We review government funding of small NGOs as a mechanism to promote international development, taking the UK Civil Society Challenge Fund (CSCF) as a case study. Within a broad institutional economics perspective we contrast two possible justifications for such support - evidence of positive impact and political expedience. Qualitative research suggests that empirical evidence of the positive impact of NGO actions funded through CSCF was relatively weak. Political expedience helps to explain why this was tolerated. The failure to generate better impact evidence can also be attributed to lack of consensus about how to do so more rigorously, combined with a willingness to give small NGOs the benefit of the doubt in the absence of credible negative evidence of impact.
- Challenge funds; civil society; development finance; impact evaluation; NGOs; warm glow