Our 7 ways to improve the management of Donor Grant Funds, and leave more for the beneficiaries.

Our 7 ways to improve the management of Donor Grant Funds, and leave more for the beneficiaries.

Hubconsult grew out of our work in international development for donors such as Europeaid, Asian Development Bank (ADB), Department for International Development (DfID), Lux Development and international organisations such as FAO, and UNDP. (Hubconsult has participated as a  successful EU Framework Contractor under Lot 1 on Agriculture and Rural Development on projects in Africa, Caribbean and Asia, as well as with other donors. In addition, its founder Nick Norvell has implemented projects in over 40 countries for several donors and international organisations such as FAO and UNDP.)

There are several three principal modalities of aid: a) project funding, typical providing technical assistance, b) Budget Support programmes which reward beneficiary Government Treasuries in support of Government achieving indicators  related to their Sector Strategy and c) grants, provided by one or several donors and partners.

Grants may be distributed to communities afflicted by malnutrition, extreme poverty, outbreaks of disease, or sudden catastrophic events such as floods, earthquakes or other natural disasters. Multilateral, bilateral and private donors have many different philanthropic goals, and they may also have certain geographic priorities.

The typical steps are as follows:

first, a Funding Agreement is signed by donors, and beneficiary Governments and Implementing Agencies. This will need to include the overall Board and responsibility for management of funds, Minutes of management meetings

second, how funds will be pooled in a designated account, and which partner will manage the funds. (It is here where Hubconsult can add value by performing this function.)

third, upon instruction from the donor, funds are disbursed to a beneficiary in a country. (This may be a relief NGO in Mozambique, an emergency NGO Lebanon, a Civil Society Organisation (CS) in Nepal etc). The funds are then used for logistics, local purchases, staff in order to provide relief, shelter, support communities etc.

fourth, the funds need to be monitored and reported upon to provide financial accountability to the donor. Without, replenishment of funds cannot happen, and new funds cannot be justified. This means providing supporting financial documentation to support the use of funds.

fifth, it may also mean that the monitoring of actual progress achieved, and even an evaluation of impact.

The UN itself administers some of these funds but their management costs are high, starting from 7%. Clearly, this is 7% which is lost to the ultimate beneficiaries. One of the reasons for this high management cost is the involvement of multiple UN agencies at global (at NY HQ), regional and/or national offices.

Hubconsult considers that some donors will be interested in reducing this management cost, and that it is capable to do so using its streamlined systems, and online accounting portal, Xero.

Once, Hubconsult is selected at stage 2 above, then it can work as an active partner with the donor, taking its instructions and follow the procedures it has tailored for its grant fund. Inevitably, these may vary depending on the objectives, value, geographical scope and conditions placed on the fund.

In addition, Hubconsult has the expertise to monitor grant funds, whether they are multi-partner pooled funds or single donor grants. We have a wide network of specialist experts who have long experience of diverse developmental sectors and issues and country experience.

Hubconsult has put systems in place to manage grant funds more efficiently than currently happens at present. It can reduce the cost of providing this service substantially - to around 2%, yet providing donors the professional execution, transparency and reporting which donors need. That's a saving of 5% on their fund management costs!

You will see from our Solutions page what Hubconsult can provide:

  1. Accounts are segregated in our online accounting software, Xero, which can account for 13 currencies simultaneously.
  2. All documentation in relation to the management and operation of the Trust Fund will be attached in Xero for convenience and easy reference, using your Xero Project Account.
  3. Realtime access to your Project Account to provide you with a Flow of Funds statement for your Grant Fund, or a Quarterly Management Accounts. The reports generated can be tailored to those you need.
  4. Our HSBC banking feed is automatically integrated with Xero accounting.
  5. Our year-end annual accounts are audited by ICAEW qualified auditors in Hong Kong.
  6. Much lower management costs, typically around 2%. These may depend on grant value.
  7. Additional grant monitoring can be arranged, which will assist with recommendations for improved Corporate Governance of the Grant Fund.

Hubconsult would be delighted to discuss how we can assist with the management of your grant fund