Costing a capacity development response is critical since it encourages stakeholders to realistically estimate the funding required for implementation. If the assessment reveals insufficient funds for the proposed capacity development interventions alternative solutions are needed.
These can include leveraging other projects and resources and-or re-prioritizing actions. Since priority setting and (investment) decision making processes are inherently political, such a process should be managed carefully and transparently with involvement of relevant stakeholders. The costs for shorter-term capacity development response can be determined through activity-based budgeting. This starts from actions often already budgeted and planned.
Projecting costs for a longer-term capacity development response is more complicated. If they cannot be accurately projected (which often involves using econometric modeling techniques), the costing exercise should probably be limited to costing actual, planned activities to avoid questioning the credibility or legitimacy of the costs. Elements of imputed costs may be estimated (and this is of course preferred) a priori and built into program or (new) project design.
Download the Capacity Assessment Guideline
To download the Capacity Assessment Guideline, please find the link below.