Small Charities Challenge Fund (SCCF) MannionDaniels | Bristol | November 2017

UK Aid Direct consortium partners:

What is UK Aid Direct? UK Aid Direct is the UK government’s funding mechanism to support small and medium sized civil society organisations to work towards achieving the Global Goals It has been running since 2010 and was previously the Global Poverty Action Fund It is multi-sectoral in nature and reflects DFID priorities Successful applicants from the most recent funding round (launched Nov 2016) were announced during the summer and are now finalising due diligence Two grant types currently: Community Partnership for organisations with income <£1m; Impact grants for organisations with an income <£10m Now Small Charities Challenge Fund (SCCF) for smaller organisations with income <£250k

What is the Small Charities Challenge Fund (SCCF)? SCCF was set up to target small, British, grass-roots organisations who are perhaps not currently eligible under the regular funding rounds of UK Aid Direct Organisations must have an average annual income of <£250k Multi-sectoral in nature and reflects DFID priorities Grants of up to £50k are available for projects lasting up to 2 years Open funding round and applications are reviewed every 6 months First cut-off date was 30 September 2017 Successful applicants are expected to be announced in the New Year

Application process: All applications must be completed and submitted online The next review of applications will take place after 31 March 2018 The funding allocation for the SCCF is £4m over a 2-year period, with a target of £1m per window Initial financial due diligence (FDD) and integrity due diligence (DD) will be carried out to ensure eligibility criteria are fully met and there are no concerns relating to the applicant organisation

Review process: All proposals are assessed by a panel of experts The experts selected have significant experience in working with DFID, on supporting projects, and on assessing proposals They are provided with guidance on scoring and reviewing proposals to ensure a consistent approach There is a thorough quality assurance process to ensure fair assessment of each application Reviews are carried out by the Fund Manager DFID moderation of reviews and successful applicants chosen

Findings from recent research and previous UK Aid Direct funding rounds: The design of UK Aid Direct projects needs to be strengthened - most issues have stemmed from this A greater focus should be given to sustainability and building sustainable elements into all projects Projects need to be able to respond better to changes in context and build on feedback and learning in order to adapt Approach to capacity building of beneficiaries, implementing partners, frontline staff and other stakeholders needs greater consideration

Statistics from recent SCCF funding round review – Oct 2017 Over 1,400 applications were registered and initiated on the online portal 522 were automatically sifted out by the online eligibility check – largely due to the applicant organisations being non-UK registered 101 eligible applications went forward to the assessment stage It is expected that approximately 20-30 grants will be awarded in this first review round, up to a value of around £1m Cumulatively the 101 eligible applications are proposing to work across 24 countries and 26 sectors

The strongest applications from the first SCCF review demonstrated the following features: They outlined the approach they are proposing in a simple and clear way, with a clear indication of what the results will be They had a simple budget that clearly relates to the proposed activities If related to another project or with match funding, they clearly explained what the overall project is and why the additional funding would add value They suggested project outcomes that are not too ambitious but are realistic and achievable in 2 years They were not focused on infrastructure or using approaches like sport or music, unless clearly linked to demonstrable development outcomes

Application Process

Project design section: Download the ‘top tips for applicants’ document in ‘Guidance’ on website Download the general project design presentation Read about DFID’s strategic objectives and focus and then consider which of these strategic objectives your project contributes to Note that projects may contribute to more than one Look at what the fund is trying to achieve – read the fund level theory of change Think about how your project will contribute to the objectives of the fund Consider which UK Aid Direct approach best fits with your approach

Project design section: Think about and detail who you consulted with during the design of your project; beneficiaries, government, other NGOs Consider and demonstrate why your project is needed Consider and show what it is you want to achieve with the project and how you will do it Show how are you working with others; e.g. is government involved? How many people will benefit from the project? Those benefitting directly and those benefitting indirectly. Measure unique individuals. How have you identified them? Show how you can address gender and disability issues

Leave no one behind – recommended reading: https://www.gov.uk/government/publications/stepping-up-a-gear-for- girls-and-women-updates-to-dfids-strategic-vision-for-girls-and-women- to-2020-and-beyond https://www.gov.uk/government/uploads/system/uploads/attachment_ data/file/554802/DFID-Disability-Framework-2015.pdf https://www.gov.uk/government/publications/leaving-no-one-behind- our-promise/leaving-no-one-behind-our-promise/

Results section: Think about and demonstrate what a successful outcome of the project would look like. What would the change you are expecting to happen look like? Consider and show how you will monitor your results to show whether you have been successful. How will you monitor how your project is doing? How will you collect information and data? Reflect on how the project will continue once UK Aid Direct funding ends? Are you building capacity? Can the local community take over elements?

Results framework: Read the specific guidance on how to develop a results framework Each stage of the results framework should form a logical flow and link to each other What you do at each stage helps lead to the success of the next stage Outline the outcomes of the project – what you expect to change Choose 2 indicators – ways of measuring the change Develop output indicators – what you need to do to contribute to the outcome Outline activities – what activities the project will do to meet the output indicators

Value for money (VFM) – things to consider: Consider VFM across your project when designing it Are you reaching the right target group? Are you reaching the right number of beneficiaries to make it worthwhile? Are you using the best way of reaching them? Are there examples of how this has been successful before? Are you considering how to keep your costs down? What are your main ‘cost drivers’? Are you being as effective as you can be? What is the cost per beneficiary? Are there any economies of scale you can take? What would this grant enable you to do that you can’t currently do?

Risks: Think about the risks the project faces: security, financial, environmental or political risks Explain what they are, what impact they would have on your project and what you will do to either prevent them from happening or dealing with them if they do happen You won’t be penalised for putting all risks down Be realistic

Applications - financial requirements: Stage Detail Requirements Application stage Financial due diligence Completed by the Fund Manager using details from the application Integrity due diligence Workplan and budget Produce a fully costed workplan in line with UK Aid Direct Financial Guidelines Prior to contracting Financial management assessment (FMA) An in-depth due diligence assessment requiring provision of documentation, staff interviews and a possible site visit Revised workplan and budget Revisions on SMILE (our online portal)

Financial Guidance

Principles: Financial guidance available online: a) Principles of reporting, b) Budget classification, c) Exchange Rates and d) Due diligence requirements Cash-based accounting (no accruals) Reporting on the transactions of the project not the grant holder – partner transactions should be reported alongside grant holder transactions 1st April – 31st March is the financial year with very little flexibility between years

Principles – continued: Quarterly financial reporting feeding into claims/payments Reporting through an online portal (SMILE) at transaction level Payments are made in arrears by default but may be agreed in advance, for smaller organisation who don’t have adequate reserves to operate in arrears

Arrears claims: Advance claims: Q1 Expenditure Claim Payment Q2 Arrears claims: M1 M2 M3 M4 M5 M6 Q1 Expenditure Claim Payment Q2 Advance claims: All grant holders will require some amount of internal funding or match funding to cover the gap between expenditure and payment.

Costs to include and to exclude: Reporting costs Audit costs IATI compliance costs M&E costs Reasonable apportionment of overheads Match-funded amounts (Impact grants) Spending by implementing partner not transfers to implementing partner Exclude (not permissible) Lobbying UK government Petition for additional funding Political or exclusively religious activities Statutory fines, criminal fines or penalties Severance pay, payments etc. Major capital expenditure cannot be supported as the primary focus Land or cars Contingency/unforeseen costs Depreciation/amortization

Start thinking about management of the risk of currency fluctuations Exchange rates: Acceptable Lump sum transfer Daily spot rate Average Market Rate Daily Market Rate Not Acceptable Budgeted rate Estimated rate Cumulative averages across the year Start thinking about management of the risk of currency fluctuations

Any questions?