Humanitarian and International Development NGOs

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.

One thing about taking in more money and becoming responsible for a larger share of international development assistance: you get noticed.

Foreign policy experts have begun to include NGOs in their analysis.  First comes a mention in Foreign Affairs by Richard Haass, president of the Council on Foreign Relations, in which he analyzes changes in geopolitical power and includes humanitarian and development NGOs among the list of entities wielding influence.

In the latest issue of Foreign Policy, a trio from the New America Foundation - Michael Cohen, Maria Figueroa Kupcu, and Parag Khanna - call NGOs this era’s “new colonialists.” Their thesis is based on the view that NGOs are providing services and assuming responsibilities that governments in many developing countries are unable to perform, a role formerly played by “colonial masters or superpower patrons.”

I suppose equating NGOs with colonialists is meant to be provocative, but it doesn’t work, even if the role has switched hands.  It’s like calling the Prius the new Hummer.  They both get you from here to there, but the goals and values behind the design are completely different.  And goals and values matter when it comes to colonialism, which the Oxford dictionary defines as “acquiring control over another country, occupying it with settlers, and exploiting it economically.”

The authors have, however, fingered a critical issue for the field:

Seeing jobs that need to be done, the new colonialists simply roll up their sleeves and go to work, with or without the cooperation of states.  That can be good for the family whose house needs rebuilding or the young mother who needs vaccinations for her child.  But it can be a blow to the authority of an already weak government.  And it may do nothing to ensure that a state will be able to provide for its citizens in the future.

This is undeniably a dynamic that most responsible NGOs recognize and strategically try to address.  It can be precariously difficult to provide high-quality, life-saving services while acting as a catalyst for a more responsive and capable government to take over, rather than creating a cycle of dependence.

But the authors conflate different types of situations and actors in the examples they cite (Booz Allen Hamilton and Save the Children have differing priorities, to say the least) and dismiss out of hand the notion that NGOs are truly committed to strengthening and encouraging governments to rise to the responsibility, simply because they find it “difficult to find examples where these groups have pulled up stakes because the needs they seek to address are no more.”

I don’t think examples are hard to find.  In Afghanistan (where one of the article’s case studies is located), CARE set up and ran a water system in Kabul that they successfully lobbied Karzai’s government to pick up.  In India, they began an integrated health and nutrition program in 100,000 villages throughout 10 states for which the state governments ultimately assumed full responsibility.  These are just two examples out of several for one organization.  There are also cases of NGOs leaving significant money on the table because they felt strongly that the project should be government-led or might weaken local governance and capacity.

It’s true that the danger exists of advantaging self-perpetuation or self-interest over a commitment to constituents and mission, and certainly a few NGOs exhibit opportunism above all else.  But the problem is not so much NGOs paying lip service to their pledge of working themselves out of a job - it’s the tricky strategic challenge of getting the balance right of different imperatives. In fact, some portion of the growth of NGOs could well be attributable to whatever halting success they’ve experienced in building local capacity and transitioning out.  It’s an attractive selling point.  It’s not like anybody else has a better track record.

It’s nice to be noticed.  It’s nicer if the nuances could be more fully developed.

PS.  The online version of the Foreign Policy article lists “The World’s Most Powerful Development NGOs.”  No mention of who picked it or the criteria used.  How does it compare to your list?

While I have some qualms about the methodology behind the data, it seems clear that private resources for international development are growing rapidly, and are beginning to rival official development aid (ODA).

This could portend a shift in the relationships between NGOs and the governments and key multi-lateral institutions that traditionally set the framework for how development aid works. As I mentioned in the previous post, increased scale means power to influence an agenda.

These private resources are dispersed among different sets of groups. There are private grantmaking foundations, NGOs, church missions, and faith-based organizations. The Gates Foundation alone is responsible for a significant portion of the growth, and the interests of other mega-philanthropists in reducing extreme poverty could quickly add up.

Whether there exists enough of a common perspective and agenda among these groups to put them in the driver’s seat of development remains to be seen. Is there a day coming when governments will see themselves as trying to leverage the money being made available through private sources, rather than the other way around?

Complicating matters is the entry of new players.  While historically ODA has been the domain of the 22 OECD countries, middle-income countries are increasing the amount of development assistance they are making available.

China, for instance, is investing significant sums in Africa.  What does this mean for the western philanthropic dollars and NGOs at work there?  Especially when China’s money has fewer strings attached (theirs is not an anti-corruption or strengthening local governance agenda) and they’re happy to invest in basic public infrastructure that is sorely needed.

Development aid is becoming an increasingly fragmented, competitive marketplace while more money enters the system.  The interests of a wide array of donors and influential actors are jockeying for position.  Harnessing this and using it to improve the impact on people’s lives in developing countries will be a challenge indeed.  NGOs should seek to play a leadership role as these shifts occur, but to be a positive force will require collaboration as well as taking risks that give voice to the aspirations of the people they are serving in the poorest communities around the world.

Michael Edwards, who recently stepped down as director of the Governance and Civil Society Program at the Ford Foundation, explores similar issues in “Have NGOs Made a Difference?”*

He finds that development NGOs have been influential in getting the mainstream to address the negative aspects of globalization, commit to participation and human rights as basic principles of development, and grapple with the implications of critical global issues like climate change and poverty in Africa.

Yet he views their performance wanting on several fronts - mainly that they have not been innovative enough to fundamentally influence the political structures that perpetuate poverty and human rights abuses, nor change the power relations that define class, gender, and race.

He worries that their increasing reliance on government funds and concern about “market imperatives” - such as fundraising and brand identity - make them crowd out the participation and voice of indigenous and Southern-based civil society, even while increasing it is a stated goal.

An interesting aspect of this analysis is the apparent contradiction that the growth in NGO scale and capacity over the last 20 years has allowed them to be credible participants in influential policy debates - yet has also created organizational pressures that complicate (or, as Edwards argues, dilute) relationships with constituents and affect the willingness of NGOs to undertake certain strategies.

This is not a theoretical issue.  As Peter Bell, former president and CEO of CARE USA and a senior research fellow at the Hauser Center pointed out during “Are NGOs Changing World Politics?”: NGOs have evolved from being proudly apolitical and recognize the need to influence policy and governance, but they are often up against well-financed, organized lobbies.  Look at the difficulty in changing the U.S. Farm Bill, which has a significant impact on world food markets and global food security.  Scale, scope, and credibility help one compete.

They may also change an organization’s appetite for risk and make it more careful about protecting its viability and reputation.  Scale can tempt NGOs to be less of an alternative — less willing to advocate radical change or push constituents to the front of the debate — and more mainstream.

What’s an NGO leader to do?  Edwards points to the potential of strengthening relationships between NGOs and social movements.  In the U.S., NGOs helped incubate the ONE Campaign.  Even here, the need to improve public education about the complexities of development and guard against the urge to oversimplify are real.  Partnering with and building the capacity of social movements in developing countries is a long-term process, and critical policy decisions are moving forward now.

Peter Bell points to value of NGOs working in collaboration.  This holds promise for increasing influence but is unlikely to increase the “alternativeness” of the proposed solutions.

Much of the nonprofit literature on “scaling up” is concerned with how to do it.  While the possibility of mission drift is always mentioned in treatises on growth, I think we’d benefit from far more analysis about the changes in perspective that an organization is likely to encounter, and the mission-related strategic opportunities and pitfalls that “going to scale” might bring — and how to maximize the former while avoiding the latter.

* from Can NGOs Make a Difference? The Challenge of Development Alternatives, edited by Anthony Bebbington, Samuel Hickey, and Diana Mitlin.

Recently the Hauser Center for Nonprofit Organizations, in partnership with the Weatherhead Center for International Affairs, hosted a seminar exploring the extent to which international NGOs are influencing world politics.  

As part of the panel, Robert Paarlberg, professor of political science at Wellesley College and an associate at Weatherhead, posed two questions:

Have NGOs been able to make the weak more powerful?

Have they been able to make the poor more wealthy?

These are provocative questions, and ones that those in the NGO community must view somewhat ruefully. The ultimate answer is “no” - or, at least, “only in the most limited way.”  

His point, one well taken, was that world politics is still state-centric, and any state wishing to remain outside the reach of global civil society is able to do so. Witness the Balkans in the 1990s, Rwanda in 1994, and now Darfur, Zimbabwe, even the recent barriers to disaster relief imposed by the regime in Myanmar. NGOs have been mostly powerless to put a stop to situations when governments choose to be oppressive or intransigent; only other states have the power to intervene effectively.  

While this might be true, I wonder whether these are the right questions. NGOs don’t necessarily aspire to the level of influence and power that states wield, nor need to in order to be influential within the international political system.

It’s true that NGOs have been unable to stop what’s happening in Darfur, for example, but would the public and even other governments know as much about it and view it as a crisis without NGOs having worked to bring it to the world’s attention?  And would the affected people be surviving as well without NGO assistance? The counterfactual seems just as easy to answer as Prof. Paarlberg’s questions: those in Darfur are better off due to the humanitarian action of NGOs that are active there.

Interesting questions seem to fall somewhere in between.  What do NGOs bring that states do not?  Do their actions sometimes relieve state responsibility, and inhibit the strengthening of local governance?  And as NGOs partner more often with states, and are increasingly asked to be part of influential fora where international policy is developed - indeed, as their private resources begin to rival that of the official development assistance provided by governments, as discussed earlier - how do they retain their independence, and their credibility with and accountability to the poor?  

The American Red Cross announced recently that their disaster relief fund was depleted, meaning the organization will have to borrow significant sums to fund relief operations for the Midwest floods.  This is not a good situation, especially with hurricane season about to arrive.

Peter Dobkin Hall, a Hauser Center principal who has done exceptional work on the arcane, baffling, and often ineffective arrangements that constitute Red Cross governance, attributes the situation to a decline in Red Cross credibility.

I’m not so sure.  Despite high-profile snafus and a revolving door at the CEO level, the general public still rates the American Red Cross as one of the most trusted and well-known national nonprofit brands.  I think this is more a function of a broken business model for disaster fundraising.

The masterful fundraising machine at the Red Cross knows well what all relief organizations understand - the most profitable time to raise funds for relief occurs in the immediate aftermath of a disaster.  In the past, it was Red Cross practice to put contributions received during one disaster into a general fund that could also be used in future emergencies.

The problem: donors were responding to the crisis at hand, and many weren’t happy when they learned that some of the money was being put aside for another “rainy” day.  Not to mention that affected communities did not take kindly to learning that they might not benefit from all the money raised during their time of need.

Both had a point.  Under pressure, the Red Cross adopted a policy of double-checking with donors who did not earmark their donations, so donors understood their contributions were going to a general fund rather than a specific crisis.  This type of transparency should be (and always should have been) the norm in the sector.

What the Red Cross hasn’t done, however, is adapt.  It’s absolutely necessary to have a robust reserve fund, in order to attend to myriad crises that may occur during a given period.  This is especially true as the response by donors to different disasters becomes increasingly uneven (without clear reasons, no matter how much we talk about “donor fatigue” or man-made vs. natural emergencies or the varying levels of media coverage), and mid-level emergencies promise to occur more often (as climate change becomes more pronounced).   It’s not easy to raise money for such a fund just on its merits.  Educating the public about the true nature of disaster response will help, but I don’t think will ever suffice.

To be fair, this is not an easy problem.   Instinctively, I don’t think the Red Cross will be able to solve it on its own. It will become increasingly untenable to rely upon timely and disaster-specific donations to provide relief.  (I also think it will be increasingly untenable for the Red Cross to be the primary provider of services in all cases - Katrina highlighted that a decentralized, local response is most effective in a large-scale catastrophe.)

It may take a collective partnership - similar to the joint appeal concept I outlined in an earlier post, but perhaps on a permanent basis - to build and develop a fund that collects money in an insurance capacity. The fund would not be Red-Cross specific, but would provide support to any organization (even local) that responds responsibly.  The fund might also become the primary contribution vehicle for the general public during a disaster. For such a fund to be successful, however, the Red Cross would have to be willing to play a lead development role, and in true partnership.   One thing is clear: as the donating public views disasters and relief operations as less than exceptional events, we’ll need to change our fundraising approach to reflect this.

Eugene Tempel and Una Osili have an article in the recent Nonprofit Times that examines how recent trends in immigration might affect the U.S. nonprofit sector.  

Their analysis provides additional nuance to the previous postings on remittances.  They too highlight the $200 billion worth of private transfers for 2005, as estimated by the World Bank, from immigrants to family members or hometown projects in developing countries. Yet they point out that, according to a report authored by Jessica Chao for the Council on Foundations, “immigrants often might not recognize informal giving as philanthropy, but rather consider it to be part of an individual’s social obligation to family and community networks.”

They point out that such informal giving among immigrants seems to persist over time. Interestingly, this occurs while immigrants are also just as likely to give to U.S. charitable organizations, and in similar amounts, as native-born Americans.   

I wonder if there’s been any analysis about what this means for U.S.-based international development and humanitarian NGOs.  When making their charitable contributions, are immigrants more likely to support international causes than native-born Americans?  If supporting international causes, do they choose to support U.S.-based international NGOs at higher rates than others, or do they prefer to develop their own organizations and projects that utilize their social networks and knowledge of their home communities, and give to organizations based there?  

Or do they tend to give to nonprofits focused on domestic issues, like native-born Americans?  (Private contributions toward international causes has held pretty steadily at 2% over time.)

If anybody knows of research that might apply, please let me know.  If such a division between remittances and charitable contributions does exist in immigrants’ minds, organizations could be missing an opportunity to have the two enhance each other.  

On Monday, the Nonprofit Sector and Philanthropy Program at the Aspen Institute released Mobilizing Change: 10 Nonprofit Policy Proposals to Strengthen U.S. Communities.  Full disclosure: I helped edit the paper and wrote much of the introduction, and its recommendation for FEMA to create a high-level coordinating body to better integrate community-based nonprofits in disaster relief derives from a paper I authored on the local nonprofit response to Katrina.  

That recommendation stems in part from the experiences shared by international humanitarian organizations like Mercy Corps and IRC.  For many of them, Katrina was the first time they responded to a domestic emergency.  In an international setting, they are accustomed to working with the UN Office for the Coordination of Humanitarian Affairs (OCHA), and were mystified to find that neither FEMA nor any other group was focused on coordinating the multitude of local nonprofits working heroically to provide relief.

This is just one example of how comparative analysis between our domestic response architecture and the international system might result in suggestions and improvements.  What can the U.S. learn about disaster preparedness from Bangladesh, which in 2007 experienced a cyclone as strong and as damaging as a 1991 storm that killed 138,000 people - but in 2007 had fewer than 10,000 deaths?  Still tragic, yes, but a vast improvement in safety and response.   

The Mobilizing Change report also points out the growing reliance on U.S. nonprofits by government at all levels, to provide services and implement programs.  The report calls for a high-level commission to explore this relationship and propose public policies that would help government strengthen nonprofit impact, rather than focus exclusively on oversight.  

I support such a commission, since I sense that most policymakers do not understand the nonprofit sector very well, even while they are turning more and more of their attention toward it. Yet what are the implications for the nonprofit sector of an increasingly intertwined relationship with government? Can nonprofits retain their independence and hang on to the characteristics that make them uniquely successful?  The unintended consequences deserve further exploration.

This is analogous to concerns raised about NGOs in the newly published Can NGOs Make a Difference?  The Challenges of Development Alternatives. As the editors - Anthony Bebbington, Samuel Hickey, and Diana Mitlin - flatly state in their introduction: “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.” More on that later.

Some of the indexes mentioned in my recent posts group NGOs together with private philanthropy (i.e., grantmaking foundations) when creating their classifications, since both derive support from private contributions and are independent organizations with private oversight.  Yet I believe the similarities go much deeper.

Because many international development and relief NGOs are operational - that is, directly involved in the design and implementation of development projects or in delivering humanitarian aid - we tend to think of them as a global version of the nonprofits we encounter daily in our communities in the United States, raising money to provide services.  Even when their activities grow to include advocacy, leadership development, technical assistance, or re-granting, they are generally viewed less as a funder than as an ally or an intermediary.

Yet the context for a Northern-based NGO promoting human development and social change in developing countries seems to be quite similar to a private grantmaking foundation.  There exists a similar imbalance between the resources of NGOs and the communities where they work, though like foundations, NGOs do not have unlimited capacity and must deploy their resources strategically to ensure maximum impact.  Even when delivering services, they identify local staff and work through local partners to achieve their goals, in a manner meant to empower individuals and local institutions, rather than create dependence on NGO support.  

I sense a cultural divide here that is analogous to the dynamics that organized philanthropy encounters, and I don’t only mean the difference in Western customs and perspectives in relation to local traditions, though that plays a meaningful role.   In the NGO context, we have an organization with significant financial and intellectual resources, coming from the outside, with defined goals for itself and concrete ideas about the strategies and implementation necessary to reach them, attempting to facilitate the growth and self-sufficiency of impoverished communities and institutions. Sound familiar?

Why does this matter?  On a practical level, greater and more regular communication between organized philanthropy and the NGO community about their experiences in promoting and measuring social impact could enhance our understanding of what works and how we know, especially when deploying resources through others to achieve our own goals. It also shades questions of accountability, representativeness, the niche that international NGOs occupy and the enterprise in which they’re engaged. I don’t mean to fully equate the two fields, but I think it would be fruitful to explore the similarities further.

While both the Homi Kharas/Blum Brookings summary and the Index of Global Philanthropy focus solely on quantity, the Center for Global Development’s Commitment to Development Index (CDI) attempts to incorporate aspects of aid quality.  Since ”aid is about more than money,” the CDI rewards donor selectivity and penalizes tied aid, project proliferation, donor fragmentation, and lack of coordination. 

Trying to integrate measures of quality alongside quantity is - it seems to me - critical, however difficult, and puts the conversation where it needs to be.  It would be interesting to systematically apply similar standards to private funds.  How would NGOs fare?  I often encounter the implicit assumption (and am guilty of it myself) that funds are better deployed by NGOs and private philanthropy than government agencies, but it would be good to use benchmarks to compare. 

Like the Index of Global Philanthropy, CDI also recognizes that “development is about more than aid,” and so it incorporates six other components: trade, investment, migration, environment, security, and technology.  Since its mission is to compare national governments in their commitment to development, it measures the impact of a country’s public policies on these factors. 

This means that the U.S. scores fairly low on the migration component, since its policies admit legal immigrants and refugees at low rates relative to other countries.  I think this more accurately gauges U.S. involvement than the absolute dollar amount of remittances used by the Index of Global Philanthropy.  But it also means that the CDI only estimates the impact of tax policies in the U.S. in stimulating private giving, nowhere accounting for the recent phenomenal growth in private aid described so well by Kharas, Brookings, and the Index of Global Philanthropy that might have significant long-term implications for the aid endeavor.