STARS Foundation and New Philanthropy Capital have published their report ‘Recognising Excellence: the case for giving well-run organisations unrestricted funding.’
The report highlights links between funding practice and the challenges faced by 489 local NGOs in Africa and Asia that applied to the 2009 STARS Impact Awards. Data gathered from the 2009 Awards, and subsequent research carried out with 2010 applicants, shows that most local NGOs are relying heavily on restricted funding and as a consequence are finding it difficult to respond to changing local needs.
From the 701 Impact Awards applicants in 2010, STARS found that:
• 52 per cent of respondents did not have any unrestricted funds
• Only 14 per cent of respondents had more than 25 per cent
STARS Foundation’s data suggests that the rarity of responsive donor support is compounding the effects of the global economic downturn:
• 58 per cent of respondents recently had to cut services they view as critical because of a lack of funding
• Of those that did cut services, 97 per cent would have cut different, less vital activities if given the flexibility offered by more responsive funding
The report also looks further into the ways in which local NGOs would allocate unrestricted funding given the opportunity, and provides some challenges to the common perception that unrestricted funding does not go towards frontline service delivery.
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