06 February 2012

How Aid works (in Tonga)

"So we had a big feast one day, out of the blue. I mean, not even with any reason, just celebrating life, I thought," a friend started the story. "Then guess what! I found out later that Organization X had just received a bunch of funding from Organization Y!"

While this doesn't happen as frequently as the stories make it out to be, aid funding in Tonga is a part of life- a part that is sometimes needed, sometimes taken advantage of, sometimes in the news, and frequently misunderstood. Speaking from personal experience, it is hard to understand aid's complexities.

Road donated by China Aid, with a helpful sign: "CHINA AID" (from blog.travelpod.com)

After spending several years on the other side of the fence with cash-strapped nonprofits, always wondering about the inscrutable decisions of the funding organizations, working at my new job now has been incredibly enlightening. Suddenly, I understand. I can't speak for anything but the processes I currently work with, but here's how it's done in my job:

The first step is a country-specific Joint Commitment for Development (be prepared here, there are a lot of high-sounding titles to come). Every five or so years, the NZ Minister of Foreign Affairs has a pow-wow with Tonga's Prime Minister, and they agree on a list of major sectors on which the two countries can focus in Tonga. In NZ's case, it's energy, education, police, tourism, and small business development. Any new programme usually has to fit in one of those sectors.

These projects usually aren't just to build a school, or community water tank, or "small" funds like that. These programmes are massively wide, sometimes several million dollar projects that last for three years and have joint goals with a Tongan ministry. Granting organizations usually shy away from small, individual grants for only tens of thousands of dollars: they're hard to administer, hard to evaluate, and don't often fit into a larger community development plan. In NZ's case, there's a "Head of Mission Fund" that covers small grassroots requests, but its a tiny sideline among all the other projects.

Any new programme started passes a long "design" phase, which usually includes meetings of the Nuku'alofa post (the office where I work) and the implementing partner organization (usually a government Ministry or large NGO), which prepares work plans, budgets, and descriptions.

After everybody agrees and everybody is happy, then NZ and the organization sign a Grant Funding Arrangement, or GFA. The GFA provides for around three years of funding, but not all at once- usually only a year at a time, according to the budget that the organization submitted. The organization and NZ also agree upon certain outcomes of the project: a marketing plan, recommended revised legislation, a certain database compiled, etc.

In order to get the next year's funding, the organization has to tell NZ what they've done and how much they've spent doing it.

But of course, things never go exactly as planned. It's as if you plan to start cooking a complicated recipe, so you get everything started, and everyone agrees it will make a good meal. But you need eggs. In order to buy eggs, you have to submit a plan for buying eggs for the rest of the year, which is rejected the first time you submit it. And then, the friend that was making the rice decides to go make rice for your neighbour instead. Then you turn to ask your niece for help, who was supposed to be advising you on how to make the chicken, and find out she's been away partying at a club in another town, and tells you that you should make beef instead, because this is what she learned in that other town. Finally, you ask your husband how much money everyone's spent on groceries to see if you have enough to buy beef, and find out he hasn't kept any of the receipts.

If the organization keeps NZ in the loop and keeps decent records, change usually isn't a problem; they submit a report and a new budget with any changes they want to make, and there's a variation to the original contract. Any time the organization wants to significantly differ from what was agreed upon, there has to be a new variation signed with NZ, agreeing on the revised plan and revised budget. If the organization randomly spends a ton of the funding on something that wasn't in the contract, the organization usually has to return the money.

At the end of the three years, either a new programme agreement is signed and the money is rolled over, or it's closed out if everything is achieved and unspent money is returned to NZ. While NZ has some influence over the activities carried out using the grant money, it has no control over (and doesn't want control over) any of the rest of the budget not funded by NZ.

My job exists between NZ and the organization: making sure NZ gets the right reports at the right time, making sure the organization understands what the contract requires, making sure NZ understands what the organization has been doing and why. Existing in the middle can be head-spinning, but mostly very interesting. I get to see what's happening in these development projects on the ground, and do my part in helping to support them when new needs come up.

This is just a description of the cooking process. Any reflections on the tastiness of the meal will have to wait for another time.

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