Paying the Price of Transformation
We share ADD International’s experience to prepare others seeking to achieve similar transformations, and to encourage funders to invest in organisations that are leading system-wide change. We believe we will need many to undertake and support similar shifts in how the funding system operates, if we are to put more funds in the control of movements and indigenous organisations led by those with lived experience of the issues they want to support.
The call for INGOs to change and transform is a crucially important one. We can no longer be benevolent ‘others’, intent on savourism, holding power in the Global North and assuming that ‘we know best’.
ADD International has been building solidarity with disability rights movements for almost 40 years. However, despite ADD’s best efforts, indigenous disability organisations still receive a disproportionately low share of human rights funding. Only 2% of all human rights funding globally is directed to disability rights issues and most of this does not reach indigenous organisations. The situation is especially pressing when you consider that an estimated 16% of the world population has a disability. This is not a marginal issue but the funding for it remains so.
Furthermore, the limited quantity of funding that does reach these indigenous disability rights organisations, is usually in the form of project-based grants. These project-based grants are often designed according to programme priorities that are pre-determined by the ultimate donor. They usually come with monitoring arrangements that prevent the recipient from using the resources flexibly and adaptively. And finally as if that wasn’t all bad enough, most project grants also fail to cover the relevant fair share of the costs of running the organisation that is receiving the grant.
We recognise, therefore, that INGOs need to do more than transform the way they are led and structured. They also need to transform their funding practices if they are to genuinely share power and work in solidarity.
To achieve this, ADD is introducing a new participatory grant-making process that will provide leaders and organisations in the disability rights movement with flexible resources, rather than project-based funding. ADD is taking a three stranded approach:
A 5-year organisational financial road map that will put a much greater proportion of our resources in the hands of disability rights organisations selected through a participatory process.
The creation of a leadership academy for disability rights movements.
Internally, ADD’s workforce will be spread more equitably across the regions in which we work, with a more equitable pay policy and approach. We are actioning a series of commitments cementing an internal commitment to anti-ableism and anti-racism of which these shifts are a part.
However, ADD is finding that transforming a single INGO’s funding practices within the prevailing funding system, is extremely difficult and costly. Despite the increasingly widespread recognition of the need for system-wide change, only a few visionary funders are willing to provide grants for such a process of internal transformation..
There are some difficult financial withdrawal symptoms from leaving the traditional and highly addictive project-based funding system. How do you sustain the programme staff that you need to design and implement the new participatory grant-making mechanisms, if you don’t keep applying for the next project in every country? And how do programme teams find the time to reimagine and design the future in partnership with indigenous disability rights organisations - if they are stuck on the treadmill of project-funding delivery and reporting timetables?
Some of the cost implications of withdrawing from project-based funding are more complex to understand and manage. ADD, like many INGOs, recovers much of its organisational running costs, or overheads, as a percentage charged on its project grants. As ADD deliberately winds down its portfolio of incoming project grants, it will need to grow unrestricted income quickly to cover these essential running costs. Meanwhile, the first priority for new funding feels like it should be making the new participatory grants, rather than paying the rent.
ADD’s overall income is falling somewhat in the short-term, as it ceases to apply for project grants and encourages funders to fund disability rights organisations directly, where possible. In common with several other INGOs shifting to more locally-led approaches, ADD’s leadership is comfortable with income falling if impact is increasing and accepts that this will mean the organisation will be financially smaller, at least in the short-term. However, as ADD still has a run-off of existing contracts, including two large FCDO-funded disability programmes – being financially smaller creates cash-flow challenges. These FCDO contracts require ADD to pre-finance the programme costs by 3 or 4 months, as they are paid in arrears. As ADD’s overall financial size decreases, it will have limited access to cash to ‘lend’ to the British Government money for its projects.
All these financial consequences have a knock-on effect on the price being paid for transformation by ADD’s people. In order to reduce overhead costs, there have been some redundancies in the finance function and everyone is having to manage and cope with change with limited resources for support and training. Affordability has limited how far ADD can go in implementing its new more equitable pay policy and approach. In line with ADD’s recently adopted pay principles, it has prioritised salary increases for the relatively lower paid rather than senior roles.
The work of transforming an INGO like ADD within a funding system that makes the changes needed much harder to achieve - is a huge leadership challenge. There are tough trade-offs between where leaders put their time and energy, while sustaining their ability to support people with empathy as they navigate change and many external pressures.
We hope that sharing ADD’s experience will help others and encourage more funders to share the cost of this system-wide transformation. Recognition from funders as well as all of us working within the sector of what it actually takes to transform is much needed if we are to ensure that our commitments to ‘shifting and sharing power’ are not just empty words but the basis for a true reimagining of the role that we play in change.
To find out more about the way we are transforming our work at ADD go to: https://add.org.uk/transformation/