Project-Based Funding is Failing Us.

If international humanitarian work is to fulfill its promise, we need a shift in donor perception. ​

​Why Project-Based Funding Is Failing Humanitarian Work. 
I am tempted to express more emotional content than would be wise in talking about this topic. It's what my boss, Dana McInturff at the Board of Accountancy in the State of Washington would have called "emotional leakage." It is the visceral reaction that most nonprofit staff feel when donors and funding institutions say they want their dollars to go to something "concrete."  It is particularly difficult to respond with just facts when the donor questions how much was spent on staff who did the work versus countable "stuff" the staff used in their work, as if paying the staff was an extravagance or misuse of the funds. This happens at the local program level and at the INGO level, and as the Executive Director of an INGO, I can tell you that we are guilty of promoting that same misguided rubric every time we are called upon to generate a donor recruitment message - "what will my $50/$500/$5000 investment do?" - and we are reluctant to say it pays a small portion of somebody's salary. Instead we say it "feeds a child for a day" or "pays for a village to have a well for clean water." And while that is often the case, it is far more likely that what is needed is to pay a staff salary needed to manage the money and the well-digging project that is necessary before the village could have clean water.

I can say it plainly. Project funding models are easy to sell to donors, but they weaken our ability to create lasting change.

​When most people give to international humanitarian nonprofits, they want to see results they can measure and celebrate: a school built, a well dug, a shipment of medicine delivered. These time-bound projects with concrete outputs are easier to fundraise for, easier to photograph, and easier to explain. But there’s a hidden cost to this approach—one that directly undermines the long-term sustainability of local communities and the capacity of international NGOs (INGOs) to do the work that truly lasts.

The Hidden Gap: Capacity Building vs. Project Outputs
Real change doesn’t come from a single project. It comes from local leaders becoming creative problem-solvers, local communities taking ownership of their futures, and local organizations gaining the skills and authority to design and lead their own initiatives. Raising local staff capacity to reach this level is the kind of slow, labor-intensive work that rarely fits neatly into a donor’s one-year project cycle.

When donors focus their giving only on specific projects, INGOs are left scrambling to deliver “outputs” while sidelining the essential but less visible work of capacity building. As a result, communities remain dependent on external help instead of developing the systems and leadership needed to stand on their own.

The Work Behind the Scenes That Donors Rarely See
Even among donors who value “locally led initiatives,” support is often limited to funding the project itself. What’s missing is support for the staff who make local leadership possible. Behind every successful, community-driven initiative is a team of skilled professionals at INGOs:

• Designing and writing curricula to train trainers.
• Working jointly with local partners to identify and adapt best practices.
• Developing communication tools and culturally appropriate procedures.
• Spending hours—sometimes days—in sensitive, careful dialogue with local staff to understand needs and gaps.
• Co-creating monitoring materials and evaluation tools that communities themselves can use.

This is not quick or easy work. It requires years of education, training, cross-cultural experience, and professional expertise. It also requires highly creative, curious, patient, and intelligent people—individuals who could easily earn more in the for-profit sector but choose this work out of dedication to justice and human dignity.

Funding Local Staff Salaries Is Funding Sustainability
When donors provide resources that allow local organizations to hire, train, and retain their own staff, they are directly investing in the self-sufficiency of communities. Local staff members are the ones who remain after international teams leave. They understand the culture, the language, and the history of their communities. Funding their salaries is not an “extra”—it is the single most reliable way to ensure that capacity and leadership stay rooted where they are needed most.

Why INGO Program Staff Salaries Also Matter
At the same time, international program staff play a vital role in helping local organizations build the skills, systems, and strategies to thrive. They are the facilitators, trainers, curriculum designers, researchers, evaluators, and relationship builders who make collaboration effective. Without stable funding for these roles, INGOs cannot provide the mentorship and technical support that helps local leaders translate vision into practice. Funding staff salaries at INGOs is not overhead—it is the very engine of capacity building.

The Myth of Overhead and the Cost of Disfavor
Unfortunately, a long time ago the definition of charitable activities got tangled up with charitable purpose, and anything a nonprofit does to operate is treated as extraneous activity. The donor has been conditioned to disfavor funding for all nonprofit employee salaries, but particularly for staff who manage the organization's ability to function. This restriction on using donations to pay for so-called “overhead” such as financial, accounting, fundraising, and administrative oversight staff cripples INGOs. It's also a tiny bit of an Alice in Wonderland dilemma.

​Every donor expects rigorous oversight, flawless reporting, and responsible management of funds, yet they often characterize those things as outside of the nonprofit mission purpose and even more often will decline to provide funding to pay for the professionals who provide it. Without adequate investment in accountants, compliance officers, operations managers, and administrators, INGOs struggle to meet basic expectations—let alone develop the kind of forward-thinking strategies needed to address global challenges like eradicating disease, dismantling poverty, ending illiteracy, and confronting injustice and violence.

Political Expediency and Government Apathy Increased the Burden on INGOs
The situation is worsened by the fact that governments and government aid agencies, particularly in Europe, North America, and other developed regions, have increasingly pulled back from funding aid to communities in need, both at home and in foreign lands. When governments fail to invest in these essentials, nonprofits are left carrying the weight. Case in point - the closure of the United States Agency for International Development (USAID) ended a great deal of direct funding, and all of the capacity building work being done by the USAID professionals employed by the agency. That work supported capacity in local programs, and energized NGOS and INGOs who were collaborating on multi-year cross-organizational initiatives. This makes the work of small, medium and large INGO staff more crucial than ever—they are left to bridge the gaps and equip local organizations, and they are providing the expertise and continuity that governments and agencies have neglected to fund.

Why Disfavor for Funding Salaries Matters More Than Donors Realize
And here is the uncomfortable truth: without funding for staff salaries, none of this happens. Donors love to fund a clinic. They are less enthusiastic about funding the staff who train local midwives, design safe medical protocols, or monitor the clinic’s effectiveness over time. Yet it is precisely these people who ensure that projects succeed and communities thrive long after the donor dollars are spent.

Every donor expects INGOs to provide monitoring, evaluation, oversight, and reporting—to shepherd donor dollars with more precision than many for-profit investment managers. But these tasks are almost never funded directly. Instead, nonprofits are forced to cobble together restricted grants, stretch thin resources, or divert time away from true capacity building just to keep up with compliance.

The Way Forward
If international humanitarian work is to fulfill its promise, we need a shift in donor perception.

Donors must begin to see that:

• Funding salaries is funding sustainability. Skilled staff are the backbone of locally led progress.
• Capacity building is a deliverable. It may not be as photogenic as a ribbon-cutting, but it produces enduring results.
• Monitoring and evaluation are not overhead. They are safeguards that ensure impact and accountability.

In short: the projects donors love to fund only succeed because of the sustained, behind-the-scenes labor that few are willing to support. If we want communities around the world to flourish with dignity and independence, then donors must invest not just in projects, but in the people and processes that make long-term change possible.