Humanitarian and International Development NGOs

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.  

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.