Abstract
In the transformation in local governance and service delivery which Uganda has witnessed over the last decade, particular roles are envisaged for CSOs. On one hand, they are frequently identified as the actors that should be holding government to account and on the other hand, they are also increasingly involved in the implementation of privatised and decentralised service delivery, under agreements with the state through subcontracting practices.

This research is a collaborative initiative between CDRN and CARE to investigate the potential tension between those two roles – holding government to account while at the same time engaging in the implementation of privatised service delivery. Our starting point is a hypothesis that, ‘contracting local government services to CSOs significantly reduces the ability and willingness of these organisations to hold local governments accountable to stated policies, procedures and plans’.

The research was conducted in the two districts of Arua and Kabale after observing that these two districts exhibited a significant degree of sub-contracting arrangements in government programmes under the current decentralised system of governance. We involved local partner institutions – Kabale District Farmers’ Association and Community Empowerment for Rural Development in Kabale and Arua respectively.

Findings

• We find that the concept of ‘NGOs holding government to account’ is woolly, foreign, new and difficult to grasp. It does not strike a chord with local NGOs or local government. There are multiple understandings of ‘holding government to account’ and equally, there is much diversity in perceptions of who should ‘hold government to account’.
  
• Local CSOs have only in some instances shown that they can engage in holding government to account. This happens when a local NGO is well resourced (especially with links to international donors); when several local CSOs work together in coalitions and networks; and when one or several local CSOs are instigated and nurtured by an international CSO.

Local non-governmental organisations (NGOs) are increasingly being required by donors and supporters to show that they are accountable and financially sustainable. However, financial sustainability is a concept that has been developed in the business sector and exported to a NGO setting without adequately defining it and discussing how it is obtainable in this new setting.

Among local NGOs in Uganda financial sustainability is seen as an integrated part of the overall sustainability of the organisation. It does not entail being totally independent from external donor funding but rather to diversify the organisation’s income sources and manage the resources soundly to enable the organisation to continue its existence and be relevant to the beneficiaries.

The NGOs interviewed combine attempts directed at generating both external and internal income and the way they diversify their economic resource base is mainly through broadening and refining their donor base, negotiating good terms with donors, income generating activities (IGAs), local fundraising, consultancy work, micro finance institutions (MFIs), international connections and money reserves. What has enabled the NGOs to attain at least a certain degree of financial sustainability is a combination of factors, such as having a clear and shared vision, having a stable and competent leadership, having proper structures and systems in place, running the organisation using a business-like approach and using local and international connections to secure support for the organisation. The current type of fundraising training was generally not seen as useful, except for sharing experiences and meeting potential donors.

Ugandan NGOs still face a number of internal and external challenges in their pursuit of financial sustainability. The internal challenges facing NGOs include setting up a specific function for resource mobilisation, not allowing attempts to generate own income to steer the organisation away from its social agenda, learning from and sharing experiences with each other and working together to carry out joint activities.

Some of the major challenges of an external nature affecting the NGOs’ attempts to pursue financial sustainability are the NGO Registration Statute, which clearly stipulates that NGOs are non-profit making organisations, and other elements of the environment in which the Ugandan NGOs operate such as a government that is heavily supported by donors to fund its budget, individual philanthropical behaviour that is not developed and the very small economic base of the country which limits the private sector’s ability to support NGOs. Finally, donor policies and priorities are often inconsistent and sometimes even contradictory; on one hand donors require the NGOs to be financially sustainable yet they are often not willing to support initiatives that are directed at generating income for these organisations. For details about this research study, request for the full report from resource@cdrn.or.ug

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