Foreign funding to NGOs in Nicaragua has undermined their accountability to grassroots organizations and limited their ability to catalyze social change. Due to short-term funding cycles tied to donor priorities, NGOs are more accountable to foreign donors than the communities they are meant to serve. This has contributed to a façade of civil society dominated by urban NGO elites rather than empowered grassroots organizations. As a result, NGOs have had minimal policy impact and have demobilized, rather than empowered, the people. Long-term funding structures that strengthen accountability to local constituencies may help NGOs better support grassroots organizations and social movements.