In addition to talking to foundations about how they conducted their operations, Alliance also spoke to a number of grantees to get their view of the advantages or disadvantages of having the funder on hand or at a distance. What chiefly emerges from these interviews is that for grantees the real issue is not how donors choose to run their overseas operations but how well the donor-grantee relationship works, often at a personal level.

Another big issue is whether the end result of funding is the development of local capacity and local institutions. It is also clear that the ‘breathing down the neck’ issue looms much larger for grantees than it does for funders.

Funders with local offices

Some of the positive points the grantees made about working with funders with local offices more or less dovetail with what the funders themselves said. If a donor is on hand, many grantees feel they often have a better understanding of local conditions. There is the opportunity to discuss matters in person and advice or assistance can be given quickly if needed. You can develop a personal relationship with local staff. This in turn can lead to a deeper understanding on both sides – of the grantee’s needs and circumstances and of the funder’s expectations.

It is an advantage for donors to have field offices, said one grantee, because it enables them to identify ‘good, small NGOs who they might not be able to reach if they did not have a local presence’. By helping develop such small NGOs, field offices contribute to building local capacity.

One Russian respondent made the point that if a Russian organization doesn’t have a travel budget, effectively it needs to work with a funder with an in-country office. In any case, she said, foundations that don’t have local offices in Russia  make few grants in the country, and those few generally to big, well-established NGOs. ‘For Russian NGOs, accessibility is a big issue.’

However, there is another side to each of these potential advantages. The personal relationship you can develop with local donor staff may not always be a good thing. You often have to deal with one person at a local office, ‘and if this person is unpleasant, this can create a lot of tension. Because we still need to deal with that person.’

Nor do funder-grantee relationships always lead to mutual understanding. While funders are often keen to get involved in their grantee’s planning process, ‘we don’t have the information on how their strategy is being changed or a real understanding of the principles they are operating on’.

Apparently, even foundations with local offices ‘actually don’t give much money to smaller organizations’ in Russia. In fact, the only private foundation that supports small organizations on any scale is the Open Society Institute, which has a huge staff and a huge network across the country and gives hundreds of grants to small groups.

The issue of cost

An obvious drawback to the field office system, and one which the donors themselves mentioned, is the cost. One grantee we spoke to observed: ‘Sometimes, there are huge offices here, and you just look at how much they are spending. I think the UN is about the worst example. Their overhead costs are so high.’ She felt that technology could help overcome the distance problem and enable foundations to devote more of their money to grantmaking. Technology may in fact be the answer even with a local office, as people can still be hard to get hold of. ‘I find that the easiest thing to do is to send them an email,’ said one grantee.

Where foundations have both a regional and a national office in one country, some grantees see this as particularly wasteful. It can in any case be difficult for grantees from one country to contact staff at a regional office in another country in the region – which negates a good part of the advantage of having a local presence.

Theory and practice

The proximity that is in theory an advantage of a local donor presence can become a drawback in practice. Much was seen to depend on the personal relationship between donor and grantee. One grantee referred to ‘the chemistry of the relationship’. This is equally true of donors that operate at a distance. In fact, it was a recurrent theme of the interviews and clearly played a crucial part in the relations between donors and grantees (and ultimately in the success of programmes). We shall hear it running like a leitmotif through the remainder of this article.

If you establish a good working relationship with local staff, there is the possibility of developing a fruitful partnership. A donor’s local office can become ‘genuine advocates for the NGO community’, said one grantee, but only after a good relationship has developed.

But a local presence can cut both ways. One grantee felt that because people in local offices are on the spot, they can make demands which grantees often find difficult to refuse. Another described it as ‘a double-edged sword’. NGOs in the region do not particularly appreciate funders who set up field offices largely for purposes of surveillance, but they are much more positive about those who do so for purposes of providing solidarity and encouragement to the local community. Some felt that donors with local offices are more likely to be prescriptive. One African grantee we spoke to felt that programme officers sometimes arrive to take up a post with ready-made solutions without necessarily having any experience of Africa generally or the individual country.

Conversely, one grantee thought that local offices are more likely to have their own agenda if the staff are themselves local or have gained their experience locally. Her own organization is a regional rather than a national one. It none the less receives money from one donor with the restriction that it can be spent only in one country, which limits the scope of their work. But, she concedes, this can work both ways: ‘Having programme staff pushing through a good agenda may be a major advantage.’ It may also be helpful to have local office staff fighting your corner with head office..

Again, a potential advantage of a local presence may be negated if in practice the local office relays many of the more difficult decisions to its headquarters. One respondent observed that ‘invariably, the real power remains in the head office’. Another said that ‘the local offices have not many teeth, they’re basically a clearing house’. This seems to be more true of public funders, of whom one grantee said, ‘They’re very centrally controlled. The local offices seem to do clerical work as far as one can see.’

Indeed, though the opening of local offices staffed with local people was often seen as a virtue, one respondent discovered another cause for scepticism. Talked of an international NGO with locally staffed district offices, she pointed out that if those offices closed, ‘they wouldn’t leave anything behind’. For this grantee, there is clearly a wider question involved here than either employing local people out of regard for local sensitivities or putting money into the local economy. What is at stake for her is the development of local institutions. Funders like Ford ‘will fund institutional development’ for local NGOs, so if they left, they would leave something behind.

Sitting on your neck?

Then there is the question of how much donors with local offices interfere in the spending of their money by grantees. As already mentioned, grantees clearly see this as more of a problem than the funders do. Most either had experience of the problem or were aware of the danger. One referred to it as ‘a crippling problem’. ‘Recently,’ she said, ‘I have felt like an 18-year-old who turns 18 and feels he’s a grown up, only to wake up and find mummy and daddy are still calling the shots.’ Another spoke of ‘close surveillance and interference’, while an African grantee spoke of staff ‘playing gate-keeping roles that are not helpful’. He felt that local staff can become intrusive because they want to be associated with the better programmes. But he did acknowledge that staff in field offices need ‘an almost inhuman level of sensitivity’ to balance their own perceptions of the best way to proceed with the need not to tamper with the autonomy of their grantees.

But the problem should not be exaggerated, said one East European respondent. ‘Interference is an issue, but probably not a universal one.’ But he also pointed out that interference can have ‘many faces’. ‘The way one funder interferes is different from another. The former may be going too far or less sensitively, the latter may be doing it productively.’

Nor does it mean that grantees don’t want to be monitored. One suggestion made was that the funder could assign a local organization to monitor and evaluate the project, while ‘yearly project visits from the funder could also assist’.

Public and private donors

‘Private donors trust you, governments almost never trust you.’ This was the trenchant reflection of one grantee. It highlights an important distinction between private funders and government or bilateral donors which many grantees we spoke to made.

Many government donors seem to be centrally controlled even though they have local offices. A Russian grantee, speaking of one foreign government donor, used the term ‘censorship’. Another grantee felt that private donors are better to work with than public donors partly because there tend to be less frequent changes in the staff handling a grant or project.

One grantee has no problem working with private funders either with or without local offices but voiced disquiet about the behaviour of some international NGOs that ‘come to our country on the basis of operating directly in the country with no experience or knowledge of the environment’. NGOs of this kind, he said, ‘travel from one country to another chasing their own government aid and always succeeding in acquiring it simply because they know how best to process the papers and use the right jargon and terminology’. In effect, these organizations are taking a high percentage of aid money back to their own country. According to another grantee, ‘Too many funders are preoccupied by concerns other than the development needs of the constituencies they are meant to serve.’

The ‘distance’ model

We have already said enough to show that, for most grantees, the real issue is not so much whether donors operate centrally or through a local office as how the relationship is viewed by key individuals in the donor agency and what degree of mutual understanding develops. The personal element of the relationship can be just as important in the centralized model as it is in the devolved model. ‘I think it’s to do with the people involved,’ said one. ‘The people we deal with are more like friends and partners,’ she added. As another grantee put it, ‘It has a lot to do with who is in the driving seat.’

Nevertheless, many grantees had interesting observations to make about both models. Those that felt that local offices are too prone to interfere not surprisingly see the key advantage of the centralized model as being that the donor is not constantly breathing down their neck and imposing their preferences. One grantee reported a conversation that took place at a donor’s annual networking meeting, where the question was raised as to whether they should open a local office. The executive director’s reply was that it was not their policy to do so because ‘they think if they sit here they will undermine local capacities’. The key question funders should be addressing, said this grantee, is ‘how best to build local capacity’.

For most, the distance problem is a minor one: it can be overcome by a combination of thorough groundwork (spending time to discover whether the interests of funder and grantee are compatible), technology and field visits. One felt that because they are aware of the potential problem, foundations that operate from a head office tend to invest more time in relationship-building and this offsets their lack of local knowledge. The same grantee thought that the use of consultants can work well because it provides donors with inside information without burdening them with overhead costs.

One grantee suggested that distance might make monitoring the project more difficult. News of any problem may take time to filter through and assistance may not be forthcoming at the time when it is needed. An interesting and unusual point was made by another grantee, who felt that donors sometimes lose out because ‘they miss a lot of the excitement of programme development because they see very fragmented samples of project implementation’.

There was also the question of what one grantee called ‘transfer of culture’. He gave the example of a US donor which funded a Hungarian organization to undertake some advocacy work in Hungary. Because the organization didn’t understand the ‘full concept of advocacy’, or at any rate didn’t understand what the US donor meant by advocacy, the programme misfired. Under certain circumstances, he wondered if there might not be an argument for closer involvement from the donor.

Partners or dependants?

Overall, recipients felt that both models, with or without field offices, could work well, depending on the attitude of the donor’s programme staff. As one put it, ‘The donor-receiver relationship can in itself be a hindrance to good relationship.’ Another respondent stressed that there is a great difference between a relationship between peers and a pragmatic, utilitarian relationship where the NGO is perceived as the ‘agency’ implementing projects designed by the donor. This both belittles the status of such NGOs and hampers their development.

A relationship that is more of an equal partnership, on the other hand, has benefits for both sides: ‘When they see themselves not just as funders but as partners in a project, that becomes a win-win situation. We help them achieve their objectives, as they help us achieve ours. We learn from each other.’ On the grantee side, it is important ‘to be firm about what you need, and to be able to say no’.

Grantees felt that local capacity, too, is more likely to be developed when grantees are encouraged to behave as partners rather than dependants. Whichever model is applied, said one, the local or the centralized, there should be some effort towards local capacity-building and the promoting of local institutional development. ‘For me,’ she said, ‘that is the bottom line.’

Who Alliance talked to

We talked to two grantees from Central Europe, one from Russia, one from Latin America, one from the Middle East, two from Sub-Saharan Africa, one from South Asia  and one from South-East Asia. We decided to do these interviews anonymously to ensure they could express their opinions openly. All the grantees we talked to had experience of working with donors with and without field offices, so they were able to make comparisons.