International Funding

Summary: International funding can help to extend regeneration activities, facilitate experience exchange and support innovation. But it is important to think about the effort of fund raising.

There is a huge gap: institutional, administrative, but also conceptual (in understanding local needs of a neighbourhood), between any neighbourhood regeneration programme and foreign and international funders. This gap is supposed to be filled by national governments and agencies, but they are not always capable of bridging that gap properly.

After having found out how scarce the resources for regeneration are in many communities with deprived neighbourhoods, some of the programme planners start turning their view towards international financial sources. The international funders normally operate through locally established or commissioned institutions, and one must find those in one’s one country to check for whatever is available. As the international sources have many political objectives, while officially targeting benefits of the recipient country, their grant programmes often bind the recipient in different ways, sometimes failing to satisfy the real needs of the recipient.

Such sources can be roughly divided into international banks, multinational (and now often multi-funder) support programmes, and private charitable trusts and foundations.

• Banks, be that the World Bank Group (WB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB) (or their likes in Asia and the Americas) lend money or buy equity in development projects. Their grant programmes are diminishing and they are oriented exclusively to prepare lending (building capacity to borrow). In addition, their mandate is to deal almost exclusively with the national governments that hold membership in those institutions through their Ministries of Finance. International Finance Corporation (IFC) in the WB Group finances private sector, and under right circumstances may be of interest to some business stakeholders in the neighbourhoods.

• Support programmes sometimes tend to be sectoral, supporting a narrow aspect (environment protection/decrease of pollution; energy saving) or targeting capacity building in administrations, hence there are rather few of them that the holistic projects of neighbourhood regeneration can benefit from. 
   
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• While a private charitable trust or foundation may support a project in a developed country, it is difficult to expect anything but a small amount for very specific issue.
   
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• Many European support programmes are targeted at international collaboration projects, making a specific number of countries one of many conditions to be eligible for support. It is perhaps the best use for international funding, as exchange of emerging experience can create added value to your activities by helping to get different insights into your situation and inspiration from others.
   
• Innovation is another criterion that the international funders willingly support as long as it sound plausible to them, as they know that local governments are more conservative in this respect.

Generally, the possibilities and usefulness of obtaining international funding are very different from country to country, and it is difficult to give any universally useful advice. One thing that has been proven many times is that international fund raising takes a lot of time and effort, and it pays involving someone knowledgeable in the field already at an early stage and - inevitably - for helping to write applications. In many countries there are free-to-use services (as Eurocentres and National Contact Points) that may help you to find information, but their scope of assistance is very limited.
For deprived neighbourhoods in re-developing countries foreign and international funders can be occasional source for support. Seeking their support is not always worth the trouble as they target lending or subsidising within their own political goals and constraints while neighbourhood regeneration objectives may be incompatible with these goals.
There are many good and responsive people who handle grant and loan applications, but one must watch out. The main warning to be issued here is the grant trap warning, although it is relevant also to national funding. Hunting grants one may end up receiving funding for activity that is less than important to regeneration objectives. That is worse than getting no funding at all, as one is compelled to use time and manpower for something irrelevant to objectives. As foreign and international funders often have more constraints and discrete targets than national, this is often the case. Then, paradoxically, one is actually better off having less funding. Hence before starting to commit oneself to international fund raising it is crucial to make sure that the funding available may be used relevantly

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