Final Draft December 2009 Bhavna Sharma, Marta Foresti and Leni Wild Table of contents

6.3. Capacity building

Capacity building is essential to enable NSAs to play a constructive role in the development process. It should not be seen as a final objective, but as a means of attaining development goals. Different processes can have an impact on the capacities of an organisation, but only those processes that are truly owned and initiated by the organisation itself will be fruitful in the long term. Building capacities is not a “one-shot” exercise but a long term process that needs commitment and confidence between actors⁵⁶.

In general, capacity building should support NSAs:

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  To improve internal structure and organisation, constituency building (broadening networks), the development of leadership qualities, the development of analytical and advocacy skills, sustainable fund raising mechanisms, etc
  
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  To perform an advocacy role vis-à-vis Government, both at central and district level, ensuring that the needs of the grassroots are represented at all levels. Related to this is increasing the capacity of civil society actors for policy analysis and dialogue.
  
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  To perform a monitoring role vis-à-vis the State institutions or vis-à-vis a particular issue of general interest.
  
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  To act as service providers. The financial and organisational management capacity of CSOs needs to be strengthened if they are to be involved in public service delivery, and if the quality of such service delivery is to be ensured.
  
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  To improve the research capacities in order to focus interventions on pro-poor development policies, to articulate poor communities’ concerns and governments’ and donors’ agendas and to identify best practices to be replicated or adapted to other contexts facing similar development challenges.
  

In order to ensure a stronger impact and a greater degree of viability in EC support, it is no longer necessary to manage a series of calls for proposals and tendering projects, but to actually implement the new political and cooperation agenda of the EC. Similarly, there is a need to focus on the political dimension of capacity building. In terms of new aid modalities, capacity building should focus on building the specific capacities of organizations to be involved in macroeconomic or sector reforms, leading to an ability to participate in GBS or SPSP processes.

Capacity development to support NSA engagement in budget processes could include⁵⁷:

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  Increasing budget literacy – NSAs (usually NGOs) can build their skills and capacity to understand the budget process including the budget cycle timing and process, the main stakeholders, designing a budget and the impact of a budget allocation. In turn they can provide training for members of parliaments, media, other CSOs, to enable them to participate more actively in budget processes. Further work can involve the mass media to disseminate information on the budget and increase public awareness and participation in budget discussions;
  

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  Budget analysis or review – NSAs can analyse government budgets, often from a pro-poor or gender perspective, and present their critique to parliament or to the general public. These can focus on national budgets, or on budgets of local governments and authorities;
  

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  Formulation of alternative budgets through participatory processes which can then be presented to government or the media.
  

Box 18: Capacity building of NSAs in the framework of a GBS
The Zambian Poverty Reduction Budget Support Programme II 2007-2008 (PRBS II), includes €2 million which has been earmarked for associated capacity building, in addition to GBS. Thus, funding civil society will help to ensure improved monitoring of the PRBS. The Financing Proposal highlighted that “The previous PRSP enjoyed a high degree of ownership, being elaborated in a highly consultative way. The recently disclosed FNDP should follow the same route; a National Stakeholder Meeting ….provided the basis for a broad participatory process. Within the PRBS02, civil society will continue to be involved, notably by looking at the poverty impact of the PRBS programme.”
Capacity building funds were made available in conjunction with GBS. Activities included strengthening data quality, improving NSA participation in assessing the impact of PRBS operations, capacity building activities for Parliament (research, studies, training and workshops) and a local CSO umbrella organisation called the Civil Society for Poverty Reduction (CSPR), which was identified to be the only suitable and capable interlocutor in this area of intervention, having established relationships with the Government and with other partners.
Source: The participation of NSAs in poverty reduction strategies, sector approaches and monitoring of policy implementation, 2009.




6.4. Complementarity of EC aid instruments
The EC distinguishes between three types of cooperation approaches, which can be used to channel funds through NSAs or in support of NSAs: the project/programme approach; the sectoral approach; and the global/macro approach. Despite a steady move towards programme-based aid modalities, the project approach is still predominant when channeling funds through NSAs.
This is partly explained by the fact the most important instruments (in financial terms) used to channel funds through NSAs are thematic budget lines, which clearly favour a project approach. This approach is perceived to have a comparative advantage in the sense that it: (i) provides an opportunity for NSAs to access funds directly and carry out their own initiatives; (ii) allows for quick disbursement at the beginning of the project and faster implementation; (iii) makes it possible to target interventions in those areas where the State is not able to deliver services; (iv) can contribute to mainstreaming innovative practices in areas such as micro-credit and community empowerment; and (v) ensures proximity to the field and good visibility.
However, increasing evidence highlights the limits of the project approach: (i) burdensome management and follow-up; (ii) tension between ownership and administrative control; (iii) risks of stand-alone activities that do not allow for replication, sustainability and systemic impact; (iv) lack of synergies with State programmes; and (v) difficulty of embedding projects in a long-term support strategy.
The NSA support programmes merit special attention. The EC has been particularly active in the ACP region to promote NSA support programmes in a wide range of countries, including in difficult partnerships, mobilising substantial funding. The programmes are specifically geared at enabling a diversity of NSAs to assume their new roles in development and promoting dialogue with governments. They are generally designed in a highly participatory manner and managed by a project management/facilitation unit. This system makes it possible to channel considerable amounts of money through local NSAs. According to the evaluation on EC aid delivery to CSOs, remarkable achievements were obtained in first generation of NSA support programmes. In some countries, the start was problematic for a variety of reasons, including government opposition or lack of experience of the selected PMU. EC Delegations of non-ACP countries have expressed a major interest for this type of programmes⁵⁸.
In its overall cooperation, the EC increasingly relies on sector approaches. This, in turn, is fuelling the search to find new ways and means to involve NSAs in these sector processes, including by channelling aid to them for performing a variety of roles (e.g. service providers; advocacy activities; watchdog agencies). In some countries, the EC pro-actively sought to review the added value of the NSA channel in the light of the current focus on sectoral policies owned by the country (e.g. South Africa, Mozambique).
The evaluation highlights an example in Somalia where aid is predominantly channelled through NSAs via projects, given the weakness of the federal state. To address the weaknesses of the project approach (such as the difficulties of designing coherent long-term strategies) the EC Somali delegation has started an innovative approach to link INGO project interventions to a sector-wide approach in the health sector, using a creative combination of instruments and channels to intervene at different levels (such as service delivery at the micro level; capacity development of health system at regional and national levels).
New aid modalities (general and sector budget support) is becoming a preferred EC aid modality. There are growing concerns about the dwindling involvement of NSAs in social sectors receiving budget support and the limited critical reflection on the role and use of the NSA channel in programme-based aid modalities. It appears that while the EC is shifting towards budget support as a preferred aid modality, it is not really engaging with NSAs beyond specific projects (identified and funded through specific budget lines) and hence is not strategically supporting civil society’s potential to play an advocacy role, empower users groups and citizens or disseminate information. In some cases, it can actually lead to NSAs being effectively excluded from receiving funds through this aid modality (e.g. Cambodia, Georgia). This has much to do with the ability of the EC to safeguard space for NSAs to participate and to stimulate consensus between government and civil society in the use of budget support.
Emerging good practices (see Box 17 and 18) show the benefits of designing complementary programmes to support CSOs in charge of PRSP monitoring or involved in PFM issues (as indicated in the general budget support guidelines).


Box 19: Use of complementary financing mechanisms (thematic and geographic programmes) to support NSAs: the India experience
The EC delegation in India provides a good example of a delegation using its skill to combine thematic and geographic instruments, and has gone to great lengths to use thematic programmes to complement sector budget support. Their focus has been that thematic projects and programmes must be relevant to the national policy framework. Additionally, the 2008 local call for proposals under the thematic programme of “NSAs and local authorities” chose specifically to focus on the issues of health and education, to complement the sector budget support focus of the EC Country Strategy Paper.
The priorities were stated as specifically related to the framework of Health and Education-related MDGs, the EC India Country Strategy Paper (CSP) 2007-2010 and the NSA Thematic Programme 2007-2010, with a specific focus on:

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  Populations out of reach of mainstream services and resources in the Health and Education Sectors;
  
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  Within the Health Sector, the focus will be on (i) prevention of mother-to-child HIV transmission and (ii) scaling up targeted interventions for populations at highest risk of HIV infection and (iii) target interventions in the health sector for population out of reach of the mainstream services. These interventions should pay particular attention to effective and sustainable convergence of services between the National AIDS Control Programme III (NACPIII), the Reproductive and Child Health II (RCHII) and the Revised National Tuberculosis Control Programme (RNTCP).
  
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  Within the Education Sector, the focus will be on improving quality of school level education and promoting school based educational reforms, with emphasis on reaching children from excluded communities not reached by the National Education Programme (SSA), such as street children, out-of-school youth, child labourers, children from marginalised and disadvantaged communities etc.
  

As is demonstrated above, the priorities outlined all make specific reference to the national policy framework and programmes. Thus, the Programme is aimed at addressing specific needs of the above key populations who are excluded from mainstream services and is therefore complementary to and within a perspective of Health and Education Sector Reforms. As well as a focus on marginalised and excluded groups of people, there is also a focus on the poorest states and hardest to reach geographical areas, which tend to be overlooked in programme implementation either by the Government or by other implementing partners. Funds were also made available for capacity building to strengthen the institutional capacities such as training, new technologies, management information systems, internal and financial control mechanisms, social performance management systems, networking and adapting to government regulations.

Thus, in terms of the health sector, the local call for the NSA and Local Authority thematic programme was designed to be explicitly complementary to the SPSP on health, which is closely linked to the Government of India’s health programme known as the Reproductive and Child Health Programme (RCH), part of the broader National Rural Health Mission (NRHM). Thus, all proposals evaluated must be relevant to the Indian context, relate to the national sector plans and contain objectives, goals and indicators consistent with the EC’s country strategy on health. The delegation dedicate resources and energy into evaluating concept notes and full proposals and are becoming increasingly strict about the criteria of relevance, alignment and integration of proposals with the health SPSP and national sectoral plans.





Box 19 continued: Use of complementary financing mechanism to support NSAs: the India experience, cont.
The same level of complementarity was sought in the education sector. This sector has also had a second call for proposals under the NSA and local authorities thematic programme (May 2009) focused on “vocational education and training for vulnerable and marginalized groups in India”, which is an area not a major focus for the Government of India, currently, but still part of the overall national policy. The guidance note makes clear and repeated references to the relevant national policies into which the projects funded under the NSA and local authority budget line will fit.
As the guidance note explains:
“The priority areas will be in line with the India Country Strategy Paper 2007-2013 with a specific focus on vocational education and training (VET). The focus on skills development for employability and future market needs is complementary to initiatives under the India-EU Strategic Partnership, Joint Action Plan on economic cooperation. Specific focus is on vulnerable and marginalised population groups, which are out-of-reach of mainstream governmental interventions. Hence Geographical Focus in terms of backwardness of the region will be given priority in order to reach the poorest population and to make best use of the available funding resources. The call will be in line with the recent initiative of the Government of India – The Backward Regions Grant Fund (BRGF) to redress the regional imbalances and to ensure equitable development of the backward regions. 250 most backward districts under the BRGF programme have been identified based on a number of socio-economic variables derived from the existing programmes and from the Inter- Ministry Task Group report set up by the Planning Commission. The list of backward districts can be obtained from the www.brgf.gov.in, (see also Annex I). Priorities will be given to those actions targeting the hard to reach community in the backward districts, however other target regions/ districts could also be considered if action substantiates reaching the poorest communities.”
Thus, another feature of complementarity is in action, i.e. using the skills, knowledge and resources of NSAs to work on issues that complement the Government of India’s focus. Furthermore, the delegation wishes to actively support those NSAs who are willing to engage with national policy and programmes, and see themselves as a facilitator for that dialogue. This is particularly the case in a country the size of India, where for real impact NSAs require engaging with the government In order to achieve scale. Similarly, it is not always possible for the Government of India to reach all parts of its territory and all groups in the country, thus NSA support and engagement is vital to achieve those ends and increase the effectiveness and potential impact of government policy and programmes.
Funds are also made available for capacity building activities to strengthen the role of NSAs and local authorities and further complement the SPSP. Funding is provided for capacity building to strengthen institutional capacities such as training, new technologies, management information systems, internal and financial control.
Internally, there is good communication between the sector budget (geographic instrument) and thematic people. The thematic calls for proposals have been designed in consultation with the sector budget support teams. Additionally, the education sector budget support programme manager was part of the evaluation team for the thematic calls for proposals. This ensured a high degree of complementarity in the projects chosen with the sector budget support as well as a more qualitative and strategic screening of proposals received.
Source: India case study, 2009.

New aid modalities have the potential to change the relationship between the EC and NSAs but this is not a straight forward issue. In India it has not been the case that increasing support for sector budget support by the EC has led to a reduction of funds available to NSAs via thematic programme budgets. According to the EC delegation they have seen a steady and consistent budget for thematic budgets coming from Brussels and do not envisage any reduction in thematic budgets in the near future. Therefore although in percentage terms most of the money goes to sector budget support they have not seen a shift of funds away from NSAs to the Indian government.

The box below highlights some emerging good practices identified by the recent evaluation of EC aid delivery to CSOs, of CSO involvement in processes complementary to GBS or SBS.


Box 20: Some emerging good practices on empowering CSOs to participate in GBS and SPSP
1. GBS
In Zambia, the EC started in 2006 to support civil society involvement in budgetary processes, with capacity building (phase I) and monitoring (phase II) undertaken within the GBS programme. The main watchdog of Zambian public expenditures is the Civil Society for Poverty Reduction (CSPR), a civil society network of over 140 organisations working for pro-poor development all over the country. The EC actively supports the CSPR and has also launched an additional project aimed at further involving civil society in the budget process in the coming years.

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  Budget support (€ 60 Million): centralised and managed by the delegation (always the case for budget support)
  
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  Capacity building (€ 2 Million): managed by gov of Zambia. Means of implementation: grant awarded to the CSPR (on the basis of a de facto monopoly of the civil society platform in charge of the monitoring).
  

2. SPSP
The Protecting Basic Services (PBS) Programme in Ethiopia was set up to decentralise the provision of basic services to lower tiers of government after the suspension of direct budget support in 2005. CSOs were involved in this innovative scheme through monitoring and accountability checks of the PBS grants on the field.. The PBS is particularly active in sectors like health and education, were CSOs are invited to directly participate in the budgetary process and to the monitoring of service delivery. The SPSP was implemented through 3 Trust Funds, with one of them aimed at strengthening the social accountability at local level (calls for proposals for CSOs).
3. Other types of geographic programmes
In Uganda a coherent approach to democracy and civil society support was provided under the ‘Democratic Governance and Accountability Programme’ which was launched in 2008. Funding is partially earmarked to enhance the role of CSOs in social accountability activities. The programme is closely coordinated with the Partners for Democracy and Governance Group’s basket fund, a multi-donor basked fund for CSO grants and service contracts for capacity development.
4. Thematic programmes
See box 17 above on India.
Source: Evaluation of EC Aid Delivery through Civil Society Organisations, 2008

Another interesting trend with regards to programme approaches is the emergence of joint funding modalities for NSAs - fuelled by the harmonisation concerns of the Paris agenda and related search to reduce the high transaction costs of direct support to NSAs. The EC has some experience with channeling aid to NSAs via multi-donor basket funding. However, this approach also presents strategic and operational challenges. Streamlining of financing could limit the kind of activities and the range of NSAs that can access the funding (to the detriment of smaller NSAs engaged in ad hoc activities). Implementation is likely to involve intermediary agents (e.g. UNDP offices, international NSAs, national umbrella NSAs, private sector companies, etc.) in the management and transfer of funding to NSAs. In some cases, the use of such intermediaries can create imbalances, competition and distrust between NSAs. There is also no guarantee that these intermediaries will function in an efficient, effective and transparent way. Furthermore, basket funds tend to be perceived by NSAs as a donor-driven initiative, often lacking NSA consultation and ownership.