This rapid literature review examines the advantages or added value of providing donor funding directly to Non-Governmental Organisations (NGOs) or Civil Society Organisations (CSOs) based in the global south, rather than channelling such funding through International NonGovernmental Organisations (INGOs). The literature reveals that United Nations (UN) agencies and INGOs receive the bulk of donor funding and operate as intermediaries between donors and NGOs located in developing countries (Walton et al, 2016; Ali et al, 2018). Donors prefer to operate through intermediaries in order to reduce the administrative burden of managing multiple contracts and relationships, as well as to transfer the risk of managing local partners to the intermediaries (Tomlinson, 2013; Majid et al., 2018). However, case study evidence from South Sudan and Somalia indicate that direct funding to NGOs in the south is increasing (Majid et al., 2018; Ali Al, 2018).
The evidence on the advantages or added value of direct funding to NGOs in the south is extremely limited (Moilwa, 2015). The literature is located mainly in policy documents on partnerships between INGOs and local NGOs in developing countries or new trends in funding for CSOs. It discusses the anticipated advantages of supporting NGOs and CSOs in the south but offers little evidence to support these claims. In addition, the Humanitarian Policy Network produced two case studies of direct funding to NGOs in South Sudan and Somalia. There are very few articles in the academic literature which touch on the advantages of supporting NGOs in the south.
The interest in providing donor funding directly to NGOs in the global south has increased because of the following reasons:
- The global shift in power and resources towards the south has implications for how development is undertaken (Longhurst, 2016);
- Expectations that CSOs from the BRICS2 countries and Mexico would play a prominent role in south-south development cooperation (Moilwa, 2015);
- Concerns regarding the legitimacy of INGOs (Walton et al., 2016);
- Trends within leading INGOs to shift influence to national branches located in the south (Walton et al., 2016);
- Concern that INGOs will crowd out local NGOs (INTRAC, 2015); and
- The Busan principles of ownership, results, partnership, transparency and mutual accountability (Moilwa, 2015).
The literature identifies the following advantages or added value of funding NGOs in the south:
- Sustainability: Local NGOs are able to maintain projects and programmes long after INGOs have exited (Altahir, 2016; Williams, 2016).
- Empowerment: It is widely argued that building the capacity and empowering local development actors in developing countries is an inclusive and democratic approach to development (Moilwa, 2015; Longhurst, 2016). Climate change: It is anticipated that the complexities of responding to climate change require ongoing partnerships with local NGOs and CSOs (Altahir, 2016). However, Longhofer et al. (2016) found no evidence that domestic NGOs have a positive impact on environmental policy reform. In contrast, INGOs are notably more successful in terms of influencing environmental policy (Longhofer et al., 2016). There are several risks and limitations for CSOs in the south, which should be considered in the debate on funding modalities (Moilwa, 2015):
- NGOs in developing countries may have hostile relations with national governments, particularly if they are critical of governance, corruption and human rights violations (Moilwa, 2015);
- The rising powers (including the BRICS countries) prefer state-led development with a focus on the government to government relationships (Moilwa, 2015);
- High transaction costs (Tomlinson, 2013);
- The limited capacity and ability to scale up programmes among NGOs in the south (Ali et al., 2018; Majid et al, 2018); and
- Dependence on external funding (AbouAssi, 2013).
The case studies from South Sudan and Somalia indicate that although direct funding to local NGOs is increasing, the UN agencies and INGOs still dominate the humanitarian sector. In Somalia, local NGOs received 0.5% of overall humanitarian funding for 2017 (Ali et al, 2017), while in South Sudan, local NGOs received 4.9% of total funds for 2017 (Majid et al., 2018). Evidence on the benefits of providing direct funding to local NGOs in these countries is not yet available. The literature reviewed in this document did not make reference to gender issues
