The participation of nongovernmental organizations in poverty alleviation

Abstract

The Government of Honduras created the Honduras Social Investment Fund (FHIS) to mitigate the negative effects of the stabilization and structural adjustment program on the most vulnerable groups of the population. To achieve poverty reduction, the FHIS has mobilized community groups, local governments, nongovernmental organizations (NGOs), and the private sector to formulate, finance, and execute many small scale investment and service projects in the various sectors. The participation of NGOs in the FHIS has been significant, especially in the delivery of social services and in the administration of small credit programs for informal sector entrepreneurs. NGOs have executed nearly one-half of FHIS-financed subprojects in the basic needs and urban and rural credit programs. The collaboration of the FHIS and NGOs has not only benefitted the poverty groups whose standard of living the FHIS has improved, but also the government and the NGOs. The FHIS would not have been as succesful without NGO participation, and without the FHIS, the NGOs would not have had access to the resources and experience. More broadly, the government - and the health and education ministries in particular - would not have enjoyed wider coverage and greater service delivery without NGO participation in the FHIS. Among the lessons learned are that the NGO-executed subprojects that work best are those that provide training and technical assistance to NGOs, have adequate supervision, and enjoy a high degree of coordination and support from the FHIS, particpating NGOs, the local communities, and the relevant line ministries. To strengthen the NGO sector and improve FHIS operations, the FHIS and NGOs should build upon experience to increase their collaboration, especially with regard to the evaluation of NGO performance and the performance of FHIS-financed projects. FHIS's experience with NGOs can prove useful to other social investment fund programs and Bank-financed projects in general, by serving as an information resource on NGO participation and as an example of the partnership that is possible between governments and NGOs.