Road to financial sustainability : a report of the sustainable financing initiative (SFI)

In response to this problem, this paper advocates creation of continent-wide performance standards and proposes a model for a regional and continent-wide competitive funding mechanism to reward the realization or surpassing of those standards. At the heart of the paper is a phased series of activities, called the Road to Sustainability, that managers of organizations can implement to gain credibility with stakeholders and enhance their competitiveness in a new funding environment of scarcity. Since organizations do not exist in a vacuum, the success of these organizations in becoming sustainable will also depend on how African governments and foreign aid donors restructure the incentive environment in which organizations are embedded. Hence, parallel roadmaps for these two players are also proposed. Organizations are encouraged to embark on a program of rehabilitation of their four kinds of capital: physical and financial, social, intellectual, and organizational. Enabling actions recommended for African governments range from reform of the legal codes around public-interest organizations to opening up the infrastructure of communication and public debate so that interest groups can flourish and better participate in the governance activities of organizations that affect them; other suggestions include participation in regional initiatives to establish organizational performance and accountability standards, streamlining the regional Research and Development sector, and supporting new competitive funding mechanisms in partnership with foreign aid donors. Donors are advised to: pool limited resources into competitive funding mechanisms that function on a continent-wide and regional basis; help define standards for accountability and organizational performance; and use new competitive funding mechanisms to reward good performance. Donors can also channel more of their declining foreign aid budgets to these funding competitions and use them to award partial endowments to the best performing organizations across Africa. (Author abstract, modified)