Achieving local institutional development : PVO co-financing projects in Indonesia and the Philippines

The co-financing concept, initially developed in the 1970"s by USAID/I and supported by USAID/P since 1980, provides an innovative mechanism for Missions to work directly with PVO"s. Both Missions have shown a strong commitment to developing the capacity of indigenous PVO"s (IPVO"s); their experience provides valuable lessons for Missions that are considering support for grassroots-level projects. The major achievement of PVO co-financing projects has been their ability to strengthen local institutions. IPVO"s now registered with A.I.D. are qualified to provide skills training and to disburse and oversee subgrants for smaller PVO"s. Registered IPVO"s are now requesting a new status as equal partners with U.S. PVO"s and broader recognition of their achievements. A long history of IPVO collaboration with U.S. PVO"s and A.I.D. staff underlies this success. This has included provision of skills training to IPVO staff to strengthen their organizational capabilities, a gradual transfer of increased project management responsibilities from Missions and U.S. PVO"s to IPVO"s, and the ability of IPVO"s to cope with the public sector-led development biases of their governments. The co-financing concept is a cost-effective means of helping IPVO"s build local organizational abilities and achieve development objectives. However, replication of the model followed by USAID/I and USAID/P should proceed cautiously; the successes noted are partly a result of a long history of relationships between the two Missions and the PVO community. Thus, it is clear that achieving high levels of local institutional development is a long-term process. (Author abstract, modified)