Abstract
This paper describes a new pilot fund to support community initiatives for urban poor groups in Uganda’s two largest cities, Kampala and Jinja. Supported by the UK Government’s Department for International Development, it is called the C3 fund since it is city-based, set up to support community-initiated proposals and includes a focus on capacity building. The approach is unusual in that external aid is supporting a local fund to which community groups can apply and where decisions about the projects that receive funds are being taken locally. The paper first describes the decentralization programme in Uganda and the changes that have encouraged NGOs and foreign donors to work with local authorities. It then describes the C3 fund’s design, how it has been set up, and its operational mechanisms and financial and managerial procedures.