Global Policy Forum

Dominic Haslam weighs up whether the European Commission's NGO Co-financing budget line, which is currently exclusively reserved for European NGOs, should also be accessible to NGOs in the South.

By Dominic Haslam *

In April 2004, the European Commission (EC) circulated a proposed regulation on ‘Access to Community External Assistance'. The idea behind it is primarily that development funds would be more efficient if they weren't tied to procurement of EU-produced goods and services. While this sounds good in theory, this article is going to focus on the potential negative impact on EU NGO funding.

The EC's NGO Co-financing line is the only budget line reserved exclusively for EU NGOs. If this communication were adopted, developing country (DC) NGOs would be allowed direct access to this budget line for the first time. There's more at stake here than the annual 200 million euro budget. It is beginning to raise questions about EU NGOs' approach to the issue of partnership. The main question is, do we want our partners in developing countries to have access to this budget line?

The NGO Co-financing line is already over-subscribed. Currently, less than 1 in 5 applications are funded, despite the EC admitting that most are of a high standard. Rumours abound about methods of selection, based on political manoeuvrings and national quotas. Attempts by NGOs to reach agreement on limiting the number of applications submitted have (annoyingly) failed, with some of the larger EU NGOs submitting 10 or even 20 applications per year. In addition, NGOs from the new member states are now eligible, so this budget will now be stretched even further. If there is to be no increase in the budget, what is the point of increasing competition still further? It could even be argued that, as EU NGOs have more experience in accessing EU funds and are more likely to have their proposals accepted, it is DC NGOs that will suffer most, through taking on extra effort, for little reward.

Secondly, having an active role in the type of multi-annual programmes funded by this budget line helps EU NGOs to remain rooted in their work with partners. Donors increasingly believe that EU NGOs should be mobilising support for development from the public and government, and challenging institutions and systems, not running projects or providing technical support.

Many NGOs already identify and structure themselves in this way. However, isn't it also essential that policy and education work is grounded not only in academic study or political beliefs, but primarily in the realities of the people we work with and for? It is important for EU NGOs that there are direct links with the programmatic work of our partners, in order to develop our analysis and act as voices for the poor. This budget line remains one way of doing that, particularly for NGOs without vast unrestricted resources.

I can understand both of these, and further arguments for continuing to restrict access to the budget line. However, the reality is that while EU NGOs continue to control the resources and manage the contracts, there will be an imbalance of power, no matter how well we manage our long-term relationships and how soft a ‘donor' we are.

We argue that this is one of the few sources of EC funding that EU NGOs can exclusively access, for our work. But, if this budget line was opened up to developing country NGOs it would be one of the only multi-annual sources of funding available to them, from any source, except for the grants they receive from us. Shouldn't we be celebrating this hugely positive step from the EC, even if we think extra resources and more regulatory flexibility are needed, to allow genuine access? Shouldn't we have been campaigning for this for the last ten years and including the skills necessary to manage these contracts in our capacity-building activities? Should we not be arguing for their right to exist as independent, self-financing organisations, before we worry about our own long-term financial security and bottom-line figures?

The EC is watching closely. At the highest level, officials are ready to accuse EU NGOs of hypocrisy - that we want open access to everything except our budget line; that even if it is restricted only to NGOs, that's not enough - it must be only to EU NGOs; that our own role is more worthy of protection than our partners'. I believe that EU NGOs still have a strong role to play in development, and not just in policy or educational roles. However, we run the risk of becoming bureaucratised, too concerned with preserving the status quo of our own position, and unable to turn the same methods of rigorous analysis we use on donors, on ourselves.

About the Author: Dominic Haslam is Public Funding Manager at WaterAid and Chair of BOND's EC Funding Group.