Don’t rush to look for money. First find out what your community actually needs

Millions for a new water main? A solar plant? Insulating a school? A sorting line? All of these may be good ideas. Or they may turn out to be an expensive mistake. Before going looking for money for a project, a community should first understand clearly which problem it actually wants to solve.

Every community has its own list of things that should have been done long ago. Renovate a school, replace a water main, modernise a boiler house, buy equipment for the municipal utility, install solar panels, set up separate waste collection. These needs have often already found their way into the development strategy, the MEP, the LWMP, the SECAP, and assorted programmes and action plans. And almost always the question that follows is an entirely natural one: where do we find the money for all of this?

A grant? A state programme? European funds? An international bank? An investor? In the current situation this is a particularly painful question for small communities, where their own resources are not enough even to address part of the problems that have piled up. But perhaps looking for money is not the first thing to start with at all. There is another, far more important question that comes before it: are we sure that this is the project the community needs right now?

First the tests. Then the treatment

There is a simple analogy we often use when working with communities. Someone comes to a doctor and says they feel unwell. A good doctor is unlikely to propose surgery straight away or prescribe the most expensive medication. First they will ask about the symptoms, look at the medical history, measure the basic indicators, order lab tests and, if needed, schedule additional examinations. Only then will they try to determine what the problem is and how to treat it.

It works much the same way with community development. Very often we start straight in on the “treatment”: let’s insulate the school, let’s replace the entire water main, let’s build a sorting line, let’s install a solar power plant. All of this may turn out to be absolutely the right decision. But before spending hundreds of thousands or millions of euros on it, it would be no bad thing to look at the “test results”.

A community has its own indicators too. How many people live here today, and how is the population changing? How much does it cost to maintain the schools, kindergartens and other municipal buildings? Which of them consume the most energy? How much water is fed into the network, and how much of it reaches the consumer? How much electricity do the pumps use? How much waste is generated, where does it end up, and how much does the whole system of collecting and transporting it cost? Which environmental and climate risks are intensifying? Which services is the community spending more and more money on every year without getting a better result?

These are, in effect, a community’s “test results”. Some of this information is already at its disposal, and some is collected while developing the municipal energy plan, the local waste management plan, the SECAP, the development strategy, budget planning or technical surveys. And often the problem is not even that the data is missing. The problem is that it all sits in separate places, and no one has assembled it into a coherent picture of the community.

What if we are treating the wrong thing?

Imagine a community that has spent several years looking for money for a full thermal retrofit of a large school. The building really is cold, heating costs are high, and so the solution seems obvious: insulate the façade, replace the windows, modernise the heating system. The project is expensive, but the community keeps looking for a programme that could fund it.

Now let us look at the situation more broadly. The community’s population is shrinking, and so is the number of children. There is another school nearby, and the building itself is far larger than the current number of pupils requires. On top of that, the heating system is barely controllable, there is no proper energy monitoring, and part of the losses could be cut by much cheaper measures. And then the question sounds rather different: should the first decision really be to sink millions into a full modernisation of this particular building?

The answer may well be “yes”. But by then it will be a well-founded one. Or it may make more sense to spend far less first on heating controls, automation and metering, while at the same time working out what the community’s network of public facilities should look like in five or ten years’ time. The problem has not gone anywhere, but after a proper analysis the way of solving it may change.

The same goes for water supply. The line “our pipes are old, we need to replace the whole water main” sounds convincing. But a more detailed analysis may show that the biggest losses occur only on particular stretches, that the pumps consume far too much electricity, that the system is barely automated at all and that proper metering is missing. Then, instead of one enormous multi-million-euro project, a sequence of several decisions may emerge: metering and automation first, then replacing the pumps, then the most failure-prone stretches, and only after that the major reconstruction where it genuinely is necessary.

The problem is the same one. But after a diagnosis the solution may turn out to be completely different.

The most expensive project is not necessarily the most important one

For small communities this matters especially. Investment policy should not begin with the question: “Where do we find five million euros?” Sometimes it is far more useful to ask first: “What can we realistically change for twenty, fifty or a hundred thousand?”

That might be automating a pumping station, installing individual heating substations, introducing energy monitoring, upgrading street lighting, a small solar plant for critical infrastructure, setting up separate-collection points, or an energy audit of the most problematic buildings. The next project may be bigger; the one after that will require a feasibility study; and a fourth will need several million in external financing. This is how a sound investment pipeline gradually takes shape: not everything at once, not everything at the highest price tag, and certainly not everything simply because a grant competition happened to open on a particular topic.

There is another important advantage to this. A small but well-prepared and well-delivered project gives a community experience that no strategy can provide. The team goes through the entire cycle from idea to delivery, sees its own mistakes, and learns to work with data, budgets, contractors and results. And it will prepare the next, more complex project in an entirely different way.

A grant should not decide what a community needs

Another common situation looks roughly like this. A call for proposals on energy efficiency opens — and the community urgently casts about for something it can submit on energy efficiency. A month later a water supply programme appears — and we start looking for a water project. Then waste, climate, renewable energy, social infrastructure. At some point the development strategy quietly turns into a hunt for grant announcements.

It should be the other way round. A community should know itself well enough to have its own priorities regardless of which call happens to open this month. These are our main problems. These are the projects we plan to solve them with. This is what we can do with our own resources. Here we need co-financing. Here it is worth looking for a grant. Here, perhaps, a loan. And this large infrastructure project we simply cannot deliver without external support.

A new funding programme then no longer forces the community to invent a project in a hurry. It simply checks: does this opportunity match one of the priorities we have already defined? That is a fundamentally different way of behaving.

Sometimes the good decision is to drop an old project

In many communities there are projects that live on for years, migrating from one programme to the next. No funding is found for them; five or seven years go by; the population, prices, technologies and needs all change — but the title of the project keeps wandering from one document into another.

This is why screening a community is needed not only in order to find new projects. It also makes it possible to review the old ones. Do we still need this project today? Does it fit the current situation? Has a cheaper or more effective solution appeared in the meantime?

If the answer after such an analysis turns out to be “no”, that does not mean the earlier work was wasted. On the contrary: not spending several million on a facility the community no longer needs, or one that can be replaced by a more effective solution, is sometimes one of the best investment decisions of all.

So what are the MEP, the LWMP, the SECAP and other strategic documents for?

Certainly not so that they can be put on a shelf once approved. A municipal energy plan should help to see where the community spends energy and money. A local waste management plan — to understand how the waste management system needs to change and what infrastructure that calls for. A SECAP — to identify environmental and climate risks. A development strategy — to set the broader trajectory along which the community is moving.

But the real value emerges when these documents stop existing in isolation from one another. When energy, environmental, demographic, financial and infrastructure data can be seen together and one very simple management question can be put: out of all of this, what does the community need to do first?

That is the moment when strategic planning begins to turn into development management, and the problems that have been identified begin to turn into future investment projects.

From a community’s “test results” to an investment portfolio

This is precisely the logic we gradually arrived at in our work on Project Navigator as well. First you need data about the community and its infrastructure. Then the analysis of that data and an understanding of the real problems. After that — setting priorities, shaping project ideas, appraising them and gradually building a portfolio of public investments.

In shorthand, this path can be written out very simply: data → analysis → problems → priorities → projects → portfolio → preparation → financing.

Project Navigator, for its part, is not there to decide on the community’s behalf what it should build. Its task is a different one — to help keep hold of the link between the real problem, the strategic documents, the solution being proposed and the specific investment project. That is why the current logic of Project Navigator is built around bringing order to project ideas, assembling a portfolio and raising the readiness of projects for the substantive conversation about financing that follows.

Because a good project does not begin with a handsome presentation, or even with the search for a grant programme. It begins with a far simpler question: which specific problem of the community do we want to solve, and why do we consider this particular solution the best one?

And only now let us talk about money

After all of this, the question “where do we find the financing?” does not go away. But it becomes far more concrete. We already know what is genuinely a priority for the community, we understand the scale of the problem, we can separate the small solutions from the large infrastructure projects, and we can establish where a grant is needed, where a loan is possible, where co-financing or a partnership makes sense, and where the community is able to start on its own.

And most importantly, we can work out which project is worth preparing first. That is a fundamentally different situation from spotting a grant announcement and then trying, in three weeks, to think up something to submit for it.

A good doctor does not open a consultation with a prescription. In the same way, work on community development should not begin with a list of projects. First you need to look at the community itself: its people, its budget, its infrastructure, energy, water, waste, environment, risks and opportunities. Then identify the problems and the priorities. And only after that decide which investments are actually needed.

It may be that after such an analysis the community confirms every one of its earlier ideas. Or it may see an entirely different picture. And that is fine, because the task is not to find money at any cost for a project that has already been thought up. The task is to understand which projects the community really needs, in what order they are worth delivering, and why it makes sense to put money into these ones in particular.

So the main question today is not even “where can the community find financing?”. There is another one that comes before it:

What exactly do we need the money for — and why are we sure that this is what the community needs?

When a community has a good answer to that question, the conversation about financing starts from a completely different position.