Shooting Oneself in the Foot: Is Donor-Imposed Bureaucracy Turning Civil Society Organizations into Malfunctioning Machines?

This presentation explores unintended consequences of donor agency regulations on indigenous civil society organizations. The findings are based on two studies conducted 10 years apart: 1) a PhD dissertation that used qualitative methods to study 7 regional- or national-level organizations dependent on different donors in the Western Hemisphere; 2) a financial assessment tool that scored 7 CSOs receiving PEPFAR funding in Cote d'Ivoire, using 32 categories of questions and a 5-point scale. Although external funding was a significant source of support for the 14 organizations and their programs, the regulations and policies attached to the financial aid also served to undermine internal systems, especially financial systems, even in the process of strengthening them: 1) fragmentation, a patchwork of mini-systems, responding to donor/project requirements, with no unified system; 2) internal inconsistencies in policies and procedures, again to comply with donor requirements; 3) donor requirements that take precedence over local laws (e.g. USAID bio-data forms completed but local payroll taxes never paid); 4) donor requirements that take precedence over internationally recognized accounting standards (e.g. project reporting trumps annual fiscal year reports; 5) project-driven system strengthening that becomes a historic artifact, filed away after the project is completed, as it was never an "organizational" system; and, 6) double-standards for local and international organizations. Findings highlight the need for organization-wide strengthening of CSOs, and a review of donor policies and practical “social justice” in the way such policies are applied to CSOs.