Any attempt to understand why some INGOs are considering setting up local affiliates should be seen against the backdrop of the partnership approach to development.
INGOs are mandated by law to work only and exclusively through partnerships with local NGOs that are working as grantees at the ground level, delivering programs and often services to local communities.
Quite often INGOs have been supporting local counterparts with organizational development that, through a long term engagement, is supposed to help them become sound and effective organizations capable of “walking” on their own two feet while delivering development activities.
Such support must be well framed, within a clear time line, indicating the start and the exit point.
Being clear about when it is the right time to “exit” this form of support is probably the most difficult as well as the most important. Organizational development cannot go on forever otherwise it becomes synonymous with an institutional dependency.
Are the INGOs ready to let their counterparts go? Are the NGOs ready to “fly” solo? How would we manage the transition towards a full independence, including financial, of local organizations?
Surely, after many years of good practices, many local organizations are strong enough to do the job without any more institutional support. Will the donors be ready to trust them or will they keep preferring paying double overhead but at least remaining sure that their funding is well spent thanks to INGOs’ oversight?
After all the partnership approach to development necessarily implies major financial costs, oftentimes involving a semi level of co-management and co-implementation that is necessary in order to deliver while building local capacities.
If more donors, cognizant of the changed organizational landscape become keener to grant more resources to local organizations, then you might get some hint as to why some INGOs are making the “nationalization” move.
Some INGOs indeed might set up their own local “shop” to tap into financial resources supposedly going local. The fact that the regulatory framework is getting tighter for INGOs could offer another good reason.
Technically or even legally there is nothing wrong with what some INGOs are doing or considering doing. After all in an era where financial resources for international development are more and more scarce what is happening could be seen not only as a survival attempt but also as a way to make the sector leaner and more efficient.
By localizing, INGOs should be able to ensure funding and implementation more through long distance “remote control”: as the HQs would grant more autonomy to a legally independent though affiliated organizations, there will be no more need to have offices in town.
Possibly this also implies a much less number of expatriates needed at the local level as localized INGOs would be run only by Nepali citizens.
At the same time a different and probably better form of localization could happen when long standing and well trusted local partners could be handed the overall management of the operations. This is the case when an INGO and a local counterpart have developed such a relationship that allows them to think strategically and long term. No need to set up a new NGO, no need to change logos but what you need is the ability to negotiate new working partnership agreements that suit the new scenario.
Ultimately entrusting your partner with such a responsibility is nothing less than proving that your partnership approach was effective. This option, referred here as the graduated approach could really offer a good compromise.
Regardless of the options, what is happening now could bring efficiency and more value for money to the sector but with one caveat: any chosen path should be carried out in a very transparent and in an open manner.
INGOs involved should not shy away from criticisms but rather come forward and start a conversation. Certainly an intervention at the policy level would be welcome as the traditional divide between national and international becomes less relevant.
For example the domain of public interest companies, a concept still very new, could be extended by creating new hybrid organizations that better reflect realities such as social entrepreneurship and ethical business. A legislative change could offer venues for INGOs to opt to register as national grant making foundations: local but mandated to support grass roots level grantees. In this case a foundation should work as a grant maker only rather than a co-implementer.
Ultimately there is no a way to prevent a group of citizens to set up a not for profit that shares the same mission, vision and objectives of an INGO already active in the country.
Both nationalization and graduation approaches are clear indicators of the transition going on in the sector. While these can be just mere attempts for many INGOs to survive, both options show that their days are counted.
By simply registering INGOs as NGOs, you do not necessarily win new grants. Ideas, contents, innovation, local knowledge and real feet on the ground are to be rewarded when donor agencies select their grantees.
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