Balancing Priorities: The Influence of Donor Agendas on the Sustainability of NGO

Development Programs in Nepal

Name- Gahatraj Reetik

Student ID- 11223164

Abstract

In Nepal, Non-Governmental Organizations (NGOs) are at the centre of development. Since they

depend on international donors, a paradox arises between upward accountability towards funders

and downward accountability to communities. This literature overview critically looks at this

relationship, supporting the argument that it is a structural paradox in that the very means

through which donors seek to achieve efficiency and control, including short-term funding

cycles, thematic priorities, and strict reporting structures, end up being systematic failures in the

long-term sustainability of development programs. This review takes a thematic synthesis

approach, analyzing the body of literature around the architecture of donor influence, its effects

on the design of programs, and its implications with regard to financial, institutional, and social

sustainability. The results point to the fact that the resulting donor pressure in many cases is

likely to create the so-called accountability myopia, and NGOs find themselves in the position of

subcontractors with a focus on compliance rather than mission. It also examines the NGO agency

literature, including approaches of resistance and adaptation, such as strategic compliance and

organizational hybridity. The review ends with a conclusion about the major gaps in the current

body of scholarship, especially the absence of longitudinal research studies and beneficiary

voices. It suggests that future studies incorporate long-term and participatory research measures
to learn more and inform the means to more equitable, sustainable development partnerships in

Nepal.

I. Introduction

The context in Nepal is different because it is not focused on marginal actors but places Non-

Governmental Organizations (NGOs) at the core of the national developmental plan, and thus the

government formally accepts and supports their activities in the country’s development

attainment (National Planning Commission [NPC], 2024). This is because they act as essential

intermediaries and direct global assistance to accommodate local community needs (Karkee &

Comfort, 2016; Lewis & Kanji, 2009). Yet, this ‘mediation’ role puts them in the middle of a

core dilemma: having to be responsive upwards to their international funding agencies and

responsible downwards to the people who receive their services (Ebrahim, 2005; Najam, 1996).

This literature review suggests that such tension is not a mere act of balancing, but a structural

paradox. A critical review of the literature shows that the very mechanisms through which

donors seek to achieve effectiveness themselves systematically compromise the possibilities of

long-term program sustainability: i.e., local ownership, institutional autonomy, and adaptive

learning requirements (Edwards & Hulme, 1996; Ebrahim, 2005; Fowler, 1997; Cornwall, 2008).

The reigning preoccupation with achieving measurable and immediate outcomes has often meant

that long-lasting, far-reaching change becomes a second priority (Ebrahim, 2005; Edwards &

Hulme, 1996; Fowler, 1997).

To support this argument, this review is arranged in thematic order. It initially looks at how

powerful donor interests configure priorities in Nepal programs at the expense of local demands

(Karkee & Comfort, 2016; Dhungana & Pal, 2025). The second part compares how donor

management tools, especially the logical framework (log-frame), affect the implementation
process and organizational learning (Ebrahim, 2005; Fowler, 1997). The third part is a synthesis

of recorded effects of such pressures on financial, institutional, and social sustainability

(Edwards & Hulme, 1996; Humphries, Gomez, & Hartwig, 2010). Lastly, the literature on NGO

agency and pathways through which it is possible to survive in such an environment is reviewed

(Lewis & Kanji, 2009; KC, 2025). This review thereby ends with the conclusion that the existing

literature has important gaps in terms of longitudinal effects and community attitudes, thus

opening the possibility of further research in this vital field.

II. Rationale and Methodology of the Review

The justification for such a literature review is that the development sector in Nepal continues to

face numerous problems. Nevertheless, questions of long-term sustainability of NGO-led

initiatives still serve as the sore spot of international assistance activities among legislators and

practitioners despite decades of international assistance. It is not only an academic undertaking

but a practical need to understand donor agendas that affect program outcomes so as to improve

aid effectiveness. This review will set out to synthesize what is available in the literature to give

a clear picture of the debates regarding the subject, the findings so far that have been arrived at,

and the most likely gaps that exist that could be used in future studies.

A systematic methodological approach was taken in order to do this review in an orderly fashion.

Literature search was made based on scholarly databases such as JSTOR, Google Scholar,

Scopus, and ProQuest, as well as significant policy archives of institutions such as the World

Bank, OECD. Combination terms incorporated, among others: "Nepal NGO sustainability,"

donor influence, aid effectiveness, accountability myopia, foreign aid Nepal, and NGO

accountability.
The selection criteria for inclusion were:

● Relevance: The sources that directly answer the question of how the relationship between

donors and NGOs affects program sustainability.

● Focus: Priority given to Nepal, with literature on Kashmir presented as a comparison,

along with literature referencing the Bangladeshi and Sub-Saharan African continents

also included to provide a background on the wider tendencies within the Global South.

● Type of sources: Peer-reviewed journal articles, scholarly books, and policy reports of

importance (e.g., Paris Declaration, Grand Bargain).

● Period: Emphasis more on recent works that have been published (the past 30 years) to

maintain initial significance to the modern aid field.

The thematic synthesis is the analytical framework of this review. Although an excellent practice

is to group sources by chronology or each by each, this review divides the literature into several

important thematic blocks. The approach proposed here enables a critical analysis that compares,

contrasts, and cites patterns and contradictions between various studies and puts a consistent

argument together about the entire situation in the field, as clarified in the introduction.

III. Topics

A. The Architecture of Donor Dominance: Setting Priorities from a Distance

The interaction between international donors and Nepali NGOs is not a random one; it is framed

within a global aid system that is predisposed in terms of the priorities of the donors (Mawdsley,

2012; Edwards & Hulme, 1996; Banks, Hulme, & Edwards, 2015). As the literature proves, such

power disparity influences the very fabric of development mandates, including which issues are

considered worthy of intervention and how individual solutions are to be theorized well before
any project is undertaken on the ground (Mawdsley, 2012; Eyben, 2013). It is possible to explain

this dynamism by the historical movement of aid, the strong impact of thematic funding flows,

and the omnipresent results agenda of prioritizing quantification over qualitative change

(Wallace, 1997; Ebrahim, 2005; Eyben, 2013).

1. The Neoliberal Shift and the Rise of the NGO Sector

NGOs are an increasingly modern phenomenon, acquiring a central position in service delivery,

based on the political and economic changes experienced globally in the 1980s (Edwards &

Hulme, 1996; Lewis & Kanji, 2009; DeMars, 2005). As researchers such as Edwards and Hulme

(1996) have claimed, the emergence of neoliberal ideology that advocated the use of market

solutions and the retrenchment of the state generated a vacuum in socially based service

provision. The general distrust of individual donors in state bureaucracies, which many perceived

as ineffective or corrupt, led to the funneling of development aid via the proliferating NGO

industry (Lewis & Kanji, 2009; Karkee & Comfort, 2016; DeMars, 2005). NGOs became

presented as more malleable, creative, and grounded closer to the grassroots and, as such, an

enticing alternative channel of aid delivery (Lewis & Kanji, 2009; Banks et al., 2015). This

tendency was boosted in Nepal, where democracy was restored in 1990, at a time when civil

society organizations began to multiply in mere decades (Karkee & Comfort, 2016). Though

giving power to a new breed of actors in development, Edwards and Hulme (1996) prophetically

cautioned that such increased closeness between these groups and official aid would translate to

a relationship that was going to be too close for comfort, thus institutionalizing a financial

dependency that would ultimately result in who is accountable to whom tensions that are

characteristic of the sector to date (Edwards and Hulme, 1996; Banks et al., 2015). In this way,
the NGO sector in Nepal was formed into an environment where its survival was financially

dependent on adhering to the intentions of the outside donors (Karkee & Comfort, 2016; Lewis

& Kanji, 2009; Banks et al., 2015).

2. Thematic Favoritism and the Geopolitics of Aid

Donor agendas cannot be assumed to be mere acts of goodwill but are a way of promoting

strategic, economic, and political interests of the donor states or institutions (Mawdsley, 2012;

Banks et al., 2015; Gulrajani, 2011). As Emma Mawdsley (2012) contends in her study on the

shifting context of aid, financing tends to be allocated to thematic agendas that coincide with the

foreign policy interests of countries situated in the global North, including counter-terrorism,

adjustment to climate change, or liberal democracy promotion. This forms funding windows that

encourage NGOs to conceptualize their work in these terms, which is commonly known as

chasing grants (Lewis, 2014; Fruttero and Gauri, 2005; Banks et al., 2015). An example is that a

local Nepal NGO focusing on non-modern agriculture may have to relabel what they do as a

project to improve climate resilience to obtain funding, whereas a local community may not have

prioritized climate resilience as the issue of concern (Karkee & Comfort, 2016; Mawdsley,

2012). This thematic earmarking implies that local priorities may be crowded out in the interests

of globally fashionable development patterns. Pressure to conform is one clear expression of the

principal-agent dynamic, as the donor (the principal) establishes the objectives and the NGO (the

agent) has to adjust its mission to achieve the objectives to gain resources (Jensen & Meckling,

1976; Fruttero & Gauri, 2005). This leads to what is called the development landscape in Nepal,

where developments are usually advocated in Washington, London, or Geneva, but not in
Kathmandu or the local villages where the projects are actually meant to benefit (Mawdsley,

2012; Karkee & Comfort, 2016; Banks et al., 2015).

3. The "Results Agenda" and the Tyranny of the Log-Frame

An even stronger guarantee of donor control is the proliferation of Results-Based Management

(RBM) and its associated instrument, the Logical Framework Approach (LFA) or log-frame

(Wallace, 1997; Lewis, 2014; Eyben, 2013). The log-frame has a background in military

planning and was later adapted by development agencies such as USAID as a means of

introducing managerial discipline and measurable responsibility into aid efforts. Though at an

early stage and then becoming prominent, some scholars such as Wallace (1997) critique that the

log-frame puts a linear, simplistic paradigm onto the unpredictable, uncontrollable, and non-

linear societal change process (Wallace, 1997; Eyben, 2013). It compels NGOs to measure the

success of a project in a strict hierarchy of pre-defined inputs, outputs, outcomes, and impacts

that are easily quantifiable and reported. The subsequent result of all this quantification is what

Ebrahim (2005) refers to as accountability myopia (Ebrahim, 2005; Eyben, 2013). Organizations

are so intent on achieving the quantifiable outcomes in their log-frames (the training people,

completing the number of workshops) that they forget the ultimate, more elusive, less

measurable outcomes of things like community trust-building, true empowerment of people, or

real institutional change. This measurable tyranny results in a distorted reward system in which

NGOs are paid well to show good reports rather than necessarily good sustainable impact

(Ebrahim, 2005; Wallace, 1997; Fowler, 1997; Eyben, 2013). The instrument of accountability

inadvertently corrupts the whole aspect of the long-run mission to the short run and donor-

satisfying indicators.
B. Translating Agendas into Action: The Impact on Program Design and Implementation

The hegemony of donor agendas, as defined in the foregoing section, is not an abstraction, but it

has some concrete implications on the design and implementation aspects of development

programs in Nepal. The literature provides a clear trend in that requirements of donors are often

the ones that inform the practices in NGOs to the extent of making them skew towards

subcontracting instead of the vision-driven and locally-based organization models (Edwards &

Hulme, 1996; Fruttero & Gauri, 2005; Lewis, 2014; Banks et al., 2015).

1. From Mission-Driven to Project-Driven: The Subcontractor Role

One of the main themes in the critical literature is that NGOs have been turned into a kind of

subcontractor of donor-initiated projects without having priority over the reason their work is

being conducted (Edwards & Hulme, 1996; Banks et al., 2015). Edwards and Hulme (1996) were

not the first to observe this trend, and they claimed that the correlate of NGOs’ increasing

dependence on official aid has been the trend to contractual relations and an increasingly

contractual approach, where the efficient delivery of services has been the priority rather than a

belief in social change. This is where the role of a subcontractor is a direct result of the principal-

agent relationship. Authors who have applied Agency Theory specifically to the non-profit world

(Fruttero and Gauri, 2005) describe this tactic as the donors (principals) coming up with

elaborate contracts and reporting conditions in an attempt to counter the risks of the various

forms of goal divergence and information asymmetry. These mechanisms build towards making

sure that the NGO (agent) will carry out the objectives of the donor and thus making it a body
that will be an implementation arm of a pre-determined agenda (Fruttero & Gauri, 2005). In

Nepal, it takes the form of NGOs pursuing grants by carefully crafting their proposals according

to the limited, tricky thematic and methodological requirements enunciated in donor calls

(Karkee & Comfort, 2016; Lewis, 2014). Rather than a program that was developed based on a

serious community needs assessment, it is reverse-engineered to fit the funding possibilities.

Consequently, the portfolio of an NGO can end up as a disjointed set of projects and activities

that are defined and dictated by donors rather than being a continuous plan that starts with a

long-term vision of the NGO itself (Lewis, 2014). This gives rise to a severe inner dilemma, as

NGOs must strike a balance between their initial mandate (inward accountability) and the

agreement requirements with their funders (upward accountability), a conflict which emerges as

a perennial feature of research into NGO governance (KC, 2025).

2. The Imposition of Managerialist Tools and 'Token' Participation

The donors’ influence is not just about project selection but goes down to the how of

implementation. A good example is the rampant demand to adopt the Logical Framework

Approach (LFA). According to Alan Fowler (1997), one of the foremost authorities on the

subject of managing NGOs, those tools are not neutral. They come with some assumptions built

into them: linearity, predictability, and control, often the opposite of the messiness of community

development (Fowler, 1997). This pre-determined nature of the indicators that are the focus of

the log-frame may inhibit adaptive management and learning within organisations, as the staff

may be more focused on the numbers that they are supposed to meet in their reports than be

responsive to emergent issues and opportunities in the field (Ebrahim, 2005; Fowler, 1997).

Moreover, this managerialist solution tends to transform the concept of community participation
with minimal change into a checklist process. Although almost all of the donor-funded projects

are said to be participatory, the literature indicates that in many cases, this can be very shallow.

Andrea Cornwall (2008), who is a well-known theorist on participation, states that a lot of the

term participation amounts to nothing more than co-optation, which means local people are

consulted or compelled to provide labor to a project whose overall aims and structure have

already been determined by people elsewhere (Cornwall, 2008; Lewis and Kanji, 2009). This

amounts to a form of tokenism due to the fact that committees can be set up within the

community as a means of meeting a donor requirement, with no effective decision-making

authority vested in these committees. Indeed, when one examines development projects in

Bangladesh (David Lewis and Nazneen Kanji, 2009), one discovers that even where

participatory structures have been established, they have not always been established to enable

communities to exercise power, but rather to justify the projects to external funders (Lewis &

Kanji, 2009). This habit directly carries a threat to any chance of real community ownership, one

of the most important aspects of long-term sustainability.

3. Professionalization and the Widening Gap with the Grassroots

The last influence on implementation that is donor-driven is the predilection towards

professionalization. Donors commonly like to finance organizations with professional teams

providing skills in reporting, using the English language, sophisticated financial outputs, as well

as tracking and evaluation (M&E) (Lewis, 2014; Mercer, 2002; Banks et al., 2015). Although

skills are needed to handle large grants, too much of this can lead to undesirable consequences.

According to Claire Mercer (2002), when reviewing the NGO literature in Africa, this gives rise

to a dual-tier system (Mercer, 2002). Only a few, better-staffed and professionalized NGOs
operating in capital cities develop the ability to access international resources, leaving other

smaller and community-based organizations (CBOs), which have strong local ties but poorer

administration capabilities, out in the cold. The result is that this process may cause the NGO to

have a disconnection with its constituency. Employees can be so culturally and linguistically

familiar with the language and cultures of the international development sector that they may be

more familiar with it than with the communities they are expected to help (Lewis, 2014; Mercer,

2002). It also strengthens the upwards accountability towards donors as opposed to downwards

accountability towards beneficiaries. The legitimacy of the NGO now is based on its capacity to

measure against the international norms rather than its integration and responsiveness to the

needs of the local community, generating a new wave of problems in the long-term significance

and sustainability of the work.

C. The Sustainability Paradox in Practice: The Consequences for Program Outcomes

These demands of donor agendas and imposition of their management tools are not just process

topics but they have significant long-term impacts on program sustainability that are often

negative. The literature captures a sustainable paradox where systems that are meant to create

accountability and efficiency at the same time destroys the pillars that are needed to create

sustainable impacts. This effect is evidently noteworthy along four essential spheres of

sustainability which include financial, institutional, and social and systemic ones.

1. Financial Unsustainability: The Cycle of Dependency and the "Funding Cliff"

paradigm of short-term, project-funded money results in an endless money game of dependence

(Lewis, 2014; Fowler, 1997; Humphries, Gomez, & Hartwig, 2010; Banks et al., 2015). NGOs in

Nepal are always involved in an unstable scramble to win the next grant and thus have to work

with a very short timeline and cannot think strategically in the long term. The literature abounds

with the conversation of the so-called funding cliff—when the funding of a 3 to 5-year project

cycle is over, as well as the funding of staff salaries and operational expenses, and any of the

program activities at all (Lewis, 2014). This model is a discouragement of financial

independence. The usage of grant funds to create an endowment or invest in any form of

revenue-generating initiatives in the form of income may be restricted by the donor's rules and

may not be used to create a future revenue base. According to a detailed investigation conducted

by Humphries, Gomez, and Hartwig (2010) on the sustainability of NGO capacity-building

programs in Southern Africa, this dependency proved to be the biggest risk to the further

existence of local organizations (Humphries et al., 2010). After the donor left, numerous

organizations that were very successful implementers were compelled to make drastic reductions

in operations, either by reducing operations significantly or shutting down altogether. Short-term

performance is thus rewarded, long-term survival is extraordinarily hard, so some academics say

that the system creates a kind of permanent state of temporary (Fowler, 1997). This economic

vulnerability will keep NGOs hostage to the interests of donors to sustain their organization.

2. Institutional Unsustainability: Building Capacity for Compliance, Not Resilience

Although donors often stipulate building capacity as one of the elements in the project, the

literature is critical of what capacity is really being constructed. In many cases, institutional
development is interchanged with the enhancement of the capacity of an NGO to fulfill the donor

regulatory demands. Capacity-building activities are rather limited and aimed at enhancing

financial reporting, monitoring, and evaluation (M&E), information gathering, and writing grant

proposals (Ebrahim, 2005; Humphries et al., 2010). These skills are valuable, but they are in the

best interest of upholding accountability. This preoccupation also tends to lead to a sacrifice of

building core institutional resilience. Other critical domains like strategic planning, community-

based governance, local fundraising, and policy advocacy are constantly overlooked due to the

lack of meeting with the immediate project-reporting interests of the donor. This is bolstered by

the fact that the principal-agent relationship supports the point in that donors are mostly

interested in the smooth performance of the task delegated to them and not necessarily in the

overall wellness of their local affiliate over a long period (Fruttero & Gauri, 2005). The outcome

is that Nepali NGOs have the administrative capacity to be more capable of running foreign

grants, but are institutionally vulnerable and lacking strategic autonomy as well as strong

governance to sustain themselves without donors.

3. Social Unsustainability: The Erosion of Community Ownership

And perhaps the most treacherous effect of donor-driven development is upon social

sustainability: that is, the extent to which a community considers a project its own, and will

continue its activities once external support is removed. Real ownership is cultivated by extreme

involvement, mutual decision-making, and the feeling of co-creation. But the top-down,

outcomes-driven model that dominates in the aid sector is actively counter-productive to this. As

has been said earlier, signifying representation may amount to little more than tokenism

(Cornwall, 2008). Communities also will not feel responsible for the long-term success of a
project when communities are approached as recipients or data as opposed to active agents in

their development in M&E reporting. A study of NGOs in Bangladesh by Mohammad Mohabbat

Khan (2003), which has many similarities to the situation in Nepal, indicated that most projects

that had formed village committees and other sections of the project were, in fact, paper

committees and sections because they had no actual power (Khan, 2003). These superficial

structures tend to break when the funding of the project has come to an end and the staff of the

NGO have left, and the project stops working. The signs of progress trumpeted in donor final

reports are not always sustainable when there is no true ownership.

4. Systemic Unsustainability: Fragmenting the Development Landscape

Lastly, the project-based approach, characteristic of the existence of uncoordinated donors in

large numbers, is a cause of system unsustainability since it complicates the landscape of

development. These donor-funded projects, in effect, present parallel structures instead of

strengthening the existing national and local government systems, and these structures tend to

become independent. This was very well seen in the aftermath of the 2015 Nepal earthquake.

This was also the case, as Dhungana and Pal (2025) explain, where a manufactured boom in

international aid succeeded by a variety of various agencies usually bypassed or flooded early

coordination abilities within governments (Dhungana & Pal, 2025). Some have called this kind

of patriotic disaster assistance a disaster to the capacity and legitimacy of the state to lead its

recovery. This act is in direct opposition to the recommendations of the Paris Declaration on Aid

Effectiveness (OECD, 2005), which states that donors should orient their assistance to country

priorities, and national systems should be used. Competition associated with grant-seeking ranks

NGOs in competition with one another, thereby discouraging NGOs from cooperating and
sharing good practices. The end outcome is disjointed point-level interventions as opposed to a

unified, system-level development plan, and achieving such a sustainable and at-scale change is

almost impossible.

D. Navigating the Paradox: NGO Agency, Adaptation, and Resistance

Although the above sections have described structural pressures exercised mutually by the

donors, it would be erroneous to conceive of NGOs as victims. The literature also gives quite

convincing evidence of their agency—the ability of organizations to actively navigate, negotiate,

and even resist donor power. Particularly, Nepali NGOs, no less than their colleagues in the

Global South, have developed a variety of complex tactics to carve out their niche of missions in

an otherwise shrinking funding landscape. Such tactics can be: tactical adaptation, seeking

organizational innovation, and utilizing new global standards to their benefit.

1. Strategic Compliance and the Art of Reinterpretation

A version of strategic compliance is one of the most frequently reported strategies in the

literature. This means that the external compliance with donor demands and rules is met, but

little or considerable adaptation or redefinition of these demands is also made to respond more

closely to the local conditions and the NGO's mission. Smart NGO managers will pay attention

to playing the game by mastering donor-buzzword use in their proposals and reports, as noted by

David Lewis (2014): sustainability, empowerment, participation (Lewis, 2014; KC, 2025). This

act of conformity wins funding, but on the ground, the organization can apply the program more

flexibly and locally responsive than is implied in the official project documents. The basis of this

strategy is information asymmetry between the principal and the agent. Since the NGO (agent) is
better aware of the local context than a distant donor (principal), the former might use this kind

of advantage of knowledge. This is not, of course, a deceptive provision but a practical reaction

to an imperfect system. It represents a form of negotiating between the demands of funders,

which may be strict, top-down, and those of communities, which may be complicated, bottom-

up. But, researchers warn that this is a dangerous balancing between and among. It is very hard

work, and it can easily result in a stressful dualism of NGO personnel having to meet two very

different sets of expectations (KC, 2025).

2. Organizational Hybridity and the Quest for Autonomy

A more radical approach is to reorganize the organization itself towards becoming less reliant on

traditional sources of donations. The literature notes that there has been an increasing degree of

the emergence of so-called hybrid organizations that combine non-profit social missions and for-

profit enterprise forms. The Bangladesh Rural Advancement Committee (BRAC) has been cited

as the most well-known of these and has been applied as a yardstick in development research.

BRAC transformed into an enormous social enterprise, which, as explained by Lewis (2014),

significantly funds its activities by providing various businesses such as dairy and textile

production (Lewis, 2014; Ebrahim, 2016). Such financial independence brings it a power of

freedom and strategic independence that cannot be envisioned in most fully donor-dependent

organizations. It can afford to have its long-term priorities, to cross-subsidise less profitable but

socially important programmes, and invest in innovation without first having to check with a

donor. Although the size of BRAC is unparalleled, its approach offers an inspirational design. In

Nepal, there is minimal literature on this topic, which can present an important research gap in

the future, although there is some anecdotal evidence that social enterprise and the mobilization
of local resources are becoming a popular topic of conversation. This plan is a direct effort to

change the power structure of the relationship using the aid by lessening the monetary superiority

of foreign donors. Critics, however, point out that a market-based solution cannot be used to

solve every social problem, and that seeking profit even in the hope of social good can threaten

the cause of mission drift (Ebrahim, 2016).

3. Leveraging the Localization Agenda and Building Coalitions

Lastly, NGOs do not only stand alone; they also utilize the changing global norms and create

coalitions to gain more strength. The localization of aid, which has been institutionalized in the

form of commitments (e.g., the Grand Bargain, 2016) and national policies (USAID) is a major

political opportunity (The Grand Bargain, 2016 ; Fowler, 1997). These efforts, which preach to

channel more funds directly to organizations based in the south and seek southern leadership,

offer a potent new vocabulary and legitimacy to NGOs seeking greater flexibility of funding and

opportunity to have greater control in program design. NGOs in Nepal are also becoming prone

to networks and consortia to be able to partake in policy dialogue with donors and the

government. According to Alan Fowler (1997), these networks may act as an important

counterforce to the dominance of donors, whereby smaller groups can combine their expertise,

combine their resources, share their information, and speak with one voice (Fowler, 1997). They

can negotiate more amicable terms, confront unsatisfactory donor policies, and advance

development agendas that are more in line with national and local priorities by putting up a

united front. This mass action will be a departure, at least from any longer competing over

crumbs of funding, to a rediscovered solidarity of redesigning the very terms of the development

game itself. This is a direct contribution to cooling down the atomizing power of the
conventional aid model and provides the route to greater coordination and systemically

sustainable development.

IV. Conclusion

This literature survey has been conducted on the intricate relationship between donor agendas on

one hand and the sustainability of NGO development programs in Nepal on the other hand

systematically. The scholarship synthesis indicates an underlying paradox in the organizational

structure; in order to ensure that aid is properly utilized, donors create a system of accountability

and control that, in many cases, ends up having many unfriendly aspects to sustainability in the

long term. As illustrated, this is captured by the evidence that donor priorities instituted via

thematic funding, short-term project cycles, and strict managerial instruments such as logical

framework significantly dictate the shape of development (Edwards & Hulme, 1996; Wallace,

1997; Ebrahim, 2005; Fowler, 1997; Cornwall, 2008; Banks et al., 2015). This is a process that

ensures NGOs go through a pattern of upward accountability whereby following donor directives

equates to success instead of deeply rooted, community-oriented, and sustainable change. The

consequence ends up with an accountability myopia as it appears in the financial dependency,

feebleness of institutional autonomy, and loss of local ownership, which are, in actual sense, the

cornerstones of actual sustainability (Ebrahim, 2005; Edwards & Hulme, 1996; Fowler, 1997;

Cornwall, 2008). But it can also be seen in the literature that NGOs are not without power. They

have considerable agency, and they apply various tactics, including tactical redefinition of

project objectives and organizational innovation and collective advocacy (Lewis, 2014; KC,

2025; Fowler, 1997; Banks et al., 2015).

gaps that can provide a rich research area in the future.

Methodological Shortcomings: The Absence of Longitudinal Analysis

By far the greatest weakness of the existing collection of research is the extreme cross-sectional

feature of this research. The greater part of investigations is done within a project lifecycle or

right after the project finale. As a result, longitudinal studies are lacking in terms of researching

what occurs to the programs, institutions, and communities five, ten, or even fifteen years after

donor funding is withdrawn. We understand a great deal about implementation as a process, but

a great deal less about its long-term, historical legacy.

Thematic Lapses: The Unheard Speeches and Circumstances

Secondly, there are large gaps in terms of themes. Whereas the literature has much to say about

the opinion of the NGO managers and the donor staff, the opinions of the community members

and the so-called beneficiaries are sorely missing. People urgently need research that puts focus

on their lived experiences and their definitions of success and sustainability. In addition, the

scholarship on Nepal has a tendency to view the NGO sector as monolithic. It calls for more

refined and comparative studies that question how these dynamics vary in different contexts,

such as between large, urban, professionalised INGOs and small, rural, grassroots-based

organisations; between different sectors of development (e.g., health versus governance); and

across regions with differing levels of state capacity.

The Accountability Theory-Practice Divide: Lastly, there is a big disjuncture between

complex and multi-dimensional accountability frameworks arrived at in scholarly work (e.g.,

Ebrahim, 2005; Najam, 1996) and the instruments applied in practice. Much M&E tracking using

field-based systems is inextricably wedded to the linear, output-obsessed log-frame logic. To fill
such a dichotomy, research that aims to design and implement practical, alternative M&E

systems capable of providing holistic accountability (upward, downward, and inward) is also a

must.

Therefore, participatory, longitudinal case studies tracking projects and communities over a very

long period should be considered in future studies. This would be invaluable information, on a

kind of bottom-up approach, to aid sustainability. In addition, it would be prudent to compare the

works done on a smaller scale and at grassroots levels to the perspective of the biggest

organizations within the aid sector to decentralize the narratives since they are usually propped

towards the largest actors. In filling these gaps, there will be a possibility that future research

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