How can large NGOs and smaller organisations based in communities we support work together to decolonise compliance and move from a culture of control to one of mutual trust?

Compliance – the systems that monitor how well organisations adhere to laws, regulations and commitments – is traditionally approached from the colonial idea that local organisations are inherently risky. Such an approach assumes the risk is all taken by the donor, rather than the local community.

Traditional compliance systems measure local organisations against metrics that work better for well-resourced INGOs and take little account of how best to manage risk in local environments. As a recent rapid review of the Ukraine response confirms, they can leave local organisations subject to repeated, bureaucratic, ‘due diligence‘ processes, often for the same donor on different programmes, and unable to respond quickly to what is needed on the ground. Meanwhile, community organisations unable to deal with compliance paperwork are excluded from funding, shrinking the pool of potential partners.

Here are seven steps on how to decolonise compliance:

1. Localise due diligence and respect local standards

Decolonising compliance means including a wider group of organisations. As Vincent Henson, Due Diligence Manager of Start Network shared at a recent Bond Funding working group meeting, they “wanted to explore models that are more appropriate, inclusive and equitable so that we can bring in a wider spectrum of humanitarian actors who have been traditionally marginalised by the prevailing compliance system”.

Start Fund is introducing locally-designed due diligence at country-level, based on local context and language, and managed by local due diligence providers. Tailoring compliance to local context has led to a better articulation of what financial controls, for example, should look like locally and made local compliance standards visible to Start Fund for the first time.

2. Trust works both ways! INGOs need to prove they are worthy partners too

Local organisations rightly ask why due diligence is a one-way street with INGOs assessing local organisations but not vice versa? To tackle this imbalance, Start Fund plans to develop a global repository of due diligence assessments. This would allow small organisations to review due diligence processes of the large INGOs they want to work with. This would acknowledge that building mutual trust and accountability means that INGOs must also show that they can be trusted.

3. Learn from compliance regimes for partners based in the UK

Frequently, taxpayer or donor demands are used as an excuse to impose inappropriate bureaucracy on local organisations. National Lottery Community Fund (NCLF), challenges this by giving local funding officers the power to use their local knowledge to assess risk and dispense with standard forms where needed.

Although the fund faces intense scrutiny as a distributor of public funds, Helen Bushell, NCLF Senior Head of Funding, said: “It doesn’t feel as though we are passing that risk and due diligence on to the same extent as the international sector. Although we have a duty to protect public money our starting point is to consider the impact of any controls placed on the grant holders to ensure that collectively they do not create a disproportionate burden.”

Such a network of local funding officers working directly with communities shows how partners can be freed from form-filling, with controls based on local knowledge.

4. Free up everyone’s time to do the things that matter… Let’s allow for applications made by video!

The Center for Disaster Preparedness (CDP) in the Philippines has worked with USAID and Global Giving to cut the number of compliance requirements for local partners getting grants from their Community Solidarity Fund from fifty-two to just one!

They use simple templates and local languages. In an innovative step, they now encourage potential partners to bypass written bids and make video submissions. Where there are gaps, CDP has a “getting to know you” process to understand areas for which many organisations don’t have documentation, such as governance, partnership values and financials.

5. Understand potential harms as well as benefits of funding

Working with partners to understand what level of funding they need is vital. As Mike Mercado, Programme Coordinator at CDP said, this applies to having too much as well as too little. Many community organisations are doing the work already without support, so a donor needs to understand how its support will impact existing work and where a sudden injection of funding could cause problems.

6. Acknowledge “sweat equity”: make invisible community assets visible

CDP’s new approach also makes visible community assets that have been ignored under traditional due diligence assessments. This includes what Mike calls “sweat equity” which describes the value of crucial work done by volunteers. Other previously invisible assets include how an organisation is viewed in its local community and its potential for local fundraising and getting other resources.

7. Look for the cracks showing in traditional compliance systems

CDP’s programme has been supported by Antonia Potter Prentice, Director of Alliance 2015, who has been facilitating “brave conversations” between CDP, Global Giving and USAID as part of the RINGO project. These conversations have looked at finding practical ways of transforming compliance along the risk and compliance value chain.

They found three powerful positive factors: the Philippines has an established movement for localised funds; USAID’s Local Works Programme and Global Giving are now both focused on funding local organisations; and the USAID contact from the Philippines is personally committed to these processes. What’s the next step? “We want to bring in other colleagues from USAID and persuade them of this vision”, says Antonia. “We can’t say systemic change is on the way but, looking at the monolithic structure, we can see cracks appearing all over it as a result of these conversations.”