There is a hugely important poverty reduction process in urban areas that is rarely noticed by international agencies and hardly ever documented – the successes of particular urban poor groups in what they do and in how they negotiate change in their relationship with local government agencies. Of course, this change in the relations between urban poor groups and city and municipal governments means change in these governments too. A proportion of these successes have proved to be catalysts for change that get larger impacts. Many urban poor groups have undertaken initiatives as ways to show local government their capabilities. In the immediate term, these initiatives have considerable importance for the achievement of several of the MDG targets – especially on halving the proportion of people without safe water and basic sanitation (by 2015) and significant improvements in the lives of at least 100 million “slum” dwellers (by 2020). They also have importance for reducing under-five and maternal mortality rates, both of which are often particularly high among low-income urban dwellers. In the longer term, they have importance in driving the changes needed in local governance – increasing the capacity and accountability of local governments (as local governments learn to work with and not against the urban poor in their jurisdiction).

Engaging with the Urban Poor and their Organizations for Poverty Reduction and Urban Governance is primarily about the initiatives of organizations formed by the urban poor themselves and the potential these have as partners for UNDP offices. This includes the work of grassroots organizations formed around savings groups, mostly managed by women and in which most savers are women. This paper has a particular interest in how the scale and scope of what they do and what they can influence has been increased by the city-wide and national federations that they have formed, and the local NGOs that support them. There are now national federations of these savings groups (usually called federations of “slum” or shack dwellers or homeless people) in seventeen nations. In many more nations, there are savings groups that are forming their own networks and federations. These networks and federations negotiate support from a wide range of local professionals as they engage with the state to address their needs.

The paper also describes the work of other organizations and federations formed by urban poor groups around their livelihoods – for instance by waste pickers and processors, home-workers, domestic workers and self-employed women and local organizations that support them. Many of these organizations and federations have developed links with similar organizations and federations in other nations and have formed international networks – through which they learn from each other and where possible help each other.

In the sections that follow the introduction, the paper considers the scale and nature of urban poverty, it then describes the many poverty reduction initiatives undertaken by grassroots organizations and their growing scale and importance – and their capacity to work with local government. Then it describes some of the tools and methods used to support partnerships between these organizations and local government and the local NGOs or other organizations that have supported this. This includes working with local governments on enumerating and mapping informal settlements and in identifying and acting on disaster risks. Then it discusses the financial mechanisms that can support these urban poor organizations with illustrations of how international funders have done so, over the last ten years, including the experience of the Urban Poor Fund International and the Asian Coalition for Community Action. It ends with a discussion of the mechanisms by which these are or can be supported and how these would prove valuable and effective partners for UNDP in-country offices, if they were interested in addressing urban poverty.