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The Number One Indicator of ICT4D Project Financial Sustainability

By Wayan Vota on November 7, 2019

ICT4D Project Sustainability

We often talk about project sustainability in information and communication for technology (ICT4D) programs, and as a result, we have multiple guides on how to ensure a project is sustainable, including:

Each of these guides makes the point that project sustainability is greater than just financial sustainability and includes the political, social, and technological aspects of ongoing project activity. However, if we focus in on financial sustainability when we talk about sustainability, which is the norm, there is often a singular question:

When is an ICT4D Project Financially Sustainable?

Let’s first be clear that we’re not talking about a project being profitable, as in charging users the full cost of the services provided, or even earning a return on investment above the cost of the service.

Few, if any services provided to poor, marginalized, and underserved people should require those very people to pay the full costs of the service. If they were wealthy enough to pay to begin with, they wouldn’t be poor, marginalized, and underserved. For example:

Now that we’ve clarified that neither the customers, clients, nor constituents will be fully funding the service themselves, who will? There is really only one long-term funder in the end.

Government Funding is Financial Sustainability

There are three main reasons why we should look to government funding for true, long-term ICT4D project financial sustainability:

  • Governments are the main provider of services to all their constituents, including poor, marginalized, and underserved people.
  • Government funding capacity is much, much greater than all donor assistance combined in all but a few countries
  • Government spending is usually constant in the core areas of health and education, while donor funding can be fickle and fleeting.

Finally, shouldn’t we all be advocating for government to provide services their constituents need, through their own domestic resource mobilization efforts? That’s not to say that its easy for a project to get government funding or an international organization to be paid by government to run the program.

First, the program needs to show enough cost-effective impact to persuade policy makers to include the project in its budgeting processes. Once a project is in the government budget, governments typically want to issue a tender through a Request for Proposal process to get the best value for money.

This process usually means that a local entity becomes the lead implmenter, which is how it should be anyway, though this will bring an upheaval in project activity with donor-supported programs, as new leadership and staff take control.

Still, transferring primary project funding from donors to governments is the number one indicator that your project has reached financial sustainability. Or as much financial sustainability that any program can expect that serves poor, marginalized, and underserved people.

Filed Under: Finance, Government
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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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