A Step-by-Step Guide on How to Develop a Livelihood Project Proposal


Most of the NGOs in developing countries are working to enhance the livelihoods of the poor community in their region. They support the vulnerable population who do not have access to income generation opportunities.

Their projects are mainly associated with income-generating activities, skill development, microenterprise development, and improving food security to attain better lives and livelihood for people. These NGO projects promote sustainable and dignified living conditions for the poorest community in the target locations.

Donor funding has always been an essential source of financing for non-profit, non-governmental organizations. International Philanthropies are taking on a more prominent role in international development issues and are the new ‘actors’ that provide development assistance that create new opportunities for small, grassroots NGOs.

Grassroots NGOs understand local issues. Therefore, prominent donors invest in their livelihood projects to support a broader change movement and contribute significantly towards development.

But, it is very challenging for smaller and newer organizations to develop engaging proposals and raise funds for their projects.

Therefore, this guide provides basic strategies to help NGOs develop livelihood projects and program proposals covering various issues. The strategies given will assist you better with how to create a proposal for a Livelihood project.

What is a project?

A project is a provisional action or series of activities to achieve a set objective. Projects are confined by limited resources and funds and have a set period, thus, they have a clear timeline.

What is a project proposal?

A project proposal is a document that seeks to address key questions surrounding a project. It concisely describes your project expectations and how to accomplish them, the importance of objectives, and how you intend to achieve them. In more general terms, it makes a case for what you plan to do. It also includes a financial requirement to achieve its objectives. The proposal length can be 8-10 Pages depending on your project area.

What are Livelihood Programs and Projects?

The livelihood projects aim to promote the well-being of the underprivileged and poor population by providing employment and business opportunities, health care, and other forms of support. In addition, these programs aim to strengthen community capacity to manage poverty conditions.

For this purpose, NGOs should formulate rules and plans or provide skill training to assist people in becoming more productive. They may also collaborate with public and commercial sectors to reach a larger audience and attract sponsors and donors. Overall, these initiatives allow people to work together on efforts to build their households and make them active agents of change.

Use the theory of change as a thinking tool

When developing projects, it is necessary to consider the cause and effect of expected project outcomes profoundly and that this process has included as many members of the project’s design team as possible. While working on the theory of change, this is the best time to do it. Please select based on your needs and utilize it to discuss the reason for supporting the initiative with the primary project stakeholders, including local implementing partners and the beneficiaries.

Identifying and Defining the Problem

The essential part of any project proposal is identifying the problem we have observed in the proposed area relevant to our project. These are typical livelihood issues that we perceive in our project region.

However, simply seeing or taking notes on these issues will not solve them. You must conduct an in-depth analysis to determine why these gaps exist and what is causing them; only then can you find a solution. We are all aware that every problem has a root cause. While designing and developing a proposed project, you must consider that every problem you encounter has a reason! Therefore, you must determine what is causing the challenges in the planned project region.

An excellent project begins with a well-defined problem. Therefore, it is critical to identify the issue your NGO wants to address, whether in your country, city, neighborhood, or Village. Then, explain why you want to change something like that and what you want to change. One approach to determine if your problem statement is clear is to explain it in one line.

Data to support the identified problem

You require not just a solid problem definition, but also credible facts and data to verify that the problem exists, which means conducting a study on the topic you’ve noticed. Data, survey findings, and information from previous reports published by international organizations, non-governmental organizations (NGOs), or government institutions are helpful as sources of data and evidence.

Data and evidence-based studies provide credibility to your idea. This information is crucial because it will help others understand why the identified problem is a worthy issue to address.

Suppose you do not provide the correct facts and data in support of the problem presented in your proposal. In that case, your proposal might get rejected immediately as no donor will trust you without the authentic data and information provided by you.

Possible Solutions to tackle a problem

When developing your proposal, it’s essential to ensure a definitive solution to address every problem. Therefore, define how your NGO will solve the problem and improve the people’s livelihood.

Your solution to these problems should be realistic, measurable, and time-bound. Also, remember that the solution must be adaptable by the community or beneficiaries. Therefore, the success depends on how the project community takes your proposed solutions.

Learn from others: What other projects have been implemented that address the same issue?

There are chances that other NGOs and organizations have undertaken similar projects to address the issue you’ve observed. Therefore, analyze those projects before deciding on your project. This step will be beneficial since you will learn from prior results of other projects. In addition, you may also acquire new ideas that will help you improve the design of your project.

You may also acquire new ideas that will help you improve the design of your project.

What is the project about?

When you identify the problems, it’s time to evaluate what you want to do and how. Remember that you do not have to tackle every aspect of your highlighted problem. The livelihood project targets the community level to increase the income of the poor community. The livelihood project objectives include:

  • Increasing vulnerability of social risk by increasing the rate of poverty,
  • Diversification of production through various sources like animal husbandry, dairy farming, crop farming, fisheries and others, according the population’s family’s ability to pay for and accept innovative technologies, providing technical support for these income-producing activities for income increase at the local level.

Focus on a simple project outcome

People’s lives are diverse and multidimensional, and a potentially huge list of activities could contribute to asset creation and sustaining a living. Unfortunately, many project designs seek to cover too many of these, resulting in activities outside the project’s scope.

When developing a livelihood project, keep in mind a simple project outcome achievable within the project’s lifecycle, and make sure that all project actions contribute fully to reaching that outcome.

The project outcome defines the project’s goal. It should specify what will change and who will benefit from it. The outcome statement should be readable and explain what the project is all about.

The following is a list of the most common outcomes, and it is unlikely that a livelihood project will fall outside these. It may be necessary for a project to address more than one outcome. (E.g., improved natural resource management may also  contribute to better disaster risk reduction; achieving livelihood protection by improved access to employment), but there should be a primary focus on a single one:

  • Basic livelihoods protection
  • Development of or increased access to productive
  • Increasing productivity
  • Diversification or increases in household incomes (including employment)
  • Access to and use of livelihoods-related knowledge
  • Access to livelihood support services, finance, and markets
  • Natural resource management
  • Disaster risk reduction
  • Rights-based empowerment, access to opportunities.

Understanding who your project will benefit from and what value it will create for them is essential.

Are you assisting a specific set of individuals, a community, or a geographical area?

Most importantly, how well does your project meet their needs?

Moreover, this is a method of ensuring community engagement, interest, and participation. It is critical to calculating how long it will take to achieve the set goals. A project has a set timeline, and we must try our best to keep to it. However, livelihood initiatives may require longer-term interventions with development outcomes that are difficult to attain in a three-year project. In these instances, timing is critical. Therefore, during planning and implementation, an overall Gantt chart is recommended.

Community development is typically considered a necessary process before taking on livelihood activities and is frequently presented as a step-by-step process, with community mobilization being one of the early steps.

This process will take time to build a community where it can engage in productive project activities. Therefore, discussions with implementation partners are essential as initiatives delivered with already mobilized and sensitized communities help to save time.

Timing is also an issue with projects that intend to develop natural resource assets, such as agriculture, forestry, or grasslands. Typically, activities may not begin immediately and may not start until well after the initial project year.

Agricultural activities often situate on an annual cycle. Therefore, building markets and realizing advantages are crucial after establishing the project. Obtaining considerable benefits from grassland or forestry interventions over a three-year project may be difficult.

Who is your target audience and why are they important?

So, why communication?

You want others to know about your initiative! Communicating and sharing what you are doing is critical not just to keep everyone participating in the project informed, but also to increase visibility among various stakeholders about the work that you are doing.

At the same time, you want people to understand why your initiative is essential and what changes it is causing, and even encourage them to get engaged.

To communicate knowledge, you must first define and target your audience. Donors, local or national governments, civil society/community, and other youth organizations are examples of different types of audiences. These are significant audiences and must be informed about your initiative.

What are your communication goals?

The communication objectives of your project will represent what you want your target audience to understand, take away, or act.

Do you want to convince, advocate, or influence someone’s behavior?

Do you wish to update your audience on your efforts and results?

Determine the critical themes you will send to each type of audience to achieve your goals. Then, consider the information they require to achieve your communication goals.

Which communication channels will you use?

Once you’ve identified your target audience and objectives, you must determine the channels (or how) you’ll best express the crucial points and reach your audience. Social media, websites, print, and press are all possibilities. Keep in mind that channels will vary depending on the audience type. To stand out, try to be unique while demonstrating the importance of your idea.

Similarly, decide on the timing and frequency of your messaging (the when). Consider your limits, including your budget or access to specific technologies. Finally, since communication is time-consuming, keep in mind that a dedicated team member may need to take on these responsibilities full-time.

How will you monitor your project?

How will you know if you’ve completed the project’s objectives?

Once you break down your objectives into crucial activities, you must determine how you will track the outcomes of these activities and the overall impact of your project.

This process is known as monitoring and should begin at the start of the project. It is critical because it will offer evidence demonstrating that the project did well.

For this purpose, you must identify a technique for measuring results, often known as indicators. You need to identify indicators for the various activities (which you selected during the Project Implementation and Coordination phase) to measure how successfully the project is meeting its objectives.

Remember that the monitoring strategy is created before you begin implementing your project. Finally, after you have your monitoring plan in place and start implementing your project, don’t forget to monitor frequently, i.e., every 3-4 months is a good starting point.


This guide covers all the crucial aspects of livelihood project design to help NGOs, especially the small, grassroots, and new. The information and strategies in this guide will help you prepare a good project proposal according to the donor’s requirements. So if you are thinking of designing your proposal, this guide is for you!

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