9 June 2015
Guidelines for core support sourced from grants to PCOs
1. Definition
Forum Syd defines core support as general budget support for a partner organisation to help it
finance its overall strategic plan and running costs. This means that since one organisation, as
financier, has judged their partner organisation’s entire operations to be relevant, the funds
provided need not be earmarked in the same way as project support. Relevant operations are
those that fall within the CSO strategy adopted by the government. Core support can be
regarded as a financing model and a strategic measure taken within a partnership to help the
recipient be flexible and effective in its work and maintain a focus on results rather than
choice of activities. In this context, a partner organisation is primarily a LEO (i.e. a local
partner of a programme contract organisation (PCO)).
Core support for the PCO’s partner organisation can be used for capacity and organisational
development and administration or for operations (e.g. the implementation of a strategic
plan). It may be taken as accepted that LEOs are experts in their own context and have
analysed and know what is needed to create the desired results effectively. Core support
strengthens an LEO’s ownership of the work it does and meets the needs it identifies, and is
thus expected to contribute to aid effectiveness.
Core support provides greater freedom for the recipient but places heavier demands for
transparency on both parties. This necessitates a more in-depth assessment of the partner’s
systems (e.g. for internal control). The partner is also expected to have a higher degree of
competence in reporting results. If a PCO observes weaknesses in the capacity of its partner in
a certain area, it must offer the organisation a competence development support plan.
Consequently, this type of funding also places higher demands on the PCO’s own systems
and procedures for the assessment/choice/monitoring of its partners, and its capacity for
holding a dialogue with them on issues of a strategic and more general nature.
2. Application of core support
PCOs are encouraged to examine whether it is possible and appropriate to provide core
support to a partner, or whether it is best to transition towards core support over a longer
period.
A partnership may pass gradually from project/programme funding to core support, or may
start as such. Naturally, core support may also arise as a possibility when an organisation
receives much of its financing in this form (from other donors). Over and above this, core
support may be regarded as part of a financing phase-out.
The option of using core support as a financing model and as a strategic undertaking is to be
discussed and evaluated in consultation with the partner in question and with Forum Syd.
9 June 2015
3. Criteria for granting core support
Forum Syd assesses whether core support is to be provided as part of its PCO grant using the
following criteria:
3.1. The rights perspective and Forum Syd’s priority issues
 Forum Syd judges the PCO’s competence as regards its own rights-based work to be
satisfactory, and deems it to have sufficient capacity to judge its partners’ capacity in this
respect. The PCO is able to demonstrate that the work it has done with grants from Forum
Syd qualifies as rights based as a whole and in its details, and that the organisation and its
partners endeavour to take a rights-based approach as a matter of principle.
 Forum Syd judges the PCO’s competence as regards the perspectives of gender and of the
environment/sustainable use of natural resources to be satisfactory, and deems it to have
sufficient capacity to judge its partners’ capacity in this respect.
 The work that the PCO has done with grants from Forum Syd shows good results in
relation to Forum Syd’s goal areas.
3.2. Partnership/SvEO added value
 Forum Syd judges the partnership between the PCO and LEO to be good enough to
warrant core support.
 Forum Syd judges the value added by the SvEO to be significantly high.
3.3. Internal control systems
 All fundamental requirements of Forum Syd’s agreements with the PCO are fulfilled,
including the assessment of the organisation’s capacity in relation to PCO criteria.
 The PCO has sufficient capacity for risk analysis and management for all its operations
funded through Forum Syd.
 The PCO has carried out its own risk analysis on the introduction of core support in
relation to its capacity and procedures.
 The PCO and the LEO in question each have an administrative manual, supplemented
when necessary with a separate instruction governing the management of core support.
 The PCO and the LEO in question each have a financial manual, supplemented when
necessary with a separate instruction governing the management of core support.
 The PCO and the LEO in question each have documentation of their organisational
structure and board.
 An up-to-date (at most 4 years old) and relevant system-based or compliance-based audit
of the PCO has been carried out.1
 A completed Mango Health Check of the LEO is available and accessible by Forum Syd.
 The PCO has issued to Forum Syd its own criteria and evaluation of core support and
Forum Syd has judged the criteria and evaluation to be of high quality.
 If weaknesses in the capacity of the LEO a certain area, the PCO must offer it a
competence development support plan.
1
The audit can have been financed by Forum Syd or another donor, and is to include the organisation’s financial systems
and procedures. If the organisation has received suggestions for improvements, these suggestions and any ensuing measures
are to be followed up. The assessment will then be based on the outcome of this audit and the follow-up. In exceptional cases,
core support may be an option if no such audit has been conducted, provided that Forum Syd is sufficiently familiar with the
organisation and that the audit reports from the past two years of operation are clean. A (simplified) compliance audit shall
then be conducted and incorporated into agreements during the first year of operations with core support.
9 juni 2015
3.4. Financial status
 The PCO is familiar with the LEO’s financial status as regards funding sources and
donors and how much of the LEO’s income comprises support from the PCO and Forum
Syd.
 The PCO has examined the LEO’s latest two annual reports.
 The PCO has assured itself that the LEO has drawn up an operational budget for at least
one year and that annual budgets exist for the remainder of the agreement period.
 The PCO is judged sufficiently able to examine and check the LEO’s total accounts.
3.5. Strategic planning, monitoring and reporting
 The PCO has previously shown good capacity in the planning, monitoring and reporting
of grants.
 The PCO is judged to have the capacity to produce its own guidelines/formats for writing
core support reports.
 The LEO has a (preferably multi-year) strategic plan for its operations.
 The LEO’s strategic plan is judged sufficient for use in result reporting.
 The LEO has an operational plan that is linked to its budget.
 The PCO can guarantee that the LEO has the necessary systems for monitoring its
operational plan and reporting results.
4. Risk analysis and risk management
Like all forms of funding, core support brings risks. The purpose of a risk analysis and risk
management is to check and limit the consequences of the risks taken by the PCO and to
enable the PCO to determine the level of risk it is prepared to accept. The assessment criteria
for core support given in this document are to be seen as part of the risk management process.
General conceivable risks associated with core support include:
 Less control of the eventuality that Forum Syd’s grant is used for operations/activities
that are not normally financed by grants from Forum Syd/the PCO (e.g. purely needscentred activities, such as personal support and stipends) without Forum Syd’s/the
PCO’s knowledge.
 Difficulties compiling financial reports.
 Less control of corruption.
 Difficulties identifying results directly linked to the grant.