What is one of the most impactful ways funders can reshape the global development and humanitarian assistance sector to be more equitable, accountable, and resilient?
According to Humentum’s new report, “Breaking the Starvation Cycle: How international funders can stop trapping their grantees in the starvation cycle and start building their resilience,” the answer is fairly straight forward: fully fund administration costs associated with implementation of local NGO grantees’ projects.
Humentum analyzed extensive data on the financial health and cost coverage of national NGOs from across the globe. Few of their funders consistently provided a full and fair share of administration costs. As a result, these NNGOs were under-resourced in functions fundamental to their health and resilience, including safeguarding against exploitation, abuse, and harassment, business development, and human resources.
Conversely, when funders encouraged and provided full cost coverage, they fortified NNGOs’ overall financial health, shifted dependency power dynamics that led them to “under-ask” in the first place, and laid a foundation for more sustainable partnerships; all elements foundational to advancing locally led development.