Research on how well CSOs and donors understand one another

02.03.2021

How to improve the relationship between CSOs and donors and what is preventing them from doing so has been the topic of research undertaken by the Charities Aid Foundation (CAF) and the Everyone Together CSO.

The CAF and Everyone Together have published the results of their research on” Competitions, reports and grants: How can relations between CSOs and donors be improved?”.

“The relationship between donors and recipients is by definition an “unequal” one. CSOs need funding which donors provide on their own terms, for which it is customary to offer thanks irrespective of how reasonable or acceptable the terms are”, wrote Maria Chertok, CAF’s CEO in her introduction to the report.

“We therefore need cooperation and communication channels that are convenient and reliable for both parties. I hope the results of the study will encourage donors to seek constructive feedback from those in receipt of grants which will be helpful in improving the quality of their work.

More than 500 not-for-profit organisations from various regions across Russia shared their experiences, said Kira Smirnova, Executive Director of Everyone Together.

CSOs and grant competitions

Grant competitions offer CSOs the opportunity to obtain funding which would otherwise be difficult to achieve through donations. Over the past three years, most CSO respondents have received grants from the Presidential Grants Fund, private foundations and regional authorities.

Most grants (68%) came from the Presidential Grants Fund, slightly less (52%) from private foundations and the least (5%) from regional support centres and local community foundations.

CSOs generally have a positive view of donor organisations. 78% of those questioned noted that donors had a clear understanding of the context to a CSO’s work, with 76% stating that donors have faith in not-for-profit organisations. 81% of CSOs believe that grant competitions play a major role in helping the sector change and develop systematically.

“Some grants also provide winners with developmental opportunities as well as funding. Successful applicants are given the chance to study, with various seminars and advice sessions organised for them.”, says the report.

Seven reasons why

In their study, CAF and Everyone Together identified seven reasons for misunderstandings between CSOs and donors. Nearly every CSO cited examples where difficulties had occurred.

1. Projects or on-going work

Donors are more likely to support CSO projects these days. 66% of respondents said they would like to receive grants for on-going activity that seeks to achieve systemic change.

“People who make decisions on awarding grants often see the CSO sector as a myriad of small projects. They don’t appreciate the fact that a CSO’s work is a large-scale or lasting undertaking”, the report says.

34% of CSOs surveyed said that grant projects involved extra work for teams that are already engaged in systematic problem-solving.

• “Short-term” money

77% of those surveyed want grants for long-term projects as a system cannot be built in less than a year. Every second respondent thought that timescales for projects were too short. More often than not, grants are awarded for a six-month period with some form of systemic change expected.

“Our work cannot be limited to such a short time period. It’s not like we’re some kind of festival whose run has come to an end. Everyone wants us to change the world and build a system but how can this be achieved in less than a year?”, said one respondent in their report.

• Co-funding

Nearly half of those surveyed (46%) said that it was difficult to attract project co-funding, with organisations often contributing their own money. “In 90% of cases, co-financing involves voluntary work carried out by CSOs. How can an organisation develop if it is forced to put its own money into a project?”, say CSOs.

• Quality of expert advice

29% of CSOs have little confidence in the ability of experts to carry out a fully objective evaluation of projects or understand their subject matter. It is even worse in regional competitions where there is often no money available to bring in expert advice. Moreover, 55% of CSOs never receive feedback on applications. There have also been occasions when different evaluation methods were applied during the same competition.

• Budget cuts

It is not uncommon for there to be a substantial cut in the budget of successful applications. 31% of organisations said they had experienced significant reductions despite meeting all their project performance objectives. In 24% of cases, cuts were made to salaries and to administration costs associated with budget management.

• Salary reductions

“For many CSOs seeking long-term results, the most important financial element is the cost of human resources and the salaries of those working every day to achieve social change. However, donors often limit these aspects in their tendering conditions which create unnecessary obstacles for CSOs”, the report says.

63% of CSOs noted the importance of funding for organisational development. There are often limits on labour costs in grant competitions.

• Trusted partnerships

Donors alone determine the theme of competitions but half of CSO respondents said they should be invited to take part in these discussions prior to contests being announced.

“Many CSOs say that situations often arise where there is a sense of imbalance in relationships with donors. CSOs genuinely believe they have to do anything the donor wants” the report says.

21% of those surveyed want to have meaningful feedback. Sometimes, CSOs are given the distinct impression that they are wasting other people’s money.

Grant competitions seen through the eyes of CSOs

Despite the fact that CSOs have a positive impression of a donor’s professionalism and openness, difficulties still do occur.

When submitting applications, CSOs identified issues such as lack of feedback, technical problems and failure to meet deadlines on behalf of donors. 27% of CSOs have had a situation where a donor has been late in signing an agreement or in making payments.

Every second respondent referred to the complex grant administration process, with 35% having difficulty in opening a separate bank account.

“A quarter of CSOs are receiving sudden and urgent requests from donors for project information. They often ask CSOs to do something that has not been agreed in advance which, in turn, imposes additional burdens on organisations”, says the report.

CSOs also noticed a formal attitude and lack of flexibility on the part of managers working for donor organisations, as well as ever-increasing reporting requirements.

40% of CSOs think that donors ask for too many documents. 16% stated that reporting requirements were changed after their report had been submitted.

29% of CSOs said they had been asked to provide personal data on project participants. “Sometimes, donors make ridiculous demands, for example asking for personal information on the beneficiaries, photographs of event lunches, or even wanting to be party to private meetings between beneficiaries and psychologists etc.

Submitting several reports annually involves too much work for CSOs, 36% of whom believe that no more than one a year is sufficient.

CSOs also believe that performance indicators suggested by donors are not always successful in achieving the best results.

What is to be done

In order to improve relationships, the not-for-profit sector needs to work on building trust and mutual respect between CSOs and donors. For example, CSOs should be invited to discuss the theme of grant competitions before they are announced.

In developing systemic infrastructure projects, CSOs should have access to long-term funding in order to support their current activities, development and growth, say the researchers.

Both sides need to be flexible in coming to an agreed assessment of a project’s results and reporting requirements.

And finally, look for ways to obtain meaningful feedback.

The study was conducted by CAF at the initiative of the Association of Socially-Oriented Not-for-Profit Organisations, Everyone Together. The methodology included qualitative and quantitative stages of data collection and analysis. The former was conducted during September and October last year and the latter in November and December.

Bonus

Those taking part in the study were asked to provide their satisfaction ratings with different donors.

The highest scores were shared between three types of donor organisations, with differences expressed in percentage terms. Regional resource centres (66.67%), the Presidential Grants Fund (65.73%) and private foundations (66.49%) among which were the Potanin and Timchenko Foundations.

Source:  https://www.asi.org.ru/news/2021/03/02/issledovanie-kak-nko-i-donoram-ponyat-drug-druga/