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Contribution to the National Strategies on Biodiversity Donor’s Expectations of Environmental Funds.

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Presentation on theme: "Contribution to the National Strategies on Biodiversity Donor’s Expectations of Environmental Funds."— Presentation transcript:

1 Contribution to the National Strategies on Biodiversity Donor’s Expectations of Environmental Funds

2 “….Foundations occupy an unusual role among the set of institutions working to make the world a better place. They are, at once, supporters and judges, enablers and critics, advocates and grantors of community-based nonprofits. At their best, their practices promote genuine participation, demystify funding parameters, support project design processes and build organizational capacity. These kinds of efforts help level the playing field and create an environment where donors and grantees share power and acknowledge each other’s contributions. Their outreach to rural communities, system of checks and balances in governance and grant-making processes, and funding criteria promise to get resources in a fair and strategic way to those isolated from donors.” Betsy Campbell, “Grantmaking for Sustain able Development”

3 I.Which Donors and what are their objectives?

4 U.S. Total Flows to the Developing World in 2000: $70.5 BN US Private Lending & Investment 39% Personal Remmittances 26% USG ODA 14% US Corporations 4% US Foundations 2% USG & Other Country Aid 4% US PVOs 4% US Universities and Colleges 2% US Religious Organizations 5%

5 Trends in ODA foreign assistance A Few Drivers of Change  Policy Coherence - reduce conflict among multiple objectives/goals of bilateral foreign aid  Manage for Results - manage more strategically, clarify goals and align resources and get greater results  Effectiveness Principles - apply the effectiveness principles to foreign aid (e.g good governance, economic freedom, …)

6 II. Donor Expectations of EFs 1.U.S. example (TFCA) 2.German example (KfW)

7 Drivers of Fund Governance Design From the grantee’s perspective: From the grantee’s perspective: They want access (to the funds) and perceived fairness. They want access (to the funds) and perceived fairness. From the Host-Country Gov. perspective: From the Host-Country Gov. perspective: The GOX wants access (to the funds) and control (influence on their use). The GOX wants access (to the funds) and control (influence on their use). From the Donor’s perspective: From the Donor’s perspective: The donor wants control (checks and balances), leverage ($), results (impacts) The donor wants control (checks and balances), leverage ($), results (impacts) Avoid direct budgetary support for public sector Avoid direct budgetary support for public sector

8 Good Governance & Management transparency transparency efficiency efficiency effectiveness effectiveness reliability reliability innovation innovation flexibility flexibility simplicity simplicity accountability leverage representative / democratic other…

9 What can we learn about donor expectations from EF Evaluations? 1. Update strategic plan 2. Develop fundraising strategy (consider endowment) 3. Develop communications plan 4. Become a learning organization 5. Rationalize administrative costs (streamline project cycle, review operations policies)

10 6. Improve reporting of impacts 7. Improve Board operations (clarify roles, responsibilities; delegate to committees; train new members) 8. Ensure proper and consistent board representation 9. Explore new ways to engage partners 10. Update and integrate information technologies

11 Lag Time in Grant Making: TFCA Funds

12 1.TFCA Evaluation Scorecard Governance The Fund: established goals & objectives complement programs of others established goals & objectives complement programs of others established all internal operational policies and procedures.. established all internal operational policies and procedures.. implemented a M&E plan for impact reporting implemented a M&E plan for impact reporting The Board: meets regularly and achieves a quorum. meets regularly and achieves a quorum. has a written strategic plan w/ specific objectives, funding priorities, and dates and regularly evaluates progress toward the key objectives and adapts as necessary. has a written strategic plan w/ specific objectives, funding priorities, and dates and regularly evaluates progress toward the key objectives and adapts as necessary. conducts an annual performance review of itself conducts an annual performance review of itself

13 Implementation of Agreements The Fund: becomes operational within one year becomes operational within one year in compliance with all agreement conditions (incl. legal registry) in compliance with all agreement conditions (incl. legal registry) completes and makes accessible, annual audits, plans and reports completes and makes accessible, annual audits, plans and reports Grant Making total funds disbursed is consistent with the expenditure plan. total funds disbursed is consistent with the expenditure plan. grant making processes are competitive. grant making processes are competitive. grant disbursement periods are reasonable. grant disbursement periods are reasonable. grant agreements follow best practices and require reporting on conservation impacts. grant agreements follow best practices and require reporting on conservation impacts. monitoring and evaluation plan of grants exists. monitoring and evaluation plan of grants exists.

14 Financial Management The Fund: has established a financial plan (w/ budgets, income & expenditure forecasts). has established a financial plan (w/ budgets, income & expenditure forecasts). has established a written investment policy. has established a written investment policy. has kept within the administrative costs ceiling limits. has kept within the administrative costs ceiling limits. has established investment monitoring capabilities has established investment monitoring capabilities has diversified its sources of revenue has diversified its sources of revenue

15 2.KfW questions of EF governance structures [April 2007] Board Which are the major considerations when nominating a Board (e.g. skills and level-of-effort) and managing the succession of its members? Which are the major considerations when nominating a Board (e.g. skills and level-of-effort) and managing the succession of its members? Which governance structures are particularly conducive to balanced and objective decision-making? (e.g. to prevent hijacking of resource allocation by special interests.) Which governance structures are particularly conducive to balanced and objective decision-making? (e.g. to prevent hijacking of resource allocation by special interests.) What is the balance necessary between levels of ex-ante and ex- post monitoring and control of Fund activities relative to the desired efficiency and flexibility? What is the balance necessary between levels of ex-ante and ex- post monitoring and control of Fund activities relative to the desired efficiency and flexibility?

16 KfW questions of EF Management [April 2007] Grant Making Which enabling conditions have proven necessary for transparent, participatory and efficient Fund mgt? Which enabling conditions have proven necessary for transparent, participatory and efficient Fund mgt? Which approaches to technical and financial auditing of grants have proven effective and efficient? Which approaches to technical and financial auditing of grants have proven effective and efficient? Which indicators have proven most effective in allocation of Fund’s resources? Which indicators have proven most effective in allocation of Fund’s resources? Which grant selection criteria have been particularly effective for allocation of Fund resources? Which grant selection criteria have been particularly effective for allocation of Fund resources? What is the appropriate level of administrative layers in the grant approval process, and why? What is the appropriate level of administrative layers in the grant approval process, and why? What are acceptable administrative expense ceilings, and why? What are acceptable administrative expense ceilings, and why?

17 What does Success Look Like? EFs which attract additional $ Demonstrate shared principles with donors. Demonstrate shared principles with donors. Demonstrate host-country government support. Demonstrate host-country government support. Offer attractive governance & management structure Offer attractive governance & management structure Develop a remarkable track record (brand) Develop a remarkable track record (brand) Avoid being identified too much with a particular donor Avoid being identified too much with a particular donor Offer economies of scale or value-added Offer economies of scale or value-added Offer incentives (e.g. subsidized admin costs) Offer incentives (e.g. subsidized admin costs) Offer a compelling strategy Offer a compelling strategy Work in areas of particularly high biodiversity value Work in areas of particularly high biodiversity value

18 Avoid Unnecessary Complexity Dualing board – Different visions Dualing board – Different visions Mission Creep (e.g. becoming implementers) Mission Creep (e.g. becoming implementers) Multiple tiers of authority Multiple tiers of authority Lack of delegation of authority Lack of delegation of authority Creation of unnecessary layers or bodies Creation of unnecessary layers or bodies Complex fund management agreements Complex fund management agreements How did we do this to ourselves?

19 “When it comes time to make a choice, most of the act of choosing has already been done.” Much of a fund “decision space” can be limited by early agreement clauses Much of a fund “decision space” can be limited by early agreement clauses Complexity of Fund design is frequently the result of accommodating diverse perspectives. Complexity of Fund design is frequently the result of accommodating diverse perspectives. ComplexityFlexibility

20 Legal and Policy Tiers For flexibility: Push conditionality to lowest level possible U.S. statuteHost Country Gov. Statute Bilateral Agreements Incorporation Documents By-laws Operational Policies Management Agreements Consider ease of amendment

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