Humanitarian and International Development NGOs

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. 

The Index of Global Philanthropy 2008 (mentioned in my previous post) tries to take a comprehensive approach to tracking funding flows and has developed a measure called “U.S. economic engagement.”  It includes official development assistance (ODA); private giving through foundations, NGO/private voluntary organizations, universities and colleges, and faith-based groups; private capital flows; and remittances from immigrants back to their home country.

While remittances undeniably have developmental impact, and are philanthropic in nature, I think it’s wrong to include them in a philanthropic index focused on development.  Most remittances go from family member to family member, while the other categories track flows between unrelated entities.  I don’t think we’d consider it development assistance (or “economic engagement”) from France to the U.S. if I were living and working in Paris and sending money home to support my parents or siblings.   The fact that the U.S. does not consider many of those sending the money to be “legal” gives the U.S. credit for stimulating development in other countries where little is due.  

Some remittances are for specific community purposes, such as the building of a local church or school.  These seem more analagous to the other types of funding measured by the Index, but would be very difficult to separate out.  The Index could include the funds that flow through hometown associations (organizations of immigrants based in the U.S. that raise funds for their hometown)  but I wonder if this would be significant. 

While it might be argued that remittances are more efficient at improving human development than aid, this demonstrates that development could occur more rapidly and effectively if labor were able to cross borders more freely.  I don’t think it counts as an increase in U.S. economic engagement supporting development. 

CORRECTION:  In my last post, I incorrectly stated that the Index did not provide its methodology for avoiding the double-counting of private foundation grants within NGO budgets.  It’s on page 69.  Basically they looked at grants listed by the Foundation Center that went to the 200 largest NGOs, and subtracted out those grants meant to be used in developing countries. 

The private giving numbers cited in the Brookings report of the last post come from an essay by Homi Kharas, The New Reality of Aid.  Kharas sifts through the published data to estimate just how much money given as “development assistance” is actually reaching the poor.

By his estimation, once debt relief (which is really a transfer between one branch of a donor government to another), emergency and technical assistance, and administrative overhead are discounted, only about 37% of the total aid given by the 22 traditional Western government donors can be considered “net development aid.”  Thus, out of the more than $100 billion that these governments publicized as aid in 2005, only about $38 billion was left over to be put to use in poor communities. 

In similiar fashion, Kharas tries to assess how much in private contributions is reaching the ground.  He groups together private foundations like Gates and Rockefeller with international development NGOs like Oxfam and CARE.  While in doing so, he admits to trying to avoid double-counting grants from the private foundations that go to the NGOs in question, but doesn’t elaborate on the methods used.   It’s also unclear if his analysis subtracts out the government support that NGOs receive (government funds made up 61% of CARE USA’s budget for FY 2005-2006, for example).  And where is embedded giving - i.e., funds collected by (Product) RED and other point-of-sale fund raisers - which is notoriously hard to track?

The Index of Global Philanthropy 2008, published by the Center for Global Prosperity at the Hudson Institute, arrives at similar figures, at least for U.S. private philanthropy (though no hint either how they avoid double-counting among foundations, NGOs, and faith-based groups).   It’s probably safe to say that the trend is unmistakable: private giving is gaining on and maybe even outstripping official government assistance.   How much of either is really reaching the poor is still a guess at best.

Earlier this year Brookings released Making Poverty History? How Activists, Philanthropists, and the Public are Changing Global Development, a report based on the Brookings Blum Roundtable 2007.  While it contains much of interest, one item immediately catches the eye: in 2005, private philanthropic giving for international causes was roughly equal to official development assistance (ODA) from “traditional” donors (i.e., governments).

Certainly the Gates Foundation, with its enormous asset base and focus on global health and development, has played a role in boosting the private giving numbers.  But as the report so ably highlights, reducing global poverty has become “hot,” capturing the attention of many new philanthropists and celebrities, and igniting a mass of talent eager to “make poverty history.” 

What do all this attention and newly varied capital environment mean for NGOs?  What are the challenges of balancing an ever-varying donor base and the expectations of these new actors?  Might it change the ability of NGOs to give voice to the poor?  Interesting questions.  More to come.

Regarding mechanisms to raise and distribute funds in the wake of emergencies, it might be productive to revisit lessons from my experience with hurricane Katrina.  I arrived in Louisiana 10 days after the storm and helped found the Louisiana Disaster Recovery Foundation.

As documented in reports like my Weathering the Storm: the Role of Local Nonprofits in the Hurricane Katrina Relief Effort (Aspen Institute) and the Urban Institute’s Open & Operating? An Assessment of Louisiana Nonprofit Health and Human Services after Hurricanes Katrina and Rita, local nonprofits and faith-based groups filled large gaps during the relief phase, yet had great difficulty accessing funds to pay for their efforts.  This despite what was by most measures the largest philanthropic response in U.S. history, ultimately over $3.5 billion, as tracked by the Center on Philanthropy at Indiana University.  

One reason is that many of the responding organizations were never before involved in disaster relief – they were trusted local groups that recognized the need and jumped in.  They had little capacity to make themselves known to a national audience, especially while providing additional services in a fast-evolving and compromised environment.

International relief NGOs were among the most successful in distributing their resources quickly to groups on the ground, even though many of these NGOs were responding to a U.S. emergency for the first time.  They deployed staff to the area and used their experience, earned in international settings, to infiltrate local networks.  Some remained beyond the relief phase: Mercy Corps’s program operated past a couple of years, for example, and Oxfam America has made a long-term commitment, with a robust staff still in the region (disclaimer: I authored a report for Oxfam at the one-year anniversary regarding the recovery status of low-income communities).

It should be noted that the Bush-Clinton Katrina Fund, which raised the bulk of its almost $130 million in the early days of the disaster, did not distribute its first grants until December 7, 2005, more than three months after Katrina hit.  I would venture that it’s not exactly what many small donors had in mind when they contributed, hoping to relieve the immediate suffering they were witnessing on TV. 

A large block of those first grants were channeled to state funds created specifically for Katrina relief, and Mississippi’s state fund had still not used any of its $17 million ($12.4 million from the Bush-Clinton Katrina Fund) by September 2006, fully one year after Katrina.

Rather than act as a pass-through to organizations already at work, similar to what they did with funds raised for the 2004 tsunami, the former presidents created a new organization - with its own staff - to handle the distribution of the money, much like a traditional foundation.  Part of the motivation stemmed from concerns about accountability and the desire to track the use of the funds more closely.  But even a determined and well-resourced start-up could not get up to speed to be relevant during the relief phase, though it lasted 10 times longer than the norm for a big catastrophe.

The positive side is that those funds were available as relief moved to recovery and reconstruction.  While the bulk of donations by the public invariably occurs immediately after an emergency, a significant portion of resources are needed over a long period of time as communities slowly rebuild.  This is another aspect that recommends the joint appeal model discussed in the previous post.  Such an appeal has the potential not only to collect and deploy donations quickly, but may also have more leeway from the public to meter their uses throughout the different phases of recovery.   

The effort to provide relief to survivors of the Myanmar cyclone and the Chinese earthquake resurfaces questions of how to effectively mobilize and deploy charitable contributions in an international emergency. People across the U.S. interested in making contributions want to know that their gifts, large or small, are being put to good use. And as Lucy Bernholz points out in this post to her blog, Philanthropy 2173, media companies like Google are beginning to make recommendations about which organizations to support, raising questions about accountability and potential conflicts of interest.

Many European countries and others like Japan, Australia, and Canada have what are termed “joint appeals,” which promote one unified fundraising campaign for a particular emergency and then share the proceeds among a consortium of organizations. A donor makes a contribution to one place, secure in the knowledge that she is supporting organizations with the capacity to respond effectively and that those organizations are cooperating – not competing – for gifts.  The donor can be confident that her gift will be deployed fairly, in accord with pre-agreed criteria.  For the donor, the focus is on efficiency rather than choice.

The Disasters Emergency Committee in the UK is the oldest and arguably most successful of the joint appeals. Through significant partnerships with the BBC, ITV, and British Telecom, the DEC has become a known and trusted brand in the UK. It has raised approximately $750 million since 2004 just for the southeast Asia tsunami.

There have been serious conversations within the NGO community about creating something similar in the U.S., but the challenges are compounded by the larger number of NGOs that provide international relief and our fragmented media market. Most joint appeals consist of no more than a dozen organizations, making it reasonable to manage governance and fund allocations.  The mechanics and politics of who’s in, who’s out, by what standards, and how to share the money get complicated when 30-40 organizations might stake a reasonable claim.

Most joint appeals also have one or two media companies that provide instant access to the majority of their public. In the U.S., four (five?) national networks and myriad cable channels make it difficult to line up enough media support to ensure it would be value-added – and that’s just television.

There is no hard research that shows U.S. donors would give up choice to reward cooperation and efficiency in a crisis situation, though the Bush-Clinton fund raising in the wake of hurricane Katrina (more on that in the next post) seems to support the notion. But it’s an attractive proposition to have a centralized mechanism, with high levels of transparency and accountability for the use of funds and with the capacity to distribute the money quickly to organizations with the capacity and reach to provide relief effectively. This would seem advantageous to having multiple companies like Google choose and promote their own recommendations, which – while providing a bit more direction – doesn’t necessarily make donors’ choices easier, especially if different companies are recommending different organizations.

NGOs have been working to coordinate the delivery of their services on the ground and develop best practices through efforts like the Emergency Capacity-Building Project. Working together on fund raising would bring them together on the other side of the proverbial “coin.”

Mike Van Rooyen, director of Harvard’s Humanitarian Initiative and an emergency room physician with experience in international disasters, recently outlined 12 Myths and Misconceptions in Humanitarian Response. He criticizes the humanitarian aid “industry” for making incorrect assumptions about the vulnerabilities of disaster victims and for propagating incorrect public perceptions about international emergencies.

The list neatly encapsulates general public views about a disaster, and showcases how that perspective diverges from the reality that NGOs face while providing response. And while his encouragement to the field to be self-critical rings true, I’m not sure those public misperceptions can be blamed in total on the humanitarian aid “industry.” It does raise the question of whether NGOs could be educating the public much more vigorously about the realities of disaster relief, and be more honest about its limitations.

This is no small issue. As Sir John Holmes, the UN Under Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator continues to emphasize (see his remarks in Helsinki at the Humanitarian Agenda 2015 Seminar), the demand for humanitarian relief will only grow, especially as extreme weather events increase due to climate change. Relief may ultimately require a different system altogether than the current method of injecting resources from the outside to help local communities deal with the aftermath.

Princeton recently announced plans to send a tenth or more of its incoming students abroad to do social service for a year, before they enter as freshmen (Princeton Plans for an Early Year Abroad).

While much of the nonprofit sector is worried about a looming leadership crisis (see Bridespan’s seminal report The Nonprofit Sector’s Leadership Deficit, and the Casey Foundation’s Next Shift), anecdotally I sense that NGOs working on international poverty are being inundated with energetic, smart students and recent graduates eager to work overseas. The problem with the pipeline for international organizations does not seem to be attracting the young talent, but developing the skills and experience that will make them effective in facilitating community development in remote and culturally diverse areas, a complicated undertaking.

Details were scant about where students will be placed and to what extent their experiences would be linked to their subsequent studies, but I suspect that an NGO or two will be consulted or involved in structuring this service abroad. If the service is intentionally integrated with Princeton’s curriculum and resources to help develop new leaders prepared for the difficulties of international development, it could be a boon indeed. Otherwise, what might be good for students could end up having questionable value for the communities being served and the sector.