How do IRED publications (notably “Financing Differently”) define or characterize “financial autonomy,” “self-financing,” or “independence” for African organizations (NGOs, CSOs, POs)? Is there a clear distinction between purely financial autonomy and strategic or programmatic autonomy?
Financial autonomy is a strategic issue for African organizations (NGOs, associations, civil society organizations – CSOs, farmers’ organizations – POs, etc.), both for their sustainability and for their ability to fulfill their mission freely and effectively. In this perspective, IRED publications emphasize the need for these organizations to strengthen their financial autonomy, an essential condition to guarantee their independence of action and ensure the sustainability of their commitments on the ground.
DEFINITION AND CHARACTERIZATION OF FINANCIAL AUTONOMY, SELF-FINANCING AND INDEPENDENCE FOR AFRICAN ORGANIZATIONS #
IRED’s publications, particularly “Financing Differently” and “Strengthening Financial Autonomy“, place considerable emphasis on the need for African development organisations (NGOs, CSOs, POs) to achieve greater financial autonomy in order to ensure their sustainability and their ability to pursue their development objectives independently.
Financial Independence
Financial autonomy is defined as the strategic objective of enabling DOs/NGOs to no longer depend on banks, international aid agencies, or governments for financial decisions concerning their own development. It implies the ability of an organization to cover its operating expenses and finance its programs through its own locally generated resources or through its activities, thus reducing its dependence on external aid.
Characteristics of a financially self-sustaining organization include
- The ability to develop and mobilize existing resources locally.
- The development of profitable economic activities and the creation of businesses generating their own income.
- Effective management of aid received, by negotiating more flexible financing and using part of the aid to build up funds and reserves.
- Capitalization of the organization, in particular through the creation of equity, reserves and guarantee mechanisms.
- Access to bank credit through guarantee systems or the creation of revolving credit funds.
Self-financing
Self-financing is one of the pillars of financial autonomy and refers to an organization’s ability to generate its own income to cover its needs. It comes from the organization’s own efforts, the mobilization of local savings, the sale of goods and services produced, profits from economic activities and businesses created by the organization, and the proper management of financing agreements. Self-financing is presented as an alternative to dependence on external aid, which is often unstable and does not allow for long-term planning.
Independence
Independence, in the context of IRED publications, is closely linked to financial autonomy. It signifies the ability of an OD/NGO to make its own decisions, particularly financial ones, without being subject to undue influence from donors, funders, governments, or other external actors. Independence allows organizations to pursue their mission and implement their own development strategies, aligned with the needs of local populations rather than the priorities of funders. Financial dependence is seen as an obstacle to this independence and can lead to stagnation in self-development.
DISTINCTION BETWEEN PURELY FINANCIAL AUTONOMY AND STRATEGIC OR PROGRAMMATIC AUTONOMY #
IRED publications recognize that financial autonomy is only one element of a broader autonomy, including cultural, economic, social, and political aspects. However, financial autonomy is presented as a necessary condition and an essential lever for achieving strategic and programmatic autonomy.
- Financial Autonomy: Focuses on the ability to generate and manage one’s own financial resources to ensure the sustainability and operation of the organization and its activities.
- Strategic or Programmatic Autonomy: Implies the ability to define one’s own objectives, intervention strategies, and programs based on the needs and priorities of beneficiaries, without being dictated by the conditions or priorities of funders. Financial autonomy strengthens this capacity by providing greater flexibility in decision-making and the implementation of actions.
In summary, the documents provided define financial autonomy as a key objective for African organizations, enabling them to free themselves from dependence on external aid and become more independent in their decisions and actions. Self-financing is the main means of achieving this autonomy, while independence is the consequence of solid financial autonomy, enabling strategic and programmatic autonomy. IRED highlights concrete strategies for mobilizing local resources, developing economic activities, and capitalizing organizations in order to strengthen this autonomy.
