Conventional Sources of Financing

By Eric Johnson, World Bank Institute (WBI); Sherine Ghoneim, Economic Research Foundation (ERF); Margaret Nyrambura Ndung'u, EcoNews Africa; Sangeeta Gupta, The Energy and Resources Institute (formerly the Tata Energy Research Institute) (TERI)
May 2001

Project funding

Project funding is typically associated with the initial set-up of an institutional or stand-alone Web project. Such projects are particularly attractive for donor agencies that aim to support activities of CSOs in particular areas of interest.

The project document used to initiate communication with donor agencies should typically address the concerns of the targeted donor. As such, in addition to the project description that would include the project components, development requirements and budget, the request for proposal should focus on the value added brought by the project at large. The value added is inherent in the access to the knowledge provided by the Web project. This may be in the form of access to online publications, information resources such as databank or reference libraries, expertise databases or means of networking amongst community members. A clear description on the knowledge content, value and classification facilitates the assessment process of the proposal. Therefore, it is also important to specify the beneficiaries, target audience as well as the sustainability of the Web presence.

Different strategies are required in approaching donor agencies. Funding opportunities are classified on either a thematic or regional basis. For example, multilateral agencies such as UNDP and the World Bank, or foundations such as the Ford Foundation, are likely to be interested in supporting Web projects that deal with economic, environmental or civil society related projects, whereas bilateral agencies, such as IDRC-Canada, DFID-UK or USAID, are typically regionally or geographically bound. Similarly, national ministries may have a more specific interest in a particular field of knowledge sharing.

In some instances donor agencies may have a particular interest in extending funding to some developing regions at particular points of time depending on the extent of focus of related activities. The Pan Asia Initiative is a good illustration, which benefited from the funds allocated by IDRC Canada towards the use of ICT for development in Asian developing countries. The fund was allocated to provide opportunities for the region to build capacity in utilizing the emergent Internet-based technologies through experimentation, networking and training. The initiative aimed to develop a critical mass of change agents to help integrate technology in the processes, systems and structures of R & D agencies in the region.

Similarly other developing regions can benefit from special programs such as the Information for Development Program (infoDev) which began in September 1995 with the objective of addressing the obstacles facing developing countries in an increasingly information-driven world economy. It is a global grant program managed by the World Bank to promote innovative projects on the use of information and communication technologies (ICTs) for economic and social development, with a special emphasis on the needs of the poor in developing countries. Such programs often times have preset guidelines for submitting proposals which can assist in the process of developing a Web project proposal.

As such it is recommended to undertake some preliminary research into the areas of interest of potential donors prior to submitting a request for funding and to address some of the issues of interest that are likely to attract the donor. It may also be worth considering that some Web projects may be subsumed under training and capacity building in the area of ICT where funding may be available for such purposes.

Product funding

Product funding as opposed to project funding is a situation which prevails in instances when the institutional Web site is already in place and there is a need to either include a new product within the Web site (e.g., publication: report, book, working paper series, database, etc.) or to develop a new but connected/related site for a particular purpose (e.g., conference, workshop, publication, project, etc.).

In this case, two potential financing scenarios may be considered. One way would be to consider the product as a stand-alone project, in which case the project funding guidelines described above would apply. Alternatively, an additional budget line item may be added to the original budget proposal under which the online costs of development would be subsumed. For example, if the product is a report, in the budgeting process of estimating the cost of production and print, an extra lump-some cost of development will be added to cover the costs of online publishing. As such, the funding is for the production and print of the report both in hard and electronic format and no separate funding activity will be required for the online version.

In order to ensure continuous expansion and update of the institutional Web site, it is very much recommended that wherever possible it is an institutional policy to ensure that a Web funding is accommodated within the various projects CSO are involved in. Building in allowance for online presence does not create a financial burden on the various projects and generates necessary income to sustain and expand online products and services.

Furthermore, it is advised that wherever possible, allowance should be made for human resource allocation for continuous management and maintenance for the Web site, whose expense would contribute towards the sustainability issue.