International Small Grants Programme: review

Chapter 4: Effectiveness of the Programme Design

This chapter reviews the design of the Programme to assess the extent to which the Programme structures and processes support the achievement of the objectives. The analysis is based on interviews with applicants and award holders, interviews with stakeholders and review of programme documentation. It also uses learning from the literature review and from interviews with other funders.

Rationale for the Programme design

As outlined in the introduction, the original SMP/NIDOS^[8] proposition was that a funding programme aimed at smaller organisations would create an opportunity to build the capacity and support the growth of small and impactful Scottish international development projects and develop a pool of stronger Scottish headquartered organisations that could in the future then bid effectively for the main grants programme and make the main programme more dynamic and varied.

The design of the Programme proposed by SMP/NIDOS was therefore focused on the growth and development of Scottish based organisations through:

• Feasibility grants to develop and test new project ideas,
• Project grants to support delivery over three years,
• Capacity building grants to build the capacity of the small organisations in Scotland and their partners.

In the submission to Ministers in 2019, the aims of the Programme were extended to capture the aspiration for local development impact. The aims of the Programme in that submission included:

• Focus (within the spectrum of the MDGs) on the priority needs of local communities
• Strengthen local community capacity and invest in local community assets within the communities
• Empower these local community groups and structures to influence local decision makers

While the first objective of the Programme encapsulates the general aspiration for local development impact (Objective1: to enhance Scotland's contribution to the global fight against poverty through activity which is clearly designed to support the achievement of the MDGs /SDGs and economic growth in developing countries), the specific aims of strengthening local community capacity and empowering local communities to influence decision makers do not appear explicitly in the final version of the Programme (as described in the invitation to tender for the Management of the Programme in 2013)^[9]. It is not clear from the available documentation whether there was a subsequent decision to remove these aims, but the final Programme design did not adopt these aims. This suggests a mismatch between the original aspirations for the Programme and the Programme design.

Capacity of the Programme

Before considering the effectiveness of Programme structure and processes in supporting the achievement of objectives, this section reviews the assumptions underlying the design of the Programme. It considers:

1. The need/demand for funding from the sector

2. The aspirations and capacity for growth in the sector

3. The accessibility of the other funds for small organisations (i.e. the existence of a funding pipeline).

These will be discussed in turn:

1) Demand for funding from the sector

While a key reason for the Programme was that there were few sources of funding for smaller organisations, the demand for the Programme has been lower than anticipated and the annual allocated budget has never been fully utilised.

The learning reports produced annually by the Programme Managers have consistently identified low level of demand for the Programme, and in particular the low demand for feasibility and capacity building grants. While there has been stronger demand for Project grants, the learning reports have identified weaknesses in:

• the quality of applications,
• the capacity of small organisations,
• the capacity of governance structures within small organisations etc

While the Programme Managers have made practical recommendations to address these issues (for example, recommendations on the marketing of the Programme, training for applicants etc) the issue of demand would appear to be linked to a mismatch between the profile of the sector in Scotland and the Programme objectives.

The profile of the sector

The international development sector in Scotland is characterised by very small organisations:

• Based on OSCR date, over 60% of Scottish registered organisations who could have relevance to international development have an income of less than £25,000. (see appendix 2 for further information on the profile of the sector)
• Nearly one third (29%) of the membership of SIDA have an income of less than £20,000.
• This income level strongly suggests that many of these organisations are reliant on volunteers.

While the rationale for the Programme was to grow small organisations, the prevalence of micro-organisations is also a limitation due to the limited capacity of very small organisations to apply for and manage funding.

In interviews, micro-organisations (volunteer-led) identified that the investment of time required to submit an application to the Programme was a significant barrier to application. Trustees reported that the opportunity cost of making an application was high i.e. the time spent on developing application meant that other work of the charity was effectively 'on hold'.

Geographic focus of the sector

The existing data does not provide a breakdown of the geographic focus of small international development organisations in Scotland, but the pattern of demand for the Programme highlights a number of issues around the fit with the Programme's geographic priorities.

The majority of demand and the greatest number of awards (31 of 80 awards) have been for activity in Malawi, which reflect the historic links and the number of organisations with existing relationships in Malawi. Nearly half of all Programme spend (49%) has been awarded to organisations working with partners in Malawi

There have been only two awards in Rwanda, which reflects the small number of Scottish organisations operating in Rwanda /few historic links in Rwanda.

While demand for Project grants has been stronger that demand for Feasibility and Capacity Building grants, the changes in the geographic priorities for the Programme (which reflected the new International Development Strategy 2016) has affected demand for project grants to some extent. Prior to the change in geographic focus, Project grants had been awarded to organisations working in Bangladesh, Tanzania and in the three priority states in India. These areas are no longer priorities for the Scottish Government's IDF.

The Programme Managers reports identify that demand for Feasibility and Capacity building grants has also been low throughout the life of the Programme. Changes to the criteria in the 2018 funding round opened eligibility for these grants to organisations working in all countries designated as having medium/low development on the UN Human Development Index. This increased the accessibility of the Programme to larger number of organisations within the sector, and resulted in a small increase in demand for Feasibility and Capacity building grants.

Table 7: Number of applications for Feasibility and Capacity Building Grants per funding round

Funding round	No. of applications for Feasibility	No. of applications for Capacity Building
2014	6	2
2015	6	2
2016	5	3
2017	3	2
2018	3	5
2019	6	8

Of 22 applications for Feasibility or Capacity building grants received in 2108 and 2019 (after the change in eligibility criteria):

• 9 were from organisations working in the partner countries of the current IDF (post 2017)
• 5 were from organisations working in countries which had been priorities in the previous (pre 2017) IDF (i.e. Tanzania and Bangladesh)
• 7 were for work in 'new' countries not previous included in the IDF but with low/medium development on the UN Human Development Index
• 1 for capacity building of the Scottish organisation.

Table 8: Capacity Building and Feasibility grant applications by country in 2108 and 2019

	Number of applications for Feasibility studies	Number of applications for Capacity Building
Malawi	2	2
Zambia		4
Rwanda	1
Tanzania	1	3
Bangladesh	1
DRC	1
Kenya	1	1
Uganda	2
Mozambique		1
Myanmar/Scotland		1
Scotland		1

2) Aspirations and capacity for growth

The profile of the sector also places limitations of the aspirations and capacity for growth. The underlying principle of the Programme is that small organisations want to grow. However, interviews with small organisations ascertained that some small organisations did not have aspirations to grow their organisations, although this does not mean that they did not have aspirations to deliver impact.

'We have skills and expertise to share – that's our driver – to share that – it's not about growing us as an organisation'

'Our model is not about growing us - it's to support our partners to grow.'

'Staying small works for us. Getting bigger would just mean more of our time spent on applying for funding and grant management. For us, it's all about the relationships we have [in the partner country] and building on them. We can see that it has real impact'.

The scale of many award holders (micro-organisations) and the finite limits to volunteer time mean that the capacity for growth is limited in some organisations.

'We've thought about growth, but it would take more time to manage more money – and we just don't have more time'

While the Programme seeks to deliver sustainable impact, interviews with micro-organisations also identified that their small scale and corresponding restricted sphere of influence was a limitation on their capacity to deliver sustainable impact at the local level.

3) Access to other funding

The stated of the Programme was 'to build capacity and upscale small international development organisations so that they can go on to bid for funding through the International Development Fund ("IDF") and from other funders.' However, research and expert opinion highlighted the lack of funding sources for small international development organisations, and the intense competition for those which do exist.

"There is no pipeline for small charities. Small organisations [referring to organisations under £500k turnover] are fighting for a very limited number of funding sources." (Funding Expert)

Research for Bond^[10] on funding trends in the UK international development sector highlighted that the major sources of funding for small organisations were trusts and foundations (36% of total income) and individual giving (32% of income).

The Bond research also showed how sources of funding had changed over time by comparing changes in the sources of funding in the period 2003-6 to the sources in the period 2013-16. For small organisations this showed a dramatic reduction (90%) in the funding raised from corporates (grants and sponsorship) which highlights a further challenge in the funding landscape^[11].

Funding experts also reported that even where funds aimed at small charities do exist, these 'larger' small organisations are better placed to secure these funds, often due to organisations having access to professional fundraisers, so even targeted 'small grants' programmes can feel inaccessible to very small, micro charities.

The inaccessibility of other funding sources was confirmed through interviews with Programme awardees who reported that they knew about other funding sources such as the Small Charities Challenge Fund but did not feel 'ready' for the scale and complexity of these types of grant processes.

Effectiveness of the Programme structure

How does the Progression structure support growth of small organisations?

The Programme is focused on building the capacity of small organisations and is designed in such a way as to provide a structured pathway for growth through feasibility, capacity building, project grants. While it is recognised that the 'standard' approach would not be appropriate for all small organisations only 12 of the 43 award holders have used the elements of the development pathway offered through the Programme.

• 5 organisations held Feasibility, Capacity Building and Project grants
• 5 held grants for Feasibility and Project grants
• 2 held Project and Capacity Building grants

Of the remaining 31 organisations:

• 17 organisations had Project grants only (4 had more than one Project grant)
• 9 organisations received Feasibility awards only
• 4 received Capacity Building awards only
• 1 received a Feasibility award and a Capacity Building award.

Interviews with grant-holders highlighted the other elements of the Programme structure which were significant in supporting the development of the organisation and the capacity to deliver impact.

Interviewees reported that the duration of Project grants (up to three years) had been a significant factor in supporting organisational growth and capacity to deliver impact by:

• enabling them to work with partners to really understand what was needed and to plan/improve delivery, understand gaps and develop new approaches,
• building delivery skills and experience and developing the capacity of the organisation to be 'funder ready' (development of M&E systems, developing reporting skills etc).

Interviewees contrasted the benefit of longer-term funding with the challenges of short-term funding including stop/start activity, loss of momentum, potential loss of partners, and the time required to constantly re-apply for funding.

Some organisations also reported that securing a three-year grant had also allowed them to employ staff, which in turn had given the organisations some 'developmental resource' which had supported further growth.

Access to Capacity Building grants was considered a unique element of the Programme. In the context of the challenges for small organisations in securing core funding, capacity building grants had enabled organisations to build capacity for project planning, build the delivery capacity of the organisation and strengthen governance. It should be noted that Capacity Building grants have not always resulted in 'growth' of organisations, but organisations reported that they had made a difference in improving the quality of the work that small organisations are involved in.

'[Capacity building grants] have enabled us to build up to where we are now. We've got a better board, more expertise in governance, we've got a plan, and we've got the confidence and skills to deliver. But it's not all about developing us as a charity, it's about increasing our capacity to deliver in [partner country]. Sustainability for us means sustainable impact in [partner country], not sustainability of our organisation'.

However, discussions on capacity building also highlighted a tension for volunteer led organisations. Volunteer time is finite and while trustees recognised the value and impact of capacity building on their organisations, they also highlighted that investment of time/resources in building the capacity of the organisation to be 'fundable' can reduce the amount of time available for 'doing the work of the charity' and can act as a disincentive to involvement in the Programme i.e. the cost to the charity in terms of the time involved in application, reporting etc and the time lost on other fundraising and delivery outweighs the value of very small grants.

Barriers in the Programme structure

Award holders also identified elements of the Programme structure which acted as barriers to achieving objectives.

The Programme limits the level of expenditure in Scotland to 8% of the total project budget. While applicants recognise the requirement to focus spend in the partner country, the limit of 8% of spend in Scotland is perceived as limiting the potential for organisational growth. As previously noted, many of the small organisations are solely dependent on volunteers. These organisations identified that 'volunteer resources are finite' and a Programme structure which restricted their capacity to employ staff also restricted the capacity for growth and professionalisation of their organisation.

'Funders need to recognise that without staff, we can't grow. Funding 'staff time' will support organisation to grow.'

The Programme has a requirement that applicants have an in-country partner. This requirement seeks to ensure that projects involve local partners in planning and design, are embedded in local structures and are more sustainable in the longer term. However, interviews identified that the requirement for a partner can act as a barrier to the development of new activity in countries where there are fewer existing relationships (e.g. Rwanda). Another applicant also reported that this requirement had hindered their ability to replicate a successful approach in a new country, as they did not have existing partnerships in that country.

The change in Programme criteria in 2018 to support feasibility grants in countries out with the Scottish Government's three Sub-Saharan partner countries has made the Programme more accessible to the sector, However, while the Programme guidance states that these proposals 'can then be taken forward subsequently as project grant applications to other funders' applicants expressed some frustration that there are few avenues for funding projects arising from these studies.

In the context of the Programme acting as a pipeline for the IDF, the very small number of award holders who had considered the progression route from the Programme to the Main Grants Programme reported that the 'jump' from managing a £60,000 project to a Main Grant is too large, and that a 'stepped progression route' was required.

Award holders also suggested there were opportunities to augment the Programme design to better support organisational growth. These included:

• a fast-track application route for 'scaling up' that is a shorter process than the full application process

• access to targeted business advice to support organisations with growth aspirations.

Effectiveness of the Programme processes

We also asked applicants and award-holders about the effectiveness of the Programme processes and the extent to which these supported the Programme purpose and objectives.

Application Process

In general, applicants found the application process accessible and well supported. However, many applicants found the scale of the application forms and the level of information required to complete them to be both 'tiresome and stressful'.

As previously reported, some very small organisations and new applicants found time/level of resource required to make an application a disincentive. However, those which had made successful applications also commented that the rigour required through the application process 'helped to make delivery more effective'.

Larger or more experienced applicants did not find the application process challenging but did identify that the application form was 'too long'. The investment of time in applying for funds was significant and applicants suggested that a two-stage application process for Project grants might be more time effective.

Partners in Malawi also commented on the long lead in times for project development 'the timescale from the time of discussing the possible work with partners and colleagues to actually being able to start a project is between 8 and 24 months'

Support for application

There is a high level of support for applicants. The Programme delivers information days which provide prospective applicants with the opportunity to find out about the Programme priorities, eligibility criteria, and assessment criteria and to find out 'what makes a good application'. In response to requests from the sector, the partners also delivered a webinar to increase accessibility of the information to those who couldn't attend the events and the information day was made available on video.

The Scottish Government International Development Team also attend the information days, providing a direct link with the donor which reinforces the sense of 'connection' between the small charities and the Scottish Government and gives confidence to applicants in the 'value' of smaller charities to the IDF.

The information sessions also provide an introduction to the 'network organisations' which provide support to new applicants: The Scottish Government funds SIDA to provide technical support to applicants – help in application writing, in developing project plans, budgets, and monitoring and evaluation plans. SMP provides support to applicants that propose work in Malawi and access to the SMPs networks in Malawi. SMP also offer a bid reading service which provides advice and feedback prior to application. Applicants highlighted that value of the support from the two network organisations and the value of the opportunity to develop peer relationships with other international development organisations.

Applicants also commented on the value they placed on support available through the network organisations post-application:

• SIDA also runs training sessions for applicants and awardees on issues such as monitoring and evaluation, report writing etc and provides mentoring to awardees to support them through the process.
• SMP also provides ongoing networking opportunities for grant holders and frequently provides practical help to grant holders to support delivery based its extensive knowledge of systems in Malawi and its of network of contacts

Assessment

The Programme Managers have developed a scoring matrix which forms the basis for assessment. However, all applicants also get a telephone assessment call. Applicants liked the opportunity to speak to someone about their application, one stating that "it's much easier to get your passion over in a telephone call" and the opportunity to explain any issues or misunderstandings in the application information. Applicants can involve partners in the assessment call, although few have participated to date.

Applicants report that the assessment process has become more demanding of them. One applicant described the assessment as 'harsh'.

'We are not international development professionals; we are a group of individuals with skills and experience that we want to share'

The Programme Managers score all valid applications and make recommendations to the Scottish Government based on RAG rating. All final decisions on funding are made by the Scottish Government after being signed off at Ministerial level.

Relationships

Many of the award holders had received considerable levels of support from the Programme Managers over time and applicants praised the 'approachability' of the Programme Managers "I know I can pick up the phone to [programme manager] at any time". Award holders described 'purposeful and supportive' relationships and 'flexible and enabling approaches' of the Programme Managers. One award holder reported that "They worked with us to help us achieve what we wanted to do", and another reported that the enabling approach had enabled the organisation to "realise something even bigger than we first anticipated".

Reporting

While applicants recognised the need for reporting and accountability, there is a lot of anxiety over reporting among the smaller organisations. Reporting was described as daunting and onerous, and there was uncertainty around what was required in terms of reporting. One interviewee stated:

'It's not clear what they want from us'

The Malawi Scotland Partnership (MaSP) also a core funded organisation of the Scottish Government highlighted that the intensity and frequency of the reporting was challenging for very small organisations in Malawi and the level of reporting seemed disproportionate to the very small sums of money that projects were receiving.

While more experienced fund holders did not find the level of reporting challenging, they commented that the focus of reporting on results means that organisations feel pressure to demonstrate success and are therefore less likely to share the challenges and learning from project delivery.

Drive for increasing professionalisation of the Programme

Applicants in Scotland and partners in Malawi reported that the application process, assessment and reporting had become more stringent over time.

The Programme Managers recognise that the requirements on applicants have 'grown over time' in an incremental way. These changes have been driven by the need for compliance with the Scottish Government's requirements for accountability and the changing policy environment and 'good practice requirements' i.e. safeguarding, financial due diligence etc. These issues have invariably added to the existing information/due diligence requirements without taking anything away. In recognition that incremental changes have driven up the 'quantity' of information required of applicants, the Programme Managers recommend a complete review of the application, assessment and reporting processes for any future Programme.

The Scottish Government has recognised the challenges of increasing compliance for small organisations and sought to support them. For example, when Scottish Government introduced requirements to have safeguarding policies, following the safeguarding scandal in 2018, the Scottish Government approach included funding SIDA to provide training and support for small organisations to develop safeguarding policies, and allowed organisations to apply for capacity building grants to develop safeguarding policies with partners.

Some applicants reported that the requirements to meet the increasing conditions were burdensome and while they recognised the need for accountability and to respond to safeguarding issues etc, they questioned the applicability of some policies to the scale at which they were operating. Some also questioned their own 'sphere of influence' and capacity as micro-organisations to influence cultural beliefs and behaviours at the local level. For example, in relation to safeguarding, one interviewee said:

'As a very small organisation, we have no official status with our partner'

While applicants applauded the Scottish Government's explicit support of small organisations and perceived the Scottish Government as a 'supportive donor', some, especially micro-organisations, felt that the processes were misaligned with the capacity of very small organisations, which are mainly volunteer-led, and felt that the expectations on trustees were unrealistic. As stated by one trustee:

" We are all trying to achieve the same thing [the sector and the Scottish Government] but the processes get in the way".

The drive for increased accountability has also affected relationships between the Programme Managers and some grant holders who feel that level of scrutiny is disproportionate.

Learning from other funders

While the interviews with Programme award holders suggest a number of weaknesses in the Programme processes, it is important to contextualise the responses and recognise that many of the issues raised by award holders are not specific to the Programme, but reflect the challenges in the funding environment for small iNGOs involved in international development. Research by the Baring Foundation^[12] described the funding context for small iNGOs:

'The context is one of intense competition for funding among NGOs, extensive time spent in applications, pressure to over-promise ambitious targets and to show success to get continued funds'

The challenges for funded organisation identified in the Baring Foundation's review are listed in the box below. The challenges echo many of those identified in relation to the Scottish Governments Small Grants Programme.

1. There is a lot of fear/anxiety in relation to high donor demands around grant making.

2. There are high levels of anxiety around grant seeking because of the intense competition and the high expectations based on target setting.

3. The growing reliance on paperwork and complex documentation appears to be replacing the need for good relationships and spaces for negotiation and shared problem solving.

4. The high costs of completing applications involving extensive paperwork, and growing monitoring and evaluation demands are not covered by the grants given.

5. There is very limited availability of funds for skills building and covering core costs.

6. The rush for demonstrable results in the short term, using quantitative methods (not useful in some contexts) is often not realistic.

7. The 'diminishment of staff' as reliance on fixed paper-based plans and evidence replace confidence in their judgment; they are increasingly working within narrow bureaucratic constraints. Essential skills for development such as initiative, understanding of context, ability to work well with people are being squeezed out by rigid systems approaches.

8. Multiple and contradictory formats, tools, focus, and the ever-changing ideas coming from different donors, makes it difficult for partners in Africa to follow or to work with these changes. Local staff feel they get little support to develop their skills, and they need many as development work is complex and demanding, while demands from the donors increasingly take time and attention away from the work at the local level.