CITY-COMMUNITY CHALLENGE FUND (C3) INTERIM EXTERNAL EVALUATION REPORT Commissioned by Infrastructure and Urban Development Division (IUDD) Department for International Development (DFID) United Kingdom Produced by

The City-Community Challenge Fund (C3F) programme is a Department for International Development (DFID) initiative being piloted over two years in Zambia and Uganda. The goal of the pilot is to assist organisations of the urban poor and their representative local authorities to undertake localised poverty eradication initiatives, through the provision of resources for small-scale innovative activities of broad community benefit. DFID has recommended an extension of the pilot programme of a further year and the first aim of this interim evaluation report is to address this recommendation. A second aim is to assess the viability of Challenge Funds, and more specifically the C3F methodology, as a mechanism for development agencies to reach and empower the poor, within the context of direct budget support, sector-wide approaches and rights-based governance. Third, the evaluation seeks to assess C3F against the efficiency and process indicators established for the external evaluation, and those outcome indicators related to social and political assets under the modified livelihoods framework. Policy lessons from the C3F pilot programme relate to how local funds can: ƒ address urban poverty through effective deployment of small resources ƒ promote rights-based approaches to urban development through fostering a sense of ownership and entitlement on the part of citizens ƒ enhance urban governance, increase transparency and foster upward and downward accountability on the part of government ƒ reach disadvantaged citizens and local governments and lead to innovative, transferable and adaptable management processes and procedures ƒ foster public-private-society-community partnerships ƒ generate lessons on how to construct development partnerships in difficult and complex social, political and institutional conditions ƒ constitute strategic and flexible development support at the sub-national level particularly in contexts where national policy does not reach the urban poor or national performance does not warrant direct budget support ƒ dovetail with and complement donor initiatives aimed at decentralisation and institutional building at local government level by reaching those parts of local governance that such programmes cannot reach. It is recommended that the C3F pilot programme be extended and should be taken up by the Urban Management Programme, with further donor funding being sought. The existing C3 pilots need to be extended not least because the methodology requires an extended time period for development, embedding, dissemination and spread and two and even three or four years is simply insufficient. The pilots are for the most part well poised for consolidation and rolling out within the national …