EU Funding for NGOs- Value for Money?
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The EU, together with its Member States, are projected to provide more than half of global aid for 2014-2020. A considerable, though unknown, amount of this aid is administered through and to NGOs. Considering the scope of funding, the issue of value for money is of acute importance, and justifiably attracts much interest among EU officials and citizens.
The following report analyzes the EU’s funding structure and highlights a number of troubling features, affecting transparency, division of labor, and coherency of objectives.
- EU funding, involving large budgets, is highly complex, marked by direct and indirect channels, overlapping in some instances. Funding instruments are frequently established and then dismantled, reorganized, or renamed – restricting transparency and public scrutiny and raising administration costs.
- All of ECHO’s funding for humanitarian aid (approximately €1 billion per year) is administered indirectly – 46% through European NGOs that often redistribute the money to other NGOs, and 54% through international organizations, UN, or Member State agencies.
- The complexity of direct funding, along with considerable use of indirect funding channels, compromises transparency and traceability of funds.
- The multiplicity of EU funding frameworks for NGOs results in “double dipping” – in which an organization is funded by more than one EU framework, often for very similar activities, for the same timeframe. There are also some discrepancies between different information sources regarding the amounts and recipient organizations of granted funds.
- EU policies and objectives are often inconsistent or blatantly contradictory.
- ECHO finances projects and NGOs that diverge from ECHO’s officially stated principles and objectives.
Multiplicity and Complexity of Funding Instruments
The majority of EU funding for external aid is managed by two departments in the European Commission: Directorate-General for Development and Cooperation – EuropeAid (DEVCO) and Directorate-General for Humanitarian Aid and Civil Protection (ECHO), formerly the European Community Humanitarian Aid Office (the abbreviation was kept) – with a projected budget of €82 billion for 2014-2020.
DEVCO’s funding structure is elaborate, consisting of several instruments that repeatedly merge, split, or change names. DEVCO itself is the result of a merger in 2011 between the EuropeAid cooperation office (AIDCO) and the Directorate-General for International Cooperation-EuropeAid. In January 2015, it was renamed Directorate-General for International Cooperation and Development (DEVCO).
The Instrument for Stability changed its name in 2015 to Instrument contributing to Stability and Peace, as part of a “new generation of instruments for financing external actions.” The European Neighbourhood Partnership Instrument changed its name to European Neighbourhood Instrument (ENI), while the new, unrelated Partnership Instrument is the successor to the Instrument for Cooperation with Industrialized Countries (ICI). Other DEVCO instruments are the European Instrument for Democracy and Human Rights (EIDHR) and the Development Cooperation Instrument (DCI).
ECHO’s funding structure is divided into “civil protection” and “humanitarian aid.” Civil protection is designated for immediate response in the aftermath of disasters and has a budget of €368 million for 2014-2020.Humanitarian aid is designated for “needs-based humanitarian assistance with particular attention to the most vulnerable victims” and has a budget of €6.6 billion for the same period. Humanitarian aid is implemented in partnership with international organizations and humanitarian NGOs, meaning that all of ECHO’s funding for humanitarian aid is administered indirectly – 46% through European NGOs that often redistribute the money to local NGOs, and 54% through international organizations, UN, or Member State agencies.
Many of these funding instruments have multiple subdivisions. ENI includes the European Peacebuilding Initiative (PbI), designated for the Israeli-Palestinian conflict, and the Civil Society Facility (CSF). PbI was previously named Partnership for Peace (PfP); according to the ENI Action Plan for 2015, “based on the findings of an external consultation conducted in 2014 on the PfP Programme 2007-14, and in order to clarify and enhance the programme’s relevance to the current regional political context, it has been decided to rename the programme as ‘EU Peacebuilding Initiative’ (EU PbI)” (Annex 5, p.3). DCI funding for NGOs is divided into thematic and geographic programs, including “Civil society organisations and local authorities” (CSO/LA), previously titled “Non-State Actors.”
In addition to the funding instruments that fall under DEVCO and ECHO, there are two EU volunteer programs – the European Volunteer Service and the EU Aid Volunteers initiative, funded by Erasmus+ and the Commission’s Education, Audio-visual and Culture Executive Agency (EACEA) respectively. Both carry out projects via NGOs.
Finally, there are several joint funding initiatives of the EU, sometimes in partnership with individual Member States, that have similar goals and overlap in geographic and thematic scope. Although these are external to the EU institutionally, they are all financed by it. Among others: the European Endowment for Democracy (EED), the Anna Lindh Foundation, and the Euro-Mediterranean Foundation of Support to Human Rights Defenders (EMHRF) – founded by the Euro-Mediterranean Human Rights Network (EMHRN).
On an EU webpage about development aid, the EU boasts to have “repeatedly been ranked among the most transparent aid donors. Giving information about where how much of our aid goes, and on what it is spent, helps tax payers to check that their money is being used wisely. It avoids different donors duplicating each other and helps to prevent corruption and misuse of funds.” However, as shown below, the complexity of funding inevitably results in compromised transparency, overlapping areas of responsibility and inconsistent objectives.
In regards to transparency, the sheer multiplicity of instruments and indirect funding render it difficult for the European Parliament and any other party to track funds. Instruments do not publish reports regularly or in a consistent manner. For example, as of January 2016 there are six instrument-specific reports published on the website of the EU Delegation to Gaza and the West Bank, while on the website of the EU Delegation to Israel there is only one published report, on the PfP. Such reports are not published in regular intervals – the latest EIDHR report published on the delegation’s website covers grants from 2013 and onward, while the previous EIDHR report only covers 2007-2010. Although EIDHR’s website sports a library of evaluations, reports and legal references, the vast majority of files are missing.
The EU’s Financial Transparency System (FTS), which reports all EU funding per year, is often inconsistent with other sources (as described below), and does not substitute for coherent and framework-specific reports, to be checked against the calls for proposals.
In order to use the FTS and due to widespread indirect funding, in many instances one must know in advance the precise names of recipients and projects in order to retrieve relevant information. For example, according to the FTS, during the year 2014 no money was allocated to the West Bank and Gaza from ECHO, while according to ECHO’s own financial report, the West Bank and Gaza received €33.5 million. This discrepancy reflects the indirectness of ECHO funding: European partner organizations receive the funds from ECHO for Palestinian-designated projects, so “Palestine” is not listed as the recipient country in the FTS. As a result, the FTS cannot be used to track the €33.5 million allocated, unless there is prior information as to specific projects and their implementers.
Another example is funding for South Sudan. A search through the FTS provides information on about €8 million spent in 2014. However, according to DEVCO’s South Sudan page, at the end of 2013 the EU mobilized an additional €45 million through the European Development Fund (EDF) in response to the conflict, and since January 2014 contracted €68 million for a development project out of the €80 million budget of the suspended “State Building Contract” project. The ECHO factsheet states that the EU has invested another €224 million in assistance since December 2013.
Aside from the compromised traceability of reported funds, the FTS only accounts for about 20% of EU spending – the 20% managed directly by the Commission. The remaining 80% are under shared management with Member States, or managed indirectly by delegated partners that determine the projects and implementers independently. More often than not, there is no way of determining who the ultimate beneficiaries of these funds are, as there is no comprehensive database.
The above-mentioned joint funding initiatives of the EU and Member States – EED, Anna Lindh Foundation and EMHRF – are also unaccounted for in the FTS. Moreover, they do not have transparency mechanisms of their own, and none of them reports the exact sums of grants given by them. EMHRF and Anna Lindh Foundation do not list all of their beneficiaries.
Overlapping Division of Labor, “Double-dipping,” and Discrepancies
The complexity of EU funding results in overlapping or unclear areas of responsibility, which in turn compromises transparency further. The following are the stated objectives of several frameworks alongside their overlapping counterparts.
- The objective of ECHO, within its mandate for humanitarian aid and civil protection, is “to save and preserve life, prevent and alleviate human suffering and safeguard the integrity and dignity of populations affected by natural disasters and man-made crises.” DEVCO, whose mandate is development aid, nevertheless has under it the IcSP, designated for “crisis response, crisis preparedness and conflict prevention.”
- EIDHR’s aim is to provide support for the promotion of democracy and human rights in non-EU countries, while the EED’s objective is “to foster and encourage ‘deep and sustainable democracy’ in transition countries and in societies struggling for democratization… recognising that human rights and democracy are inextricably connected.”
- PfP’s objective is to build “confidence in a shared future” by “demonstrating the advantages of working together for mutual benefit and tangible results.” The purpose of the Anna Lindh foundation is “to bring people together from across the Mediterranean to improve mutual respect between cultures and to support civil society working for a common future for the region.”
- The DCI’s program CSO/LA “provides greater support to civil society and local authorities to encourage them to play a bigger role in development strategies,” while the CSF aims to “support the development of civil society financially… support for national and local civic initiatives and capacity-building to strengthen the role of civil society in the region.”
- CSF funds supplemented EIDHR calls for proposals for Gaza and the West Bank in 2012. While the nature and the precise amounts of this CSF funding are unclear and untraceable, this also indicates a lax and unclear division of labor.
The problem of insufficient coordination between EU donors has been raised before – a report analyzing this issue was commissioned by the European Parliament in 2012 and published in 2013. It found that “fragmentation and duplication of aid is widespread.” The EU has dedicated considerable efforts to addressing this problem – as stated in an EU factsheet: “in many countries the EU and its Member States combine their development efforts to ensure that we work more hand in hand and don’t do the same thing twice.”
One of several initiatives in this field is AMICI (“southern Mediterranean Investment Coordination Initiative”), whose objective is to “enhance coordination and efficient use of available resources… Any AMICI mechanism will be implemented taking full advantage of the existing institutional framework, without establishing new instruments or facilities, neither duplicating, nor substituting existing structures.”
Despite this initiative, which specifically addresses the Southern European Neighbourhood as part of the European Neighbourhood Policy (ENP), the latest review of the ENP (November 2015) indicates a clear intention to establish more instruments (p.20): “The Commission will therefore conduct an in-depth assessment over the coming months with a view to developing options, including an instrument, that could better and more efficiently address the financial needs of neighbourhood countries” (emphasis added).
In a section about the PfP in the ENI Action Plan for 2015, it is stated that “the Programme will take into account, seek complementarities with and avoid duplication with bilateral and regional actions, in particular under the European Instrument for Democracy and Human Rights, the Civil Society Facility and the Civil Society and Local Authorities Thematic Programme, the Instrument contributing to Stability and Peace (IcSP), and the East Jerusalem Programme under the EU-PA bilateral cooperation” (Annex 5, p. 7, emphasis added).
The EED, an indirect EU instrument (see above), states on its website that “it will engage in regular consultations with relevant EU institutions and other actors in order to avoid duplication and ensure synergy, complementarity and added-value to EU instruments and Member States bilateral activities” (emphasis added).
Despite these efforts, the following are examples of duplicated funding in 2014 involving precisely these instruments, some of which also result in discrepancies between reports:
- According to the FTS, Israeli NGO Mossawa received a grant of €77,207 from EIDHR (and indirectly from the CSF) in 2014, for the project “Strengthening Democratic Participation of the Arab Minority.” This NGO also received a grant of €373,586 from the CSO/LA for the project “Empowering the Periphery: Palestinian and Bedouin NSAs activated for community development.”
- According to NGO reporting to the Israeli Registrar of Non-Profits, Israeli NGO Ir Amim received a grant of NIS 229,692 from the EU (unspecified framework) for the project “Strengthening Socio-economic rights in East Jerusalem,” as well as a grant of NIS 138,000 from EED in 2014. The funding from EED is designated for “Overall use for the organization” – indicating that this grant could be used for all of Ir Amim’s activities, including those enabled by the EU grant. (On EED’s website, Ir Amim is mistakenly categorized as Palestinian.)
- According to the FTS, Palestinian NGO Applied Research Institute Jerusalem ARIJ received a grant of €471,543 for 2014-2016 from Non-state Actors (DCI) for the project “Towards Better Services in the Vulnerable Communities of the oPt through engaging Palestinian Non State Actors in Local Community,” as well as a grant of €497,040 for the same period from the PfP (ENI) for the project “Addressing Israeli Actions and its Land Policies in the oPt.”
- According to NGO reporting to the Israeli Registrar of Non-Profits, the Israeli NGO Association for Civil Rights Israel (ACRI) received a grant of NIS 489,775 from the EU in 2014 for the project “Rights of Palestinians in area C in a criminal procedure” and an additional EU grant of NIS 389,088 NIS for “Educational activity against racism.” The framework is unknown, as neither of the two EU grants is reported in the FTS.
- According to UN-OCHA’s financial tracking system, the Norwegian Refugee Council (NRC) received three separate grants in 2014 – from EuropeAid, ECHO, and the “European Commission” (both ECHO and EuropAid are part of the European Commission) – all designated for a project entitled “Information, Counselling and Legal Assistance (ICLA) for increased protection and access to justice for Palestinians affected by forced displacement in Palestine.” The three grants amount to $4,340,509, while FTS only reports the ECHO grant (€2,100,000).
- According to the FTS, NRC received €1,400,000 from ECHO for the ICLA project in 2012, as well as €284,797 from EIDHR for the project “Information, Counselling and Legal Assistance (ICLA) in the Gaza Strip.”
- The NGO Grassroots Jerusalem (GJ) states on its website that 28% of its funding for 2014 comes from the European Commission (EC), 33% from EED, and 10% from DanChurchAid. An EED report (p.10) and the DanChurchAid website both indicate that the latter’s support also originated with an EC grant. None of these grants is reported in the FTS, nor is there information as to the size of the grants or GJ’s budget. EED justifies its funding for GJ, intended to “cover the running costs of the organization,” as “bridge funding” following “the reduction in support initially foreseen from Danish Church Aid for 2014 (funded by an EC Grant).”
Inconsistent Policies and Divergence from Objectives
Like any other allocation of EU funds, EU funding for external aid is a means of implementing EU policies and objectives. As seen above, the complexity of EU funding results in a lack of transparency and coordination, as well as duplications of grants, thus inhibiting the effective implementation of said policies. However, there is also inconsistency and lack of clarity as to the policies themselves.
The review of the ENP from 2015 states that “relations between neighbours themselves should be reinforced, and sub-regional cooperation in both the east and the south should be promoted” (p.18). This is in line with the PfP’s (now PbI) objective of building “confidence in a shared future” and “demonstrating the advantages of working together for mutual benefit and tangible results” (see above).
This objective is highly relevant to the Israeli-Palestinian conflict, where there is a growing trend of “anti-normalization” – a movement rejecting any cooperation or dialogue with Israel and Israelis. The Palestinian NGO Code of Conduct endorses this rejectionist approach, obliging signatory NGOs “to be in line with the national agenda without any normalization activities with the occupier [Israel], neither at the political-security nor the cultural or developmental levels” (emphasis added). This movement’s growing influence is noted in the EU’s Roadmap for Engagement with Palestinian Civil Society for 2014-2017 (p.7): “[due to] pressures from the anti-normalisation movement, the willingness of Palestinian civil society to cooperate with Israeli partners has generally declined.”
However, the Roadmap also states (p.19) that “the EU will encourage the implementation of the Palestinian NGOs Code of Conduct” regarding its “level of implementation” as an “indicator of progress” (p.20). Furthermore, the EU funds the NGO development Center (NDC), the organization that initiated and facilitated this Code and included BDS and anti-normalization campaigns in its 2013-2017 strategic plan.
A parliamentary question to the Commission from September 2015 on behalf of MEP Zdzisław Krasnodębski (ECR) addresses this very issue. The answer, from November 2015, simply states that “the EU ongoing projects with Palestinian non-governmental organisations do not promote nor support this NGO’s Code of Conduct.” However, the answer appears to contradict itself by adding that “The objectives and strategic framework of EU engagement with civil society in Palestine are identified in a publicly available Roadmap” – referring to the Roadmap cited above, which explicitly endorses the Code of Conduct initiated by NDC.
The EU is also inconsistent as to its overall funding policy for NGOs. When criticized for funding NGOs with agendas or values that contradict the EU’s own policy, the EU’s recurring response is that it “funds projects submitted by NGOs, in line with (the) EU’s fundamental principles and values, but not NGOs themselves.” However, the establishment of two instruments – CSF and CSO/LA – whose sole purpose is to enhance the role of civil society in respective regions (see above), contradicts this. Furthermore, a report mapping Palestinian NGOs explicitly states: “[EU policies for supporting CSOs] have been increasingly focused on supporting the engagement of civil society organisations in policy dialogue and in governance, not merely as partners in project and programme implementation, but as partners in policy making and management of public resources; thus recognising both the legitimacy and the capacity of CSOs to play an autonomous and active role in partnership with public institutions and other actors” (emphasis added). In line with this, the Roadmap cited above pledges that “there has been a fully EU recognition of Palestinian civil society not only as service providers or implementers of EU strategies, but also as key political actors in the governance and development processes” (emphasis added, p.17).
Aside from these contradictory objectives, EU funds are in practice often allocated to NGOs per se and not for projects, especially when they are administered indirectly – as seen in the above-mentioned examples of EED funding to the NGO Ir Amim for “overall use for the organisation” and EED “bridge-funding” for the NGO Grassroots Jeruslaem.
Another instance of contradictory EU objectives is its funding via ECHO for humanitarian aid. According to the European Consensus on Humanitarian Aid, signed in 2007, common principles of humanitarian aid to be emphasized are “humanity, neutrality, impartiality and independence.” According to an EU factsheet, humanitarian aid, as distinct from development aid, “helps to save people’s lives rapidly in crisis situations, and address their basic needs, for example by providing food, shelter or medical care in conflicts or after natural disasters.”
However, many projects funded by ECHO have an openly adversarial character that diverges from these principles, and lies within the distinctly non-humanitarian fields of advocacy and legal counseling. Examples for ECHO-funded projects diverging from humanitarian objectives in 2014:
- “Information, Counselling and Legal Assistance (ICLA) for increased protection and access to justice for Palestinians affected by forced displacement in Palestine,” implemented by the Norwegian Refugee Council (NRC). Total amount: €2,100,100. This project received additional funding from Europeaid, which is not designated for humanitarian aid. An almost identical project of the NRC from 2012 was funded by EIDHR, also not designated for humanitarian aid (see more details above).
- “Strengthening Humanitarian Coordination and Advocacy in the occupied Palestinian territory,” implemented by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA). Total amount: $760,719.
- “Humanitarian Coordination and Advocacy on behalf of the vulnerable population in the oPt,” implemented by OCHA. Total amount: $868,984.
- “Natural disasters / The Dryland Learning and Capacity Building Initiative (DLCI) for policy and practice change in the Horn of Africa (formerly Regional Learning and Advocacy Project for Vulnerable Dryland Communities – REGLAP),” implemented by Save the Children. Total amount according to FTS: €600,000.