DevExplains: The development funding cycle

A partnership award signing ceremony between the West Africa Network for Peacebuilding and the U.S. Agency for International Development for the Mitigating Election Violence in West Africa through National Early Warning Systems project. How can your organization master the intricacies of development funding and win donor financing? Photo by: U.S. Embassy Ghana / CC BY-NC-ND

Understanding how donor resources translate into tender and grant opportunities could go a long way, from finding the right market for your organization to increasing your chance of success in competitive bidding processes. It is essential to familiarize yourself with donor practices and how they are shaped by recent events to make informed decisions.

As a prospective implementer, you should know the context in which a program will be carried out before designing a project or preparing your proposals. What problems need to be addressed? Which sectors will be targeted? What type of services, goods and construction works will be required? These are just some of the questions you need to answer before you can effectively get involved in the bidding process. And it is just as important to know your competition and seek out potential partners that could help your organization win contracts.

Aid agencies follow a system to identify priorities, allocate funding, release tender and grant opportunities and award contracts. Below are five steps you should take to help your organization master the intricacies of development funding and win donor financing.

Find procurement opportunities

Devex Tenders, Grants & Open Opportunities are updated daily and aggregate business opportunities from more than 350 donor funding sources. To find the opportunities and information you’re looking for within the world-class Devex funding database, try using the Devex Advanced Search feature, and you can even proactively receive email alerts on relevant funding opportunities by signing up for Devex Business Alerts.

Organizations win funding by participating in competitive selection processes. These rigorous screening methods are employed by aid agencies in order to find the most cost-effective proposals from the most capable candidates. Ahead of these procedures, donors advertise tender and grant opportunities to invite prospective implementers to either submit bids or express interest in carrying out specific components of development projects.

The amount of time between publishing a procurement notice and the deadline of submission of proposals vary depending on the complexity of the tender. For smaller contracts, deadlines may arrive as soon as a few days after the release of the notice. For larger contracts, organizations could have up to several months to prepare their proposals. Either way, it is always advantageous for your organization to be informed of these procurement opportunities as soon as they are advertised.

Understand the funding trends

Devex Funding Trends offers a hub for Devex funding resources and gives you a snapshot of the latest donor initiatives so you can follow the spending of top aid providers.

While donor agencies follow similar practices in budget allocation and project implementation, several factors affect the way they set funding priorities. These could include regional or global events such as economic recession, an ongoing health crisis, the onset of natural or man-made disasters, realignment of government policies, budget cuts and many more.

Follow the donor priorities

Devex Funding Strategies help synthesize country-level data that can inform your organization’s strategic planning by providing in-depth analysis of priorities, programs and funding trends of donors across the globe.

Before donor agencies determine what type of projects they need to design and implement, a significant amount of planning takes place in order to determine where their resources would create the most impact. In these preparatory stages, aid agencies undertake a number of fact-finding activities such as consultations with government bodies, civil society and nongovernmental organizations, the private sector, and other relevant stakeholders. They also do risk assessments and performance evaluations of past projects and development strategies to better inform future allocations.

A recent trend among donor organizations is the push for maximizing their budget. The U.K. Department for International Development constantly emphasizes value for money, and the World Bank has been moving toward carrying out fewer large-scale projects as opposed to several small-scale ones. The Asian Development Bank takes a selective approach where they engage sectors in which they have more technical expertise.

These are but a few examples of donor practices that affect the way aid agencies allocate resources. A host of other factors also play a role in this complex decision-making process, including political climate, environmental challenges and social and economic indicators.

Identify the programs

Devex Pipelines bring you advanced intelligence on upcoming opportunities as well as information on donor implementation strategies.

Once donor priorities have been set, development programs are designed in accordance with the identified goals. These projects vary in scale and can be implemented at the community, national, regional or global level. Each project targets different components of the donor strategy and focuses on specific sectors.

Aid agencies can release information on these programs as early as the planning stage. This happens months before procurement planning, although not all projects require tendering procedures for implementation. Project documents typically contain information on the context of the program, activities to be supported, budget, timeline and geographic scope. Familiarizing yourself with this data will allow you to anticipate upcoming tender and grant opportunities.

Know the key development players

Devex Contract Awards & Shortlists provides a comprehensive list of winning organizations so you can identify key organizations in your field.

Once a winning organization has been selected, donor agencies publish a contract award. These documents typically contain information on the winning organization as well as the size and nature of the contract. In some cases, the aid agency also publishes a shortlist enumerating the top organizations they considered for funding.

Although the procurement process has ended by the time these documents are published, both contract awards and shortlists serve as valuable resources for organizations competing for donor funding. It is common for organizations to team up in order to increase competitiveness in selection procedures. By sharing expertise and pooling resources, organizations can increase their chance of being selected. This is especially beneficial for smaller organizations trying to win their first contract with a donor agency.

By looking at contract awards and shortlists, your organization can understand the competition and learn more about potential partners.

Check out more funding trends analyses online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.

About the author

  • Ezekiel Carlo Orlina

    Ezekiel is a Senior Development Analyst and Team Leader at Devex. His primary role is monitoring and reporting on project opportunities and trends of leading multilateral and bilateral donor agencies. A graduate of Ateneo de Manila University with a degree in Political Science, Ezekiel has extensive global development research experience having also worked at the World Youth Alliance, Asia and the Pacific (WYAAP).