Development Funds

Proposed Main Users / Purpose of the Tool:

	Development organisations, government agencies, private sector, local and regional governments, private donors and sponsors.
	A fund is a mechanism through which resources are channelled, according to pre-determined selection criteria, to demand driven sub-projects, proposed by public, private or voluntary organisations. Social Funds are typically created as new agencies, often outside the realm of a ministry. Even in cases where they are set up within a ministry, they are still granted a relatively high degree of independence with regard to normal bureaucratic procedures. Social Funds can be viewed along a spectrum with varying degrees of being demand-driven, autonomy, execution responsibility, community participation, financing mechanism (loans or grants) and varying sectors and activities. A Social Fund is not a substitute for fundamental financial or institutional reforms in the economy. Typical purposes of social funds are: to mitigate recession and adjustment-related social costs or to address emergencies such as natural disasters and wars; to improve living conditions of the poor through speedy provision of basic economic and social services; to strengthen decentralised delivery mechanisms by supporting local (governmental and non-governmental) organisations that are responsive to local needs and to build institutional capacity at the local levels