Despite the valuable role of the Palestinian NGO sector, recent years have witnessed significant reductions in their funding. In the early 1990s, according to World Bank estimates, the NGO sector received financial support of between U.S. $140 and U.S. $220 million a year from outside sources. By 1994, following the Gulf War and the post-Oslo reallocation of bilateral funding to the Palestinian National Authority (PNA), this amount had contracted to about U.S. $90 million, and in 1995 and 1996 fell by as much as a third again. Since 1993 many hospital and outpatient clinic services have been cut, dozens of pre-schools closed and disability programs discontinued. The speed and scale of the adjustment have caused hardship and a dislocation in services, particularly for the poor and disadvantaged.

Project Description

The Palestinian NGO Project establishes a multilateral mechanism to finance NGO activities for the poor and marginalized. The project is "demand-driven" in the sense that NGOs themselves, in consultation with beneficiaries, put forward their own projects for financing. Targeting of priority services is conducted on the basis of a "Needs Assessment" drawn up in consultation with the NGO sector. Work is currently underway to strengthen projects through the formulation of a set of poverty alleviation and marginality indicators. By supplementing, not substituting for, existing channels of bilateral funding, the project helps sustain key NGO services, strengthens the professional and technical capacities of the NGO sector in the West Bank and Gaza (WBG) and strengthens cooperative relations between NGOs and the PNA.

Project Design

The project was designed by World Bank staff with considerable input from Palestinian and international NGOs and the PNA. The project is being implemented by the Welfare Association Consortium (consisting of the Welfare Association of Geneva, the British Council and the Charities Aid Foundation of the UK). Twice each year - the first cycle of grants commenced on July 30, 1998 - the Project Management Organization (PMO) awards grants to local NGOs on the basis of an open competition that is advertised widely in the local media. Prior to each grant "round," the PMO consults widely with all interested parties to obtain guidance on the areas and sectors that should be given priority. The PMO then monitors and supports sub-grant recipients, while providing management and technical assistance to build implementation capacity for the sub-project in the field.

The NGO Project Components

Development Grants are used to finance sub-projects that deliver economic and social services to the poor and marginalized in Palestinian society. A number of innovative approaches are being developed, including the award of large block grants to well-established NGOs which allows for on-granting to smaller experimental sub-projects and less well-established NGOs in the peripheral areas of the West Bank and Gaza Strip. Grants are only awarded where there is evidence of solid community approval. Sub-projects currently span a spectrum of NGO activity, including screening and rehabilitation of children with disabilities, child health care, rural health clinics, pre-school education, social programs for youth, vocational training for adult women including disabled women, and environmental awareness in agricultural communities.
NGO Recovery Grants are made available to NGOs facing significant financial difficulties as a result of the loss of previous sources of funding. Grants are given as part of an agreed financial recovery program to assist NGOs to move towards improved financial sustainability.
Research Grants and Resources for NGO Training and Capacity Building Grants are awarded to qualified institutions and individuals to support NGO sub-grant recipients to plan, manage and monitor projects and for research studies designed to improve information on and analysis of the sector. Funds are also being used to support the development of modern legislation for the NGO sector, for NGO governance issues, and for activities designed to foster relations between the PNA and NGOs.

Project Development

The project has developed as follows: Inception Phase (July 1997-February 1998): On commencement of the project, the PMO established two field offices in Gaza and the West Bank, recruited qualified staff, and established its operations and its internal governance structures, including a Supervisory Board with Palestinian representation drawn from outside the immediate Welfare Association Consortium framework. During this period, a needs assessment for grant targeting and a wide-ranging consultation process were completed.
Under the Pilot Grant Round (March-July 1998), details of the project were widely disseminated and 500 NGO proposal packages were distributed. By the closing dates the PMO had received 361 grant proposals. After an intensive appraisal and selection process, and following endorsement by the PNA Ministry of Planning and International Cooperation, 39 eligible sub-projects were approved. In total, U.S. $1,828,690 in assistance was committed following the initial pilot grant round, with single grants ranging in value from U.S. $12,444 to U.S. $102,000. Grants are geographically spread between Gaza, Jerusalem and the West Bank, providing services in both rural and urban areas. Implementation is proceeding apace with all 39 projects in various stages of development. Disbursements currently amount to U.S. $495,894.
Current Project Status (end-1998): The PMO is moving forward; a second grant round formally commenced at the end of October 1998. The round will encompass both development grants and block grants (for on-granting by larger NGOs to smaller NGOs). Sectors covered by the second grant round include civic and legal counseling, non-formal and community education, formal education, housing, income generating projects, health and social services and agriculture. The PMO is projecting between U.S. $3.5 to U.S. $4 million in disbursements to sub-projects.

Project Financing

The estimated total cost of the project is U.S. $17 million. The World Bank has provided U.S. $10 million and the Saudi Fund and the Italian Government have provided U.S. $2.5 and U.S. $2.1 million respectively. Additional funds have been provided by the United Kingdom for technical assistance (£140,000). Communities and/or grant recipients and the PMO will contribute some U.S. $1 million. An assessment is being conducted to establish the feasibility of creating an independently endowed foundation for the benefit of Palestinian NGOs.

From West Bank and Gaza Update - The World Bank Group (fourth quarter, 1998). <