Background

Where non-governmental organizations (NGOs) rely heavily on restricted funding to support their project work, there is a risk it could undermine their organizational effectiveness or financial resilience. Restricted funding for project or programme grants does not typically cover a full share of the administration costs incurred for the organization as a whole. These administration costs could include the costs of organizational management, finance and payroll functions, or other necessary non-programme costs, such as head office rent and utilities.

Administration is essential to the effective, efficient and safe delivery of projects and programmes, but without adequate funding, such functions may be inhibited. Alternatively, the organization either has to draw on reserves to fund such functions, or fund them disproportionately from unrestricted income.

The issue can be compounded by a reluctance by NGOs to divulge their actual administration costs. There can be a perception in the sector that expenditure in such areas demonstrates inefficiency and undermines legitimacy. This creates a vicious cycle with organizations reporting lower administration costs and funders not knowing whether they are covering a fair allocation of these costs.

The community of international grant-making foundations has identified this as a global issue and has been raising awareness of the issue over the last few years. As part of that work, they have come together and have commissioned Humentum, a not-for-profit organization with considerable experience in the sector, to gather information on grantees’ experiences in Africa, Asia, Latin America and Europe. This research will be used to help inform their future policies in relation to cost coverage accordingly.

This page tells you all about our research into this issue. We would like you to take part in the research and this page helps answer questions you might have about it. Once you’ve read this information, or talked about it with Humentum, you can decide whether you are content to participate.

What the research is about

The purpose of this research is to enable these and other funders to understand more clearly whether, or not, they are sufficiently covering grantees’ financial needs.

As part of this work, we are engaging with a sample of grantees of these foundations based in Western and Eastern Europe, East and West Africa, Latin America and South Asia. Although the contexts in each geographical area are different, any similarities will indicate whether this is indeed a global problem.

Your funder has invited your organization to take part in the research. Around 90 organizations will take part in the first phase of the research where we will ask for some core information on your organization. We will then ask 50 of the organizations to take part in the second phase of the research, where we will explore the issues in more depth. Of those 50, some organizations will be invited to be one of the case studies included in our research.

What will happen as part of the research?

Your organization will be asked to complete a questionnaire, and to provide some financial data and other information. You will also be asked to complete a self-assessment of your organization’s cost coverage practice. Humentum will go through the data collection requirements with you in a webinar before the data collection process and provide support to you during the process. This may then be followed up with some further questions and an interview, when our researchers will spend some time with you and relevant members of your team in order to better understand your organization’s approach to recovering costs from donors and the challenges and issues you face in this area.

Your funder recognises that this is an additional burden on NGOs and is willing to provide some financial compensation accordingly. In exchange, a stipend will be provided for your organization’s participation, amounting to $1,000 USD for Phase 1 and $1,500 USD for Phase 2. If you wish to claim this funding for your organization as part of your participation, you will be able to sign up for this stipend when you register.

What if we don’t want to take part?

Your organization doesn’t have to take part in the research. Just tell Humentum via Kelly Russell, on kelly.russell@humentum.org, that you prefer not to participate. It’s not going to be a problem. It’s up to you if your organization takes part in the research.

What if I change my mind?

If, after starting the data collection process, you change your mind about your organization taking part, that’s OK. Please just let us know.

Will anyone know that our organization has participated in the research?

We will acknowledge your organization as a participant in the research in the final report, unless you prefer us not to. But any information we gather as part of the research (whether through the questionnaire, self-assessment, financial data collection template, document review or interviews) will be non-attributable. This means that the information from your organization will be collated with that of the other organizations in the first phase, and, if applicable, with that of the other organizations taking part in the second phase. It will be presented in such a way that the reader cannot attribute anything to a specific organization. If we wish to use any of the information you provide as a case example, we will seek your organization’s approval beforehand, and you retain the right to say no.

Will individuals participating on behalf of their organizations be named or quoted in the research?

Nothing said by an individual will be attributed to them by name. The research will not refer to job titles unless these are so generic that it would not be possible to identify the individual.

During the research, the Humentum researcher will sometimes write down things that you or your colleagues say about your organization. what you’re doing and what you’re thinking. This is because we think that it’s useful and interesting. The researcher may also ask whether you are okay if they record the discussion digitally. If this happens, the recordings will not be shared with the organization or the funders and will be kept secure on Humentum’s IT system. This would be simply to enable the researcher to make sure that they fully understand what you have said when they look back over all the notes. But do not worry if you are uncomfortable with this if asked, the researcher will ask your permission to record a conversation beforehand and if you would prefer that they don’t, you just have to say.

As mentioned above, the researcher won’t identify you in the report. Your name won’t be used and any notes or recordings will remain confidential.

How do I know that you’re going to keep any information I provide safely?

Any digital recordings, documents or notes will be stored in a password protected folder within Humentum’s IT system. All documents will remain confidential with only the research team having access to them. All recordings will be securely managed and deleted after the research has been completed.

What’s going to happen after you’ve done all this research?

The information collected will be used to write and publish a report. The anonymised data will form part of the analysis.

What if I have questions about the research?

If you take part in the research, you will be assigned a named researcher and you will be able to ask them questions at any time. You can also contact Kelly Russell, Humentum’s project coordinator, on kelly.russell@humentum.org.

How do I raise a concern or complain about the research?

If you have a concern or a complaint, please contact Tim Boyes-Watson, Humentum’s Global Director for Alliances and Advocacy, who is the project director for this research, on tim.boyes-watson@humentum.org. He will endeavour to resolve any problems that might arise.

Still have questions? Please see our FAQ.