Dutch NGOs make harsh, 'emotional' decisions to survive billion dollar budget cuts

By Jenny Lei Ravelo 14 October 2015

Dutch aid relative to GNI is expected to fall to just 0.55 percent by 2017 — its lowest level in more than four decades. Photo by: Images Money / TaxRebate.org.uk / CC BY

Development NGOs in the Netherlands are diversifying income streams and emphasizing strong program development. They’re exploring new markets, closing offices and hiring new talent with different skill sets — all in an effort to adapt to a vastly different aid environment in the country.

In just under five years, one of Europe’s largest donors has undergone a complete transformation. The Dutch government dropped its commitment to spend 0.7 percent of its gross national income on aid, cut the number of bilateral partners in half and decided to put more emphasis on trade in its international cooperation makeup.

By 2017, the coalition government’s decision to cut a total of 1 billion euros ($1.14 billion) from its development cooperation budget is expected to be realized, alongside its plans to refocus its core budget for civil society actors on lobbying and advocacy efforts. Dutch aid relative to GNI is expected to fall to just 0.55 percent by 2017 — its lowest level in more than four decades.

This could recede even further to 0.5 percent in 2018, based on the latest Dutch aid budget released in September, according to Koos de Bruijn, advocacy manager at Partos, the association representing 120 Dutch development NGOs.

“Be aware that due to increased refugee costs … the ODA percentage [of 0.69] for 2015 now appears larger than was projected in the budget for 2015,” he added.

The shift has led to a series of endings and new beginnings, some of which are welcomed by the Dutch development sector, others remaining a source of concern. Devex spoke to executives at four of the biggest Dutch development organizations — most of which are still taking inventory on what stays and what goes — to find out what steps they have taken to prepare for such a massive change and what a slimmed-down Cordaid, Hivos, Oxfam Novib and SNV will look like in the coming years.

Shifting strategy

In January, the Dutch government announced the new funding window “Strategic Partnerships,” which is meant to replace the soon-to-be-defunct MFS II for civil society organizations. At 220 million euros, it’s 60 percent less than what the government offered CSOs through MFS II in 2010, according to de Bruijn.

Catch up on the changes here:

Dutch government plows ahead with aid cuts

A close study of the 2015 budget reveals just how deep the cuts are to Dutch development assistance, how those reductions will affect the work of NGOs and why the Netherlands seems to be reneging on its 0.7 percent commitment. A Devex analysis.

Under the new partnership, the maximum amount an organization — or an alliance of organizations — can receive is 15 million to 16 million euros, a far cry from the 70 million to 80 million euros a number of Dutch organizations accessed each year under MFS II.

None of this comes as a surprise to Dutch development NGOs. Cordaid, Hivos and Oxfam Novib have known of the cuts and impending changes for a number of years and have been busy working on a strategy to mitigate its impact on their organizations.

For Cordaid, this has led to the creation in 2013 of business units within the organization responsible for product development, program marketing and fundraising for each of the organization’s focus areas, from women’s leadership to urbanization.

The organization is also exploring innovative approaches in raising private funds. For example, instead of only seeking support from the general public for donations to its Cordaid Memisa fund — aimed at raising money for the strengthening of health systems, including maternal and child mortality — it specifically targeted mothers, young families or would-be parents by partnering with websites or retailers catering to this population.

Hivos, which was drawing an average of 50 million euros a year from MFS II to cover 40-50 percent of its annual budget, will receive about 10 million euros from the new budget line. The organization has commissioned studies on donor trends to gauge how in sync the current external funding environment is with its own ambitions, working on a new strategy to narrow its focus. It also further stepped up fundraising efforts with large institutional donors and philanthropic foundations, mostly from the “global north,” but also included a few in emerging markets.

Did you know?

The Dutch government is also cutting back on embassies and representation abroad. Cordaid CEO and former Ambassador Simone Filippini feels this may eventually have a negative impact on the Dutch position in the world, as so doing diminishes influence and outreach.  

Oxfam Novib, meanwhile, has been exploring new markets where Oxfam doesn’t yet have a presence. In 2013, it began public and corporate fundraising in Sweden — in part envisioned to win unrestricted funding, which the organization knows won’t come as easily following MFS II’s demise. And SNV, whose own special funding arrangement with the Dutch government is facing the same fate by the end of the year, has put resource mobilization on everybody’s plate within the organization.

“You can’t say resource mobilization is the work of somebody else,” SNV CEO Allert van den Ham told Devex. “That’s not possible. Maybe you don’t write the proposals yourself, but you should always be concerned about where you get the money.”

New beginnings

The changes pushed the organizations to assess where their strengths lie — and drop programs that didn’t meet that criteria. For Hivos, that now means working under two overarching domains: one focused on being “open,” which includes transparency and accountability, freedom of expression, sexual and women’s rights; the other on the “green agenda,” including the promotion of renewable energy.

With limited resources, however, the organization can no longer support a number of activities carried out by some 700 local civil society partners. These include efforts by a local group in Kurdistan, Iraq, to ban female genital mutilation, support for lesbian, gay, bisexual, transgender and intersex organizations worldwide, as well as support for microfinance organizations, among others.

Amid ODA budget slashes, what talent are Dutch NGOs seeking?

A series of billion dollar cuts to Dutch aid has been a blow to the status quo for the Netherlands’ NGO community — and resulted in a major shift in who is employed in what kinds of positions at major organizations like Cordaid, Hivos, Oxfam Novib and SNV.

“We will continue to support LGBTI organizations in a strategic way, but we cannot continue [doing the same for] close to 100 organizations that we’ve supported in the past globally,” according to Ben Witjes, director of programs at Hivos.

The support for organizations working in the fields of culture and art — as well as women’s rights — will also likely diminish.

“We looked at where we have something to offer [that other organizations] don’t have, and we think we’re very strong on renewable energy and combining it with an advocacy position, [as well as] in the area of transparency and accountability, and also in using technology to further citizen engagement,” Witjes said.

Oxfam Novib, too, tightened up its scope of work after gauging its strengths, based on the Oxfam International family’s strategic plan. The Dutch affiliate now focuses on four overarching themes, including food, land and water; governance and finance; conflict and fragility; and gender justice and youth.

Oxfam Novib CEO Farah Karimi told Devex they may no longer be as active in the areas of education and health care, but she expected Oxfam Novib to become a more innovative and impact-focused organization.

“We need to be agile and absorb ups and downs in our incomes because there is no longer a steady income, stimulate people to work on innovative ideas, and organize learning, sense making and impact measurement, because in the end we want to see more impact,” she said.

Cordaid, meanwhile, is in the middle of the next stage of its restructuring process to be rolled out in 2016, which is necessary to prepare the organization for a sustainable future in view of global developments, including a funding landscape that has changed considerably. Among others, the organization is taking stock of which partnerships to continue and which organizations it will no longer be able to co-fund or subsidize, as well as which projects need to be cut entirely — and the decisions aren’t easy.

“Working in fragile and conflict-affected areas and being often the only supporters of the most vulnerable people in the world, and having to leave them completely on their own at the moment, for us it feels really harsh and emotional,” Cordaid CEO and former Ambassador Simone Filippini told Devex.

Read more international development news online, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.

About the author

Jenny lei ravelo 400x400
Jenny Lei Ravelo@JennyLeiRavelo

Jenny Lei Ravelo is a Devex senior reporter based in Manila. Since 2011, she has covered a wide range of development and humanitarian aid issues, from leadership and policy changes at DfID to the logistical and security impediments faced by international and local aid responders in disaster-prone and conflict-affected countries in Africa and Asia. Her interests include global health and the analysis of aid challenges and trends in sub-Saharan Africa.


Join the Discussion