO directors.

One of the success stories of MRCP is the ability of semi-government bodies to function in an effective manner. This proves that given the funds and room for flexibility, government agencies can be just as effective if not better than NGOs. Overall, MAVIM, the parastatal agency, has turned in a better performance than NGOs. This is principally due to: a strong group of village-level workers; a District Implementation Unit (DIU) that holds monthly meetings to monitor progress and provides timely backup; a strong training component that provides support to field-level staff in record-keeping, building and nurturing groups, empowerment of women, and health and education. Much of the credit goes to MAVIM's committed field-level cadre who have benefited from intensive and periodic training of sahayoginis, high recruitment standards, flexibility, and good wages. These characteristics are exhibited by some large NGOs such as Chaitanya, Ami Amchya Aarogye and very small ones such as Dilasa and Yuva Vedh Manch. The upshot is that the Government can perform well in developmental activities if it follows decentralized implementation procedures and provides training and infrastructure to its staff.

A surprising finding of the study is the excellent performance of some bank-assisted self-help groups and villages. Where the field officers, branch managers and sahayoginis appointed directly by the bank have been active and committed, the village as a whole has been involved in the project. Dynamic village development councils have been instrumental in raising social awareness of men and women in the village. However, as a sustainable model to incorporate the rural poor into formal credit, there are several difficulties, which include the variability of individual commitment, institutional indifference of banks towards empowerment, and banking focus on credit rather than non-credit activities.

A key contribution of MRCP has been increased exposure of banks and government to the needs of the rural poor. The 100% loan recovery rates in MRCP villages (up from 30-50%) has made bankers well disposed to SHGs and dispelled myths about the poor being bad risks. But several problems remain, including difficulties experienced by MAVIM — and NGO — nurtured SHGs in linking with banks as a result of misinformation on bank procedures, slow processing of loan requests and refusal by banks to lend to the SHG if even only one member is a former defaulter. Attitudinal changes are slow and will take time before the entire banking sector can be said to be people oriented. The regional rural banks are already proceeding in that direction and have taken up MRCP concepts with great gusto (see discussion on bank models).

The poorest groups have been excluded from SHGs by medium and large NGOs and MAVIM. Only small NGOs have successfully integrated this segment of the population as a result of concerted and intensive activity in the villages. The poor have been included in self-help groups of small and large NGOs and MAVIM, but medium NGOs have demonstrated unsatisfactory targeting as a result of internal institutional problems of NGOs (such as inadequate backup of field workers).

The study found that NGOs had a major role to play in tribal areas as a result of the special nature of tribal needs, which require intensive interaction, patience and commitment. Small and large NGOs with a lengthy field presence in tribal areas have performed well.

Thus the main areas where NGO-government collaboration could be improved include: (a) consultation on selection of project sites; (b) sustained and periodic joint meetings between government functionaries and NGOs/MAVIM which explain the objectives and expectations of both agencies; (c) better utilisation of NGOs in tribal areas, and in their areas of comparative advantage; and (d) focus on improving marketing and training of NGOs, SHGs and fieldworkers.

Case study: Zambia. Southern Province Household Food Security Programme Download (143 kb)

Summary: This case study examines the role of two international NGOs, CARE and the African Reinsurance Corporation (AFRICARE), in the IFAD-funded Southern Province Household Food Security Programme (SPHFSP). The NGOs implemented three of the eleven components in SPHFSP between 1995 and 1999: rural roads (CARE), rural water supplies (AFRICARE) and seed multiplication (AFRICARE and Government of the Republic of Zambia). The activities of these NGOs merit attention for several reasons:

• The approaches by the NGOs were innovative and could provide models for future IFAD programmes.
• It is the first time that NGOs have implemented part of an IFAD-funded loan to the Government of the Republic of Zambia . An analysis of the problems undertaken by the tripartite partnership among IFAD, the Government and NGOs may facilitate future projects of this sort, several of which are ongoing or planned in Zambia.
• In 1999, halfway through SPHFSP, the Government decided not to renew the contracts with the NGOs for the water and roads components. This decision was prompted by perceptions that will be discussed in this case study.

The SPHFSP involves four main parties, the community, NGOs, the Government and IFAD. Each party has different perceptions about the effectiveness and approach of the NGOs.

Not surprisingly, the NGOs have a favorable view of their efforts. They cite numerous benefits they have brought to the community and the Government through implementation of their components. Within GRZ and IFAD, reviews are mixed, with some strong supporters and others who feel that the water and roads components would have been better implemented by the Government from the start. Without exception, members of the community were positive about the impact of the NGO components. During interviews with the four parties, certain perceptions about NGOs and their operations tended to be raised. These were:

• NGOs have high unit costs.
• NGOs add value to civil works through community mobilization.
• NGOs add value by locating civil works using participatory methods.
• NGOs add value through links with other programmes they implement.
• NGOs add value by supporting the small-scale private sector.
• NGO overheads are too high, especially the portion spent outside Zambia.
• NGOs provide financial control and accountability.
• NGOs supported SPHFSP with their own resources.
• NGOs have technical capacity not present in the private sector.
• NGOs take credit for the Government initiatives.
• NGOs add capacity to the Government.

The primary criticism of the NGOs is that their programmes cost more and produced less impact than direct implementation by the Government and private contractors would have. This is a particular concern because IFAD funding is in the form of a loan to the Government. Generally, the NGOs accept that their costs per unit (per well or dam or kilometer of road) may be higher, but the quality of the works is also high and their approaches to development add value and enhance sustainability in less tangible ways. Two key approaches taken by the NGOs were to involve the community in the implementation process as much as possible and support the growth of the private sector at the grass-roots level.

The overhead costs are the most problematic element for the Government, especially the portion used by the NGOs to support their head offices. The NGOs counter that their being part of a larger, international organization provides benefits that are not found in local NGOs or private-sector companies. These include strong financial controls, financial resources outside the project and technical expertise. As an example of the latter, the study mention CARE’s ability to put up USD 600000 from their own resources before receiving their first reimbursement, an act that permitted operations on the ground to continue unimpeded during the first year of implementation.

Finally, there is a perception among some the Government staff that NGOs took credit, in the minds of the community, for civil works built using the Government funds. Although this may seem to be a petty concern, it is symptomatic of larger issues relating to communication. This perception came as a surprise to the NGOs, who felt they were enhancing the Government capacity. This case study examines each of these perceptions, based on field visits and interviews with the Government staff, the NGOs and members of the community.

The overall conclusion of this case study is that while NGOs are more costly, mostly due to overheads, the latter are more than justified by increased sustainability. It should be noted that it is too early to make a definitive judgement about the sustainability of NGO activities, since two components ended in late 1999 and one continued into 2000. However, there are numerous indicators that the NGO's approaches are likely to result in longer-term impact than traditional implementation by the Government through its agencies and private contractors.

Discussions with community members during the field visits indicate that all three NGO components have been successful and have attained the impact anticipated in the original staff appraisal report (SAR).

The recommendations of the case study centre on the urgency to improve communication between the three parties in the project, both before and during implementation. More specifically, there must be:

• more communication before implementation, in the form of a memorandums of understanding, on subjects such as overhead rates, monitoring and impact indicators, financial reporting requirements, performance targets and post-project disposition of assets; and
• more communication during implementation to resolve problems quickly and promote equal ownership of project accomplishments.

IFAD's Workshop on Rural Poverty: Civil Society Organizations and their Role in People's Empowerment and Rural Poverty Eradication

This report provides an in-depth analysis of the status of civil-society organizations today, their ability to participate in the fight against rural poverty, and their participation in IFAD’s operations in the field. The report was produced in the context of developing IFAD’s Rural Poverty Report 2001 to provide an NGO perspective.