'Out of the question': Localization challenges in Central America

Elisa Areano fell in love with sharks when she was studying to become a scuba divemaster off the coast of Central America. As she spent more time in the ocean, she began to yearn to do something to halt the deterioration of the marine habitat she was witnessing up close. So eight years ago, she founded the Blue World Foundation, a small nonprofit in her native Guatemala focused on conserving the ocean and promoting sustainable livelihoods for fishing communities. While passionate about her mission, but without a background in conservation or development, she felt overwhelmed by how to find support for her work so she could expand her ocean sustainability and livelihoods programs. It didn’t take her long to realize how complicated and time-consuming applying for funding from large donors could be and how many strings are attached to their grants. She also had trouble identifying funding sources that would allow her to use it for overhead, including additional staff. “You’ve passed maybe two weeks doing a proposal nonstop and then [after] those two weeks, ‘Oh, you didn't get the grant,’ for maybe, $30,000,” Areano said, reflecting on her frustration with the resources that go into applying for funding you have no guarantee of receiving. This scenario is all too common for small, local NGOs such as Areano’s in Central America. Burdensome application and programming requirements along with inflexible funding from large donors, including the U.S. Agency for International Development, essentially puts them out of the running. Such complexity leaves organizations, which are locally-led and perhaps best placed to determine how to help the communities, without access to big pots of money that could broaden their impact. Instead, funding goes to large international implementers that often lack the appropriate on-the-ground context, local organizations say. More frustrating still, they often mine them for local knowledge without making them feel like true partners. Alex Guerra Noriega is the general manager of the Private Institute of Climate Change Research, or ICC for its Spanish acronym, which focuses on climate change adaptation and mitigation in Guatemala. “We needed to figure out a way to lower those barriers to allow those organizations to work with us.” --— Matt Rees, deputy mission director, USAID El Salvador Many of his staff are paid with private sector funding, allowing them “a lot of freedom,” he said. “That’s radically different from the funding that we manage through [donor] projects,” which can take as long as a couple of years to move through the contracting process, Guerra adds. “I feel that part of that time is wasted on things we would otherwise be working on the ground already, and because of this bureaucratic processes, it is really hard.” Guerra said it is rare for grant money from donors to arrive ahead of time, and aid agencies often expect NGOs to front the money for project expenses. Private sector funding helps, but most organizations which rely purely on NGO money, cannot. These challenges are not new to donors such as USAID. Last year it launched the $300 million Centroamerica Local Initiative “to empower local organizations.” While that funding is specifically focused on programs that help reduce migration, it demonstrates the agency’s awareness that much progress is needed to ensure smaller, locally led organizations have access to funding from large donors. USAID Administrator Samantha Power has pledged to increase the level of funding to local organizations to 25% over the next four years. Matt Rees, deputy mission director for USAID El Salvador and its regional Central America and Mexico programs, said the agency regularly “gets an earful” from local organizations detailing how onerous requirements prevent them seeking partnership with the agency. “We needed to figure out a way to lower those barriers to allow those organizations to work with us,” Rees told Devex in an interview. “It’s always been a great degree of difficulty — the sheer significant investment that an organization has to make just to get close to us, just to share their good ideas with us, just to put a proposal down on paper.” One solution, Rees said, is the “annual program statement,” which invites organizations to submit project proposals. This skirts USAID’s regular unsolicited proposal process, which can require 20 pages of concept papers. Instead, five pages outlining ideas are initially enough, then they can co-create a more specific program with the agency. Guerra’s organization has been part of USAID-funded projects, receiving small grants. It was also a partner on a project where the prime was one of the large U.S.-based contractors. This experience gave him insight into how the development industry works, which he now realizes “really is a business.” Contractors spend a considerable amount of money — sometimes hundreds of thousands of dollars — to put together a proposal, form a project team overseas, and prepare a work plan; all without knowing whether they’ll be awarded the contract. “It makes it impossible for Guatemalan institutions to compete. I don’t know any institutions in Guatemala that would be able to, say, hire 10 people to work full-time for two months with that level of expertise in writing a proposal, let alone fitting perfectly with what USAID wants,” Guerra said. “That’s out of the question. We accept that we can only be partners of one of these companies that is the prime.” Reporting requirements are also burdensome for NGOs that don’t have staff dedicated to fulfilling the contract, and uncertain funding makes it difficult to find time and resources to train people, Areano said. She has difficulty retaining staff when she might not be able to guarantee long-term employment. She also works as an economist and puts part of what she earns toward paying salaries. But recently, she received what she and many other organizations consider to be the holy grail: an unrestricted grant. This means the money can be used for any expense she wishes. “I can just work. I don’t have to do a million proposals,” Areano joked. “It allowed me to reduce that choking sensation of ‘where am I going to get the funds for people?’ Because most of the funds they fund for projects, but they don’t give salaries. So how are you supposed to execute projects without salaries … You need people.” Sometimes success in local communities is not easily measurable or demonstrative, said Sara Hurtarte, co-executive director of SERES, an NGO focused on training and empowering youth leaders to improve their communities in El Salvador and Guatemala. One of its metrics for success is how the young people they support sustain their leadership and what additional roles they take on. Many of the youth go on to be involved with community councils and some have even expressed intention to run for mayor or Congress. This shows their capacity building approach is working, said Hurtarte — but isn’t something that would be a measurable deliverable within a typical donor-funded project time frame. “How can we show that impact?” Hurtarte said. “It’s very, very, very tricky.” Organizations like SERES are in a strange in-between place when it comes to qualifying for funding, she said. They are too large to receive seed funding but not large enough to easily apply for and win sizable contracts. After receiving money from a U.S. government-funded foundation Hurtarte said SERES was surprised that among the metrics they were asked to measure was migration — which was not originally part of the project. International NGOs frequently seek to partner with local organizations, increasingly a requirement by large donors. “We feel like we were getting used,” said Hurtarte, adding that such organizations have the structure to clinch funding but need a local partner to tick a box in the application. “We have declined those opportunities even though it was good funding … but wasn’t the type of partnership that we were wanting to build,” she said. USAID will continue to “insist” on having opportunities for local organizations within large contracts, and held an event last month in El Salvador to discuss with contractors how to better manage these partnerships, Rees said. “There will always be the feedback in saying ‘It seemed insincere,’” he said. “It’s on us, but also it’s on the big partners too to take up the helm, so to speak, of what USAID is asking for.”