THE FALSE PROMISE OF CORE FUNDING A study of the impact of donor requirements on the execution of foreign aid by civil society organisations

Abstract

This thesis investigates the impact of donor requirements on execution outcomes within civil society organisations (CSOs) in the context of international development cooperation. Through a qualitative structured focused comparison, the study examines two cases of CSOs receiving funds from the Swedish International Development Cooperation Agency (SIDA) through intermediaries, namely the Swedish Mission Council (SMC) and LM International (LMI), utilising two different aid delivery mechanisms: core funding and project funding. Based on the premise that excessive focus on measurement and indicators diverts resources and time from primary duties and leads to counterproductive effects, the research proposes an analytical framework, built on key concepts such as Results-Based Management (RBM), and the dynamic web model of the aid chain, to provide a structured approach to explore the complexities of donor-recipient dynamics. Methodologically, the study conducts a process impact assessment informed by a documental review and semi-structured interviews. Through the analysis of empirical findings, the thesis reveals unexpected outcomes, with core funding exhibiting a significantly more adverse impact than project funding, contrary to theoretical expectations and practitioner beliefs. The thesis further identifies that plural actors within the aid chain exert varying levels of impact and influence over aid execution outcomes depending on the mechanism being used and their role in communicating with the recipient. SMC shows a higher impact under core funding and LMI under project funding. Ultimately, this research contributes to the field of international development cooperation, offering implications for policymakers, practitioners, and researchers to enhance the effectiveness and sustainability of aid initiatives.