Risk management practices are playing an increasingly important role in partner selection and engagement when NGOs receive funding from UN agencies or government donors. On June 10, ICVA and PHAP organized a webinar, as part of the Learning Series on Risk Management in Practice, where we examined the role of risk management in good funding partnerships as NGOs engage with external funders.
For funders of humanitarian programming of NGOs, risk management is playing an increasing role in both the decision to offer funding and the terms and conditions of partnership once a grant is secured. Funding from UN agencies for NGO partners now includes an assessment of risk management practices in partner selection. Most also use a risk rating system with partners to determine funding limits and levels of required oversight.
Donor governments currently have a wider range of practice, some with extensive risk management systems in place. For NGO partners, there can be major consequences if donor government funding is accepted without a proper risk assessment being carried out. Accounting and compliance requirements for NGOs can be difficult to meet without appropriate training, and there are often serious legal consequences if the terms of funding agreements are not met.
The topics that we have covered so far in the risk management series have primarily focused on internal decision making and the role of risk management. It is important to extend this thinking, however, to external funding relationships. NGOs should be confident that they are basing the decision to accept funding taking into consideration key questions such as:
- Can we meet expectations of the funder?
- What is the likelihood that we can fulfill compliance requirements?
- Which risk controls are missing, or should be strengthened, to help meet expectations and compliance requirements?
As with our other webinars in the series, we were joined by a panel of experts representing both NGO and funder perspectives, followed by a live discussion with participants.