Watch: What does effective local funding look like?

Is there an opportunity to scale up successful models for making small grants to communities and NGOs in the global south? Could this be a way to increase the amount of funding that flows to locally led organizations? Speaking at a Devex Pro Live event, representatives from World Connect and Spark MicroGrants, which make small grants of around $10,000 to villages and communities, and the African Visionary Fund, which makes grants typically of around $150,000 to locally led NGOs, said they believe their model has proved extremely resilient and successful, and can also be readily scaled up so that it is used to distribute hundreds of millions, instead of millions. Money granted to communities and organizations has allowed grantees to raise substantially greater levels of funding elsewhere, they said and has been measured as having significant impacts on local development. They talked about the importance of having good grant-giving practice and discussed how many of the barriers traditionally raised as problems for local giving can be addressed. Effective grant-giving practice Shamira Lukomwa, the strategic partnerships manager at the African Visionary Fund, said that effective grant giving involved long-term, unrestricted, multisector funding. Sasha Fisher, the executive director of Spark Microgrants, talked about how her organization funds in such a way as to involve all members of a community in making decisions, particularly women and younger people. And Frank Kasonga, the Malawi country director at World Connect, talked about the importance of supporting communities to develop projects. “We don't just leave these communities on their own,” he said. “We coach them along the way, side by side.” Capacity building Kasonga also criticized the idea that work needed to be done to build the capacity of local leaders. “It's high time we have to bin this myth that communities don't have capacity,” he said. “You know, communities have tremendous knowledge and cultural capacity. They have networks and social capital. They have leaders with vision and generosity. They have … understanding of their natural resources and the local ecosystems. In fact they have assets and capacity that no outsider can possibly possess or bring to the table in quite the same way.” Scaling up Right now, money for local grant giving is coming from foundations and individual donors, with relatively little backing from institutional donors, and the available funds are relatively small scale. Fisher said that the methods of local funding pioneered by those on the call had similar assets to other types of funding that had been scaled rapidly, such as microfinance and direct cash transfers, because they were decentralized, and focused on repeatable processes rather than individual projects. She also said that the model could be scaled up rapidly by involving governments. She said governments such as Rwanda and Malawi had already engaged with the idea and were proactively looking at using the model. “The World Bank and USAID — those groups they shouldn't be funding Spark; they should be funding governments directly to do this work at scale,” she said. Fisher said that many of the barriers often put forward to scaling up this work were “fake barriers.” She suggested that part of the problem was a desire to retain power with existing structures and groups. “There's the much more complicated question of how to untangle the Congressional ties to USAID and a lot of the power dynamics that are wrapped up in that,” she said. “I think absolutely we can do that and we can shift this system so that we can deploy a lot more of the capital directly to villages.” Who has to change? Lukomwa said that fundamentally, localization required a change in mindset from large institutional donors. Rather than helping local organizations bid for existing contracts from the U.S. Agency for International Development and others, she said, those organizations themselves would have to change. “Be honest,” she said. “How are these parameters precluding locally led organizations from even being able to compete or even be eligible for funding? You have to ask yourself if you're serious about localization, you're probably going to have to make some changes to your requirements.”