Most Southern Non-Governmental Organizations (SNGOs) depend on donor agencies for their survival. To qualify for donor funding, SNGOs typically have to meet a range of funding conditions. Critics argue that donor requirements may have undesirable consequences. Based on qualitative research involving 41 SNGOs in India and Ghana, this article explores (1) the (potentially) adverse effects of donor conditions on SNGOs and (2) the strategies that SNGOs employ to deal with these conditions. We demonstrate that certain donor conditions are difficult to reconcile with a view of development that emphasizes local ownership and a strong and autonomous civil society. We also show that SNGOs employ a multitude of strategies to deal with adverse donor conditions, highlighting that they are not powerless in their relations with donors. Yet, these strategies are not always available to all organizations and may have undesired consequences.

Points for practitioners Private development aid is increasingly characterized by pressure for accountability and a tightening of funding arrangements. Donors supporting SNGOs need to take into consideration that their funding conditions may have a range of undesirable consequences. Our study offers an overview of these consequences, enabling donor agencies to systematically review their conditions in the light of their potentially adverse effects. In addition, our study shows that – when confronted when unworkable donor conditions – SNGOs employ strategic behaviour. This is particularly problematic when SNGOs resort to manipulating the perception of donors resulting in the creation of a paper reality