Uganda - The role of nongovernmental organizations and community-based groups in poverty alleviation

Report No. 12262-UG Republic of Uganda The Role of Nongovernmental Organizations and Community-Based Groups in Poverty Alleviation June 22, 1994 Population and Human Resources Division Eastern Africa Department FOR OFFICIAL USE ONLY MICROGRAPHICS Report No: 12262 UG Type: SEC Document of the World Bank This document has a restricted distribution and may be used by recipients only in the ,erformance of their official duties. Its contents may not oterwise be discosed without World Bank authorization  CURRENCY EOUIVALENTS US$ 1.00 = USh 1165.13 (Dec. 1992) Ush 1.00 = US$ 0.0012 (Dec. 1992) ABBREVIATIONS AND ACRONYMS ACFODE Action for Development ACORD Agency for Cooperation and Research in Development AFTSP Africa Technical Social Policy Division AIDS Acquired Immune Deficiency CAP Community Action Program AMREF African Medical and Research Foundation CARE Catholic Agency for Relief CBG Community-Based Group CEM Country Economic Memorandum CIDA Canadian International Development Association DANIDA Danish International Development Agency DCAT District Commnunity Action Trust DENIVA Development Network of Indigenous Voluntary Organizations DES District Executi--e Secretary DHS Demographic and Health Survey EDI Economic Development Institute GDP Gross Domestic Product GOU Government of Uganda ICRC Intprnational Committee of the Red Cross IDA International Development Association IMF International Monetary Fund LWF Lutheran World Federation MUPEP Ministry of Finance and Economic Planning NCAT National Community Action Trust NGO Nongovernmental Organization NRM National Resistance Movement NRP Northern Reconstruction Project PAPSCA Program for the Alleviation of Poverty and Social Costs of Adjustment PTA Parent Teacher Association UWESO Uganda Women Efforts to Save Orphas RC Resistance Council SAF Social Action Fund SCF Save the Children Fund SDA Social Dimensions of Adjustment SEDF Socio-Economic Development Fund SIDA Swedish International Development Agency SSA Sub-Saharan Africa TASO The AIDS Support Organizadon of Uganda UCOBA The Uganda Community Based Association for Child Welfare UDHS Uganda Demographic Household Survey UNICEF United Nations International Children's Emergency Fund URDT Uganda Rural Development Training USAID United States Agency for International Development  FOR OFFICIAL USE ONLY REPUBLIC OF UGANDA THE ROLE OF THE NGO SECTOR IN POVERTY ALLEVIATION Table of Contents Executive Summary .......................... i-vi Chapter One. Introduction ................................... 1 A. Rationale, Objectives and Audience .................... 1 B. Key Issues . .................................. 3 C. Methodology and Approach ....... .................. 7 D. Structure of the Report ........ ................... 10 Chapter Two. The Socio-Economic Context of Poverty ..... .......... 11 A. Background . ................................. 11 B. Social Indicators ............... 11 C. Government Strategy and Constraints. .Constraint 12 D. The Social Fallout from Political and Economic Adjustnent 13 Chapter Three. The Economic Rationale, Character and Role of NGOs in Poverty Aleviation..... 15 A. The Econonmic Rationale for NGO Intervention .15 B. The Character of NGOs in Uganda ................... 19 C. The Historical Evolution of NGOs .................... 20 D. The Changing Roles of NGOs ...................... 22 E. Leveraging Limited Community Resources .... .......... 26 Chapter Four. NGOs and The State: The Operating Environment .... .... 29 A. Benign Neglect or Banal Suspicion ................... 29 B. From Development Ideology to Sustained Action .... ....... 30 C. Registration and the Question of Internal State Control ... .... 30 D. Regulation and External Donor Accountability .... ........ 32 E. The Emerging Third Sector: NGOs, the State and Private Sector . 34 This report was prepared by a mission which visited Uganda in February 1993. The mission consisted of Messrs. N.J. Colletta (Missio-i Leader), A. Thompson (Economist, AF2PH), J. Clark (International Relations Officer, HRO), and T. Brett (NGO Research Specialist, Consultant), Lydia Tabi provided secretaral assistance in the preparation of the report. The mission drew heavily upon the Special Project Preparation Facility (SPPF) studies on the Uganda NGO Sector conducted by A.l. Ratter and J.B. Kwesiga (consultants) under the management of Mr. 0. Mattar, Director of Aid Coordination, Ministry of Finance and Economic Development, as well as extensive field visits and interviews throughout Uganda. This domn ha a restrcted dsiuton d may be used by recdpitu only in the peufman of offcildi&es. Its conten ma not otherise b disclosed itho Wodd Bn auhoizaon  Chapter Flve. Assessing NGO Performance in Poverty Alleviation ....... 36 A. Measuring NG Effectiveness and Efficiency .... ......... 36 B. The Nexus of Participation, Poverty and Equity .... ...... 41 C. The Road Toward Sustainability ..................... 42 Chap' r Six. Accountability, Monitoring and Control .45 A. Accountability To Wrhom? .45 B. NGOs and the Diversity of Stakeholders .46 C. The Community Beneficiary Vantage Point .47 D. Donors and NGOs: a Problem of Monitoring. 49 E. The Politics of Regulation, Control and Autonomy .51 Chapter Seven. Positioning NGOs for Sustainable Poverty Alleviation. ..... 54 A. Institutional Relationships ......................... 54 B. Government-Donor-NGO Relations ................... 58 C. Cooperation in Community Capacity Building .... ......... 60 D. National Community Action Trust .................... 61 Chapter Eight. Flndings and Recommendations .................... 66 A. Understanding Diversity as Strength ................... 66 B. Unfettering the Operational Environment .... ............ 67 C. Identifying Mechanisms for Integrated Planning and Collaboration 69 D. Fostering World Bank Collaboration with NGOs .70 Annexes 1. NCAT - Extract from MFEP Budget Speech - July 1992. 2. Overall NGO Sector Study Methodology. 3. Methodology for NGO Typology and Operating Environment. 4. Select Community Field Study Methodology. 5. Collective Groups and Market Competition. 6. The Problem of Evaluation. 7. Government Bodies with Responsibility for Coordinating NGOs Activity Boxes 1. DENIVA 2. The NGO Registration Act 3. Donor-NGO Relations 4. Action for Development (ACFODE) 5. When Trickle Down Meets Conscientization 6. The Btwaa: Limits to Empowerment 7. The Benefits and Costs of Participation 8. Monitoring, Effectiveness and Accountability 9. The Aringa Development Program 10. Community Action Trusts 11. Building Community Capacity: The Change Agent Training Program  UGANDA THE ROLE OF THE NGOs AND CBGs IN POVERTY ALLEVIATION EXECUTIVE SUMMARY At Independence in 1963 Ugand l was one of the better placed African countries with good health and education facilities, a relatively good human resource base, a sound infrastructure, and an opportunity to benefit from fertile agricultural conditions, mineral deposits and hydroelectric potential. However, over a decade of civil strife has seen these assets under-utilized, run down or destroyed. Now Uganda finds itself as one of the poorest countries in the world, both socially and economically. In 1986, President Museveni and the National Resistance Movemnent came to power and over the seven years since then they have been able to bring stability and security to the country. Under a structural adjustnent program supported by major donor agencies, the Government has started to rebuild its shattered infrastructure, to provide a positive macroeconomic environment for private enterprise and to redirect Goverrnent spending away from areas such as defense and towards basic needs such as health, education and water suppiy. However the Government's capacity to facilitate the provision of basic services to the poor and engender self-reliant, sustainable development has been severely constained by a numner of factors. Lack of funds and qualified people, the enormous social deprivation, a rapidly growing population, inter alia, all mean that the Government will need to forge effective partnerships with the nongovernmental and private sectors to alleviate poverty. While structural adjustmnent is necessary, and the Government has been a willing partner in this process, it has not proven to be sufficient in addressing persistent poverty. The Government its If suffers from inefficiency, lack of resources, and an inability to reach the poorest sections of the community even when its policies are right. The private and voluntary sectors are seen as having the characteristics necessary to complement inadequate government services to the poor. Their activities range from social mobilization to direct service delivery. Historically the non-government sector of NGOs and Community-Based Groups (CBGs)l/ has played an important role in Ugan&t. Whereas previously the Government saw its role as taking over the services from NGOs it is now more interested in giving these groups greater opportunity to participate in a more decentralized development process. As the NGO role in the public domain grows, it becomes more important to identify and articulate the economic justification for their activities. NGOs have an economic role to play in providing the collective goods that would otherwise be undersupplied or not supplied at all, by the private market. They may produce these collective goods on their own initiative or at the behest of government and acting as the government's agent. In this case they may I/ In this sector report, NOD0vemental Organizaons (NGOs) are generally - - - as legaly conuted. non-govenunental, non-profit organizations working in the areas of relief, development and advocacy. They are principally value-driven and oriented toward meeting the needs of the poor. Connmity-Based Groups (CBGs) are informally structured and exist for the benefit of their own members and/or communities while NGOs have formal organization and exist to meet needs beyond that of their own members and communities. In many places in this report, the acronymn NGO is used broadly to include CBGs.  ii be thought of as substitutes for private contractors. However, NGOs are often distinguished from private agents by their social comnmitment, closeness to local issues, and low labor costs. These characteristics are the basis for a potential comparative advantage to NGOs in providing public goods and services. In additior, NGOs (and other community organizations) can assist in the formulation of allocation rules for common property resources. Finally, and perhaps most important, NGOs can serve as a catalyst to civil society, giving voice to the needs and preferences of people (particularly poor people) who are currently under-represented in the political system. The concept of working with NGOs is generally accepted, but trying to define what an NGO or a CBG is and what form a working relationship should take is often contextually specific. These groups and organizations are extremely diverse in nature, development ideology and self-percepton. Some see themselves primnarily as policy advocates or comunity mobilizers while others see themselves as direct providers of social services. Many are reluctant to be measured in terms of cost-effectiveness as they see their unique contributdons to be in areas such as community mobilization which does not easily lend itself to quantitadve analysis. In addition, while NGOs and CBGs undoubtedly have many strengths, they also possess technical and managerial weaknesses. They usually work on a small scale and their projects may not be easily replicable. There is a wide range of ability, some groups utilizing resources with remarkable economy and effectiveness while others fail on most, if not all, counts. Their projects may be vulnerable to collapse once external support is withdrawn. Often they are independent-minded, pursue their own agenda, and are not accountable to govermnent, donors or to beneficiaries. Within the above broader context, the Ministry of Finance and Economic Planning (MFEP) and the Bank agreed to initiate a study of the NGO sector in Uganda financed by SPPF. The primary purpose of this study has been to discover where the comparative advantages of NGOs and CBGs lie in poverty alleviation, and how the enabling environment (policy and operational) can be improved to maximize this comparative advantage. The broader goal of the study was to facilitate a process that builds a value- adding partnership between government organization, NGOs and CBGs, and to explore how this process can be strengthened and better interface with donors' efforts to meet the needs of the poor. The MFEP study consisted of four major tasks. First, it established a comprehensive profile of the NGO sector in Uganda; secondly, it analyzed and assessed the environment in which NGOs and CBGs operate; thirdly, a field study was undertaken in a number of communities to examine how NGOs and CBGs perform from the perspective of the communities in which they operate; and fourthly, it identified and assessed opportunities for strengtening the efficiency and effectiveness, accountability, and sustainability of the NGO sector in order to realize more fully its comparative advantage. This sector report is based upon the information from these SPPF-financed studies and a Bank mission which conducted field visits and in-depth interviews during February, 1993. The study was followed by a National Workshop on "Realizing the Development Potenti of NGOs in Uganda", held in Kampala from February 9-10, 1994. The Workshop participants included a cross section of NGOs, CBGs, Government agencies, and Donors. The major outcome of the Workshop was consensus on the need to prepare a National Plan  iii of Adtion for the NGO Sector. It was further agreed that the key elements of this plan should include: (i) clarification and promulgation of government policy toward NGOs; (ii) establishment of an NGO data base/information system; (iii) introduction of an NGO Code of Conduct; (iv) creation of appropriate NGO coordination structures and mechanisms; and (v) development of institutionalized modalities of GO-NGO collaboration at the local and national levels. As managers of the NGO study and convenors of the National Workshop, the AID Coordination Unit, MFEP, would take steps to commission a team for the preparation of the proposed Plan and secure the necessary funds. Principal Findings and Recommendati The three key findings that emerge from this report are as follows: 1. In a country as poor as Uganda, with limited government capacity, and profound social needs, it is urgent to expand partneshps in a decentralized framework in order to reach the poor, and to offer interventions that are meaningful to their lives. (see Paragraph 56) 2. The special comparative advantage of NGO's, relative to government, is that they are innovative, spontaneous, and varied. Given this, government regulations that attempt to impose conformity on NGOs and channel their activities will stifle the spirit of the NGOs and reduce the prospects for effective partnerships. In addition, misguided regulation can impinge on the freedom of associati m-. and weaken civil society. The NGO sector should be "Lberalized" and remaining regulations should be of the technocratic variety. Government's role should be to facilitate the development of an NGO Code of Conduct and provide information-sharing mechanisms that signal the particular capacities of individual NGOs in order to promote partnerships based on trust and knowledge. (see Paragraphs 125-129). 3. NGOs play an essential role as capaity builders of community based groups. NGOs can serve as a conduit to financing sources, build up community management and technical capacity, and facilitate the social decision-making required for ownership and sustainability of common property resources. (see Paragraph 175). These three over-arching findings support the rest of the detailed recomnmendations and encapsulate the thrust of this report. The specific findings and recommendations faU under four broad categories: A. Understanding Diverity as Stregth 1. NGOs are diverse in nature. This diversity is a strength in terms of flexibility and responsiveness to beneficiary needs. NGOs face a number of constraints: organizational and technical capacity, government laws and regulations, and donor procedures. Reducing these constraints, it is argued, would improve the effectiveness of NGOs. However for donors and government to more readily work with NGOs, an understanding and clasification of the NGO universe by function and acdvity rather than by type would be a useful perspective for facilitating policy and programmatic collaboration. Developing and mainaining  iv an NGO informaion system/data-base would be an effective vehicle for enhancing donor and government collaboration with NGOs. 2. NGOs play an important role, particularly in the promotion of popular participation and civil society, but they are not meant to substitute for govenunent nor simply be relegated to the narrowly defined role of low-cost service provider. They can serve as a genuine complementary partner to government in the development process. 3. NGOs have widely differing goals and activities ranging from community mobilization to service provision, but there are many areas of mutual concern. These areas present opportunities for new partnerships with government, donors and beneficiaries. Regular fora for building such partnerships and sharing experience need to be established. B. Unfettering the Operational Environment 4. NOOs should be encouraged to use indigenous structures (i.e. CBGs) before creating new institutions. Donors should support decetraliaon policies throughout all operations to empower the District and sub-District level administration and improve responsiveness and accountability, while supporting measures to review exist statutes and create an unfettered and enabling enviromnent for NGOs and CBGs to work in. This should cover such matters, inter alia, as registration, regulation, taxation, visas, plaining, implementation collaboration, consultation and official support. 5. As part of the effort to create a supportive enabling environment for NGO partnerships, the current registration procedure should be changed. This report recommends disbanding the current Registration Board housed in the Ministry of Interior, and redefinng govemnt's function as coordination and information sharing. A database/information systm of NGOs, designed to identify their capacities and track record, should be housed in a technocratic arn of government, such as the Aid Coordination Department of the Ministry of Finance and Economic Planning. The classification of NGOs for tax purposes should remain with the specialized tax authorities. 6. Support for the National Community Action Trust (NCAT) proposal is still weak within both government and the NGO community. NCAT is unlikely to work if the government tries to concentrate all NGO finances in one body and if resource allocation decisions are politicized, because NGOs wil, not voluntarily work within such an environment. Given limited government capac.ity, it is recommended that movement on this waits until some experience is gained (and evaluated) from the district level pilot of a similar mechanism, the Community Action Program (CAP), in West Nile District.  v C. Identifying Mechns,s for Integrated Planning and Collaboration 7. Accountability to whom is an issue for NGOs, government and donors alike. Efforts need to be made to develop transparent mechanisms to enhance accountability, especially to the ultimate beneficiaries - the poor. A join review of existing statutes and regulations governing NGO/CBG activities, e.g. registration, taxation etc., is required to clarify legality, accountability and responsibility issues. Development of an NGO Code of Conduct should also help facilitate peer accounting. 8. When working in partnership with NGOs, efforts should be made to enhance their effectiveness by learning through participation at the design stage, building flexibility intc the project and specifying procedures which correspond to NGOs' abilities and needs. In addition, full transparency and mutual understanding should be ensured by making responsibilities, obligations and administrative mechanisms clear at the outset. This can be achieved by providing basic orientation and training, by preparing the project or credit agreement and other legal documents in a clearly written style, and by ensuring that all NGOs understand government meduanism, e.g. for handling Donor assistance. 9. Donors should avoid overfunding NGOs and inadvertently nururing a dependency syndrome. Steps should be taken to improve the financial environment and NGO sustanability by introducing and encouraging the use of cost recovery and business-like practices among NGOs and CBGs, and by easing the bureaucratic constraints on the provision of direct support from Donors to NGOs, CBGs, and beneficiaries alike. Caution is warranted against funding NGOs beyond their capacity to absorb additional resources. 10. Steps should be taken to provide places for NGO staff on Donor and Government funded staff development courses. They should also be encouraged to make proper provisions for training, office equipment, administrative overheads and other capacity-building expenditure in their own budgets and applications for funding. Building organizational capacity will increase NGOs' ability to act as capacity builders themselves as well as absorb and better utilize edsting and additional resources. 11. Ways should be sought to assist in the followup of the National Workshop recommendation to prepare a detailed NGO Action Plan. D. Fostering World Bank Collaboration with NGOs 12. Provision should be made for technical, management and training support to NGOs with an emphasis on strengthening their ability to serve as "capacity builders" for themselves and of CBGs. This could be accomplished through  vi the establishment of a special Bank NGO Grant WindowZ/. Although alternative vehicles for NGO funding exist, such as the Participation Fund and the Institutional Development Fund they have tended to focus on different targets. Nor do these alternative funds provide the scale of funding that may be required to meet social needs through NMOs and community based groups. Financing through a special Grant Window would encourage NGOs and CBGs to build sustainability into their projects at the design stage by facilitating institutional development, beieficlary participation, ownership and implementation competence. At the same time, IDA efforts to strengthen NGOs as capacity builders through the ongoing EDI Japanese Trust Fund for NGO training and strategic planning, and the newly established Institutional Development Fund ([DF) and African Capacity Building Initiative (ACBI) should be expanded as much as possible. 13. This Sector Study Framework and Methodology should contribute to the development of an NGO Operational Handbook which is being undertaken by the Bank's NGO unit; and a Guide to NGO Country Sector Assessment currently being developed by the Africa Technical Department. 14. In addition to a longer term study to profile NGOs as part of the development of a comprehensive information system accessible to provide private and public users, research should be undertaken to develop a better understanding of the economic advantages offered by NGOs. Such research should identify and quantify "subsidies' enjoyed by NGOs (e.g. donations, employees willing to work for lower wages), the advantages of basing accountability on "shared values" rather than on auditing, monitoring and evaluation, and the economic benefits of having employees that share maragement's objectives. An example of suh funding is The Population NGOs Special Gn Program which ia one of ten speoial pant PaRg managed by th PHN Depatment of th Wold BaRk Th progum is financed out of World Bak proft. It "hd be noted t as thi spot is being finaized, th Bak is crret preparing a comrehensive grant fund to support innovation Eth aus of capaciY buding, para and socal u _esmn  Chapter One. Introduction A. Rationale, Objectives and Audience 1. In this sector report, Nongovernmental Organizations (NGOs) are generally defined as legally constituted, non-governmental, non-profit organizations working in the areas of relief, development and advocacy. They are principally value-driven and oriented toward meeting the needs of the poor. In Uganda, as elsewhere, there are numerous Conmunity- based Groups (CBGs) established locally, of the commnunity and operating on a very modest scale. These community groups are organized informally and have little experience or resouryces, but are characterized by a high degree of comLmWitment and fill an urgent and often temporary need. They are "ad hoc" in nature, rising to address a need and dissipating once that need is addressed. An example of this latter kind are credit and savings schemes amongst women, fanning brigades, or Hoe Groups (women who hire their labor out during harvest and weeding season in exchange for cash payment or sometimes payment in kind). 2. In Uganda, as in many other parts of the world, there is an increasing reliance on NGOs and CBGs to shoulder the burden of socio-economic development aimed at po. arty aleviation. This reliance comes in large measure because of the vacuum created by the inability of governments to meet the basic needs of the absolute poor. Also, because of perceptions that their transaction costs are lower than those of Government, and that they are closer to their clients (beneficiaries), engender ownership through participation, and are more effective in their delivery of basic services to the poor. The nature and extent to which NGOs and CBGs have affirmed these percepdons is part of the underlying rationale for this study. 3. As part of the Government's efforts to alleviate poverty, the Minister of Finance and Economic Planning (MFEP) announced in the July 1992 Budget Speech the proposed creation of a National Community Action Trust (NCAT), a quasi-government body which would assist those communities involved in self-help projects. Recognizing the need for a national framework for mobilizing non-govermnental capacities and developing more systematic linkages with loca' government and official donor agencies, the government proposes that the NCAT and District Community Action Trust (DCAT) branches would be created to chanmel official and non-official donor resources to grassroots NGOs and Community-Based Groups in order to more directly support their self-help approach to social rehabilitation and development (see Annex 1 - NCAT extract from MFEP Budget Speech, 1992). 4. It is expected that a number of NGOs and CBGs would participate both in the administration of Trust funds at the District level and also serve as technical agencies assisting communities in the implementation of self-help projects. The DCAT would form a framework for promoting effective collaboration between NGOs and CBGs, Resistance Councils (RCs), the District Administration, sectoral ministries, and Donors in a coordinated assault on absolute poverty. 5. The Govermnent has acknowledged the niche currendy carved out by NGOslCBGs and Resistance Councils (RC) who have embarked on a host of local development schemes to rehabilitate and improve health care, primary education and rural infrastructure. In many areas, their contributions at the grassroots and national and regional levels have helped to fill the:. -siderable void left as a result of government incapacities caused by the past civil conflict.  2 6. In its portfolio of operations supporting the Government of Uganda and its pursuit of poverty reduction, the World Bank has several activities such as the Program for the Alleviation of Poverty and Social Costs of Adjustment (PAPSCA) and the Northern Reconstruction Project (NRP) which it undertakes with NGOs/CBGs ax"! has proposed expanding this partnership. Yet, the Bank's knowledge and understanding about the character, range, and performance of NGOs/CBGs in poverty alleviation is limited. The report should help to increase Bank knowledge and understanding concerning NGOs/CBGs. 7. The overall objective of this sector report is to foster a better understanding and an "enabling environment" for NGOs and CBGs, and to extend areas of collaboration between donors, Government and non-governmental organizations (NGOs and CBGs) to alleviate persistent poverty in vulnerable communities. Its intended audience includes the Bank in particular, NGOs, donor organizations, and the Ugandan Government. Specifically the Report seeks to do the following: (a) Profile the character and role of the NGO sector in Uganda, especially in activities relating directly to poverty alleviation; (b) Examine the legal, regulatory, and procedural environment in which NGOs operate and identify for the Bank, donor conmunity and Government, specific areas for improvements in procedures, policies and legislation; (c) Examine the deficiency and effectiveness of select NGOs in providing basic services to the poor from a community perspective; and (d) Recommend means to improve accountability, scale and sustainability of NGO activities. (e) Analyze the prospects for the NCAT as a vehicle for improving the efficiency and effectiveness of collaborations between the Government, donors, NGOs and CBGs to better achieve poverty alleviation objectives. 8. This NGO report complements the following other World Bank poverty alleviation work in Uganda: the Social Sectors Strategy Paper, the Poverty focused Country Economic Memorandum (CEM),the Economic Development Institute's (EDI) training activities both independendy of and in collaboration with the Social Dimensions of Adjustment Program. In addition, Uganda is proposed for inclusion in the Africa Technical Social Policy Division (AFTSP) structural adjustment support activities to enhance NGO capacity and to furither their collaboration with the Bank. AFTSP has a threeyear training initiative designed to improve NGO efficiency and quality.  3 B. Key Issues3/ Profiling and Classifying NGOs 9. Because of the wide variety of NGOs, profiling them can be difficult. The operations of NGOs are diverse in nature, their motiations range from the religious to the philanthropic to purely developmental. They also differ in their methodologies, goals, activities, relationships, size and funding. For the purposes of this study NGOs are generally considered to be non-political, non-profit groups, committed to the betterment of the neediest, the protection of the environment, and the welfare of the community. They emphasize self-help and self-reliance. In their organization and operations they tend to be more flexible and innovative than larger bureaucracies. They are often motivated more by a sense of social commitment than material remuneration. They work directly to fill knowledge and information gaps through skills training and other technical assistance programs; support institution-building and help design, prepare and implemrent development programs. They are close to the poor and the communities they live in, which allows them to mobilize communities for participation and involvement in development projects. Because they lack bureaucratic controls, they are typically characterized by speed and flexibility of response to identified needs. 10. Their strengths more often than not are also their limitations. They are small in size and scope, and thus often have only a limited impact. Frequently they lack a broad economic and social perspective, their financial and technical resources are seldom s-ufficient, they are loosely structured, sometimes without real accountability, and they are often weak (or excessively flexible) in management and planning. To achieve the optimum balance between, for example, flexibility and planning requires a high level of maturity and experience. It is r!ot surprising that the efficiency and effectiveness of development NGOs is still relatively unmeasured despite the large number of organizations that have registered with the NGO Board. Most NGOs operating in Uganda, whether national or international will fit the above description in part. 11. The great diversity found in the NGO sector, including CBGs, constitutes a strength of the sector and is a reflection of its flexibility and responsiveness to local needs. However given this diversity, classifying NGOs can be problematic. 12. On what basis does one differentiate between groups of NGOs, and in the use of any such classification? A number of different models have been suggested and used in the past, but often these have been of limited functional value. For example the Development Network of Indigenous Voluntary Organizations (DENIVA), in compiling its directory of Non- Governmental Organizations in Uganda, used the following definition. 'For an organization or an institution to be non-governmental it must be a voluntary one; it must be completely independent of government in its policy formulation and in the areas of its operation. It must have the freedom to choose what it must do in accordance with its aims and objectives. It must be an organization which is not established by government. Of course, it can raise the funds from the general public or from its own specific or sectarian groups." This definition serves little purpose other than to emphasize the separation and independence of NGOs from govermnent. However in doing this it excludes somne of the largest and most active NGOs in 3/ The issues section has been substantively enriched by the contribution of Ms. Mona Grieser, NGO specialist, consultant, to the Uganda - NGO Sector Study Issues Paper-, August 20, 1992, AMRPH.  4 Uganda, for example African Medical Research Foundation (AMREF) and Save the Children Fund (SCF) both work very closely with the central govermment as well as Oxfam and Lutheran World Federation (LWF) who have been supporting the public sector administrative infrastructure at the district level. Box I DENIVA The Development Network of Indigenous Volwuaiy Organizations (DENIVA) was established in February 1988 as an unbrella organization for local NGOs. According to its brochure, it has a membership of over 200 NGOs including 8 associates. Reflecting the interested awareness of the NGO sector, DENIVA has atracted the interest ad suppot of such organizations as The Ford Foundation which financed te publication of an NOO dieW in 1990, and the EEC which is currenly planning to provide support for the DEAIVA _It was involved with the United Naions Economic Commission for Afrca in organizing a National Polio Workshop for indigenous NOOs which was attended by numerous goven ment officials and Kampala -asd representives of NGOs. Its chairma curently sits on the Steering Condnittee which oversees th MVEP's NGO study financed by the World Bank. In contrast to the heavy atention from governmnt and honal donors, NGOs genealty fIi that DENIVA has no relevance to their needs and that it had not satisfid the objectives for which it had been ceated. While many of them expressed a need for more coordinatio among NW0s, none though* dtat DENIVA could adequately fulfill this role, despite it being one of DENIVA's or4igin objecve. The Enabling or Disabling Environment in which NGOs and CBGs Work 13. Frustration in the environment in which NGOs operate is evident from both the donor experience and the stated opinions of NGOs. NGOs and Donors feel that their partnerships are not yet optimum and that there are implementation problems that may in part be due to this environment. This Report highlights the factors which NGOs perceive have the greatest negative impact on their operations. 14. As can be expected the larger, international NGOs complain about those govermment regulatory procedures that could be resolved through policy changes. Tax exemption status, restrictions on imports of vehicles and equipment, and problems with immigration for those NGOs bringing into the country expatriate technical assistance are all cited as having a potentially constraining impact on implementation of activities. They also point to the difficulty in adhering to donor procurement, disbursement, and auditing policies and procedures are common. 15. Smaller NGOs are concerned about resource deficits; money, manpower and materials. With smaller administrative staff, they are unable to compete with the larger NGOs in writing proposals and winning the confidence of donors on their terms. They cite competitiveness among NGOs and lack of cooperation as part of their problems. Indeed in some parts of Uganda, several NGOs are providing similar services to the same populations, while in other parts of Uganda, those same needs go unfilled. Providing a loose framework to redress the lack of understanding and integration of NGO efforts into the National Development Planning process in partnership with the Government is one of the expected contributions of this study.  5 16. Even more uncertain are estimates of resources at the disposal of NGOs. Where funds are obtained from public sources, or through international NGOs these figures can be computed with some degree of accuracy, but many NGOs receive funds privately and any estimate of NGO financial contribution to development is mere guesswork at present. The whole question of how and where to draw the line between non-profit and for-profit NGOs, especially in terms of their tax status is unclear. This report seeks to facilitate, through a follow-up National Workshop, the definition an agenda of operational changes (action plan) which will smooth and enrich the relationship between the NGOs, CBGs, government and donors. Measuring NGO Efficiency and Effectiveness 17. Tied closely to the legal and regulatory environments of Govermnent and Donors in which NGOs operate are questions related to their efficiency and to the quality of services which NGOs provide. Conventional wisdom has assumed that NGOs achieve high levels of reach, quality and efficiency, especially when compared to govermment agencies. It is assumed that NGO transaction costs (in delivering basic services) are lower than government. Since there has been little empirical evidence of the efficiency of NGO activities in Uganda, this study has taken a case study approach and has reviewed the activities of selected NGOs in selected communities. The perspective used has been that of the communities in which NGOs operate and not the perspective of the NGOs themselves. In addition to efficiency and quality of service provision indicators and measures, these evaluation parameters encompass equity, sustainability and accountability indicators. 18. Only a few NGOs have evaluated their own work in Uganda and evidence indicates that their success ranges from excellent to spotty at best. Even the more successful activities have considerable room for improvement. As well as pointing out areas in which NGO services could become more efficient, the study also points out those under-served populations and regions where NGOs could assist the Government to become more efficient. 19. De Coninck (1992)_4 noted in his evaluation of four NGO project activities that, while the provision of services was, for the most part adequate and the cost for services acceptable to the local population, the projects were not located in truly rural areas and in some cases competed with government and other private services. Beneficiaries sometimes complained that technical assistance was not provided as often as needed because the NGOs were too centrally based and did not have the resources to support field operations. One interesting aspect of De Coninck's work in evaluating a vocational, technical training component of a project, was his discovery that few of the individuals trained had utilized their skills to their financial benefit because other factors, such as access to credit to purchase necessary equipment, were not in place. In other words the environment for the beneficiaries was also not conducive to maximizing the opportunities presented through their training. Further, De Coninck notes that using the old apprenticeship method of training in a real world context was far cheaper and more efficient than the questionably sustainable "one-off" NGO training program. Thus NGO performance as perceived by the conmunity has been the starting point for the field component of this report. 4/ 'Evaluatng te Impact of NGOs in Rural Poverty Alleviation - a Uganda Country Study,' John de Coninck, ODI Working Paper no. 51, 1992, London.  6 The Accountabilitv. Scale and Sustainability of NGO Efforts 20. Accountability of NGOs is an actively debated issue. Many NGOs feel that the accountability question should be asked of donors and government as well as of themselves. With specific regard to NGOs, accountability relates, not only to the reporting and monitoring of financial information, but to the way in which NGOs are held responsitble to stakeholders for what they do. NGOs act as agents for donors, government (particularly when contracted for service delivery), their beneficiaries, and even other NGOs. 21. Each of tlese parties has differing and sometimes conflicting interests and, due to the nature of much of the work that NGOs are involved in, there exist complex problems of monitoring and auditing of objectives with achievements, and aligning priorities of NGOs with stakeholders. 22. Particularly in rural areas, beneficiaries arc typically poor, ill-educated and vulnerable, with limited access to information. They are aware of the services they receive in their immediate areas, but not of the costs involved, the way decisions are arrived at or what is happening elsewhere. NGOs decide what services they will provide or what function they will fulfill. Donors provide funding which can be withdrawn if NGOs fail to meet expectations, but if they work in remote areas under harsh conditions on small projects the cost of independent monitoring is high. So donors rely on the information provided to them by the NGO and on the reputation the NGO enjoys. This provides a weak basis for defending the credibility of organizations under criticism and for distinguishing between valid and effective organizations and so-called "briefcase" NGOs. 23. The Government also has legitimate development interest in NGO activity in addition to its natural concerns with internal security. It's interest is in ensuring that service provision is equitably spread and not duplicated. Increased coordination should make this possible in the public sector, but it cannot be guaranteed where services are the outcome of decisions made by an array of autonomous NGOs competing with each other for funds. Thus, ways are needed to ensure that consumer needs are effectively identified and the activities of both state and NGOs are undertaken in an open manner to create an effective base for political accountability without imposing unacceptable levels of control. The government's interests in equity and efficiency of service provision should not provide an excuse to limit free entry and exit of NGOs and CGBs in the provision of services. 24. Related to the question of accountability, are issues of scale and sustainability. As has already been pointed out, the work of NGOs tends to be small scale and therefore their impact equally small. Attempts to interfere with the scale of their operations may impact negatively on the very things they do well, e.g., strong grassroots involvement, because of their small scale. An NGO that seeks to increase the scale of its operations may require greater investment by donors in institutional development so that management and administration can keep up with service operations. Donors and government are generally reluctant to provide overhead funds, but at the same time, they recognize the weaknesses of NGOs in these areas. 25. Scaling-up NGOs may also diminish the very qualities of commitment to the poor and the sense of mission which makes them willing to labor under difficult conditions. Inadequate information about how NGOs operate means that plans for scaling-up or developing partnerships amongst NGOs and Government until now has necessarily been limited.  7 26. The issues of scale and sustainability are closely linked. While many NGOs carry out their activities through partnerships with RCs or community groups there is some evidence to suggest that real participation, the kind that leads to sustainability, is not fully taking place. The example of the Agency for Cooperation and Research in Development's (ACORD) project in Gulu may be a case in point. Despite linkages with the local labor organization, this NGO failed to build local management and administrative capacity in the Acholi Cooperative Union engineering workshop, and with social and political changes taking place in the region, this has made their activities with the workshop less effective than hoped. However, in fairness, it should be noted that ACORD has been more successful in working with a large number of CBGs in promoting participation and self-reliance in the region. C. Methodology and Approach MFEP Study Methodologv 27. This report follows on from a Ugandan studyS/ undertaken by the MFEP and financed by a special project preparation facility (SPPF) of the World Bank. The study is essentially exploratory and diagnostic in nature. It endeavors to determine the extent to which NGO, Government, Donor and Beneficiary claims and expectations of NGOs are valid. It addresses what measures need to be taken to improve their operating environment, and seeks to fill the knowledge gap concerning the quantities and kinds of NGOs, and the efficiency, accountability and sustainability of their operations. Due to limitations of time and money, much of the study research was confined to secondary sources, and the field study was restricted to communities in just one district. 28. The study examines four key issues: (a) definition and classification of NGOs; (b) regulatory constraints of Government and donors on the functioning of NGOs (the 'enabling or disabling environment"); (c) The efficiency and effectiveness of NGOs; and (d) The scale, sustainability and accountability of their activities. These issues most closely determine the shape, form and potential contribution of NGO activities. 29. The investigative model research design endeavored to look at how NGOs operate within three interacting tiers. The first tier represents the national context, the second the district context and the third tier the community context. Within this three-tier model the core (third) tier consists of the vulnerable communities' beneficiaries and determines if their expectations for services are being realized by NGOs. Simultaneously the study has looked at the enabling environment for constraints to delivery of services at that level. The second tier is the services provided by NGOs and the enabling environment required to deliver those services and supports at the district level. The first tier explores Government's and donors' roles in support of Tiers 2 and 3. It examines and analyzes regulatory issues, financial incentives, accountability and evaluation mechanisms, and provides a context for donors to improve their working relationships with their NGO partners. It also examines the operational mechanics of NGOs at the national level. An important aspect planned for the S/ 'Realizing the Development Potenti of NGOs and Community Groups in Uganda', Governmen of Uganda, Ministry of Finance and Economic Planning, a repon prepared by J.B. Kwesiga and A.J. Ratter, October 1992 - March 1993.  8 study, although difficult to achieve, was the examination of the synergism and dynamic relationships between the tiers (see Annex 2 - Overall Study Design). 30. The study endeavored to address the concerns of NGOs, Government and donors by inviting their participation in the study at the design stage.&/ This has been done by establishing a Study Steering Committee made up of representatives from both NGOs and affected Government ministries to guide and advise on design and implementation of the study. It was assumed at the outset of this study that the combined experience of locally- based donor representatives, Government and NGOs is more expert than foreign consultants. The study has tapped this rich resource of in-country experts to advise on the study. The research team developed standardized research methodologies. They interviewed key informants, organized focus group interviews and identified and trained local people to assist with the field research. Beneficiaries were included in the assessment of NGO impact. Identifyin' and Classifying NGOs 31. An analytical exercise has attempted to establish a profile of the NGO sector in Uganda classifying NGOs by type and distribution, determining the nature and extent of their activities and resources. A content analysis was conducted by creating a database from the NGO Board's register. This effort demonstrated the difficulties of classifying diverse NGOs, but further work is planned in developing a database on NGOs (see Annex 3, Part A- NGO Mapping Methodology). 32. There are several long-range objectives of this exercise including reviewing the process of registering NGOs, providing the Government and donors with reasonable accountability measures, identifying the contexts in which certain NGOs can function most effectively for future development partnerships, developing reconmnendations for the establishment of the proposed NCAT and DCATs which will facilitate the government's and donors' ability to work in partnership with both NGOs and CBGs in development activities. Analvzin Leaal and Regulatory Constraints 33. The study has analyzed the legal and regulatory "enviromnent" at all levels in which NGOs and CBGs operate to determine the factors that facilitate or impede their work. This process has included In-depth interviews with Government officials, local authorities, donors and NGOs to review structures and statutory instruments, rules and regulations, practices and procedures that help to create the environment in which NGOs operate (see Annex 3, Part B- Operating Enviromnent Methodology). Among the issues that have been examined are those regulations that can facilitate or promote the work of NGOs. They include such matters as registration requirements, tax concessions including import duties, sales taxes, and income taxes; immigration regulations, particularly for those NGOs who bring in expatriate staff. At the field level it looked at the relationships of NGOs with local government, including the Resistance Councils (RCs), to identify possible constraints and areas for improvement.