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The Governance and Transparency Fund Criteria and Guidelines

(Valid as of 20 June 2007)

“People want to be governed well, and to have a say in what happens in their lives. They want to be safe. They want the chance to earn a decent living for themselves and their families. And they want to be treated fairly by their government and public officials. These aspirations are enshrined in the Universal Declaration of Human Rights, and the Millennium Declaration of 2000. But the reality for people in poor countries is different… Effective states and better governance are essential to combat poverty… Unless governance improves, poor people will continue to suffer from a lack of security, public services and economic opportunities”.

The ability of citizens to make their voices heard and hold their governments to account is fundamental to good government. Its absence fosters an environment in which corruption can flourish, and citizens are unable to assess the decisions of their leaders, or make informed choices about who they elect to serve as their representatives. Civil society, the media, and others have a key role in promoting accountable governance and transparency.

To address some of these issues, DFID has created a new £100 million Governance and Transparency Fund (GTF). It is designed to help citizens hold their governments to account, through strengthening the wide range of groups that can empower and support them.

1. About the Fund

1.1 The key elements

£100m over five years.
A demand-led competitive Fund.
Larger scale proposals only – between £750,000 and £5m – based on a portfolio of activities rather than individual projects.
Projects within the portfolio must be based in developing countries.
One funding round.
Up to 100% funding.
Only one application per organisation or consortium
Proposals to cover a period of up to five years and not less than three years.
Open to a wide range of not for profit organisations, including those registered outside the UK.
Successful applicants must grant 85% of GTF money to local partners in developing countries – we will consider a lower figure if the applicant can show exceptional circumstances.
Proposals must address governance and transparency issues by working through a variety of local partnerships and networks.

And in more detail…

1.2 Who can apply to the GTF?

The Fund is targeted principally at not for profit organisations. In order to be eligible, organisations applying as lead or part of a consortium (see below) must be formal legal entities, though need not be UK based. Examples include:

NGOs;
Faith based groups;
Trade unions;
Co-operatives;
Media groups;
Women’s groups
Other civil society groups, such as professional bodies;
Umbrella bodies that have a membership of a range of smaller civil society or community based groups.
Groups working on promoting democracy and strengthening parliaments/parliamentary processes (but not political parties).

The fund will also consider proposals which involve local/regional government bodies and certain for-profit groups (particularly those involved in the media), where their involvement as partners can be shown to be an integral part of the project/programme proposal.

1.3 Consortia

Consortia formed of one or more of the types of not-for-profit organisation above are also encouraged to apply. Forging new links between organisations from different traditions and backgrounds has the potential to play an important part in a broader more inclusive approach to addressing governance and transparency issues. Consortia applicants should set out the added value of the consortium and the roles of each organisation within it.

1.4 Are Southern based not for profit organisations eligible?

Yes, providing they come within the definitions set out above and can submit portfolio projects in the range £750,000 to £5m. However, the Fund will not accept smaller proposals from Northern or Southern based organisations.

1.5 How will other Southern based organisations participate in the fund?

It’s vital that Southern based organisations can access this Fund because they are the key players in addressing governance and transparency issues on the ground.

All applications will therefore have to demonstrate that at least 85% of money they receive under the Fund will be granted on to Southern based organisations. Applicants will be required to provide details of all overheads or administrative costs that form part of the programme budget. And in keeping with normal practice, applicants are expected to ensure local partners have sufficient technical and financial management capacity to undertake their programme components.

We will only consider a proposal where the applicant intends to grant less than 85% of the GTF monies to Southern partners if they can demonstrate unusual circumstances and costs that arise as an integral part of delivering the programme objectives.

1.6 Are there pre-determined allocations between sectors and activities or geographical areas?

No. We expect many proposals to cover a portfolio of work in a range of developing countries and continents and across a range of activities. It would therefore be unhelpful to divide the Fund’s resources into rigid pre-determined allocations. However, in assessing the overall package of proposals to be supported under the Fund, we will aim for a reasonable balance across sectors and geographical areas.

1.7 How are "developing countries" defined under the GTF?

Proposals can focus on work with partners in any Low or Middle Income Country as defined by the DAC, excluding EU accession countries.

1.8 What is a portfolio?

A range of individual projects, with a number of partners, often delivered in different locations, which taken overall represent a coherent strategic package that will deliver agreed programme outcomes.

1.10 Why larger scale portfolio proposals?

This is a practical way to bring together a wide range of existing skills and experience to support the work of southern based organisations. Larger scale portfolios based on clear overall programme outcomes underpinned by a range of projects with a variety of southern partners will bring different perspectives, encourage synergies between projects, and add to the diversity of partnerships.

1.11 Will the £100m be spent evenly over each of the five years?

No, our commitment is to spend £100m over five years through the Fund. The precise year by year breakdown has yet to be determined. But in broad terms, the first two years will probably have smaller allocations, and the later years larger allocations in order to reflect the fact that actual spending on long term programmes tends to start slowly and then accelerate.

1.12 Proposal to cover a period of up to five years?

The GTF commitment is £100m over five years. Addressing governance and transparency issues involves this sort of longer term investment, so we expect proposals to cover a period of up to five years, and not less than three.

1.13 One funding round?

Given the five year time frame and the size of proposals, there will be one call for proposals rather than annual calls (see section on Process for more details). Funding will, however, continue to be passed through to Southern partners throughout the period of the scheme so there will be funding opportunities for southern based organisations throughout. There will also be scope for consortia to evolve and include new partners during the course of the scheme.

1.14 Other DFID funding support

Applicants will not be excluded from the GTF on the grounds that they already benefit from other grants from DFID – e.g. Partnership Programme Agreements (PPA), Civil Society Challenge Fund (CSCF), Country Office support or humanitarian relief/conflict resolution funding. Obviously, applicants cannot include in their portfolio any projects that are already being funded under other DFID schemes.

2. The Proposals

2.1 Proposals need to demonstrate a strategy for addressing governance and transparency underpinned by projects operated by a range of local partners which have specific inputs and outcomes. The full range of all the local partnerships and projects does not have to be included in the proposal; the lead organisation will be able to allocate funding to partners throughout the five years. But it will need to clearly set out initial partnerships and projects, together with details of the process by which further partnerships will be developed and money granted on to those local partners for specific projects.

2.2 All applications will need to demonstrate in their proposals that they have considered:

Gender - the needs of men and women within the activities and the overall programme strategic outcomes.
HIV/AIDS - the impact of this may have on the proposed activities.
Environment - the environmental impact of the activities and the overall programme strategy.
Disability - whether disabled people will be included in the activities and whether their rights and needs are considered within the overall programme strategy.

2.3 Should proposals link to DFID'S objectives in specific countries?

This is not a mandatory requirement. The GTF is intended to be complementary to DFID’s county programmes rather than an integral part of them. But DFID’s Country Assistance Plans (CAPs) will provide a useful context for developing applications, along with material from elsewhere. The new Country Governance Analyses (CGAs) which DFID will be undertaking, as announced in the White Paper, will be included in some of the CAPs. They will provide an assessment of the trajectory of political governance and point to areas of governance and transparency that may be in particular need of support or strengthening.

2.4 Where can I find CAPs and CGAs?

CAPs are public documents and are published on our website. Copies of CGAs, in those countries where they have been undertaken, can be obtained from our country offices.

2.5 What can’t be funded under the GTF?

Disaster and humanitarian relief projects
Research - though a small research component within a wider action-orientated programme is allowable;
Evangelising and proselytising
Discrimination – any element of a project or portfolio that discriminates between individuals or groups because of their race, ethnicity, gender, sexual orientation, religion or disability
Scholarships, unless as a small and integral part of a broader project.

3. Management and Process

3.1 DFID will contract out the management of the GTF to a Fund Manager. The Fund Manager will be responsible for all aspects of operating the Fund from the initial call for expressions of interest, through to paying grants, and appraising reports and checking accounts. We aim to nominate and release details of the Fund Manager by 25 April.

3.2 Will the Fund Manager’s fees and costs be met from the GTF?

No. The whole £100m GTF budget will only be used for grants to successful applicants. The managing agent’s fees and costs will be met separately.

3.3 How will the application process work?

There will be two stages, Concept Notes and full proposal.

3.4 Submission of Concept Notes

There will be a widely published call for Concept Notes from the Fund Manager with a clear timetable and contact details. Interested parties will be invited to submit a three page (maximum) Concept Note setting out the basic concept of the proposal and details about the applicant/s. The deadline for submitting Concept Notes is midnight (GMT) Friday 29 June 2007.

3.5 This Concept Note stage will be used to make an initial assessment of whether your ideas fit with the general purpose of the GTF and whether your organisation/consortium meets eligibility criteria. At this stage, no judgement will be made about relative strengths and weaknesses of the proposed work.

3.6 Concept Notes must be completed using guidance attached as Annex B(24 kb). Please follow all instructions on the template carefully.

3.7 And Next?

The Fund Manager will respond within a specified period. If the proposal outlined by the Concept Note is not eligible for the GTF, they will write to the applicant setting out the reasons. If it's accepted the applicant will be invited to submit a full proposal.

3.8 The Full Proposal

This is the detailed document on which the strengths and weaknesses of the programme will be assessed, and it will therefore be crucial in reaching a decision on whether to offer support. Detailed guidance on the format of the proposal will be made available through the Fund Manager. The key elements will be:

The overall programme rationale and strategy;
Programme approach – eg outputs, range and types of partnerships and activities, how this links into the overall rationale and strategy, and a risk analysis.
Management and implementation – details of Southern partners and partnerships to whom money will be granted on; details of the initial projects to be undertaken by the Southern partners; explanation of the process through existing partnerships will be developed and new ones established and further projects identified.
Budget.
Monitoring arrangements with measurable outputs and indicators.

3.9 Appraising the Proposals

The Fund Manager will then conduct a detailed appraisal of the proposal. This will include seeking comments from relevant DFID country offices and others. If necessary the Fund Manager may also contact the applicant if issues need further clarification. Key factors in the appraisal will include:

Objectives. How do the programme’s objectives contribute to improving governance and transparency?
Outputs. What will the programme actually do? Are the outputs meaningful and realistic?
Partnerships. Who are the southern parters, what is their legitimacy and potential, how has the partnership been formed and developed?
Capacity to deliver. Does the applicant have the capacity to deliver against the objectives and outputs, what is its track record and potential?

The Fund Manager will notify the applicant of the decision by a specified date. If the proposal is unsuccessful, they will provide detailed feedback. If it’s accepted they will follow up any points of detail that require fine tuning, including the budget, and then issue a formal funding agreement. An example of the funding agreements will be issued by the Fund Manager after Concept Notes have been approved. They will also provide details of the payment system they will use for grants made under the GTF.

3.10 And in summary?

A flow chart of the main stages is attached at Annex A(22 kb)

3.11 How will the individual portfolios be monitored and reviewed?

Every year each successful applicant will be required to produce an annual report on the progress of their portfolio. This will review progress against the agreed output indicators. The Fund Manager will appraise these reports, providing feedback to grant holders. The Fund Manager will discuss any areas of concern, problematic issues, discuss any remedial action etc directly with the portfolio holder.

Portfolio holders will also be required to submit a completion report at the end of the programme and commission an external independent evaluation which will assess the impact the portfolio.

3.12 Accounts

Successful applicants will be required to produce annual audited accounts of the programme including details of all money that has been granted on to Southern partners. They will also have to produce final audited accounts for the whole programme. The Fund Manager will assess all of these accounts.

3.13 How will the Fund itself be monitored and reviewed?

The Fund Manager will produce an annual report on progress against objectives by the Fund as a whole. A copy of the report will be placed on the DFID website and made widely available to the sector.

3.14 How will good practice and innovative approaches be shared?

All annual reports will be posted on a programme website and lesson learning workshops will be held regularly. The Fund Manager's annual report to DFID will also be posted on the DFID website and shared widely amongst the sector.

3.15 Will the overall GTF be assessed?

Yes. A mid-term and final independent evaluation will be commissioned to assess the overall impact of the Fund and its contribution to DFID’s objectives.

DFID Department for International Development