In 2011, SNV plans to launch LCDFs in Nepal, Laos, Ethiopia, Mozambique, Rwanda, Uganda, Burkina Faso, Cameroon, DR Congo, Ghana, Zimbabwe, Pakistan and Latin America.
Looking ahead to 2012, preparation is underway to launch LCDFs in Cambodia, Tanzania, Zambia, Benin, Mali, Guinea Bissau and Sudan. LCDFs are currently active in Albania, Kenya and Vietnam. From 2011 to 2015, SNV's financial contribution to LCDFs will increase yearly (from 11% of total regional budget in 2011 to 26% in 2015).
The methodology behind LCDF is as follows:
- SNV's and local partners facilitate multi-stakeholder platforms to engage local organizations, governments, donors and businesses in defining sectoral specific context of capacity development services.
- Local organizations and individuals, with the support of SNV, establish LCDFs as separate entities with an independent board. Aligned with SNV's commitment to women's empowerment, women comprise at least 35 percent of authorized LCDF decision-makers (e.g., trustees or directors).
- The LCDFs define their operational mandate and the specific brokering and financing functions, and functions in support to CD market environment, whether in-house or sub-contracted to competent organizations. SNV and partners further leverage knowledge networks, partnerships and additional funding to support LCDFs.
- The LCDF commences activities in specific brokering and financing activities, and to support to CD market environment.
Financing: LCDFs solicit local organizations (including NGOs, private and public enterprises) to submit their interests in increasing their capacities through access to CD services. The LCDF then support the identification, tendering and contracting, financing and quality assurance in the provision of services. Correspondingly, the Capacity Service provider, benefits from the tendering through quality assurance process in professionalizing their offering to the market.
Brokering: Each LCDF will utilize sectorally relevant methods to further foster the market environment such as through match making events, service directories, libraries. lobbying and information dissemination.
Local organizations are better equipped to deliver basic services, produce important goods, create job opportunities or otherwise contribute to development with the support received from the LCB. Local communities benefit from the increased capacity of local organizations through improved access to services, production, employment, and income.
To foster accountability, learning and proper management, LCDF design, implementation and results will be supported by a planning, monitoring, evaluation and learning (PMEL) system done in a participatory manner with local stakeholders. SNV will provide initial financial and administrative support to establish the operational and financial infrastructure of each LCDF. As the independent LCDF boards assume control, they take full authority and accountability for all ongoing financial governance.
Far too often, development aid has been donor driven, fragmented, based largely in major cities and inadequately localized in rural communities. Lack of local ownership and a supply-driven capacity development service industry hinders aid effectiveness, perpetuate the dependence on external funding and limits the job creation potential in the capacity development services field to a small number of firms. These problems are further complicated by supply and demand barriers at local and sub-national levels for capacity development services including: the inability of sub-national organizations to pay for services, limited opportunities to express their specific demands, inadequate mechanisms to find and compare available services, and the supply of services that does not effectively work in an open market context.
Furthermore, investments in capacity development are mostly ad hoc, fragmented and top-down. All too often budget allocations for capacity development, if they do exist, are not based on sound market principles. The resulting impact of these factors is a clear macro-micro gap in that capacity development market place.
Although the Paris Declaration (2005) and the Accra Agenda for Action (2008) have brought increased attention to the importance of localization to achieve the Millennium Development Goals (UNDP MDG localization 2010), capacity building services in many countries continue to be dominated by international and national firms based in urban areas. Frequently, these firms receive the bulk of donor funded capacity development contracts and provide services consisting of general workshops or trainings that often do not address complex local problems.
SNV seeks to address these problems by facilitating the scaling-up of successful local development initiatives. Through locally owned and governed Local Capacity Development Facilities (LCDFs), SNV will support market growth for capacity development services at the sub-national level in countries where SNV has a presence. LCDFs will help scale local innovations to improve access to basic services and income generation. Through brokering services and financing opportunities, LCDFs will also assist in empowering local communities to have greater control over their own development priorities.
SNV has conducted extensive independent research and research in partnership with Overseas Development Institute to inform its approach in co-initiating and piloting initiatives, and to ensure quality criteria are met.
Each LCDF's structure and sectoral focus is tailored to the specific context. All LCDFs share principles of local ownership and governance. The LCDF Governance and Financial Management Framework sets out internationally recognized standards of good governance, financial management and quality assurance. Responsive funding will be allocated through competitive and transparent tendering processes based on applicants' demands for access to basic services, economic development and other capacity development services. To ensure local ownership and sustainability, applicants will financially contribute to the services they receive.
By the second anniversary of a LCDF's founding, and from the founding when possible, citizens in the country of operation control the LCDF. This means that SNV and other funders do not have majority control in the Board of Directors and that the Executive Director and other managers are national citizens employed directly by the LCDF.
SEEKING: Financial Resources, Media/Marketing Opportunities, Other
SNV is seeking funding partnerships for 2011 and beyond to contribute financing directly to the LCDFs. SNV's medium to long term goal is to mobilize two times the amount of its own financial contribution combining in-country and international financing streams. SNV is also interested in media or marketing partnerships. A technology partnership would also be of interest to support the interface between different systems of technology based applications to facilitate brokering and funding for capacity development services.
OFFERING: Implementing Partners, Best Practice Information
SNV's 45 years of experience and track record in building the capacity of local organizations make SNV a strong implementation partner for projects or funds focused on capacity development. SNV is offering the opportunity for donors to contribute to locally owned and governed, sustainable funding and brokering mechanisms that will improve capacity development at the sub national level. By placing funding in LCDFs, donors can be sure that their capacity building funding is directly impacting local communities, and is backed by SNV's experience, quality assurance and commitment to partnering with local stakeholders.