Reimagining Microgrants: Bridging the Local Civic Infrastructure in Nepal

With funding spaces shrinking, and a large number of civil society organizations (CSOs) struggling to survive, microgrants or innovative grants are becoming critical to sustain the civic space, especially at the local level. They support organizations to fund staffing, maintain operations, and keep their footprint alive in the communities in which they work. But they can support more than just survival. When done right – with trust, patience, and accompaniment – microgrants can support small and emerging CSOs to scale operations and experiment with new ideas. They can also serve as a launchpad to build organizational structure, compliance and governance.

Accountability Lab (AL) under the DDI (Digital Democracy Initiative) South Asia program has rolled out microgrants to nearly 150 CSOs across South Asia, allowing them to work on ideas that address digital governance and democracy. In Nepal alone, these grants have supported initiatives such as a multilingual AI-assisted election information helpline, a digital archive of all election-related commitments and electoral information in Karnali province, as well as efforts to build the online presence of local entrepreneurs in Dhangadhi Sub-Metropolitan City. These are relatively “easy to implement” ideas but with the potential for meaningful long-term community impact. Unlike traditional funding mechanisms, microgranting seems to provide space for creative and unique solutions that are cost-effective and innovative. We find civic-tech and CSOs working on digital solutions benefit most from these grants, as they can produce data-driven solutions at relatively low-cost and outputs within a short timeframe. 

Traditional funders also seem open  to the idea of microgrants. For instance, the European Union (EU) has mandated Financial Support to Third Parties (FSTP) across all their grants, allowing locally based CSOs – which would otherwise have little chance of directly accessing EU funds – to receive support through sub-granting arrangements managed by first-line implementers. It has created pathways for smaller CSOs to gain the experience and credibility to become direct grantees in the future. They do, after all, deeply understand local realities and advocate a contextually relevant way. Accountability Lab Nepal (ALN) has also managed 29 grants under this FSTP mechanism so far, working with CSOs from across all provinces – even those working in the most remote parts of the country, on issues of inclusive education and youth participation.

As an organization that has both received and implemented these grants, as well as rolled them out, Accountability Lab Nepal positions microgrants not merely as a funding mechanism, but as a catalyst to transform how resources and decision-making power are shared. We view it as a way to enable local action and to shift power to communities, allowing them to identify and address their own concerns and priorities. 

On the surface, micro grants come across as a win for everyone, but how they are structured can be the difference between a grantee thriving or sinking under the weight of bureaucracy and incongruent expectations. The challenges raised in this blog are largely based on our observations and interactions as grant managers.

Microgrants are not just ‘smaller’ grants. How they are implemented, who implements them and what documentation is required to implement them must all be considered and built into the initial grant agreement and expectations of the grantee. Microgrants not tailored to smaller and emerging CSOs become demanding to administer, with budgets, compliance rules, documentation, and reporting deadlines. They fund activities but rarely the conditions that make those activities possible. Even small projects need a capable team and solid organizational systems, yet a microgrant usually covers only one or two staff members, who must handle delivery, visibility, impact documentation, stakeholder relationships, quality assurance, and donor compliance at once. Administrative costs, staff development, and reserves are largely absent, but strengthening them allows CSOs to deliver structured, meaningful results. 

Donors also often stress sustainability, even for short-term projects. In practice, microgrant projects are so tightly scheduled that they end before they can mature. CSOs jump from activity to activity with little time to plan advocacy strategies, engage communities and stakeholders, or build lasting consensus. Whether the goal is behavior change, policy influence, or knowledge building, the timeline is usually too short to show results. Project periods often don’t match government policy cycles, so by the time a policy opening appears, the project has ended and stakeholders have moved on. Behavior change and knowledge building are slow and depend on context, and a handful of activities rarely creates lasting change.

As funding shrinks, larger organizations will increasingly compete for microgrants too. So the question is not whether microgrants should exist, but how they can do more than fund project delivery and also strengthen institutions. To truly support CSOs, microgrants must help them build the internal capacity to sustain advocacy beyond a single project. That means more flexible funding that reflects the different realities, capacities, and constraints of each organization.

It also calls for a more empathetic and flexible approach to grant management, one that understands CSOs not as mere vehicles for delivering outputs, but as institutions handling complex social and political environments while trying to create long-term change.

Over the years, we have worked with 28 subgrants, many of them working in communities  under difficult circumstances and with limited resources. While the process can often feel overwhelming for both grant managers and grantees. Here’s some of what we’ve learned from that journey.

Prioritize small ideas that culminate in big changes
Safal Nepal, an organization based in Dhangadhi, a sub-metropolitan city, came up with an approach of accessibility audits and advocacy for disability-friendly digital infrastructures within the city. As a disability-led organization, it was focused more on small campaigns prioritizing people with disabilities, so despite being registered for a few years, Safal had not implemented any funded projects. Members of the organization were part of the Youth Sounding Board, a consultative platform established by the European Union Delegation to Nepal to allow young Nepalese people to directly influence, guide, and monitor EU policies, programs, and development cooperation, and they were looking for opportunities to make change. 

Accountability Lab Nepal worked to capacitate the organization on budgeting their project idea, compliance requirements, and reporting styles. 

Safal Nepal conducted the audit on Dhangadhi and the city announced a tender that included their recommendations. The website is now being re-designed to incorporate them.

Supporting what could have been seen as a “small” and easily overlooked idea, has gotten the organization on its feet and in a position where it has secured other funding since. 

Compliance support to counter overwhelm
Passion drives the work of bottom up organizations. Many are deeply connected to their communities and committed to creating change, and it is important that complex systems and compliance processes do not weigh down their efforts.

Reporting templates, procurement procedures, financial documentation, and monitoring requirements can quickly become overwhelming. As facilitators, our role is not just to monitor grants but also to simplify processes and communicate expectations in ways that are accessible and supportive.

An organization of persons with disabilities we worked with that was very new to grant management, lacked technical understanding of several processes, but what they lacked in experience, they made up for in dedication and willingness to learn. Step-by-step guidance, regular follow-ups, and patient communication helped us navigate challenges together. 

They later went on to secure a larger grant from another donor, which we consider one of the biggest successes of our engagement with them. What could have become a frustrating process instead became a collaborative learning experience.

Adapting expectations to contextual norms & conditions
Field realities rarely go exactly as planned. Community dynamics shift, local stakeholders respond unpredictably, political contexts change, and unforeseen challenges emerge constantly. Smaller organizations are often trying to balance multiple responsibilities at once, usually with very small teams. At times, they may approach tasks differently from established plans or operate according to their context rather than strict timelines. 

While delays, incomplete documents, or communication gaps can be difficult, meaningful and sustainable work takes time. Rigid expectations do not always produce quality outcomes, and listening and adapting become more valuable than insisting on a fixed process.

Tailored responses for particular needs
This may go without saying, but each organization is different. Some could be excellent at mobilizing communities yet struggle with documentation. Others may have strong administrative systems but limited advocacy skills. Still others require intensive mentoring, over only occasional guidance.

Understanding these differences is important – but responding to them is even more important.

Capacity strengthening cannot be approached with a one-size-fits-all mindset. Tailored support, flexibility, and understanding where organizations currently stand are necessary if we genuinely want them to grow sustainably.

Subgranting, at its best, should not only distribute resources. It should strengthen confidence, systems, leadership, and long-term organizational capacity.

Sustainability at the core
Proximal, bottom up organizations remain embedded in the field, closely connected to local communities and sub-national governments. This proximity allows their work to continue and evolve even beyond the life of a project.

However, sustainability is not only about structure – it is also about mindset.

As funders and facilitators, there can be a tendency to seek visibility, ownership, and attribution for the work being done. But within the communities where these organizations operate, it is the local actors who are the real champions for change, who need to be given the space to take the lead and enjoy the recognition they earn, even if it means we remain in the background. The more ownership we cede, the stronger and more sustainable the impact, because sustainability is not just about whether a project continues, but about whether the people closest to the issue are enabled to carry it forward.