The Benefits and Challenges of Working Through International Intermediaries
Workshop notes

The purpose of the session was to provide information to help attendees navigate the broad landscape of intermediaries and to hear from donors and intermediaries themselves about lessons learned. Attendees expressed interest in common distinctions among intermediaries and what questions to ask to find the right fit, and how to best use intermediaries, and specifically how to ensure a shared philosophy and values about working with grantees. Intermediaries expressed interest in hearing how other intermediaries work and what donors want from them.

John Harvey of Grantmakers without Borders, Shaun Paul of EcoLogic, Mike Rea of Give2Asia, and Ruth Bender of Tides each presented on their different, but equally compelling approaches. Throughout the conversation there was emphasis on the need to define "intermediary" precisely.

One of the main points was with regard to earmarking: A foundation making a grant to a re-granting intermediary may not earmark it to a particular organization; such grants may not be counted as part of the 5% mandatory pay-out, and penalties may be assessed by the IRS. When a foundation makes a grant to an intermediary, they cede control over it. By law, it is the re-granting intermediary's decision where the money will go. On the other hand, grants may be designated to a particular focus, for example "disaster response" or "economic development projects."

Another important point was that donors should expect intermediaries to retain a portion of the grant, and these are for real costs (of administering the grant, to provide other services like capacity building). They also use a portion of grant funds retained to leverage other funds, which is a bigger picture issue that deserves to be valued. Of course, the service, costs, and benefits need to be clear. If a donor gives $500, they can't expect quarterly reports.

Intermediaries talked about the challenges they face balancing what donors want, which may be more or less in line with the intermediary's own views, and what people on the ground think is best. Some "intermediaries" really work as partners, providing value beyond money.

From the grantee perspective, intermediaries can sometimes be fundraising competitors, especially if they raise money locally. It seems especially unfair if the intermediary is in the north. Donors need to take care not to over-empower intermediaries. Some distinguished between those "intermediaries" that also implement their own programs (e.g., CARE) and those that do not (e.g., Grassroots International). The former model gives the intermediary too much agenda-setting power, and especially when they work in coalitions where they influence broader strategy, overall frameworks, and language being used. The latter model is seen as more supportive of local development. The point was also made that when intermediaries merge funds and pass them on, the local grantee loses control over what kind of funds they want to take or refuse (e.g., government money).

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