Sophia's Peace Work

Friday, November 29, 2013

German Funding Lessons ...

"Our funding mode is deficit financing" 

This statement from T, our contact with the German Foreign Federal Office, was the source of some confusion in the RiverWatch Program I administered to collect water samples and do community education in both  Kurdistan, northern Iraq and along the Tigris River during the Flotilla. has the following definition:

deficit financing

(especially of a government) expenditures in excess of public revenues, made possible typically by borrowing.

The U.S. Government survives on deficit financing and this is my understanding of the term.  I.e. it means spending money you don't have today by borrowing (but in fact you're gonna have to pay that money back one day and with interest).

But my contact with the German FFO explains it this way: "Deficit-financing mode means that the FFO finances the gap between the funds that you have and the funds needed for implementing the project. If other funds come up, the gap becomes smaller and thus the deficit to be financed by FFO decreases."

In other words, if our organization doesn't have all the money needed to do the work, the German FFO will provide the difference ... but if our organization suddenly comes up with more dough, the German FFO pays less.

Yesterday I was able to sit down and finally have a face to face meeting with T, who has been a tireless supporter of our work and has held my hand through all the detailed discussions on the grant.  We submitted our financial report on the project back in the spring, and T told us that the financial folks at the German FFO are still scratching their heads over it but things will wrap up in the next week or so.  I'm hopeful that things will resolve themselves without much difficulty.  The project was a great success and generated a lot of interesting data that we're still working up.  The financial part is what made it all possible but has certainly been a big headache.

German Foreign Federal Office in Berlin


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