Operational Directive 14.70 dated August 28, 1989 Involving Nongovernmental Organizations
in World Bank-Supported Activities
From The World Bank Operating Manual
This Directive was prepared for the guidance of staff of the World Bank and is not necessarily a complete treatment of the subjects covered.
Introduction1. This directive sets out a framework for involving nongovernmental organizations (NGOs) in Bank-supported activities. It provides staff with guidance on working with NGOs, bearing in mind their potential contribution to sustainable development and poverty reduction, as well as the need to consult with relevant member governments and to proceed in conformity with their policies towards NGOs.
Definition and Classification of NGOs
2. The diversity of NGOs strains any simple definition or classification. NGOs include a wide variety of groups and institutions that are entirely or largely independent of government, and characterized primarily by humanitarian or cooperative, rather than commercial, objectives. The terminology varies: for example, in the United States they may be called "private voluntary organizations," and most African NGOs prefer to be called "voluntary development organizations." Although organizations such as universities or research institutes may be nongovernmental, this directive refers principally to private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.
3. In pursuit of the Bank's development, environment, and poverty alleviation objectives, staff increasingly come into contact with a wide range of NGOs. Production-related NGOs include water users societies, pastoral associations, consumer and credit cooperatives, farm equipment lease associations, and tree-grower associations. Charitable and religious associations may be involved in shelter for the homeless, food distribution, family planning, and mobilization of funds for development. NGOs heighten awareness and influence policy concerning environmental degradation (OMS 2.36, Environmental Aspects of Bank Work, to be reissued as OD 4.00, Environmental Policies), involuntary resettlement (OMS 2.33, Social Issues Associated with Involuntary Resettlement in Bank- Financed Projects, and OPN 10.08, Operations Issues in the Treatment of Involuntary Resettlement in Bank- Financed Projects, which will be combined and reissued as OD 4.30, Involuntary Resettlement) and tribal people (OMS 2.34, Tribal People in Bank-Financed Projects, to be reissued as OD 4.40, Tribal People). NGOs usually play a critical role after a major disaster, such as an earthquake, because of their local knowledge, flexibility of operations, action- oriented staff, and effectiveness in enlisting local volunteers and mobilizing funds for disaster relief and reconstruction (OPN 10.07, Guidelines for Bank Participation in Reconstruction Projects after Disasters, to be reissued as OD 8.50, Emergency Recovery Assistance). While most NGOs with which the Bank works are implementation organizations, some NGOs focus primarily on the advocacy of specific changes in policies or approaches to development.
4. Local NGOs are often served at the provincial or national levels by apex federations and other support organizations which can improve local NGO effectiveness (for example through information sharing and coordination) and act as intermediaries between small NGOs and large funding institutions (e.g., by appraising the institutional capabilities of local NGOs or, in some cases, serving as funding channels). National NGOs, in turn, often join international and regional associations (of voluntary development agencies, cooperatives, trade unions, environmental organizations, religious groups, etc.).
5. Bank-supported activities most often involve the following types of NGOs:
(a) NGOs (based in both developing and developed countries) that have demonstrated professional expertise and managerial capabilities in a particular area related to Bank lending, such as environment, rural development, food security, women in development, small-scale enterprises, appropriate technology, low-cost housing, education, vocational or management training, family planning, health, nutrition, or community organization;
(b) NGOs (based in developed countries) that have demonstrated specialized experience in developing countries in managing foreign assistance -- from both private and public sources -- intended to promote development at the local community level.
Strengths and Weaknesses of NGOs
6. The main strengths many NGOs can bring to Bank-supported operations are their ability to
(a) reach poor communities and remote areas with few basic resources or little infrastructure, and where government services are limited or ineffective;
(b) promote local participation in designing and implementing public programs by building self-confidence and strengthening organizational capability among low-income people:
(c) operate at low cost by using appropriate technologies, streamlined services, and minimal overheads; and
(d) identify local needs, build upon existing resource, and transfer technologies developed elsewhere. Some approaches and ideas now prevalent among official development agencies began as NGO innovations.
7. On the other hand, some NGOs' ability to contribute to Bank-financed operations are constrained by a number of factors:
(a) Limited replicability of many NGO-sponsored activities that are too small and localized to have important regional or national impact. In attempting to scale up their operations with public sector support, some NGOs may lose their innovative quality, and become top-down, nonparticipatory, and dependent on external and governmental support:
(b) Limited self-sustainability. Like many government programs, many NGO-sponsored projects are not designed with sufficient concern for how activities will be sustained;
(c) Limited managerial and technical capacity. Even some professionally staffed NGOs are poorly managed, have only rudimentary accounting systems, and sometimes initiate infrastructure projects with inadequate technical analysis;
(d) Lack of broad programming context. Although experience varies by region and sector, NGO development projects often are implemented individually, outside the framework of a broader programming strategy for a region or sector, and with little regard even to other NGOs' activities. Coordination has been recognized as a constraint affecting the NGO community itself as much as the public sector or the donor community (OD 14.30, Aid Coordination Croups); and (e) Politicization. Some NGOs combine development concerns with political or religious objectives that limit the extent to which the Bank can work with them while safe- guarding its primary relationship with its member governments.
Ways of Involving NGOs in Bank-Supported Activities
8. Although the Bank does not lend directly to them, NGOs can play a role in selected Bank- supported activities in various ways, in conformity with the relevant government's policies towards NGOs:
(a) Analysis of development issues. Bank staff and governments can learn from NGO assessments of official development programs, especially regarding the concerns of low- income groups. There may be a role for NGOs in adjustment programs, especially concerning the social dimensions of adjustment; where the government and the Bank agree that such a role is appropriate, NGOs should be consulted at an early stage. Country economic and sector work on poverty-related issues could also benefit from NGOs' views, particularly those of local NGOs;
(b) Project identification. NGOs can be sources of information on intended beneficiaries and technological and institutional innovation (OMS 2.12, Project Generation and Design, to be reissued as OD 10.00, Project Generation and Preparation). Small NGO programs sometimes become the model for a larger Bank-financed project. NGO staff may also provide consulting expertise for Bank missions;
(c) Project design. NGOs may serve as consultants or sources of information for the Bank, government, or local communities during project preparation. In such cases, involvement at an early stage could be helpful;
(d) Project financing. Some international NGOs may cofinance a project or, more likely, finance activities complementary to a Bank-financed project (OMS 1.24, Co-Financing, to be reissued as OD 14.20); Project implementation. An NGO may be (i) a contractor or manager engaged by the government and financed from the loan proceeds or through trust funds (OMS 4.40, Trust Funds, to be reissued as OD 14.40), (ii) a financial intermediary or a supplier of technical knowledge to local beneficiaries, (iii) an adviser either assisting local beneficiaries to apply for project resources (e.g., credit) or organizing local communities to make use of project facilities, (iv) an independent partner implementing activities complementary to a Bank-financed project, (v) the recipient of a government grant or loan funds, or (vi) the beneficiary of an NGO funding mechanism established by the project; and
(f) Monitoring and evaluation. NGOs may assist the government, a project entity, or the Bank in monitoring project progress or evaluating results.
9. Because NGOs find it difficult to fund their involvement during the relatively long planning process required for Bank operations, the Bank sometimes makes small grants to NGOs from its administrative budget, for example for studies or meetings related to Bank operations. The Special Project Preparation Facility can be used to launch innovative NGO-related activites in Africa. The Bank provides grant funding to strengthen African NGOs dealing with population issues. Grant funding to facilitate NGO involvement in a Bank-financed project can also be sought from an international NGO or from another official development agency (chiefly bilateral agencies and the European Economic Community). A few bilaterals (notably the Canadian International Development Agency) and multilaterals (mainly the United Nations Children's Fund [UNICEF] and the United Nations Development Programme [UNDP]) provide grants directly to developing country NGOs and NGO associations.
Guidelines for Involving NGOs in Bank-Supported Activities
10. Staff are encouraged whenever appropriate to involve NGOs, particularly local NGOs, in Bank-supported activities along the lines set out in para. 8, bearing in mind the strengths and weaknesses of NGOs (paras. 6-7). However, because of the Bank's relationship to its member governments, staff must operate in the framework of the relevant government's policies regarding NGOs. Given the potential benefit from selective NGO involvement in development activities, staff should encourage constructive working relationships among governments, donors, and NGOs. The Bank.may provide advice to interested governments on approaches and policies for encouraging the development of indigenous NGOs as effective development agents. Successful replication of NGO-supported local initiatives may be possible only in a political environment that allows NGOs to flourish and multiply.
11. Staff should be responsive, and encourage governments to be responsive, to NGOs that request information or raise questions about Bank- supported activities, subject to the restrictions set out in Administrative Manual Statement 1.10, Directive on Disclosure of Information, including preserving the confidentiality of privileged information and the dialogue between the Bank and the government. If NGOs give the Bank information, the extent of confidentiality should be agreed in advance.
12. A Bank-supported project may well finance NGO-managed programs; however, too much official funding can destroy an NGO's grass roots character, and the administrative costs of funding small NGO projects are sometimes disproportionate to activity costs. Staff should be sensitive to the NGOs' need to ensure that their special status is not compromised as a result of official funding, Staff could also seek to reduce administrative costs for governments and the Bank by working, whenever possible, with NGO organizations and groupings, especially of local NGOs,
13. Any major collaboration with individual NGOs may need to be accompanied by management assistance, for example to improve monitoring and accounting.
Procurement and Disbursement
14. NGO participation in project execution as contractors or suppliers should meet the criteria set out in the Bank's Guidelines for procurement under IBRD Loans and IDA Credits and in OD 11.00, Procurement. However as NGO contracts are usually small and involve community participation, international competitive bidding and limited international bidding are normally not feasible, and even open competitive procurement is not always feasible. Shopping or direct contracting is often the most appropriate method of procurement. Direct contracting may be justified where an NGO is the only entity capable of carrying out an activity (e.g., maintenance of feeder roads in remote areas, or the transfer of a particular technology). Contracts with NGOs may need to reflect the fact that NGOs differ from commercial contractors: the contract might therefore stipulate, for example, that NGOs should involve the community in planning and implementation. Similarly, special measures may be required to ensure that NGOs have sufficient liquidity to carry out the contract.
15. When NGOs act as consultants financed through a Bank loan or Bank-executed UNDP project, they should be engaged following the Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency, OMS 2.18, The Development of Local Capabilities and the Use of Local Consultants, and OMS 2.50, Services of Consulting Firms for Bank Group Projects and UNDP Studies. Several Part I countries consultant trust funds include provisions that would allow their use to hire developing country NGO consultants.
16. When an NGO acts on behalf of a borrower or implementing agency, the standard accounting and audit requirements apply. Statements of Expenditure (SOEs) prepared and certified by the NGO normally constitute acceptable documentation for disbursement purposes, subject to the Bank's specific agreement. An independent audit should be carried out (see Circular Op 6/80, Statements of Expenditure: Interim Guidelines, filed with OMS 3.30, to be reissued as OD 12.30, Statements of Expenditure).
References in Bank Documents
17. When NGOs are likely to be involved, the Executive Project Summary should indicate their role, and the Project Brief and Staff Appraisal Report should, if appropriate, discuss relevant NGOs and their relation to the project, and describe agreements reached with the government and NGOs regarding NGO involvement in projects that directly affect large groups of low-income people. These would often include (a) agriculture, population, health, and nutrition projects; (b) low-income housing and urban upgrading projects; (c) education and training projects; (d) some structural and sectoral adjustment operations; and (e) projects that involve resettlement or retrenchment. Economic and sector reports could include an analysis of NGO activities, particularly when they focus on poverty reduction.
Responsibilities
18. Country departments (especially country officers and resident representatives) should make a concerted effort to collect information about NGOs in their respective countries, including government attitudes toward NGO activities, and incorporate relevant information about and from NGOs into their work. While relying on various inventories and non-Bank sources of information about NGOs, the sector operations divisions are also encouraged to develop knowledge of important NGOs by sector and make their own capability assessments. Where appropriate, staff may organize periodic meetings with NGOs. Staff should, however, keep the borrower government appropriately informed of their contacts with NGOs, and proceed in conformity with that government's policies towards NGOs.
19. Sectoral departments in Policy, Planning and Research (PPR) are responsible for maintaining relationships with NGOs that are active on operational aspects of policy in their areas. The External Affairs Department is responsible for cooperation with NGOs in development education and for public information work with NGOs with a serious interest in international development issues.
20. The International Economic Relations Division of the Strategic Planning and Review Department (SPRIE) is responsible for developing and coordinating the Bank's overall relationships with NGOs subject to guidance provided by senior management and the Board, and keeping the relevant country director informed. SPRIE acts as the Bank's secretariat for the Bank-NGO Committee, which is a formal forum and focal point for the Bank's discussions with NGOs. SPRIE also fosters new initiatives, backstops other departments in their work with NGOs, and provides information to operational staff on individual NGOs.
Return to the NGO Page
Comments and suggestions:
Hari Srinivas - hsrinivas@gdrc.org
