B.2 Relationships with Partners

The partners of Australian NGOs have become significantly more diverse in recent years with more development actors, and stronger civil society in many developing countries. To achieve social change, it is imperative to build coalitions. In response, the structure and nature of partnerships have also evolved and become more diverse.

The partners of aid and development organisations include individuals, affiliated groups, organisations, governments and universities. All of these can collaborate with signatory organisations to achieve mutually agreed objectives.

Partnerships of all types are critical to achieving effective development outcomes and investments must be made to ensure they are effective. A healthy partnership needs to understand the context in which partners are working, and recognise and respond to unequal power dynamics.

Some signatory organisations will not implement programs directly. Instead, they will choose to work in partnership with local implementers, such as NGOs or CSOs. This reflects a commitment to build local capacity and self-reliance. For this to work effectively, organisations must invest in developing the quality relationships with implementing partners that occurs over time, and ideally through spending time together.

Good relationships evolve over time, based upon trust, mutual learning, accountability and acceptance of difference. The purpose of good relationships is to build the capacity of implementing partners and increase the process of self-reliance and/or local ownership.

– ACFID NGO Effectiveness Framework 2004.

Section B.2 of the ACFID Code of Conduct includes three sets of Standards each with their respective Principle and Obligations. Standards B.2.1 and B.2.2 encourage signatory organisations to develop mutual respect and support with partners, as well as clarity of roles and responsibilities. Standard B.2.3 seeks to ensure that there are proper controls on funds and resources disbursed in relation to the partnership.

Compliance with Standards B.2.1 and B.2.2 and their Obligations is progressive. This means that signatory organisations can work towards complying with the Obligations over a defined period of time. Signatory organisations are expected to have a plan to work toward meeting these Standards and Obligations and to monitor their implementation.
 

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B.2.1 Mutual respect and support

Principle

The relationship between signatory organisations and their program partners will be characterised by mutual respect and by a commitment and openness to two-way learning and support.

Obligations

  1. The relationship between a signatory organisation and its program partners will be based on honest and transparent communication and on two-way learning which leads to continuous improvement in the development practice of both.
  2. Signatory organisations will demonstrate a willingness to invest in their partner organisations to enable partners to:
    1. Be more effective in fulfilling their own development objectives and priorities; and
    2. Enhance their ability to help the signatory organisation meet its obligations under this code in the areas of accountability to primary stakeholders, child protection, gender equity and control of funds and resources.

Why

Effective partnerships contribute directly to effective development outcomes. They are based on understanding and mutual trust, and acknowledging and respecting each other’s strengths and the mutual benefits that come from cooperation.

Values

This standard reflects the Code of Conduct’s commitment to:

  • Accountability to all stakeholders for performance and integrity
  • Honesty and transparency in all dealings
  • Strengthening civil society in Australia and the countries where work is undertaken.

Practical guidance

This standard has dual intentions. The first, mutual respect, requires a values-based or philosophical commitment from your organisation that can then be put into practice through policies and procedures which promote mutual learning, respect and accountability between partners throughout the project and funding cycle. The second intention of this Standard, support, requires an investment in capacity building and the broader mandate of partners. 

Here are some practical suggestions for your organisation to enable mutual respect and support in working with your partners:

Governance and strategy

  • Articulate the principles of partnership in all of your organisation’s key documents such as statements of vision, mission and values, and strategic frameworks
  • Include performance indicators and targets related to partnership in key documents such as your strategic framework, and operations, business and work plans
  • Ensure the board, management committee or senior management monitors these performance indicators and targets to ensure accountability
  • Include orientation to the importance of partnership and the attitudes required to promote strong and effective partnerships in the induction of board members
  • Develop governance and strategy-development processes that include partners in some way.  For example, at program level, establish a clear mechanism to jointly govern operational decisions.  At organisational level, jointly develop strategies with partners. Or, at global level, think about including partners in governance processes through yearly consultative councils, periodic relationship “health checks”, etc.  

Policy and procedures

  • Develop a policy statement on approaches to partnership which includes:
    • Recognition and respect for the strengths and unique skills of each partner
    • The centrality of partners and partnership to effective development
  • Communicate this policy to staff, partners and supporters
  • Integrate partners and their roles into all relevant phases of the project cycle:
    • Role of the partner in project identification;
    • Role of the partner in project design;
    • Role of the partner in project implementation;
    • Etc.
  • Design procedures for establishing relations with partners – partner agreements, project agreements, etc., ensuring that these mechanisms are suitable for an “authentic” partnership.

Engagement with Partners

  • Commit to understanding your partners’ broader mandate and work
  • Provide opportunities for partners to understand your broader mandate and work
  • Choose methods of communication taking into account power imbalances, language and cultural barriers and accessibility of information
  • Invest time and resources in your partners’ broader mandate and strategy and capacity beyond specific projects considering for example non-project grants for training, systems development, etc
  • Host staff secondments from and between partner organisations
  • Link partners to your own development networks to assist their broader mandate
  • Develop a joint agreement on the elements of effective partnership and how to manage any conflicts that may arise
  • Share partnership performance indicators and progress towards targets with your partners
  • Undertake two-way performance assessments where partners assess each other’s performance together
  • Train your own staff and partner staff on the importance of partnership and the attitudes required to promote strong and effective partnerships
  • Develop and ensure that all staff have the necessary personal and interpersonal skills, attitudes and behaviours to listen and receive feedback
  • Give partners the opportunity to respond and edit any marketing materials representing their organisation or their work prior to publication
  • Design and communicate compliance requirements in a way that recognises joint responsibility for compliance, builds trust and respect, and recognises partners’ strengths and contributions.
  • Negotiate and discuss any changes to funding arrangements with partners before implementation and in a way that takes the needs of the project and communities into account.
  • Encourage staff to recognise opportunities to learn from your partners
  •  Ending partnerships well is important. Provide appropriate notice when you are planning to end funding, either at the conclusion of an agreed project or due to other factors
  • After ending long-term partnerships consider a jointly arranged event to celebrate all that has been achieved through the partnership.

Partnership Agreements

  • Create a partnership agreement in discussion and negotiation with partners rather than imposing predetermined templates or contracts.
  • Include clauses describing the value add of each party
  • Invite partners to develop content for the agreement
  • Develop a joint agreement on the elements of effective partnership and how to manage any conflicts that may arise
  • Carry out periodic measurement of the effectiveness of the bilateral partnerships (partnership ‘health checks’), with each partner, and agree actions to strengthen

Capacity Assessment

  • Develop together with partners, a process for assessing and understanding the capacity of each partner.
  • Allow for two-way assessments and self-assessments focusing on reflection, learning and capacity-strengthening rather than assessment of competency
  • Use the assessments to create plans to strengthen the capacity of both partners

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B.2.2 Clarity in Roles and Responsibilities

Principle

In work undertaken with partner organisations, signatory organisations will ensure mutual clarity and agreement about the objectives of the partnership and the respective roles, responsibilities and mutual accountability mechanisms.

Obligation

  1. Signatory organisations will work towards having a written agreement with each of their partners which sets out the agreed objectives of the collaborative aid and development activity and the roles, responsibilities and obligations of each party.
  2. In their communications with stakeholders, signatory organisations will appropriately reference the role of their partners in delivering aid and development activities.

Why

Trust and empowerment are central to creating effective partnerships, which in turn are essential to development effectiveness. The shared negotiation of roles and responsibilities and acknowledging the strengths of each partner builds trust and accountability, and enables greater autonomy and empowerment.

Values

This standard reflects the Code of Conduct’s commitment to:

  • Accountability to all stakeholders for performance and integrity
  • Building creative and trusting relationships
  • Honesty and transparency in all dealings
  • Strengthening civil society in Australia and the countries where work is undertaken

Practical guidance

Here are some practical suggestions for your organisation to ensure clarity in roles and responsibilities in working with your partners:

Governance and strategy

  • Articulate the principles of partnership in governance documents such statements of vision, mission and values, and strategic frameworks.
  • Include performance indicators and targets, related to partnership and clarity of respective roles and responsibilities, in key documents such as your strategic framework and operations and communications plans
  • The board and senior management to monitor these performance indicators and targets. 

Engagement with Partners

  • Devote adequate time to discussions between you and your partners to develop partnership arrangements whether these are for time bound project activities or broad ongoing engagements
  • Invite partners to develop content for agreements
  • Discuss and negotiate the content of agreements with partners rather than imposing predetermined templates or contracts
  • If using standard partnership agreement templates as a basis for negotiating the terms, conditions and content of agreements with partners, ensure these facilitate agreement rather than impose a particular vision or idea.  
  • Conduct discussions in a manner which encourages the autonomy of partners and recognises the unique strengths and contributions of all parties, and is sensitive to power imbalances, language and cultural barriers
  • Use the process of signing agreements to acknowledge the autonomy of partners and the shared value that comes from partnership. 

Partnership arrangements – policy and procedures

  • Develop clear guidelines for the establishment of partnerships that include documented partnerships agreements. Documentation could vary from an exchange of letters, a strategic level agreement broadly governing an ongoing partnership or a partnership agreement covering a time bound set of activities. Documented agreements ensure that organisations clearly spell out what they can expect from one another. The process of signing agreements acknowledges the autonomy of partners and the shared value that comes from partnership. As important as the documents themselves, is the process of discussion and agreement of the content between signatory organisations and partner.
  • Develop a policy statement on approaches to partnership which includes a commitment to joint negotiation (between signatory organisations and partners) of respective roles and responsibilities.
  • Encourage partners to develop similar documentation with their other partners and key stakeholders
  • Regularly review partnership documents to ensure they are up to date and reflect the needs, experience and changing contexts of the program.
  • Partnership agreements or other such documentation could include:
    • An outline of agreed roles and responsibilities between partners in the support and implementation of projects
    • Resources and support needed to achieve identified development outcomes
    • Resources and support needed to fulfil respective roles and responsibilities
    • Whether the agreement is ongoing or for time-bound activities
    • The strengths and contributions of each party to the agreement
    • Broader organisational development objectives or participation in each parties’ activities
    • Joint involvement in communications, marketing and development awareness-raising activities
    • Agreements for joint training
  • Agreed mechanisms for dispute resolution and conflict management
  • Regularly assess joint progress against agreed roles and commitments to ensure mutual accountability
  • Ensure that all mechanisms (agreements, procedures, etc.) place equal value on financial and non-financial contributions to the partnership to help balance power relations by highlighting the kinds of non-financial contributions often made by the local partner.

Communication

  • Develop a communications policy statement that acknowledges respective roles and responsibilities clearly, honestly and accurately.
  • Communicate this to your stakeholders (your partners, members and the public) (see Standard C.1.2) using communication platforms such as websites, newsletters and reports.
  • Reference the full name of your partners in communications except where the partner has expressly requested for this not to happen, for security or other concerns related to identification
  • Acknowledge the roles and responsibilities of partners in communications with other in-country stakeholders.  

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B.2.3 Control of Funds and Resources

Principle

Signatory organisations will make every reasonable effort to ensure that funds or resources disbursed to partners or third parties are applied lawfully, in accordance with the promise to the donor, for a proper purpose and with proper controls and risk management in place (Australian Government legislative requirement).

 

Obligations

1. A signatory organisation will only disburse donated funds or resources to a third party (including affiliates or partner agencies) for aid and development activities where it is satisfied that:

  1. The activity is consistent with the explicit or implicit promise to the donor;
  2. The activity is consistent wiht the signatory organisations' strategy, objects, purpose and values.
  3. The third party has the capacity to apply the funds or resources in accordance with the promise to the donor, with this Code, with the signatory organisations' strategy, objects and purpose and with the specific instructions of the signatory organisation;
  4. The funds or resources will be disbursed in accordance with relevant laws including taxation, counter terrorism financing and anti-money laundering legislation; and
  5. Appropriate control and risk management mechanisms are in place to mitigate the risk of misappropriation or improper use of the funds or resources once disbursed

Why

There are risks associated with transferring funds, and the responsibility and accountability for how they are used. Your organisation and your partners must do your best to manage this risk. Compliance with this Standard is governed by Australian legislation. The legislation which governs this Standard is the Criminal Code Act 1995 (Cwlth) and the Charter of the United Nations Act (1945). These prescribe that individuals or organisations may face criminal penalties if they provide financial support to a terrorist individual, organisation or act.

Values

This standard reflects the Code of Conduct’s commitment to:

  • Accountability to all stakeholders for their performance and integrity
  • Honesty and transparency in all dealings.

Practical guidance

This Good Practice Toolkit guidance recognises the diversity of arrangements between Australian signatory organisations and their affiliates, partners and implementing agencies, yet offers a range of general guidance that will be useful for all agencies.

This Standard and its Obligations are complex. The following table breaks down each of the Obligations into individual elements.

 

Obligation

Considerations

Key components to address

Suggested framework

1a. Consistency with donor promise

Who develops and approves fundraising campaign materials?

How do you capture, record and bank your donations? If you have run an individual appeal or campaign, how do you keep it separate from other finances and record its income and expenditure?

·   Language used in fundraising campaigns

·   Separation of duties

·   Limits of authority

·   Practical implications

·   Audit (internal risk assessment)

·   Choice of appropriate accounting system

·   Use of project or job codes

Use of separate bank accounts, and when their use is triggered

·   Finance policy or manual

·   Privacy policy

·   Fundraising and donations policy

·   Delegations policy

1b. Consistency with Objects, Purpose and Strategy

Is your organisation a conduit for third parties? If so, is this intentional or unintentional? Is it appropriate? What are the risks of this practice and how can you mitigate them?

·   Review of partner including: Constitution, website, Annual report, finances and references from other in-country agencies.

·   With whom do you share findings of a review of partners?

·   Who approves your engagement with third parties? Eg the CEO, board, multiple board members, project managers,)

·   Fundraising and donations policy

·   Ethics and conflict of interest policy.

·   Anti-fraud and anti-corruption policy [see D.4.1]

·   Due diligence documents such as checklists, templates and contracts and monitoring visit reports

·   Delegations policy

·   Partner Project Agreements

1c. Capacity of third parties

How do you perform due diligence and verify the existence and capacity of third parties?

As above

·   Due diligence checklist

·   Documents from partner agency including legal, pro formas and templates 

·   Reference checks

·   Government checks

1d. Compliance with relevant laws

How do you confirm how donations will be used?

How do you ensure your funds are used in a way that complies with relevant laws?

 

·   Checking all relevant lists of known terrorist individuals and organisations.

·   DFAT and Attorney Generals list, any other list of note

·   An explicit organisational statement to say you do not work with known terrorist organisations

·   Due diligence checklist

·   Documents from partner agency including: legal, pro formas and templates 

·   Anti-fraud and anti-corruption policy [see D.4.1]

·   Finance policy or manual

·   Evidence of periodic checks against proscribed terrorist lists

·   Partner Project Agreements

 

1e. Controls and risk management

How do you assess and mitigate risk? And how often?  How do you disseminate key risk management messages to stakeholders?

·   If risk is identified, what is a proportionate response that is appropriate to  the circumstances?

·   What methods do you use to transfer funds?

·   Are you compliant with Austrac/Anti Money Laundering /Counter Terrorism Financing Act?

·   As above

·   Human Resources and volunteers policy

·   Policy that addresses appropriate insurance

 

Here are some more general, practical suggestions for your organisation to ensure compliance with the control of funds and resources:

Consistency with donor promise

  • Establish project financial management documentation and systems that allow for the tracking and reporting of donor funds that have been raised for particular purposes (see also Standard C.3.6)
  • Develop and use project plans and budgets for monitoring
  • Develop processes for regular progress and expenditure reports from partners towards achieving development outcomes
  • Provide accurate and realistic assertions in fundraising campaigns and materials (see also Standard C.3.2).

Consistency with objects, purpose and strategy

  • Uphold your organisation’s reputation by ensuring your aid and development activity is consistent with your purpose. 
  • Recognise the risk of being exploited as a conduit for third parties for the wrong purposes, such as to channel funds in order to obtain a tax deduction.
  • Prevent funds from being channelled through your organisation to give a third party a tax deduction, unless:
    • The third party’s intentions are clearly consistent with your purpose and objectives and you have an opportunity to review intended project objectives, progress and results;
    • You are satisfied that all of the relevant obligations of this Code have been met, and
    • Intended activities or purposes comply with relevant Australian legislation.
  • If your development activities or engagements are implemented through a shared management arrangement with other international partners, alliances or affiliates (as distinct from a direct relationship between your organisation and an implementing partner), you should assess the proposed use of funds to ensure they are consistent with the strategic plans of your organisation and your partner organisation if relevant.

Capacity of third parties

  • Undertake appropriate due diligence to assess the capacity of any third party to whom funds or resources will be disbursed for aid and development work. It should be appropriate to the scale of the funds and resources involved and to the risk.  At a minimum, it should include assessing the third party in relation to:
    • Appropriate registration and governance oversight
    • What type of program or work they do
    • Their ability to comply with relevant laws
    • Their track record and reputation in the sector
  • Establish and maintain a relationship with the third party organisation consistent with the values of this Code and your organisation.
  • Develop a system for monitoring and evaluating the use of your funds by the third party.

Compliance with relevant laws

For most signatory organisations, the relevant Australian laws require that funds raised for charitable purposes must remain under the control of the organisation until they are disbursed or used for that purpose. This is entirely consistent with the intent of this Code. To comply with relevant laws, you may also wish to:

  • Establish documented agreements and procedures with partners that require that they and any third party that they disburse funds to, will apply the funds or resources in compliance with the relevant legal obligations. These should include as a minimum:
    • The appropriate principles of this Code
    • The specific Australian law that is known to apply
    • A general provision to other relevant law in both Australia and other jurisdictions
  • Note that the signatory organisation is not absolved, either under this Code or the law, of its responsibility by passing the funds or resources to a third party for implementation.
  • Undertake capacity assessment and due diligence of partners to ensure they have regulatory and legal compliance knowledge and systems that are adequate and appropriate to their circumstances
  • Establish a regular review system to check partners, other third party organisations and key individuals against the Attorney General's Department list of Terrorist organisations and the DFAT terrorism lists. This can be done using software like DFAT’s LinkMatchLite.  

Controls and risk management

  • Undertake an initial risk assessment to understand the appropriate and proportionate level of control and risk management required.  Considerations include:
    • The amounts of funding or resources involved
    • The specific context of the development activity (e.g. location and legal, political, social and economic context)
    • The extent to which the development activity is innovative or proven
    • The use of formal or registered financial channels for transferring funds and
    • The maintenance of full program budgets.
  • Establish documented agreements and procedures with partners which allow for long-term engagement for an appropriate length of time and the ability to adapt and evolve, but which are also as specific as possible.
  • Develop written agreements that include:
  • Reference to governance of joint development activities and an outline of roles and responsibilities (see Standard B.2.2).
  • Specific clauses detailing the proposed use of funds and budgets
  • Provisions dealing with:
    • How much funding or resources will be provided
    • Whether they are provided in one or more instalments or tranches
    • The timing and method of disbursements
    • Application of interest and/or exchange rate movements
    • Corrective action and/or reimbursement of funds or resources if an agreed development activity is no longer performing satisfactorily, meeting the agreed objectives or are applied other than to the agreed activity
    • The return of surplus funds.
  • If you are not directly involved in implementing development activities, establish other systems to ensure you are informed of progress and are able to influence the development activity. This could be achieved through the receipt of progress reports and through participation in strategic direction or program design, through approvals of plans or budgets and through evaluation and review.

Monitoring and evaluation

  • Jointly develop a system by which the signatory organisation and the partner can monitor progress against agreed measures.
  • Undertake regular monitoring and evaluation of progress and expenditure including through financial, progress and evaluation reports.
  • Withdraw funding or initiate corrective action where an agreed development activity is no longer performing satisfactorily or meeting the agreed objectives.
  • As above (‘consistency with donor promise’):
    • Establish project management documentation and systems that allow for the tracking of donor funds that have been raised for particular purposes (see also Standard C.3.6)
    • Be able to demonstrate that they have been applied to those purposes
    • Develop and use project plans and budgets for monitoring
    • Develop processes for regular progress and expenditure reports from partners towards achieving development outcomes
    • Provide accurate and realistic assertions in fundraising campaigns and materials (see also Standard C.3.2).

 

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