Why donors keep asking for sustainability

October 26, 2026 Leave a comment

I have often been asked by the funding partners, ‘How will this project be sustained after the funding ends?’ While it is a reasonable question, it is also often the wrong one. The development sector has turned ‘sustainability’ into a synonym for ‘what will happen when the donor stops paying?’ The donors ask NGOs to build lasting solutions while often funding them through short-term, restricted projects that make long-term institutional and financial resilience harder to achieve. The real test of sustainability is the possibility of value created by the funding that can continue beyond the project cycle, and whether the economic, institutional or public systems exist to carry that value forward.

If a donor spends money on training women entrepreneurs, establishing community institutions, improving health services or creating livelihood opportunities, it is entirely reasonable to ask what happens when the grant ends. Nobody wants an intervention to disappear the moment the donor’s logo disappears from the last banner. But before asking how a project will survive without the donor, we should ask what exactly is supposed to continue, who is expected to take responsibility for it, and whether the conditions exist to make that possible.

A three-year project can be financially unsustainable but socially transformative, and it can end because its purpose has been achieved. A community institution can survive without the NGO but require continued public or market support. A livelihood intervention can become sustainable because participants increase their incomes, while the organisation delivering it remains dependent on philanthropy. And sometimes ‘sustainability’ simply means that the NGO promises to find another donor, which often is the least convincing of all. For years, development organisations have been encouraged to think about sustainability as an exit strategy. The donor funds the intervention often for 1-3 years, the NGO builds capacity, creates local ownership, establishes linkages and prepares an exit plan, and then the donor leaves and the model is expected to continue. While the logic is attractive, ending external funding and creating sustainability are not necessarily the same thing.

The OECD’s longstanding definition of sustainability in development evaluation focuses on the benefits of an intervention continuing after donor funding ends. That is a useful starting point, but it immediately raises a more important question of what will allow those benefits to continue? Government may take over, communities may contribute, users may pay, markets may generate revenue, or another institution may assume responsibility. Or the intervention may change behaviour or strengthen systems sufficiently that continued external support is no longer necessary. These are fundamentally different pathways, yet grant proposals often treat sustainability as a generic quality that can be added through a paragraph near the end of a concept note.

Consider a women’s entrepreneurship program that trains 5,000 rural women, organises producer collectives, provides business support and connects them to markets. If a donor asks how the program will be sustained after three years, the answer depends entirely on the model. Perhaps producer collectives will become commercially viable, or an anchor company will continue purchasing from the enterprises, while the financial institutions in the entrepreneurial ecosystem will provide working capital, and women will eventually pay for business services. Each possibility requires a different intervention design. If sustainability depends on markets, the project must build a viable market proposition. If it depends on government, public institutions need to be involved from the beginning. If it depends on producer collectives, those organisations need governance, capital and commercial capability. If another donor will be required, the project should be honest about that rather than presenting donor substitution as financial sustainability.

Donors increasingly expect NGOs to be resilient, adaptive and financially sustainable, while many NGOs are funded through short-term, restricted project grants that make precisely that difficult. Recent evidence from Bridgespan’s 2025 research, based on responses from 460 nonprofits and interviews with 51 nonprofit leaders, funders and intermediaries from India, found growing movement towards multiyear funding and greater recognition of core organisational costs, but continuing gaps in organisational development and financial reserves, particularly among smaller and non-metro organisations. Earlier Bridgespan research found that 83% of Indian NGOs surveyed had difficulty securing funding for indirect costs, while more than half had fewer than three months of reserves. Only 18% said they invested adequately in organisational development. Another analysis of 40 relatively well-funded Indian nonprofits found that actual core costs ranged from 5% to 51% of total costs and averaged 19%, while the average coverage provided by key donors was only 9%.

Funders ask organisations to be resilient while funding them as if their only legitimate expenditure is the activity that can be photographed and counted. Donor grants fund the field worker but not always enough of the management system that supports the field worker, training but not necessarily the organisational learning required to improve it, and program delivery while hesitating to fund reserves. Funders ask NGOs to diversify their funding while providing little unrestricted money with which to build their fundraising capacity. Then, three years later, the funder asks why NGOs are not sustainable.

Instead of asking an NGO, ‘How will you sustain this project when our funding ends?’, donors should instead ask, ‘What needs to be true for the benefits of this intervention to continue, and what role should our funding play in creating those conditions?’ This question recognises that philanthropy is often most useful when it finances a transition between two states. A grant can demonstrate that an idea works, absorb early-stage risk, strengthen institutions, develop markets, improve technology or support innovations that government and commercial finance are not yet prepared to fund. The grant should help create the conditions for the next stage. That may mean public financing, market revenue, community ownership, institutional adoption, commercial investment or another form of philanthropy. The appropriate pathway will vary by intervention, for example, a rural entrepreneurship program and a community health program should not be expected to arrive at sustainability through the same route.

This also means donors should sometimes be prepared to fund the less glamorous parts of sustainability. Financial systems are not exciting, NGO reserves are not photogenic, good middle management rarely features in impact stories, and neither do information systems, HR, audit, leadership development or fundraising capacity. Yet these capabilities determine whether an organisation can survive shocks, retain good people, manage resources and deliver programs consistently. Flexible funding is therefore not necessarily the opposite of accountability. It can be an investment in the organisational capacity required to deliver accountability well. A strong organisation with adequate systems and reserves may actually be better positioned to manage restricted program funding, and respond to changing circumstances and protect donor resources.

Then there’s another very important aspect of development programs, where everything cannot be sustained. Some projects end and achieve the desired results/purpose during their lifecycle. A delivery model may become obsolete, a technology may get replaced, a program may fail to produce meaningful results, or a community may no longer need an external intermediary. Continuing to fund something simply because it has existed for five years is institutional inertia and not sustainability.

The objective should therefore be sustainable value, not sustainable projects. This matters because many development challenges are systemic. Poverty, women’s economic exclusion, malnutrition, tuberculosis, climate vulnerability and the lack of decent employment cannot generally be ‘solved’ by a three-year project. At best, a project can change part of the system like improve a service, strengthen an institution, alter incentives, demonstrate a model, influence policy or help people acquire assets and capabilities.

Sometimes the honest answer will be that an intervention requires long-term funding, and there is nothing inherently unsustainable about that. Governments continuously spend money on education, public health, roads, social protection and environmental management. We do not ask whether a public hospital will become financially self-sustaining after three years, but are more interested in it producing sufficient public value to justify continued investment. Perhaps philanthropy should adopt some of the same logic. A community health program that requires continued financing may still be highly valuable if it prevents disease at a cost society is willing to pay. A program supporting children with special needs may never generate revenue, yet its social value can be substantial. 

So sustainability cannot always mean, ‘Can this generate its own revenue?’ That is a business-model question. For many social interventions, the better question is that, Who has a legitimate reason and capacity to pay for this value over the long term? The answer is an appropriate combination of market, government, communities, and philanthropy as per the need. This also places a responsibility on NGOs to become more honest in how they answer sustainability questions. A reassuring paragraph about capacity building, community ownership and exit strategies is not necessarily a credible plan. It’s better to be honest about it and say that the interventions may require continued public expenditure, or a livelihood project would need several more years beyond the grant cycle before it can cover its operating costs, and show the pathway. If another donor will be required, explain why and what will be different by then.

Sustainability becomes more credible when it is treated as a theory of how an intervention will continue to create value, rather than as a promise that the NGO will somehow find money after the current grant ends. We have turned a ,legitimate development objective into a ritual of grant writing. Every proposal has a sustainability section, a sustainability framework, and an exit strategy. Yet none of these, by themselves, answers the fundamental question of what will make this intervention continue to work when the source of money ends. A serious answer requires thinking about incentives, markets, institutions, behaviour, public finance, community ownership and organisational capability. It may require more than one source of funding and more than one institution. It may take five years rather than three. It may require unrestricted funding rather than another tightly earmarked project grant. And sometimes it may require accepting that the value created by a program is important enough to warrant continued investment. Perhaps, then, donors should stop treating sustainability as the final question in a grant proposal, but should be one of the first. So, instead of ‘How will you survive without us?’, the donor should ask, ‘What will exist, who will own it, who will pay for it, who will maintain it, and what should our role be when the grant ends to make the impact sustainable?’ While these are harder questions, I think, they can also lead to better projects. The most sustainable thing a donor can fund is NGOs capability, institution, market, public system or community ownership that makes the original grant less necessary over time.

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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The missing business case for ending Tuberculosis

August 24, 2026 Leave a comment

Tuberculosis (TB) presents one of the most enduring paradoxes in global health. It is preventable, diagnosable, and curable, yet it remains among the world’s deadliest infectious diseases. Every year, millions of people fall ill, and more than a million lose their lives to a disease that medicine has known how to treat for decades. The burden is concentrated overwhelmingly in the Global South, particularly in countries such as India, Indonesia, Pakistan, Nigeria, Bangladesh, and the Philippines. Yet despite this enormous human and economic cost, TB continues to attract only a fraction of the funding mobilised for many other global health challenges. The question is not whether TB is a public health emergency, but rather why a disease with such a high burden struggles to attract sustained investment.

The answer lies less in epidemiology and more in economics. Global health financing is often driven by a combination of political attention, public visibility, strategic interests, and commercial incentives. Diseases that threaten wealthier populations, generate public fear, or offer lucrative opportunities for innovation tend to attract substantial resources. Tuberculosis does none of these particularly well. It is largely a disease of poverty, affecting populations with limited political influence and weak purchasing power. As a result, the market signals that typically drive investment remain weak, even when the social need is overwhelming.

This disconnect is evident in the global financing landscape. Governments meeting at the United Nations High-Level Meeting on Tuberculosis in 2023 committed to mobilising US$22 billion annually for TB prevention, diagnosis, treatment, and care by 2027, alongside US$5 billion annually for research and development. Yet current financing remains far below these ambitions. Many high-burden countries continue to face significant resource shortages, and funding gaps persist across national TB programmes. Research funding is even more constrained. Global investment in tuberculosis research remains only a fraction of what experts estimate is necessary to develop better diagnostics, shorter treatment regimens, and more effective vaccines. The world has repeatedly declared its intention to end TB, but its financial commitments suggest otherwise.

A major reason for this shortfall is the narrow donor base supporting the global TB response. Unlike some other health sectors that benefit from a broad coalition of governments, foundations, corporations, and private investors, TB relies heavily on a small number of actors. The Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFTAM) remains the largest external financier of TB programmes worldwide. A handful of bilateral donors and philanthropic organisations account for much of the remaining support. Outside this relatively small circle, engagement is limited. Family foundations, corporate social responsibility programmes, impact investors, and development finance institutions have yet to embrace tuberculosis as a priority issue at scale.

This concentration of funding creates vulnerability. Any reduction in donor commitments, shifts in geopolitical priorities, or fiscal pressures in donor countries can quickly undermine progress. Recent debates around development assistance budgets and declining aid commitments have highlighted the fragility of the current model. The reality is that the global TB response rests on a financial foundation that is both narrow and uncertain.

The deeper challenge, however, is that tuberculosis has never been successfully positioned as an investment opportunity. Unlike cancer therapies, medical technologies, or chronic disease management solutions, TB offers limited prospects for commercial returns. The populations most affected are often served by publicly funded health systems or donor-supported programmes. Pharmaceutical companies face uncertain revenue streams, while investors struggle to identify scalable business models capable of generating attractive financial returns. In a world increasingly shaped by market logic, tuberculosis suffers from a lack of investability.

Yet this perception obscures a much larger economic reality. Tuberculosis may be one of the highest-return investments available in international development. The disease primarily affects people during their most productive years, reducing labour force participation, household earnings, and economic mobility. Children leave school to care for sick relatives. Communities lose workers, caregivers, and local leaders. The economic impact extends far beyond health systems, affecting productivity, human capital formation, and long-term development outcomes. Every case prevented and every patient cured generates benefits that ripple across households, communities, and economies.

The problem is that these returns are largely social rather than financial. The benefits accrue to governments, employers, families, and society as a whole rather than to any single investor. Economists describe this as a classic market failure. The social return on investment is extraordinarily high, but the private return remains relatively low. As a consequence, the market underinvests in solutions despite their obvious public value.

This is precisely why tuberculosis requires a different financing narrative. For decades, the disease has been framed primarily as a public health challenge. While this framing is accurate, it is insufficient. Tuberculosis should also be understood as a development challenge, a labour market challenge, and a human capital challenge. Countries across Asia and Africa are investing heavily in education, skills, entrepreneurship, and economic growth to capitalise on their demographic dividends. Yet the continued prevalence of tuberculosis silently erodes these investments by reducing productivity and weakening workforce participation.

Reframing TB as an economic issue rather than solely a health issue could unlock new sources of capital. Development finance institutions could view TB investments as essential components of economic resilience. Corporate CSR programs could recognise tuberculosis as a workforce and community development issue. Family offices and philanthropists interested in inclusive growth could support interventions that strengthen human capital among vulnerable populations. Impact investors could explore opportunities in diagnostics, digital adherence technologies, and community-based healthcare delivery. Innovative financing mechanisms, including blended finance and outcome-based funding, could help bridge the gap between social value and financial participation.

Such approaches would not replace traditional public health financing, nor should they. Governments must remain the primary funders of national TB responses. However, relying solely on governments, multilateral agencies, and a handful of foundations is unlikely to generate the scale of resources required to end the epidemic. The financing ecosystem must expand, and that expansion will only occur if the narrative changes.

Perhaps the most troubling aspect of tuberculosis is that its persistence is no longer primarily a scientific problem. The tools to diagnose and cure the disease already exist, and innovations are emerging. What remains missing is sufficient investment and political commitment to deploy these solutions at scale. In an age that celebrates technological breakthroughs and billion-dollar innovation ecosystems, the continued burden of a curable disease reflects not a failure of medicine but a failure of financing.The global community has largely treated tuberculosis as a charitable cause. It is time to recognise it as an investment in human productivity, economic resilience, and social stability. Until funders, policymakers, and investors view tuberculosis through this broader lens, the gap between disease burden and financial commitment will persist. The missing business case for ending tuberculosis is not a lack of evidence that the returns are absent.

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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First Published on LinkedIn: 26 June 2026

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Building Demand for Development

July 13, 2026 Leave a comment

India’s rural development dialogues have treated health, education, and income as parallel priorities often pursued through separate policy silos. Budgets are allocated, schemes are launched, infrastructure is built, and targets are set, all with good intent. However, one foundational truth remains insufficiently acknowledged, that increasing rural incomes is not merely an economic goal but one of the most effective demand-side interventions for health and education. Without income security, even the best school education systems and local health facilities struggle to translate access into outcomes. With income growth, aspirations gain purchasing power, the choice basket expands, and human development accelerates in ways no standalone welfare program can achieve.

The constraint on health and education in rural India is rarely a lack of awareness alone. Most families understand the value of a healthy body and an educated child, but they cannot act on that understanding consistently. Irregular incomes, seasonal employment, debt cycles, and exposure to shocks force households into a constant state of prioritising needs and what is immediately affordable. In such conditions, preventive healthcare is postponed until illness becomes unavoidable, and education becomes negotiable once opportunity costs rise. When incomes increase, particularly when they become predictable rather than sporadic, this calculus begins to shift fundamentally. I have witnessed this change countless times among the families from rural livelihood and entrepreneurship development programs across multiple states of India, from the north to the northeast.

The first visible change that accompanies rising rural income is in health-seeking behaviour. As disposable income grows, households move from reactive to preventive care. They begin to spend on nutritious food intake, diagnostics, maternal health, and timely treatment rather than relying solely on home remedies or last-resort interventions. This is observable across rural belts where livelihoods have stabilised through dairy cooperatives, non-farm employment, or entrepreneurship opportunities. Increased income reduces the psychological cost of seeking care. A doctor’s visit no longer feels like a financial gamble, and medicine is no longer a choice between recovery and indebtedness. Over time, this shift translates into lower morbidity, higher productivity, and a virtuous cycle of income and wellbeing.

Education follows a similar but slightly delayed trajectory. At very low-income levels, schooling competes with survival. Children’s labour, whether on farms, in family enterprises, or in caregiving roles, has immediate economic value. As incomes rise, the opportunity cost of schooling declines. Families are more willing to keep children in school, invest in better quality institutions, often private schools in their own villages or neighbouring towns, and support supplementary learning such as tuition or digital tools. Crucially, income growth often changes learning outcomes and ambition, and not just enrolment. Education stops being about literacy alone and starts being about mobility, including English proficiency, technical skills, credentials, and pathways beyond the village economy.

This transition from survival to investment is critical as human capital investments respond strongly to income thresholds. Below a certain level of income, households simply cannot afford to plan long-term, and above that critical level, behaviour changes rapidly. Rural India today stands at precisely this inflection point. Decades of infrastructure expansion, electrification, and digital penetration have laid the groundwork. What remains uneven is sustainable income enhancement pathways at scale. Where it happens, demand for health and education services rises organically, often faster than supply systems can respond.

However, increased income alters expectations and does not merely increase consumption. Rural households with higher incomes begin to demand quality, accountability, and outcomes. They compare schools, question teaching standards, seek second medical opinions, and are willing to pay for reliability with profound implications. It challenges the assumption that rural citizens will accept poor service quality indefinitely. It also creates space for private, social, and hybrid service models like low-cost clinics, diagnostic centres, skill academies, and ed-tech platforms that were previously unviable due to weak demand. Income growth can enable choice for households, who would increasingly adopt mixed strategies of using public facilities for some services and private providers for others. This duality can, if managed well, improve overall system performance. 

The ripple effects of income-driven demand can extend beyond individual households. As spending on health and education will increase, local economies will diversify. Teachers, health workers, lab technicians, transport providers, and service support staff will find employment closer to home. Women’s participation in the workforce will rise as care responsibilities will reduce and aspirations will expand. These multiplier effects will strengthen rural markets, making income growth more resilient and less dependent on a single sector like agriculture.

However, income growth alone is not sufficient, as demand without supply will lead to frustration, not development. In many rural areas, rising incomes have resulted in out-migration for services, with families travelling long distances or relocating temporarily to access quality healthcare and education. This is not a failure of income-led development, but a failure to anticipate and respond to it. Both public and private supply systems must be designed to scale alongside income growth. Physical access, skilled personnel, digital connectivity, and trust are essential if local ecosystems are to capture the benefits of rising demand.

Livelihood programmes and social sector investments are often conceived independently. Income-generation schemes focus on outputs like jobs created and enterprises supported, while health and education programmes focus on inputs like schools built, staff hired, and beneficiaries enrolled. What is missing is an integrated demand-supply lens. Rural income enhancement should be explicitly recognised as a human development strategy, with parallel investments planned in service delivery capacity. When livelihoods improve in a region, health and education infrastructure should be strengthened proactively, not reactively.

For corporate social responsibility (CSR) and philanthropy, this insight could be particularly valuable. Rather than choosing between livelihoods and social services, funders should see them as sequential and reinforcing investments. Supporting rural entrepreneurship, value chains, or digital livelihoods creates the conditions for sustained demand for health and education. Complementing this with investments in service quality of teacher training, primary healthcare strengthening, telemedicine, or skill education will maximise impact. Fragmented interventions will yield fragmented outcomes, while integrated strategies can create lasting change.

When rural citizens earn more, they become more vocal stakeholders in the local political economy. They demand better governance, transparency, and responsiveness. Health and education, being highly visible services, often become focal points of this demand. Income growth thus strengthens democratic accountability. It shifts the relationship between the state and citizens from charity to entitlement, from gratitude to expectation. 

India’s development journey offers ample evidence of this dynamic. States like Gujarat, Tamil Nadu, and Maharashtra that have successfully diversified rural incomes through improved irrigation, manufacturing clusters, or services consistently outperform others on health and education indicators. The lesson is that the effectiveness of social spending is amplified when households have the means to engage with it meaningfully. Supply creates possibility, and income creates participation.

As India looks ahead to the next phase of rural transformation, the question is no longer whether to invest in health, education, or livelihoods, but how to sequence and integrate them. Treating income growth as the foundation of demand generation reframes the debate. It reminds us that people are not passive recipients of services, but active decision-makers whose choices shape outcomes. Empowering those choices through income security may be the most humane and pragmatic development strategy to have. This has the potential of unlocking a chain reaction that will turn latent needs into effective demand, services into systems, and welfare into wellbeing. Healthier bodies and educated minds do not emerge in isolation, but they grow where households have the freedom to choose them. And that freedom, in rural India, begins with income.

If this essay made you reflect on how income shapes opportunity, choice, and human potential, subscribe to my blog for one new article every week in your inbox. It’s free!

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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Digital Literacy vs Digital Confidence

June 15, 2026 Leave a comment

The digital divide in rural India is often described as an access problem. Smartphones are becoming increasingly common, data is becoming more affordable, and women are increasingly present on digital platforms, sharing messages, watching videos, and making video calls. However, this apparent inclusion masks a deeper exclusion. When it comes to using technology for business, like sending payments, managing accounts, registering enterprises on platforms, or selling online, many rural women hesitate. The contradiction is striking as access and skills exist, but ownership and confidence do not. The real barrier to digital inclusion is not digital literacy, but digital confidence.

Consider the experience of a rural woman entrepreneur who runs a home-based food business. She owns a smartphone, uses WhatsApp comfortably, and receives digital payments from customers. Yet she avoids sending money digitally, hesitates to use business apps, and depends on a family member for anything that she thinks is ‘important.’ Her fear of ‘what if something goes wrong?’ is not about a lack of knowledge, but about a lack of trust in oneself. Across rural contexts in India, women are digitally present but not digitally empowered. While they are users of technology, but unfortunately not the decision-makers within it.

Most development programs approach this challenge through the lens of digital literacy. Literacy is usually defined as the ability to operate a phone, navigate apps, recognise icons, or complete basic digital tasks. Training programs, device distributions, and short workshops are designed to tick these boxes. Once completed, women are counted as digitally included. However, literacy does not translate into agency. Knowing how to open an app does not mean feeling confident enough to transact independently. Watching a demonstration does not prepare someone to make decisions in real situations. Literacy teaches what to do, whereas confidence determines whether one dares to do it.

Digital confidence, unlike literacy, is rarely named, measured, or funded. It refers to a person’s trust in their own ability to use technology without fear, their willingness to make mistakes, and their sense of belonging in digital spaces. This confidence is more psychological than technical, emotional rather than instructional. For rural women, digital confidence is shaped by years of social conditioning that discourages experimentation, independence, and risk-taking. Without this confidence, technology remains something to be handled carefully or delegated to others.

The reasons for low digital confidence among rural women are structural and gendered. Financial fear is a major factor, with stories of fraud, which are often exaggerated, circulating widely. A single mistake can lead to loss of money, blame from family members, or public embarrassment. Cash, by contrast, feels safe and visible as it can be counted, corrected, and recovered. In this context, avoiding digital tools becomes a rational choice rather than a sign of ignorance.

Gendered control over technology further weakens confidence. In many households, men act as informal gatekeepers of digital systems. Even when women own phones, passwords, banking apps, and registrations are often managed by husbands or sons. Over time, this creates dependence and reinforces the belief that digital decision-making is not a woman’s responsibility. What begins as ‘help’ slowly turns into exclusion.

Men are often allowed to experiment, fail, and learn, while women, especially in rural settings, are not afforded the same grace. A mistake made by a woman is quickly interpreted as evidence that she should not be engaging in business or technology at all. This low tolerance for failure discourages curiosity and reinforces caution. When the social cost of error is high for women, playing safe becomes the only viable strategy.

Design and language barriers also play a role, as many digital platforms are not built for first-generation users. Interfaces are cluttered, English-heavy, and filled with technical or financial jargon. For women with limited formal education, each unfamiliar term reinforces a sense of exclusion. Technology begins to feel alien, designed for someone else, and confidence erodes further. The consequences of low digital confidence are visible in how rural women run their enterprises. As a result, businesses remain informal, small, and dependent on intermediaries. Family members or middlemen step in to handle digital aspects, capturing control and value. Instead of reducing inequality, technology ends up reinforcing existing power structures.

Evidence from the ground suggests that when confidence is addressed, outcomes change. In India’s SHG networks, women who participate in repeated, hands-on digital practice sessions gradually begin to transact independently. Rural women entrepreneurs who learn in peer groups adopt digital tools more confidently than those trained in isolation. The turning point is rarely a new app or feature; it is the moment a woman completes a task on her own and realises she can do it again.

Building digital confidence requires a different approach. Repetition matters more than certification. One-time trainings raise awareness, but confidence grows through continued practice. Peer role models are powerful, especially when women see others from similar backgrounds navigating technology successfully. Safe spaces for failure are essential, allowing women to learn without fear of financial or social consequences. Trusted human support through community facilitators, SHGs, or NGOs provides reassurance and continuity that technology alone cannot offer.

For policymakers, donors, and practitioners, this demands a rethinking of program design. Success should not be measured by the number of women trained or devices distributed, but by independent usage, decision-making, and willingness to explore digital tools. Budgets must allow for handholding, follow-ups, and time. Behavioural change cannot be rushed, and technology should not be treated as a shortcut to empowerment.At the policy level, digital public infrastructure holds enormous promise, but only if it is designed with gendered realities in mind. Women-first user experience, local-language interfaces, and community-based support systems are essential. Digital inclusion must be understood as a question of agency, not just access. Until rural women believe that the digital world belongs to them and they are confident to click, transact, and decide, technology will remain an accessory rather than a catalyst for entrepreneurship and change. The future of rural women’s enterprise will be built not just on smartphones, but on the transformative moment when a woman says to herself, ‘I can do this,’ and acts without fear.

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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Why good projects struggle for funding

April 6, 2026 Leave a comment

The social impact sector’s irony is that some of the most thoughtful, community-centred, transformative projects struggle to secure funding, while others that are not so well designed, and sometimes even superficial, find their way into donor portfolios. This contradiction is often explained as a failure of proposal writing or organisational capacity, but such explanations only scratch the surface. The deeper truth lies in understanding donor behaviour, including the incentives, constraints, and biases that shape funding decisions. Good projects are overlooked not because they lack merit, as ‘merit’ is not the primary currency in the funding ecosystem, but because of factors like alignment, risk perception, measurability, and institutional incentives.

At the core of the problem is the simple fact that donors do not fund the ‘best’ projects; instead, they support those that align with their priorities. Every donor operates within a specific thematic, geographic, and strategic framework, often influenced by board directives, political factors, or institutional legacy. A project that is highly relevant to a particular community may still be rejected if it does not fit neatly into a donor’s current focus areas. This creates a subtle but significant distortion in the sector, as organisations begin to design projects around donors’ language and preferences rather than the lived realities of communities. In this process, genuinely valuable ideas can become invisible, not because they lack worth, but because they are misaligned with funding narratives.

This is further compounded by the deeply risk-averse nature of development funding. Donors are not neutral actors, and they are accountable upward to their boards, governments, shareholders, or trustees. This shapes a cautious approach to funding, where the emphasis is on minimising risk rather than maximising impact. Established nonprofits with proven track records are preferred over emerging grassroots organisations, even when the latter may have deeper contextual understanding. Similarly, tried-and-tested models are favoured over experimental or innovative approaches. The consequence is a filtering mechanism that systematically excludes many high-potential projects simply because they appear uncertain or difficult to manage. Ironically, the very qualities like innovation, localisation, and adaptability that make a project transformative are often the ones that make it seem risky.

Now there’s a growing emphasis on measurability in funding decisions. Donors desire clear metrics, defined outputs, and quantifiable results for results-based management and data-driven accountability of projects. While this has enhanced transparency, it has also created a bias toward interventions that can demonstrate immediate, tangible results. Projects focused on infrastructure, service delivery, or training programmes tend to perform better because their outputs are easily measurable. Conversely, initiatives aimed at changing social norms, empowering communities, or strengthening institutions struggle to articulate their impact within the same frameworks. The most complex and deeply rooted development challenges are often the least measurable within the funding cycle, and therefore the least fundable. Good projects operating in these areas are disadvantaged not because they are ineffective, but because their effectiveness cannot be readily quantified.

The nature of donor engagement further complicates the picture, despite frequent references to ‘partnership,’ much of development funding remains transactional. Organisations submit proposals in competitive, opaque processes with limited opportunity for dialogue or feedback. In such an environment, relationships matter enormously. Organisations with prior visibility, networks, or access to donor ecosystems often have a significant advantage, even if their projects are not fundamentally stronger. Trust, built over time, can outweigh the intrinsic quality of a proposal. Conversely, new or lesser-known organisations, particularly those operating at the grassroots level, find it difficult to break into these networks. As a result, good projects often fail not on their own terms, but because they are evaluated in isolation, without the benefit of relational context.

This dynamic is closely tied to a broader structural bias within the global development ecosystem. Local organisations, despite being closest to the communities they serve, receive only a small fraction of direct funding. Donors frequently cite concerns around compliance, financial risk, and administrative capacity, which leads them to channel funds through larger intermediaries. While this may simplify management from the donor’s perspective, it creates a distance between resources and realities. Local initiatives, which may be highly effective and deeply embedded, often remain underfunded or entirely excluded. This is not merely an operational issue, but reflects an implicit hierarchy of trust, where proximity to power and familiarity with donor systems are valued over contextual knowledge and lived experience.

Equally important is what might be called the ‘proposal illusion’, with the tendency to compare the quality of a project with the quality of its documentation. In practice, donors assess proposals, not projects. This places a premium on articulation, structure, and the ability to translate complex realities into donor-friendly language. Organisations with access to skilled writers, consultants, or international exposure are better positioned to succeed, even if their fieldwork is not exceptional. On the other hand, grassroots organisations that may be doing outstanding work often struggle to present it in ways that resonate with donor expectations. The result is a system where storytelling can overshadow reality, and where good projects are overlooked because they are not packaged effectively.

Time horizons further skew funding decisions as donors tend to operate within short funding cycles, typically ranging from one to three years, with success evaluated within this limited timeframe. This creates a preference for projects that can demonstrate quick wins, rather than those that require sustained engagement over longer periods. Yet most of the development challenges, like education reform, livelihood transformation, and social cohesion, are inherently long-term and demand patience, continuity, and iterative learning. When funding is short-term, even well-designed projects can struggle to show meaningful results, making them less attractive to donors. This leads to what is often described as the ‘pilot trap,’ where innovative ideas receive initial funding but fail to scale or sustain due to a lack of long-term commitment.

Another big challenge is the persistent reluctance to fund organisational overheads. Donors often prefer to allocate resources directly to programmatic activities, placing limits on administrative costs such as salaries, systems, and governance. This undermines the very foundations that enable effective implementation. Strong organisations require robust systems, skilled personnel, and institutional stability. When these are underfunded, the quality of implementation suffers, reinforcing donor perceptions of risk and inefficiency. This creates a vicious cycle in which organisations are unable to build capacity, and good projects become difficult to execute at scale.

Underlying all of these factors are the incentives that shape donor behaviour. Funding decisions are rarely neutral as they are often influenced by a range of external and internal considerations. Corporate donors are often guided by brand alignment and visibility, favouring projects that can be showcased or communicated easily. Philanthropic foundations may be influenced by leadership vision, legacy goals, or thematic interests. In each case, the logic of funding extends beyond impact alone. Good projects that do not align with these broader incentives may struggle to gain traction, regardless of their potential.

Bilateral and multilateral donors operate within geopolitical frameworks, where aid allocation may reflect strategic interests as much as development priorities. In the wake of global economic slowdowns, traditional sources of Official Development Assistance (ODA) are shrinking. The U.S., U.K., and several European governments have all announced significant cuts to their ODA budgets. These reductions should have sparked debates about the failures of the aid system, but they largely passed with little reflection. The outcome is a development finance environment that’s simultaneously more selective and more risk-averse. Funders now prioritise large-scale, measurable, and politically ‘safe’ projects that can boast short-term, quantifiable results. Small-scale social initiatives, particularly those addressing systemic or cultural issues like inequality or governance, find themselves outside the funding radar. Even when progressive funding streams exist, for example, climate justice or inclusive innovation programs, they come wrapped in new conditionalities of alignment with national development strategies, ESG benchmarks, or private-sector co-financing. These conditions further alienate grassroots actors who can’t meet such formal requirements.

It is also important to acknowledge a more fundamental constraint of scarcity, as the pool of available funding is limited, while the number of worthy projects is vast. Even in a perfectly functioning system, not all good ideas can be supported. This introduces an element of competition that is not purely based on merit. Projects must not only be good, but must also be timely, visible, and strategically positioned. In such an environment, marginal differences in presentation, alignment, or relationships can determine outcomes, leaving many strong proposals unfunded.

Projects that are technically sound but insufficiently rooted in community realities often struggle to convince donors of their sustainability. Funders have been increasingly looking for evidence of participation, co-creation, and local ownership. However, these elements are difficult to demonstrate within conventional proposal formats, leading to a gap between genuine engagement and its representation. Good projects that are deeply participatory may still fall short if they cannot adequately convey this dimension to donors.

These dynamics suggest that the funding ecosystem does not necessarily reward the intrinsic quality of projects. Instead, it rewards alignment, clarity, measurability, and perceived reliability. This does not mean that donors are acting in bad faith; rather, they are responding to their own constraints and accountability structures. The system, in many ways, is functioning as designed. However, the consequences are significant, as innovative, context-specific, and potentially transformative projects often remain unfunded, while safer, more conventional interventions dominate.If we are serious about tackling poverty, inequality, and climate injustice, we must start by rethinking how funding itself operates. It is not enough to design good projects, but one must also learn to translate them into the language of donors without diluting their essence. This requires strategic proposal architecture, effective communication, and relationship-building. For donors, the challenge is more profound as it involves rethinking risk, expanding definitions of impact, and creating funding mechanisms that are flexible, inclusive, and long-term. Without such shifts, the sector will continue to produce good ideas that never see the light of day, not because they are unworthy, but because they do not fit the system that is meant to support them.

(Cover image generated using AI)

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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