The grant cycle and donors

1Who funds humanitarian action?

• Public institutional donors: the European Commission (ECHO for humanitarian aid) and governments' development cooperation agencies (for example the FCDO in the United Kingdom, Global Affairs Canada, German or Swiss cooperation).
• United Nations agencies that sub-contract to partner NGOs (UNHCR, UNICEF, WFP…).
• Pooled funds: the country-based pooled funds managed by OCHA (CBPFs), open to national NGOs, and the CERF at global level (reserved for UN agencies).
• Foundations and the private sector: more flexible, often smaller.

Each donor has its own geographical and sectoral priorities, formats and rules. Reading the donor's annual strategy (for example ECHO's Humanitarian Implementation Plan for a country) is the first step.

2The grant cycle

1. Horizon scanning and identification: calls for proposals, dialogue with the donor, cluster meetings.
2. Design: concept note, then full proposal and budget.
3. Negotiation and contract: donor questions, revisions, signature of the grant agreement.
4. Start-up: internal kick-off meeting where the contract is reviewed line by line.
5. Implementation and monitoring: activities, budget monitoring, interim reports.
6. Close-out: final narrative and financial report, audit, archiving.

3Capacity assessment (due diligence)

Before providing funding, especially to a national NGO, the donor or partner agency assesses the organisation's capacity. Prepare a file in advance with: statutes and legal registration, organisational chart and board, financial statements and latest audit reports, procedures manual (finance, procurement, human resources), protection policies (PSEA, child safeguarding, anti-fraud and anti-corruption), references from past projects.

Localisation: in 2016, under the Grand Bargain, major donors and agencies committed to channelling at least 25% of humanitarian funding to local and national actors as directly as possible. A strong capacity file is the key to benefiting from this.

4In-depth donor mapping: instruments, rules and rationales

Knowing donors' names is not enough. An experienced grants officer knows, for each one, which legal instrument it uses, who can access it, which financial rules apply, how fast the money arrives and what the donor is really trying to buy. These differences determine whether a project is feasible long before the quality of its writing comes into play.

The main donor families and their instruments

Good practice: for each target donor, build a two-page profile summarising the instrument, eligibility, ceilings, budget flexibility, calendar, disbursement arrangements, reporting and audit obligations, and the geographic and sectoral priorities for the year. The profile is updated with each new annual strategy and shared with finance and programmes.

Direct, intermediated and cascaded funding

The same amount of money can reach the field through several routes: directly from the donor to the NGO, through a UN agency, through a pooled fund, or through an international NGO that sub-grants to a national partner. Each intermediary adds management costs, delays and reporting requirements, but also support and risk sharing. The Grand Bargain calls for funds to be channelled to local actors "as directly as possible"; in practice, most national NGOs start with intermediated funding, then gain access to pooled funds, and only later to direct bilateral donors.

The donors' annual calendar

• ECHO: HIPs published at the end of the year for the following year, with additional funding tranches during the year; dialogue with the field technical expert before submission.
• Country-based pooled funds: a standard allocation early in the year after the response plan is published, often a second one mid-year, and reserve allocations at any time in the event of a shock.
• UN agencies: renewal of partnership agreements at year end, calls for expression of interest on a rolling basis.
• Bilateral donors: tied to each government's budget cycle, hence the importance of regular contact with the humanitarian attachés at embassies.

A consolidated calendar, updated every quarter, avoids discovering a call three days before the deadline.

5Horizon scanning, positioning and the go/no-go decision: a step-by-step method

An organisation that responds to every call wears itself out, spreads its teams too thin and ends up signing contracts it cannot deliver. Deciding whether or not to pursue an opportunity is a senior management decision, documented and taken on explicit criteria.

Step 1: organise horizon scanning

• Sources: donor websites and newsletters, the UN Partner Portal, cluster and inter-cluster coordination group meetings, pooled fund announcements, contacts with embassies and agency country offices, national NGO networks.
• Owner: the grants officer keeps an opportunities register (pipeline) recording, for each one, the publication date, deadline, amount, duration, sector, area, eligibility and status.
• Frequency: weekly review of the register at the senior management meeting during call periods, monthly otherwise.

Step 2: analyse the call within 48 hours

As soon as the call is received, the following are extracted into a one-page summary: the objective and priorities of the call, the eligibility criteria (legal status, registration, years of existence, minimum turnover, mandatory partners), the minimum and maximum amounts, duration, co-financing, indirect cost ceiling, sectors and areas, formats, the deadline and time (with the time zone), the evaluation grid and the documents to be attached. A single unmet eligibility condition is enough to stop work.

Step 3: score the opportunity

Each criterion is scored from 1 to 5 by two or three people (senior management, programmes, finance), then the weighted average is calculated. A simple rule: above 3.5 out of 5, apply; between 3 and 3.5, apply only if a weakness can be fixed before the deadline (for example through a partnership); below 3, do not apply, and tell the donor if there is an existing relationship.

A reasoned "no" is a management decision, not a failure. Donors prefer an organisation that knows its limits to a partner that accepts everything and then underdelivers.

Step 4: prepare positioning

• Prior dialogue: most humanitarian donors accept, and even expect, an exchange before submission (presenting the idea, asking about priorities). For ECHO, this dialogue with the field technical expert is decisive. During a formal competitive call, however, questions go through the official channel and the answers are published for all.
• Coordination: present the idea to the cluster and check that it fills a real gap, without duplication. In a pooled fund, the clusters take part in ranking the proposals.
• Partnerships: decide early on each partner's role, share of the budget and support costs; a partner brought in the day before submission is spotted immediately.

Step 5: plan the production

Appoint a proposal coordinator, set a backward schedule from the deadline minus two days (a margin for sign-offs and technical problems with the platform) and allocate the sections: needs analysis and intervention logic to programmes, budget to finance together with programmes, administrative annexes to administration, final review to senior management. This method is covered in detail on day 2.

6Capacity assessments and due diligence: what is really examined

A capacity assessment is not an administrative formality: it is the instrument through which the donor decides how much it can entrust, with what level of control and under what conditions. Its outcome (a risk rating) concretely determines the funding ceiling, the number of tranches, the frequency of reporting and the number of checks. Preparing it well changes the life of the organisation for several years.

The main frameworks

What lowers the score

• Insufficient segregation of duties: the same person orders, receives and pays, or the director signs cheques alone.
• No monthly bank reconciliations signed by someone other than the preparer.
• No cost-centre accounting: impossible to produce expenditure by project and by budget line.
• No external audit of the organisation's accounts for the last two or three financial years, or auditor's qualifications not followed up.
• Procurement manual missing or not applied: no thresholds, no committee, no conflict-of-interest declaration.
• Safeguarding policies on paper only: code of conduct not signed by staff, no focal point, no functioning complaints mechanism.
• Weak governance: a board that does not meet, no minutes, no distinction between the founder and the organisation.
• Dependence on a single donor and no financial reserves.

The standing due diligence file

A well-managed organisation keeps a standing file, updated every year after the audit of the accounts, organised into numbered sub-folders:

1. Legal identity: statutes, valid registration certificate, framework agreement with the government where applicable, tax number.
2. Governance: composition of the board, minutes for the last two years, dated organisational chart.
3. Finance: audited financial statements for the last three financial years with the auditor's management letters and follow-up on their implementation, annual budget, list of current grants with amounts and donors.
4. Procedures: financial, procurement, human resources, asset management, security and data protection manuals.
5. Policies: code of conduct, protection from sexual exploitation and abuse (PSEA), child safeguarding, counter-fraud and anti-corruption, conflicts of interest, whistleblowing, sanctions list screening.
6. Accountability: complaints and feedback mechanism, self-assessment against the Core Humanitarian Standard (CHS).
7. References: summaries of completed projects (donor, amount, duration, results), letters of recommendation, evaluation reports.

Prepare a capacity assessment as you would an audit: every statement ("we carry out monthly bank reconciliations") must be provable on the spot with a dated and signed document. Assessors often ask for three randomly selected examples.

Sanctions screening and countering the financing of terrorism

Donors require that funds do not benefit persons or entities subject to restrictive measures. Depending on the donor, the reference lists are the United Nations Security Council Consolidated List, the European Union's restrictive measures, the US Treasury's Specially Designated Nationals list and the UK Sanctions List. Screening covers staff, suppliers, partners and private donors; it is documented (date, list consulted, result, person responsible). It does not apply to affected people selected on the basis of need: most humanitarian donors explicitly exclude this, and the humanitarian exemptions adopted by the Security Council in 2022 (resolution 2664) reinforced this principle. In case of doubt, the organisation consults the donor and documents its position.

7Full example: building a national NGO's funding portfolio

Fictional context: the Association pour l'Appui aux Communautés du Mbari (AACM) is a national NGO with 42 employees, active for nine years in the fictional province of Haut-Mbari, where a protracted conflict has displaced around 180,000 people. Its annual budget is USD 1.1 million, 70% of which comes from a single international NGO partner. It works in water, sanitation and hygiene (WASH) and in protection. The new director wants to diversify funding and gain direct access to the country-based pooled fund.

Step 1: diagnosis of the current portfolio

Findings: a critical dependency (70% of the budget ends in seven months), very low recovery of core costs, and no direct funding from an institutional donor. Actual core costs (senior management, central accounting, annual audit, head office rent, insurance, IT) amount to USD 140,000 per year. The amounts recovered are USD 23,100 (3% of 770,000) and USD 7,273 (10% included in 80,000, i.e. 80,000 − 80,000 / 1.10), around USD 30,400 in total: a shortfall of almost USD 110,000, covered so far by approximate charges to projects, which would expose the organisation to disallowed costs at audit.

Step 2: analysis of the opportunities and decision

Three opportunities arise during the quarter.

Calculation for A: 5 × 0.25 + 4 × 0.20 + 5 × 0.20 + 3 × 0.15 + 3 × 0.10 + 4 × 0.10 = 1.25 + 0.80 + 1.00 + 0.45 + 0.30 + 0.40 = 4.20. For C: 1.25 + 0.80 + 1.00 + 0.60 + 0.40 + 0.30 = 4.35. For B: 0.50 + 0.40 + 0.40 + 0.30 + 0.30 + 0.20 = 2.10.

Senior management decision: apply for A and C, drop B (area and theme outside the mandate, no presence in the neighbouring country). For C, AACM negotiates before committing: a co-design role rather than that of a mere implementer, its own budget of USD 600,000 over 18 months, 7% indirect costs (instead of 3%) on the basis of the 2022 Inter-Agency Standing Committee (IASC) guidance on the provision of overheads to local and national partners, and a seat on the consortium steering committee.

Step 3: the pooled fund capacity assessment

For opportunity A, AACM must first pass the OCHA capacity assessment. An internal self-assessment, carried out three weeks beforehand, reveals four weaknesses. The team draws up a corrective action plan.

Outcome: AACM is rated "medium" risk. In line with the fund's operational manual (the exact thresholds vary from one fund to another), this means a lower ceiling per project than for low-risk partners, three disbursement tranches instead of two, more frequent financial reports and at least one financial spot check during the project. AACM notes that each well-implemented and well-audited project will allow it to request a review of its risk level.

Step 4: the 18-month funding plan

The weighted amount (USD 703,000) is well below the current budget: senior management decides not to renew six fixed-term contracts that are coming to an end until two funding agreements are signed, to build up a reserve by negotiating indirect costs, and to prepare a second application for the pooled fund's next reserve allocation. The largest source no longer exceeds 40% of the weighted portfolio: dependency has been reduced.

Lesson from the example: diversification cannot be decreed; it is built through documented decisions (opportunity score, corrective action plan, weighted plan) and through negotiating core costs. A national NGO that does not recover its overheads funds its survival through fragile charges to projects.

8Variations by context, common mistakes and the donor's perspective

Adapting the funding strategy to the context

Common mistakes and how to avoid them

• Responding to everything: without a decision grid, the team produces mediocre proposals and then underdelivers. Apply the go/no-go score systematically.
• Discovering eligibility at the end: read the eligibility conditions and administrative annexes first, not the narrative form.
• Confusing the donor relationship with the submission: a donor that discovers an organisation through its proposal rarely funds it. Meet donors outside call periods to present the work done, share field analysis and invite them on visits.
• Accepting zero overheads: every project without recovery of core costs weakens the organisation. Use a documented allocation method and negotiate.
• Out-of-date due diligence file: an expired registration certificate or unaudited financial statements can hold up a signature for weeks.
• Dependence on a single person: when only the director knows the donors, one person leaving means losing funding. Share the opportunities register and the donor profiles.

What donors and evaluators look at at this stage

• The consistency between the organisation's strategy and its requests: a health NGO that suddenly submits a road rehabilitation project raises concerns.
• The absorption capacity: a requested budget more than double the organisation's annual budget is a red flag; many donors compare the amount requested with the volume of expenditure in recent years.
• The track record: burn rate on previous grants, reports submitted on time, audit findings, disallowed costs.
• The place in coordination: active participation in the clusters, consistency with the response plan, no duplication.
• Accountability to affected people: a functioning complaints mechanism, feedback documented and acted upon, alignment with the Core Humanitarian Standard.

For a donor, the main risk is not fraud: it is funding an organisation that does not deliver the promised results. Everything that demonstrates delivery capacity (past results, team in place, access, systems) carries more weight than the quality of the writing.

9Interview questions and key references

Interview questions

1. "How do you decide whether or not to respond to a call for proposals?"

A strong answer describes an explicit grid (alignment, technical capacity, access, financial and compliance capacity, positioning, preparation cost), a collective decision between programmes, finance and senior management, and checking eligibility first. It gives a concrete example of a deliberate "no" and explains how that decision was communicated to the donor.

2. "What differences do you see between ECHO, a country-based pooled fund and a UN agency as donors?"

The candidate distinguishes access (partnership certificate reserved for organisations established in the European Union, allocations open to national NGOs, partnership agreements under the HACT approach), the rules on indirect or support costs, the partner's role in design, the calendar and the disbursement modalities. They show that they know how to read a HIP or an allocation strategy.

3. "Our national NGO has been rated high risk by the pooled fund. What do you propose?"

Request the detailed report, identify the findings, draw up a dated corrective action plan with owners and evidence, prioritise financial controls and segregation of duties, implement a first, modest-sized project flawlessly and request a reassessment on the basis of performance. Avoid contesting the rating without evidence.

4. "How do you fund the core costs of an organisation whose donors refuse overheads?"

Cite the distinction between indirect costs and shared costs charged directly using a documented allocation key (time spent, floor space, number of projects), the 2022 IASC guidance on overheads for local and national partners, negotiation based on actual cost data, and diversification with unrestricted funds.

5. "A donor asks you to screen beneficiaries against sanctions lists. How do you respond?"

Point out that screening applies to staff, suppliers and partners, but that the selection of assisted people is based on needs in line with the humanitarian principles; mention the humanitarian exemptions (including Security Council resolution 2664), consult senior management and headquarters, document the discussion and seek a written solution with the donor.

6. "What is the first thing you do when you receive a HIP or an allocation strategy?"

Extract the geographic and sectoral priorities, the target groups, the preferred modalities, the indicative amounts and the technical requirements of the annex, compare them with the organisation's presence, then arrange an exchange with the donor and the cluster before any writing begins.

Key references

• Humanitarian Partnership Certificate 2021-2027, Model Grant Agreement and Single Form guidance: European Commission, Directorate-General for European Civil Protection and Humanitarian Aid Operations (ECHO).
• Humanitarian Implementation Plans (HIPs) and annual technical annexes by country and region: ECHO.
• US Code of Federal Regulations, Title 2, Part 200 (Uniform Guidance), 2024 revision.
• Country-Based Pooled Funds Global Guidelines (CBPF Global Guidelines) and the operational manual of each fund: OCHA.
• Framework for the Harmonized Approach to Cash Transfers to Implementing Partners (HACT): United Nations Sustainable Development Group.
• Grand Bargain commitments (2016) and Grand Bargain 2.0 framework (2021) on localisation and quality funding.
• Inter-Agency Standing Committee (IASC) Guidance on the Provision of Overheads to Local and National Partners (2022).
• Core Humanitarian Standard on Quality and Accountability (CHS), 2024 edition.
• United Nations Security Council resolution 2664 (2022) on humanitarian exemptions to sanctions regimes.
• ALNAP's work on the State of the Humanitarian System and the Development Initiatives network's Global Humanitarian Assistance Report.