Project assistance completion report : special development fund (391-0500)

The GOP deposited Rs 520 million in the Trust for Voluntary Organizations (TVO) for direct grants to NGOs. An independent Board of Directors was established, with ten members from the private sector with voting rights, and three ex-officio members from the government. By 10/91, the TVO was functioning as a support organization for development-oriented NGOs; human resource development was expanded to include primary education, adult literacy, and technical training; and a fourth project focus, poverty alleviation, was added. The TVO established stringent criteria for NGO funding. As of 12/93, the number of accredited NGOs had grown to 68, and the number of TVO supported projects had risen to 39. These projects received a combined funding of Rs 223 million, and had reached 297,841 beneficiaries through the establishment of 558 outlets in 58 districts in all the provinces. In addition to its headquarters, the TVO set up three regional offices to cope with the demand for accreditation and other support. Lessons learned with positive impacts include the following. (1) The TVO converted all funds received into an endowment, thereby ensuring perpetuity. (2) The TVO may solicit and receive funds from other national and international sources since USAID does not have proprietary rights over it. (3) The Government has no role in the operations of the TVO. (4) To circumvent political pressure, Board members from the private sector are barred from holding political office. Also, since and the Board acts as a collective entity, individuals do not have any authority. (5) Confusion in the roles of the Board and the staff was avoided through bylaws that made a clear separation of duties. (6) Because most NGOs would not quality for outright accreditation, the TVO created an intermediary category of accreditation. (7) The TVO places high value on the quality of the staff of the NGOs, insisting on full-time project director and experienced staff. Lessons learned with negative impacts include the following. (1) Since USAID had no proprietary rights over the TVO, it could not influence the Board's decision to grant government officials voting rights. (2) Nominations to the Board require approval of the government, which has so far delayed in replacing three private sector members who departed in the last year. (3) Too many NGOs think that credibility comes from having a well-known patron and too many are claiming to replicate the work of established NGOs, without building their own capacity. Similarly, accreditation does not imply that an NGO has the capability of implementing all projects effectively. (4) The increasing role of NGOs in development does not absolve the government of its responsibility to provide essential services to society. (5) Both at the grassroots level and at the TVO, there needs to be stronger emphasis on institution building. (6) In the last year, the TVO has been criticized in the press on a number of occasions; it has been alleged that the TVO does not allocate its grants fairly, and that its CEO is overpaid.