Humanitarian and International Development NGOs

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.