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Dilemma 3: The Tied Funding Dilemma

Updated: Mar 20



 

Oxfam had a goat problem! One of Oxfam’s most successful fundraising campaigns was where you could buy a Christmas card for a friend that paid for a goat for a village in need instead of giving a friend a gift. The program was very successful raising more money than expected. The problem was Oxfam forgot to add a caveat on the card that said the money could be spent on providing goats ‘or other items of need for the villages’. The funding was linked to buying goats! Oxfam couldn’t find enough goats to buy and the villages were saying, ‘stop with the goats already!’


Oxfam has of course added wording to create flexibility in aiding villages but the

same dilemma of Tied Funding plays out over and over again. Instead of a ‘goat problem’ this is often caused by the ‘Government Knows Best’ dilemma. Tied funding has two fundamental problems. The first is that government officials millions of miles removed from the situation believe they know the best way to resolve problems. The US government has spent more than $1.4 billion funding abstinence programs in Africa called the President’s Emergency Plan for AIDS Relief (PEPFAR) aimed at stopping the spread of HIV around the world. But a study, published in Health Affairs, found the abstinence programs have been a failure. When President George W. Bush proposed PEPFAR in 2003, it was an unprecedented plan.


The program would give billions of dollars to test and treat people for HIV in Africa. No one had ever given this much money to fight a single disease. This funding was tied to delivering better health outcomes by preventing the spread of AIDS by including funding for abstinence programs. Yet, at the time, there was little evidence to suggest abstinence programs worked. Experts on the ground in Africa also knew that attacking one of the most deadly pandemics in history is an extraordinarily complex venture, dealing with abject poverty and starvation, civil wars and rebellions, devastating violence against women, centuries of such cultural mores as male domination and polygamy, political and corporate corruption, and religions.


Oxfam has recognised that the people who know the best solutions to their problems are those closest to the problem. This is why they have created the operating structure under Oxfam 2020. Oxfam wants the incountry programs to be selected and implemented using local in-country people. Oxfam believes they are the ones closest to the problem and have the best understanding to implement a solution.


Remember the example of the Sternins, with Save the Children, the work they did in discovering the best way to solve the malnourishment of children in Vietnam. They didn’t go into the villages with ‘the’ answer. Oxfam are following this example. With the aim of delivering better outcomes, several prominent international aid Organisations have changed their organisational structure to distribute more power to those ‘closest to the problem’. Oxfam is not the only one to restructure. According to a Chronicle of Philanthropy report featured in Philanthropy News Digest: With the aim of delivering better outcomes, several prominent international aid organisations have changed their organisational structure to distribute more power to those ‘closest to the problem’. In 2017, Pathfinder International, a reproductive health NGO that works in nineteen countries, replaced its top-down structure, a U.S. headquarters overseeing field offices in Africa, Asia, and South America, with a non-hierarchical one that puts every office on equal footing and better positions non-U.S. staff to take a leadership role in shaping the organisation’s agenda. As part of the effort, Pathfinder named a new chief of programs and impact, Mohamed Abou Nar, who is based at the organisation’s Cairo office, and plans to deploy flexible teams comprising employees from different offices to work on specific projects. Pathfinder CEO Lois Quam told the Chronicle: Our talent is distributed around the world where we work. By this approach, we are more able to give opportunities for advancement across the organization, wherever people are located. We believe the closer we are to the people we serve and the work we’re doing, the more creative and effective we’ll be. (Philanthropy News Digest, 2018)


The second issue with tied funding is that it creates program silos within the Mission-to-Market Map. For example, Mater Health found that taking a holistic approach to aged care that includes nutrition, exercise, mental health, as well as medical treatments is far more effective. However, if government funding schemes focus only on one aspect of a person’s care then that creates funding and program in one area while foregoing the others. Australia’s new National Disability Insurance Scheme (NDIS) may create even more program silos. The premise of the NDIS is to allow the Beneficiaries to select the programs for their needs. The idea is that this will enable market forces like we see in the For-Profit world to provide better services. What NDIS may lead to is a further breakdown of the holistic approach as service providers compete for the same money for their disconnected, siloed services. Both Plan International and Oxfam have objectives in their strategic plans to reduce the percentage of Tied Funding in their overall fundraising. They state that the more Un-Tied Funding they have the more effective they will be for their Beneficiaries. The answer lies in the Mission-to-Market Map and educating government officials on the holistic Positive Framing, aligned to outcomes approach. Oxfam’s 2020 model helps in this way. The biggest challenge is that it will take time.

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