| By A.Bebbington and R.Riddell | Published in the Journal for International Development, vol. 7 No. 6: 879-893 |

Introduction: The tendency of official donors to channel an increasing amount of funds directly to Southern NGOs (SNGOs) raises a range of questions: why is this occurring; how is it being done; what are the impacts on SNGOs; what sorts of SNGOs are being supported; what does this imply for institutional and power relationships within Southern civil societies; what does this mean for the relationship between state and civil society in the South and what does this imply for Northern NGOs (NNGOs)? For several reasons, these are apposite and timely questions. In the North, the ever-growing interest of bilateral donors in Southern NGOs raises concerns among Northern NGOs that bring to the surface the longer-standing problem of how far Northern and Southern NGOs are really partners in a reciprocally accountable relationship. At the same time. Northern NGOs are challenged to think what it is they can contribute that their increasingly strong Southern ‘partners’ cannot, and whether their increased receipt of government funds to implement projects is distracting them from a more searching self-analysis of their ‘distinctive competence’ and their own identity. In the South the contribution and legitimacy of professional, non-membership NGOs (or grassroots support organizations—GSOs)^ is being subjected to increased scrutiny. The discovery of Southem NGOs by larger donors is bringing to the surface similar longer standing problems in the relationship between Southern GSOs and popular organizations where the same questions arise as in the North: has this really been a partnership of reciprocal accountability between GSOs and popular organization? Some, particularly those linked to popular organizations, think not, and are increasingly vocal
about this.

These observations suggest that it would be wise for official donors to be cautious in moving rapidly into direct funding because bilaterals may not have the knowledge and capacity to engage in direct funding effectively. More importantly, increased direct funding will influence both the relationships between Northern and Southern NGOs, and those between Southern GSOs and popular organizations — relationships that are sometimes (perhaps often) fragile. This paper is an attempt to open up some of the questions surrounding these issues (see also Riddell et al., 1994). It does so by concentrating on three questions. Firstly it looks at issues around the reasons why bilateral donors choose to support Southern NGOs directly. The main message of this first section is that donors need to be clear first on what development objective they seek through supporting Southern NGOs, and only then determine the most appropriate means of achieving this goal which often may not be direct funding. The second section looks at several donor experiences with channelling funds to Southern NGOs. We close with some reflections on what seems to be happening in donor-NGO relations, and compare this with what we feel ought to be happening.