Donor agencies and multi-stakeholder partnerships

Karaki, K., Medinilla, A. 2016. Donor agencies and multi-stakeholder partnerships: Harnessing interests or herding cats? (Discussion Paper 204). Maastricht: ECDPM.

Promoting and supporting partnerships is a complex and iterative process, requiring considerable resources, knowledge, and time.

This paper studies the roles of donors in a selection of partnership related instruments, with a view to better understanding their challenges and opportunities, constraints and incentives. 

It shows that there is a gap between donor agencies’ policy objectives and their current practice, which in formal terms is overly passive in terms of funding mechanisms and administration systems towards supporting partnerships. This diminishes the benefits that might be gained from the large palette of resources and capabilities of donor agencies. That said, informally donor agencies go further than their roles stricto sensus, implying a gap between policy and practice.

Based on these insights, some reflections, implications, and recommendations are presented below for policy makers and donor agencies aiming at boosting the effectiveness of their support to partnerships.

Key messages:

1. Promoting and supporting partnerships is a complex and iterative process, requiring considerable resources, knowledge, and time. A deeper analysis and understanding of the role of donor agencies in the partnership process is thus required to foster effective partnerships.
2. This paper studies the roles of donors in a selection of partnership related instruments. It shows that there is a gap between donor agencies’ policy objectives and their current practice, which needs to be filled to realise the full potential of partnerships.
3. Overall, donor agencies tend to limit themselves to funding partnerships, often through competitive procedures, adopting a reactive attitude to supporting partnerships. More could be done in terms of coordination between their instruments and donor agencies to maximise the effectiveness of their interventions.
4. Therefore donor agencies can contribute more significantly, by using their large palette of resources, including political connections, networks, expertise and knowledge. This depends in turn on the design of their instruments, their level of understanding of the operating context, and degree of involvement and flexibility in the partnership.

Some extracts:

Partnerships can help (better) link commercially, market-driven investment projects and private sector innovation and know-how, with sustainable, inclusive and equitable outcomes. (page 11).  In the wider context of private sector promotion and its engagement for development, where donor agencies aim to facilitate business opportunities for (usually domestic) businesses among other (development) objectives, multi-stakeholder partnerships involving donors, domestic business and international/local CSOs or companies are increasingly important.  (page 27)

Many donor agencies already dispose of a wide range of funding mechanisms that can be activated as part of a strategic approach to partnerships. (page 30) [But] Some donor agencies are reluctant to directly support companies, in particular big business or companies operating in some sectors such as oil and mining, by fear of potential reputational damage or being perceived as using development money to subsidise multinational companies. That is why working through CSOs, which then partner with the private sector, is at times perceived by some donor agencies as a more relevant approach - as long as CSOs are equipped to work with the private sector, i.e. not too slow and bureaucratic. (page 22)

Deeper analysis and understanding of the role of donor agencies in the partnership process has never  seen more pressing if they are to succeed and contribute to sustainably improving livelihoods. (page 10) (...) While most donor representatives learnt how to support partnership on the job, very few of their agencies invested resources and time to build (formally) their internal expertise and capacities on partnerships. (page 20)

Seed funding - i.e. funding the first stage of a partnership’s development - is an important incentive that facilitates the start of multi-stakeholder partnerships, by lowering the transaction costs perceived by cross-sectoral stakeholders (page 19) The approval and funding of partnerships from donor agencies generate more trust, credibility and reputation than other initiatives. This in turn can provide the partnerships with further business opportunities and legitimacy. (page 21)

While a logframe approach to monitoring and evaluation may be relevant for project-based partnerships, it may be less relevant for complex partnerships, which need a more sophisticated, adaptive approach based on a set of relevant performance indicators. (page 8) There is an urgent need to adapt M&E architectures to match these new approaches and to create/build a system that is suited to partnerships, in a way that reflects their complexity and iterative and non-linear nature.(page 22) This is especially the case for developmental impacts which can sometimes be hard to assess based on quantitative data, and/or hard to attribute - did donors’ funding contribute to job creation, or would have it happened anyway otherwise? (page 23) It requires a reflection upfront of  what type of information can be useful to collect, how to best frame a change process, and how to use this and build in learning moments - be it formally or informally - along the way. (page 31)

When working on long-term change, for example transforming a community’s livelihood or adapting a global value chain, M&E should seek to register contribution rather than attribution of a linear causal link between partnership actions and achieving their objectives.(page 31) 

If treated as a reporting tool rather than a strategic reflexion, a Theory of Change (ToC) approach can have more disadvantages than benefits, and over-formalising the process tends to defeat its own purpose, which then becomes an issue for practitioners and partnerships. donors must find a trade-off between the political pressure for a results-based management approach (which does not respond to the dynamic and changing nature of partnerships), and the reality on the ground (many and diverse stakeholders), which is unpredictable and requires donors some flexibility. This trade-off is translated differently according to donor agencies. (page 23) 

Related:

European Development Days 2016, Session on “Strengthening multi-stakeholder partnerships to achieve the SustainableDevelopment Goals” with Petra Kuenkel (Collective Leadership Institute); Dave Prescott (The Partnering Initiative); Mike Wisheart (World Vision); Adriaan Heinsbroek (ING Bank Belgium).