The Overhead Problem
Another problem associated with funding that has troubled environmental NGOs elsewhere in Africa (Cherrett et al., 1995; Michael, 2004; Beer, 2012) and surfaced in our pretest interviews is the issue of “overhead.” The problem occurs because some funders are very project oriented and restrict the use of their funds to only those directly related to the purposes of the grant or contract, making no provision for paying a portion of the costs for the NGO’s office space, communications and office equipment, administration, or staff training. An NGO funded mainly from such sources is thus apt to experience significant problems keeping itself in operation over the long term. We were unable, however, to locate any systematic research about this problem.
We asked our interviewees to tell us whether each of their sources of funding included an allocation for overhead expenses.6 The average NGO interviewee said that his or her group could use funds from 76 percent of its funders to pay overhead. The distribution was highly skewed, with 60 percent of the interviewees reporting that all of their funders paid overhead. At the other extreme, six NGOs (16 percent) said that 25 percent or less of their funders paid overhead. Among the Cameroonian NGOs, the percentage of funders who paid overhead was weakly correlated with the percentage of foreign funding sources (r = -.27), indicating that foreign funders were less likely to pay overhead, while funds raised from Cameroonian sources, though likely modest, could be used for any purpose.
Interviewees from NGOs that received little or no overhead sometimes complained vociferously of the problems this produced. They said that they were unable to pay for the basics, which hindered their ability to carry out their projects and write new proposals, and several hinted that they had been forced to resort to a bit of “creative accounting” to deal with this problem.