As international NGOs, we need to stop assuming partners are risky, respect local standards, accept we should prove ourselves as much as partners do, and slash the form-filling, says Oxfam compliance advisor Dominic Vickers. In fact, how about encouraging partners to apply for funds by video?
How can large NGOs and smaller organisations based in communities we support work together to decolonise compliance and move from a culture of control to one of mutual trust?
That was the big question for a recent webinar organised by BOND, the UK network for organisations working in international development.
Compliance – the systems that monitor how well organisations adhere to laws, regulations and commitments – is traditionally approached from the colonial idea that local organisations are inherently risky. Such an approach assumes the risk is all taken by the donor, rather than the local community.
‘The Center for Disaster Preparedness in the Philippines has managed to cut the number of compliance requirements for local partners… from 52 to just one.’
Traditional compliance systems measure local organisations against metrics that work better for well-resourced INGOs and take little account of how best to manage risk in local environments. As a recent rapid review of the Ukraine response confirms, they can leave local organisations subject to repeated, bureaucratic, due diligence processes, often for the same donor on different programmes, and unable to respond quickly to what is needed on the ground. Meanwhile, community organisations unable to deal with compliance paperwork are excluded from funding, shrinking the pool of potential partners.
In this blog, I’ll share seven takeaways from the illuminating BOND session on how to decolonise compliance, which you can also watch here.
1. Localise due diligence and respect local standards
Decolonising compliance means including a wider group of organisations. As Vincent Henson, Due Diligence Manager of Start Network shared at the Bond meeting, it “wanted to explore models that are more appropriate, inclusive and equitable so that we can bring in a wider spectrum of humanitarian actors who have been traditionally marginalised by the prevailing compliance system”.
Start Fund is introducing locally-designed due diligence at country-level, based on local context and language, and managed by local due diligence providers. Tailoring compliance to local context has led to a better articulation of what financial controls, for example, should look like locally and made local compliance standards visible to Start Fund for the first time.
2. Trust works both ways! INGOs need to prove they are worthy partners too
Local organisations rightly ask why due diligence is a one-way street, with INGOs assessing local organisations but not vice versa. To tackle this imbalance, Start Fund plans to develop a global repository of due diligence assessments. This would allow small organisations to review due diligence processes of the large INGOs they want to work with. It would also acknowledge that building mutual trust and accountability means that INGOs must also show that they can be trusted.
3. Learn from compliance regimes for partners based in the UK
Frequently, taxpayer or donor demands are used as an excuse to impose inappropriate bureaucracy on local organisations. The UK’s National Lottery Community Fund (NCLF) challenges this by giving local funding officers the power to use their local knowledge to assess risk and dispense with standard forms where needed.
Although the fund faces intense scrutiny as a distributor of public funds, Helen Bushell, formerly of Oxfam and now NCLF Senior Head of Funding, said: “It doesn’t feel as though we are passing that risk and due diligence on to the same extent as the international sector. Although we have a duty to protect public money our starting point is to consider the impact of any controls placed on the grant holders to ensure that collectively they do not create a disproportionate burden.”
Such a network of local funding officers working directly with communities shows how partners can be freed from form-filling, with controls based on local knowledge.
4. Free up everyone’s time to do the things that matter… Let’s encourage applications by video!
The Center for Disaster Preparedness (CDP) in the Philippines has worked with USAID and Global Giving to cut the number of compliance requirements for local partners getting grants from their Community Solidarity Fund from 52 to just one.
It uses simple templates and local languages. In an innovative step, it also now encourages potential partners to bypass written bids and make video submissions. Where there are gaps, CDP has a “getting to know you” process to understand areas for which many organisations don’t have documentation, such as governance, partnership values and financials.
5. Understand potential harms as well as benefits of funding
Working with partners to understand what level of funding they need is vital. As Mike Mercado, Programme Coordinator at CDP, said, this applies to having too much as well as too little. Many community organisations are doing the work already without support, so a donor needs to understand how its support will impact existing work and where a sudden injection of funding could cause problems.
6. Acknowledge ‘sweat equity’: make invisible community assets visible
CDP’s new approach also makes visible community assets that have been ignored under traditional due diligence assessments. This includes what Mike calls “sweat equity”, which describes the value of crucial work done by volunteers. Other previously invisible assets include how an organisation is viewed in its local community and its potential for local fundraising and getting other resources.
7. Look for the cracks showing in traditional compliance systems
Antonia Potter Prentice, Director of Alliance 2015 has been facilitating “brave conversations” between CDP, Global Giving and USAID as part of the RINGO project. These conversations have revolved around the risk and compliance value chain to find practical ways of transforming compliance.
These conversations have gone well for three reasons: the Philippines has an established movement for localised funds; both USAID’s Local Works Programme and Global Giving are now focused on funding local organisations; and the USAID contact is from the Philippines and personally committed to these processes. The next step will be to bring in other colleagues from USAID who can be persuaded of this vision. What is clear is that the systems are starting to change. As Antonia said: “We can’t say systemic change is on the way but, looking at the monolithic structure, we can see cracks appearing all over it as a result of these conversations.”
We at Oxfam are already looking at our own systems to rethink how we do compliance and work with partners. If you have ideas or great examples to share, I’d love to hear from you!