Great post and conversation over at Blood and Milk for those thinking about starting their own international development NGO: Can you share some of your experiences in which inexperienced nonprofits did more harm than good?
Philanthropic bloggers have been abuzz with Kjerstin Erickson’s decision to post the details a few weeks back about a funding crisis that could put her NGO, FORGE, out of business. After Sean Stannard-Stockton described this as an experiment in “radical transparency” on his Tactical Philanthropy blog, many folks have jumped to Kjerstin’s aid, with the agreement that all involved post their perspectives as FORGE, well, forges ahead.
This is a case study unfolding in real time. While Kjerstin’s move provides an unusual learning opportunity for those interested in nonprofit effectiveness and sustainability, it also offers a chance to reflect on the many “facets” of nonprofit transparency.
(1) During my time as funder, several organizations came to us in crisis, laid open their books and spoke plainly about the decisions and mistakes that got them there. In this respect, I don’t find the honesty with which Kjerstin is presenting her dilemma all that unusual.
Crisis can inspire transparency. It’s hard to get the injection of cash or technical assistance you need by trying to mask the fact that you need it.
Most of these organizations already had a relationship with us, and trusted us enough to discuss their problems openly. They were not going to tell just anybody about their state of affairs.
What is unusual is that FORGE is fairly well-established, yet Kjerstin is using online social networking tools to let everybody know about her plight. She has attracted great resources, partly due to the “buzz” created by her initial posts and her courageousness in being so open. But I suspect if it became standard practice for nonprofit leaders to post honest and detailed information about looming financial crises, the novelty would wear off - and subsequent leaders would have a hard time getting the same sort of attention. Which brings up the question - what kind of transparency are we after?
(2) The discussion in the blogosphere centers on the benefits of transparency for donors and, as a learning opportunity, other nonprofit leaders and allies. But nonprofits derive their legitimacy from the constituents and the communities they serve. Shouldn’t transparency also serve them? To what level?
And it’s a two-way street - if I were a prospective donor, I’m interested in what the refugees served by FORGE think (if they know the program is in jeopardy of closing and have some understanding of the decisions that led there yet still choose to participate in the program, that’s important to me). Caveat: I discount the information somewhat if FORGE is the source of the refugees’ voices, since those voices are being filtered through an interested party.
(3) Filters can degrade transparency. We’ve heard about FORGE’s history and decisions almost exclusively from Kjerstin, so we’re getting mainly one perspective (not sure that meets the definition of “radical transparency“). Does better transparency include accessibility to, and information directly from, all parts of the organization?
During my time in NC, the Golden LEAF foundation, funded from the proceeds of the tobacco settlement, held their grantmaking meetings in public (they may still). As a prospective grantee, you could attend and watch as your proposal was discussed and decided.
This example highlights different levels of transparency regarding board decisions: we can get a summary from the chief executive; have access to a copy of the minutes; or be able to listen to the board meeting itself. I probably learn the most if I listen, but can I really do this for each organization that interests me?
Filters might degrade transparency, but they can also make information useful.
(4) Do we want different levels of transparency for different phases of an organization’s evolution? A venture capitalist investing in an early-stage company, for example, may expect a seat on the board - not only for control, but to have the fullest possible information about internal operations. After the company goes public, however, the standards of transparency for new outside investors don’t presume such access.
This also brings up the question of size, both of potential investment and the organization itself. Are large-scale investors entitled to more information than small donors (they might reasonably expect a more direct relationship, but are they entitled to a different level of information?)?
How should our standards serve both the International Rescue Committee, which in 2006 served 15 million refugees in 25 countries with a budget close to $250 million, and FORGE, which serves refugees with a budget approaching $400,000 - and is there a way to design those standards so that the refugee programs for the two can easily be compared? I’d love to see an organizational prospectus that meets the informational needs of all interested parties: the government/IRS, institutional investors (i.e., foundations and high-wealth donors), everyday contributors, and constituents.
(5) I think it’s important to recognize that FORGE is practicing transparency from a relatively privileged position. As Kretzmann and McKnight - who pioneered the asset-based approach to community building - would point out, Kjerstin has a strong base of intellectual and social capital and access to a range of additional resources (evidenced by the amount of support she’s already attracted).
As an organization accrues an increasing amount of “assets” - not just financial, but intellectual, social, and reputational - the instinct is to become increasingly guarded, since more seems at risk. The counter-intuitive nature of Kjerstin’s move is one reason why it has elicited so much attention. I have experienced nonprofit leaders in marginalized communities, for example, who are brutally honest and open about most details of their organizations (mistakes included), but their transparency doesn’t get them much. Often such “assets” are used by those with potentially helpful resources as a proxy for effectiveness (or at least potential effectiveness), and those that seem lacking are too easily dismissed.
If funders are honest, we’ll admit that getting too full a story is sometimes a turn-off; we think it shows poor lack of judgment. Presentation is still important, even when being open.
(6) It’s easy to be glib about “weeding out” the sector, to say that some nonprofits need to close. FORGE’s dilemma demonstrates that the reality is complicated. Refugees would go unserved. (When I hear conference presenters say donors should throw their support behind a well-run homeless shelter that serves 20 people (and has no aspirations to serve more), and stay away from another that serves 200 but where the management is more suspect - that it should be allowed to fail - I always wonder what the 200 people suddenly out on the street would say.) This would occur due to what appears to be a well-intended error in judgment vs. a pattern of bad management.
Yes, some nonprofits should cease to exist, but I don’t trust that at this point, through whatever weeding out processes are occurring - given the fragmented and imperfect nature of the nonprofit capital market, the difficulty of assessing and articulating impact, and our personal biases and predilections - we’ll end up with the organizations providing the most effective services, or that those who might benefit most would get served. We ought to be careful what we wish for - and wish FORGE well.
During our seminar with Duncan Green and Lant Pritchett last Friday, we revisited the question of NGOs providing services that governments are expected to provide – thereby undermining the development of effective states. This is terrain I initially touched upon in reaction to the Foreign Policy article decrying NGOs as “the new colonialists.”
Lant used a metaphor of NGOs as scaffolding – a temporary structure to relieve an immediate burden of a developing community, as well as a resource to build the wall necessary to hold the burden over the long term. Problem is, often the wall never gets built, and after a while the scaffolding is dismantled and it’s on to the next project.
I cited examples in my initial post to highlight that this is not always the case. However, I do agree that NGOs can do a much better job of developing strategies – from the very beginning of a project – to ensure that their intention of transitioning a program or services to local government or authority comes to pass. There is a need to document and share learning about such efforts, and deepen our understanding about what makes them successes or failures.
Martha Chen of the Hauser Center, who coordinates WIEGO, also offered the example of Bangladesh, where NGOs – BRAC in particular – have essentially created and run an educational system in light of the government’s failure to provide this basic service. While the intent was to provide education until the government assumed responsibility, there seems to be no end in sight, even after close to 20 years. She raised the possibility of a hybrid, where the NGO takes over permanent authority and responsibility for what we generally consider a state-provided social service. Could this work? What would be the implications?
In Duncan’s thesis, a key element in the relationship between active citizens and effective states is taxation. As he notes in the book, “until governments depend on their publics for their wages, it will always be an uphill struggle to force them to listen.”
Aid distorts taxation. When a government receives 60% of its revenue from foreign aid (as, Duncan explained, Uganda did until recently), their leadership is going to spend far more time interacting with donors than their own citizens. Devising a way to provide aid that insists on creating indigenous capacity so that ultimately aid is unnecessary is a conundrum akin to devising a successful U.S. withdrawal from Iraq, with attendant political dynamics and risk to stability. Perhaps the first step – as in the much-debated military strategy - is making clear that an exit is going to happen, and sticking to it.
Today the Hauser Center hosted Duncan Green, head of research at Oxfam GB, to discuss his new book, From Poverty to Power. Lant Pritchett, professor of the practice of international development, offered a response.
Some quick reflections:
Duncan’s thesis is that development is best achieved through (1) active citizenship and (2) effective states. While instinctively we might place these two in opposition to each other, they can be compatible and complementary. To be successful in alleviating poverty, the two must combine to redistribute power within markets so that poor people benefit:
The impact of markets on poverty and inequality depends on whether poor people can exert influence over the way they operate.
Working from his thesis, Duncan offered the following pressing issues for NGOs (this is my interpretation):
Much food for thought. I was especially struck by the point that the aftermath of emergencies is an opportunity to advance social change. It rang true - the social and government structures are so often unsettled, and those in charge more willing to incorporate new ideas and policies, especially if such policies reduce the vulnerability that the crisis has brought into such relief. NGOs might make relatively easy changes to their approach and have great impact doing so.
I’m sorry we didn’t get to explore the question of accountability more deeply. How are NGOs less accountable than they purport?
What jumps out at you?
(I originally posted this on Tuesday 11/11/08 and it mysteriously disappeared, so I’m reposting. Unless there’s been foul play from a new philanthropist acolyte, I can only chalk it up to a site glitch. Apologies for the redundancy.)
It is a truth almost universally acknowledged, at least by NGO leaders and international development policy experts, that U.S. foreign assistance is badly in need of modernizing and restructuring. One reason is excessive fragmentation: aid is distributed by the federal government out of 20 different agencies and 50 different offices. As critics like to point out, this does not make for policy coherence.
There are myriad factors for this jumble, chief among them the steady disinvestment in USAID over the past two decades. But there’s another reason that deserves more attention, since it reflects a similar trend among major private foundations and donors: the desire to measure and demonstrate impact.
As three past administrators of USAID point out in a recent article in Foreign Affairs, the focus of many newer presidential initiatives or earmarks is narrowly defined on a particular issue, which is “politically appealing because they appear to have a direct, measurable impact on identifiable individuals.” Here’s the problem: “… such a concentration on the short-term delivery of goods and services comes at the expense of building sustainable institutions that promote long-term development.”
It’s not enough to make drugs available to treat AIDS in a developing country. To solve the problem requires a public infrastructure - education and training for clinicians, effective government agencies, appropriate public health education, sustained services - as well as a healthy civil society that will make the drugs less and less necessary by improving the overall health and stability of the affected community.
The current craze in philanthropy for assessing and quantifying impact presents a similar conundrum. Focusing too closely on individual trees - because it’s easier to count the leaves - makes one run the risk of missing the forest altogether. As Susan Berresford, former president of the Ford Foundation, remarked over a year ago, “Isn’t it possible that too much reliance on short-term plans can miniaturize ambition for justice and for progress on deeply entrenched problems such as racism, poverty and inequality?”
If the federal government were to develop a comprehensive U.S. development strategy, it could help - at least then the burden can shift to measuring progress on the broad aims of development in toto. As most community organizers will tell you, rights-based development requires sustained, comprehensive investments in people and communities, and processes for developing local capacity and reforming social structures are messy and non-linear. A commitment to improving human security - which a new Obama adminstration has put forward as an important element of its approach to U.S. global engagement - requires a willingness to accept that some crucial elements of progress might be unquantifiable. The political appeal of short-term results will have to give way to a more complicated, nuanced picture - and that would buck the prevailing winds in the sector.
A continuing theme on which I’ve commented several times (links here, here, and here) concerns the increasing share of private resources in development aid. Sam Worthington, the president and CEO of InterAction, the leading coalition of 165 U.S. development and relief NGOs, was on campus this week to kick off the NGO Leaders in Humanitarian Aid and Development seminar series and discuss the shifting landscape for NGOs. The subject of money - and private money in particular - kept coming up.
Sam’s statistics were stark. In 2000, the revenues of the U.S. NGO community working to reduce global poverty were approximately $4 billion. About 50% of that funding came from government, 50% from private contributors. In 2006, revenues had grown to $8.8 billion - but $6 billion came from private resources. The $800 million increase in government funding was dwarfed by a $4 billion increase in private funds, and the balance was suddenly close to 70% private and 30% public.
On the surface, such a trend might seem liberating to NGOs, offering the space to be more creative and take greater risks in their mission to serve the poorest people in developing countries. Federal funding is intended to serve the national interest, and it carries constraints. Early versions of the strategic realignment of U.S. foreign assistance, which brought the Director of Foreign Assistance under the auspices of the State Department, did not even include the word “poverty.” It is challenging for NGOs to stay true to a development mission using U.S. funds when all other interests appear to trump it.
Yet it matters just how that $6 billion in private money is comprised. Major philanthropists and foundations, the kind that participate in the Global Philanthropy Forum or the Clinton Global Initiative, for example, often impose their own constraints in pursuit of strategic impact. There have been too many times in the recent quest for innovation that donors have created large projects without taking advantage of the development expertise hard-earned by NGOs through three decades of trial and error.
Whereas before NGOs could voice their views to one entity - the U.S. government - and know that they were attempting to influence a major segment of their market, suddenly they are faced with educating and negotiating with a multitude of actors, all with their own individual agendas.
As Sam Worthington noted in our discussion, unrestricted money best provides NGOs the freedom to act on their own knowledge and inclinations. Paradoxically, those NGOs where countless small donors make up the largest slice of revenue are likely to feel freest to pursue their agendas on their own terms - and may result in more innovation and more empowering relationships with local communities than otherwise. Foundations and philanthropists who believe that NGOs, left to their own devices, are effective at developing successful strategies to reduce poverty would do well to build a percentage of unrestricted funding into every grant.
This is important for a bottom-up approach to development. Helping local communities and individuals find their own voice and build their own leadership often brings change at the deepest level, but it is not linear, and progress along the way is often hard to measure. To be successful requires long-term commitments (from 10-20 years) with money that allows strategies to be flexible and priorities to be adaptable.
Some critics* contend that the ties between large Northern NGOs and their host countries have grown too close and diluted the NGOs’ ability to offer approaches that differ significantly from their country’s aid program. It’s not clear that the increasing share of private funds within foreign aid, while significant, will offer much respite.
* From Can NGOs Make a Difference? The Challenges of Development Alternatives: “There are serious doubts regarding how far NGOs in the North are able to do anything that is especially alternative to their host countries’ bilateral aid programmes.”
So, questions still remain about the ability of the U.S. disaster relief system to handle a large-scale catastrophe. What can we do?
(1) Develop a national disaster relief fund
With such a fund, private contributions for relief and recovery would be collected and distributed by an independent entity, with independent oversight, whose sole purpose is to find and support the organizations - local or national, small or large - that are responding most effectively in a specific disaster. My preference would be to have all response agencies, including the American Red Cross and the national VOAD agencies, commit to and benefit from such a fund. This means that the national agencies would throw their support behind a collective fund raising effort after a disaster, similar to the joint appeals by international NGOs that are so successful in other countries, rather than undertaking their own individual campaigns. This could:
Let’s be real - the bulk of the money from such a fund would likely still go to large, national organizations. However, it would improve immeasurably the access that local organizations have to small private contributions, and if done correctly, should also significantly improve accountability. If such a fund built a successful track record, I can envision it developing the reach and credibility to raise funds successfully between disasters to ensure an adequate reserve and fund preparedness programs (see #2…).
(2) Stimulate and support local, integrated disaster preparedness programs
Federal funding for disaster preparedness has been in steady decline at a time when we need it most. Such programs should be expanded; should be focused at the local level; and should ensure that local nonprofits, faith-based groups, and the private sector are at the table when plans are created.
It’s time to resurrect programs like Project Impact, which brought local nonprofits and businesses alongside government to develop and implement mitigation strategies. Project Impact was widely credited with keeping damage and casualties to a minimum after the Seattle earthquake in 2001 that measured 6.8 on the Richter scale, yet was cut the same exact day by the president to save $25 million, a tiny percentage of FEMA’s base budget.
It’s time to perfect and take to scale programs like Operation Brother’s Keeper, a partnership between inner-city African-American churches and the New Orleans chapter of the American Red Cross meant to ensure that vulnerable community members were included in relief efforts during a major disaster. Unfortunately the partnership was in the early planning stages when Katrina hit.
We need hundreds of local, self-directed efforts like the promising multi-sector effort in San Francisco - BayPrep - with the leadership of the mayor’s office behind it, and like the local VOADs - coalitions of local nonprofits and faith groups in dialogue with local emergency officials - that have sprung up in Louisiana through the leadership of the Louisiana Association of Nonprofit Organizations, the United Way, and others. Concerted funding and effort by FEMA and key national nonprofits could go a long way toward stimulating robust and essential disaster preparedness at the local level.
(3) Develop a high-tech, quick-strike coordination capability to take in and report out essential information in real time to responding agencies
Current systems of organizing and presenting information are not accessible nor usable by the multitude of nonprofits that might be involved in a large scale response. The system currently in place does not easily allow a wide array of nonprofits to feed in information about their needs assessments and services, so it’s difficult for other organizations to understand where they may be best used to fill the gaps. We need to create a system that assumes that many diverse organizations will be involved, and can systematically organize information gathering and sharing of a decentralized response. Responding organizations should be able to get real-time answers to the fundamental question “What is needed by whom where?”
For FEMA to play the primary role in developing and implementing such a system, it will have to radically improve its understanding of the broad nonprofit sector and elevate its senior nonprofit liaisons to a much higher level of authority.
(4) Review and reform the Stafford Act
We need to make sure that our legislation works well to cover and handle the increased amount of emergency events that we are sure to face; that we have a clear sense of the extent of our government’s commitment to supporting people in their relief and recovery; and that budgeting processes are structured in a way that minimizes politicization.
To undertake any or all of these will require the leadership of the dominant players - FEMA, the American Red Cross, and the national VOAD agencies - and the input of local organizations and governments that have experienced some of our recent major disasters. It will require a shift away from promoting their individual organizations and “becoming fund raising machines” to thinking about what is best for the field and what would make U.S. disaster relief as effective as possible. Then perhaps we’ll truly learn the lessons that Katrina, Ike, and Gustav have so harshly offered.
I’ve been silent on the blog for a few weeks due to paternity leave.
In my absence, events continued to raise questions about the capability of the U.S. disaster response system. There were criticisms of the response to Hurricane Ike, a report from the GAO that the American Red Cross and other leading nonprofits lack the capacity for a major emergency, and the American Red Cross just received $100 million from Congress to replenish funds for disaster relief.
U.S. disaster response is officially a public-private partnership. It is one of the few instances in which the government officially designates nonprofits to provide support (see the National Response Framework). The lead governmental agency - FEMA - is given authority to coordinate non-governmental groups.
Some major weaknesses that I perceive:
(1) I do not believe there is clarity between what our government views as its responsibility and what it considers the purview of private donations to nonprofits and faith-based groups. The Stafford Act gives permission for the federal government to fund everything from temporary shelter and cash grants to legal aid, food supplies, and home repair. But to whom and to what point? Is the government primarily focused on helping those who have the least resources to support their own recovery, or on everyone - rich or poor - who was affected? Is it their goal to support survivors until they’re able to return to their homes and start clean-up, or get them back to their level of pre-storm living?
The way the Act is structured, federal funding is negotiated on a case-by-case basis with the affected state after each emergency. The government clearly sees itself as the primary supporter of the repair of damaged infrastructure. “People” issues, however, seem to get revisited each time. The danger is that those decisions can become politicized, especially since the funding is budgeted outside the annual appropriations process. Mississippi sustained only half as much damage as Louisiana from hurricane Katrina, but Congress mandated they share almost equally the initial $11.6 billion in CDBG funds for “citizen” long-term recovery (after several more months, Louisiana was successful in advocating for more). Mississippi had a Republican governor and a strong Congressional delegation at the time, with one of its senators (Thad Cochran) chairing the Appropriations Committee.
(2) The nature of fundraising for emergencies is episodic. Nonprofit responders like the American Red Cross reach out to private donors and the general public after each disaster. States and the federal government also negotiate federal grants after each emergency. As emergencies occur more frequently, the ability to rely upon the necessary level of funds through such methods becomes questionable. It also makes very few resources available for disaster preparedness.
(3) FEMA has limited understanding and ability to coordinate the many local nonprofits that will provide extremely important services in any major catastrophe (another GAO finding). As the recent GAO report suggests, and as our Katrina experience demonstrated, a major event will outstrip the capacity of the national nonprofit responders. Local groups will fill the gaps, and since they have local trust and expertise, they can be extremely effective providers. While FEMA assumed the responsibility to coordinate the efforts of these groups after squabbling about it with the American Red Cross during Katrina, the agency has little capacity to do so successfully.
(4) Local groups have very limited capacity and profile to access contributions by donors from outside the affected area. The bulk of disaster donations go to large, high-profile national responders like the Salvation Army and the American Red Cross, while in a major catastrophe, local groups are often first on the scene. During Katrina, for example, many local groups jumped in when they saw the need in their communities, and they did so without worrying whether they had the funds for it. But they don’t have the fund raising capacity to provide such services and make themselves known to a completely new public, and they often struggle to find the funds to pay for their courage.
Improvements since Katrina imply that we simply needed to enhance the efficiency and operations of the system already in place. It’s a centralized approach that is built around a few institutions - FEMA, the American Red Cross, and the national VOAD agencies. This works well for the size of most emergencies, but continues to crack when tasked at a large scale. We seem to think that improving the system means building these institutions big enough and efficient enough to respond to anything.
I find this underlying assumption questionable. I think we need to develop an approach that is decentralized and supple enough to integrate the strengths of hundreds of nonprofits if necessary. I have some ideas for this that I’ll share in a following post. I’d also appreciate comments from those of you who are experienced in providing disaster relief internationally.
As Hurricane Gustav approached this weekend, the president and both would-be presidents engaged in a bit of fund raising, mostly for the American Red Cross (ARC). Barack Obama directly asked all those in his fund raising network to send funds to the ARC; John McCain made mention of the ARC in his remarks and the RNC made a direct plea for delegates at the convention to make a donation; and President Bush asked for support for both the ARC and the Salvation Army.
Does it strike anyone else as odd that our political leaders now style themselves as philanthropic advisers when disaster hits?
(1) Instead of telling me where to make my charitable contributions, I would have hoped to hear more about what we can expect from the government’s response. FEMA still does not have a thoroughly vetted strategy for housing after an emergency (and why FEMA was ultimately given this responsibility rather than HUD still mystifies me). I’m also unclear as to how FEMA has increased their capacity to coordinate all the local nonprofits that might respond, a role to which they agreed after both the agency and the ARC said it was the other’s responsibility during Katrina - so neither did it.
OK, perhaps these are too technical for a general audience. But I also haven’t heard any present or future president articulate a vision for government’s role in disaster response. President Bush, in his remarks, noted that it’s the job of the federal government to assist the states. To what level? What will public funds - both state and federal - pay for?
Are citizens expecting one thing and the government set up to deliver another? My sense is that there is a mismatch between what the Stafford Act offers (that’s the law that gives structure to FEMA and disaster funds), and what disaster survivors - and perhaps even the unaffected general public - expect. To hear about the role of our government after disaster and how legal structures, public budgets, and leading agencies will successfully meet those obligations - that’s what I expect from political leaders.
(2) I expect a charitable adviser to have done some vetting. I’m making an assumption here, but my guess is that there was not a great deal of analysis or comparison of the ARC and other responding organizations done by the administration or either campaign.
Even if there was, it’s a poor use of the bully pulpit. The American Red Cross is one of the most recognizable brands in the sector (though technically it’s not a nonprofit, but a government-chartered institution). The Salvation Army regularly ranks among the top three of nonprofits receiving the most revenue annually. People don’t need a great deal of direction for them to come to mind.
Immediate response to a disaster is inherently local. Grassroots organizations have significant trouble accessing the funds they need, since they don’t have a national profile. Local foundations like the Louisiana Disaster Recovery Foundation* (which was formed after hurricane Katrina to support relief efforts), the Greater New Orleans Foundation, the Baton Rouge Area Foundation, and the Community Foundation of Acadiana (which covers southwest Louisiana) all created Gustav funds and know how to identify local groups doing excellent work. It would not have taken much to find and mention such organizations in addition to the ARC and other national organizations.
Maybe each made his plea on behalf of the ARC because its current financial position is precarious and they want to keep it healthy. The organization does play a role in the National Response Plan, after all. But any donor will tell you: that’s usually the wrong reason to ask for her money.
In a report for the Aspen Institute about the nonprofit response to Katrina, I recommended mandating that the American Red Cross give 5% of its disaster fund raising to local funders after an exceptional catastrophe. With the American Red Cross such a strong and recognizable brand, I didn’t think it wise to try to create a national fund (with all the risk and start-up costs) that would support grassroots organizations on the local level. But if would-be presidents are going to give their personal imprimatur, perhaps a private national fund that distributes funds on a competitive basis to the American Red Cross AND local groups - i.e., to whichever organizations are doing the best work - is the next great innovation.
Let’s keep in mind: Private, voluntary action is both necessary and welcome after emergencies hit, but it is not sufficient nor fully capable of doing all that’s needed.** Rather than try to score political points and look caring by asking people to donate time and money, I call on President Bush and Senators Obama and McCain to make clear what government will do. And then make it work.
* Disclaimer: I am a founder of the Louisiana Disaster Recovery Foundation and continue to provide strategic advice to the foundation.
**In all the media frenzy over Gustav, they missed a huge opportunity to highlight the incomplete nature of the recovery from Katrina. Local folks, faith-based groups, and nonprofits have done heroic things in the past three years - yet all of it amounts to a small percentage of what’s needed. This recent report by Oxfam does an excellent job of laying that out.
While working through a backlog of reading I came across this post by Lucy Bernholz* on Philanthropy 2173, in which she characterizes “foreign aid” as “international philanthropy” while referencing Reinventing Foreign Aid, a new volume edited by William Easterly.
Private philanthropy is part of “foreign aid,” and as I’ve mentioned in previous posts, arguably its fastest growing segment. Yet for folks in the NGO field, the term generally connotes funding made available to developing countries by Western governments and multi-lateral institutions like the World Bank and UN (and, from a cursory skim, this is the general sense in which the book uses it). They have traditionally set the intellectual framework for how and where aid is deployed.
That one of our leading commentators on philanthropy uses the two terms interchangeably might be another example of the growing influence of private dollars within aid. Yet most of us would not equate government funds and philanthropy and would be careful to draw a distinction between the two when examining domestic nonprofit and public services. However innocent Lucy’s characterization (the point of her post was something else entirely), it surfaced for me the challenges of perception faced by the international NGO community.
No matter how strong the humanitarian values of the U.S. general public, they misunderstand or are uncertain about our government’s role and aspirations in providing development assistance. According to data collected by Public Agenda, half of the country believes that we spend more on international aid than Social Security and Medicare.
They also remain pretty skeptical about its value. As Joe Lockhart (the former White House press secretary) said at InterAction’s 2008 National Forum, “foreign assistance” are two words sure to create strong negative reactions in the American public. Most view U.S. foreign aid as “charity” — i.e., something based on a moral impulse rather than a strategic imperative — and worry that the money is being wasted.
Major U.S. NGOs are part of a push to modernize and reform U.S. foreign assistance, an issue that they hope will get serious attention from the next presidential administration. Convincing the public that this should be a priority will be a challenge. And helping them understand that focusing on the reduction of global poverty as an important goal in and of itself, rather than making it subordinate to our national security or foreign policy strategies - helping them realize that this focus may ultimately have the most benefit for our security will require significant education.
“Foreign aid” may not be the same as “international philanthropy,” but it should aim to be “philanthropic” - strategically invested, with a focus on maximizing its impact on poverty. Doing so successfully will increase human security worldwide - and increase our national security at home.
Full disclosure: I have taught seminars with Lucy Bernholz and consider her a personal friend, as well as one of the field’s leading thinkers about the future of private philanthropy.
