The Department for International Development is currently accepting applications from charities for its £40m Global Poverty Action Fund.

The Fund will support civil society organisations that seek to work towards the Millennium Development Goals on poverty reduction through tangible changes to the lives of poor people in developing countries.

Projects may focus on service delivery, empowerment and accountability, or work on conflict, security and justice.  Successful applicants must be able to demonstrate the impact they make on poverty, clarity or outputs and outcomes, as well as value for money.

There are two funding windows, the ‘innovation window’ and the ‘impact window’.  The impact window will comprise around 90 per cent of the Fund’s total value, ie grants worth £36m agreed annually, while the innovation window will offer the remaining 10 per cent, or £4m.

Innovation projects will be high-risk, with potentially greater rewards from ground-breaking work, while impact projects will be low-to-medium risk for proven work at a greater scale.

Innovation grants will be offered up to £250,000, with a maximum of two grants to any one organisation.  Only smaller UK-based civil society organisations, with an average income of less than £500,000 per year for the past three years, are eligible to apply.

Impact grants can range from £250,000 to £4m but the annual value of the grant cannot exceed 40 per cent of the applicant’s annual income. The maximum is three grants per organisation but the successful applicant must obtain matched funding for at least 25 per cent of the grant. These grants are aimed at ‘medium’ sized UK-based organisations, though there is no fixed upper or lower income limit.

DfID has specified the countries where projects can take place. Click here for more information.

The deadline for applications to the impact window is Monday 19 September. The next funding round for the innovation window is due to open in October 2011.