Nothing unusual in the title of the seminar that The Hauser Center at Harvard University put together just over a year ago. Everyone from academics to NGOs, government officials and even rock stars seem to have something to say on the topic. The innovation here was the choice of the lead panelist: Ndiogou Fall of Senegal, an authoritative and articulate representative of the burgeoning movement of Africa small producers who, in his words, “are both the prime victims of and the solutions to the problem of hunger”. Listening to the views of the actors most directly concerned by the problem sounds like common sense. But how often have you seen peasant leaders on stage at Harvard when food and development issues are under discussion.

Ending Hunger in Africa panel discussion, November 8. 2010, Harvard Kennedy School

The leap into uncharted dialogic territory paid off. Ndiogou Fall gave us the gift of a lucid, convincing and combative analysis of how African food security has deteriorated over the years and what is required for the continent to feed itself. The policies applied during and following the colonial period, from export-oriented specialization to structural adjustment and liberalization, have drastically dampened food production, barred small producers’ access to their own domestic markets, and reduced them to de-capitalized subsistence farming. The 2007-2008 food crisis and the attendant uprisings have had the salutary effect of dramatically exposing the failure of past approaches. What to put in their place? For Fall the horse to bet on can only be the small-scale family farmers who today provide food, employment and incomes for the majority of Africa’s population despite the neglect from which they have suffered for decades. With supportive policies and programs, and applying environment-friendly agro-ecological methods, it is possible to significantly increase smallholder productivity while helping to cool the planet and defend biodiversity.

But this requires a change of paradigm, Fall explains. African governments have to prioritize local and regional markets over the world market through trade policies that protect local producers, regulate supply, and build intra-regional exchanges. Agricultural policies formulated with the participation of all stakeholders are required. Infrastructure and communications need to be extended in rural areas and the rural economies strengthened by supporting producers to develop value chains that can generate employment and revenues. Small-scale producers need to access credit at reasonable terms – not the 25% interest rates they now have to contend with as compared with 5% in Europe. Land policies have to defend the right of rural people to the territories on which they live and from which they draw their livelihoods, blocking the galloping phenomenon of speculation and land grabs.

Ndiogou Fall passed away, prematurely and deeply mourned, on May 5, 2011. We pay tribute to his memory by making available the video recording of the Hauser Center seminar in which he participated. His message is an important one for Harvardians in a moment in which other voices advocate biotechnology as key to preventing hunger and news reports unveil the possible involvement of the Harvard endowment fund in land grabbing in Africa (The Guardian – June 9, 2011).

Nora McKeon was formerly responsible for civil society relations at the Food and Agriculture Organization of the United Nations (FAO). She is the author of several publications on small farmers and food policies. Harvard Class of ’62.

The 17th Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC COP17) is coming up, and no one harbors great hopes that the South African hosts will manage to cajole all major polluters into signing a legally-binding agreement to cut emissions. Civil society is rightly flummoxed at the glacial progress of negotiations, which never respected the pace set out by the Bali Action Plan of 2007. Failure to find common grounds on the future of the Kyoto Protocol killed off COP15, and the matter was essentially circumvented in Cancun.

In the meantime, 2012 is only a month away, and – doomsday previsions made by Hollywood blockbusters aside – calamity is about to strike. The Kyoto Protocol – flawed, limited, but also the only treaty to have ever committed countries to stabilize GHG emissions – is set to expire, and the political will among key players to sign an agreement at least as strong is nowhere to be seen.

Civil Society Organizations (CSOs) will struggle to decide which advocacy strategy to undertake. In Copenhagen, the massive effort of mobilization raised awareness (and expectations), yet by CSOs’ own reckoning, probably helped the talks collapse. In Cancun a year later, the quieter effort to help build consensus so as to sow the ground for a comprehensive agreement in Durban didn’t quite work out as expected – consensus was reached, but only because most sensitive topics were deferred to COP17.

CSOs did score some successes in Cancun. Most were on questions of principle (for example on youth and gender involvement) or on technical matters: the Climate Action Network (CAN – a coalition of like minded NGOs) worked hard to prevent the agreement on Land-use land-use change and forestry (LULUCF) from being worded so as to provide loopholes for polluting countries. Civil society also embarrassed Japan into not vetoing references to a second commitment period (albeit failed to make that a durable position). It is however evident that CSOs were most influential over matters where political controversy was low.

Unfortunately, Durban needs to resolve the most politically sensitive issues:
1- what enforceable mitigation efforts countries should take,
2- and how to include in such a process big developing countries (and the USA).

Civil society can influence the process through three different channels: by appealing directly to public opinion, by lobbying negotiators, and by setting the discourse on an issue.

In the short run, work must be done on the first two. Mobilizing public opinion will be difficult in rich economies, where economic instability has long displaced environmental sustainability in the minds of most. Nevertheless, environmental NGOs could very well link up with the ‘Indignant’ movements across the world, whose broad discontent with the excesses of finance-driven capitalism is not incompatible with the environmentalist message of combating unnecessary consumption.

Whilst lobbying negotiators is probably the most direct way to influence the final agreement, this isn’t usually the channel for fundamental change. Either CSOs also act on domestic policy-makers, or else influencing negotiators with strict marching orders from capital will not achieve anything politically radical. Lobbying must be innovative to be successful: witness WEDO (Women’s Environment and Development Organization)’s capacity to insert 8 references to gender issues in the Cancun Agreements thanks to its financing and training women negotiators from low-capacity delegations.

What these two channels may achieve in Durban is unclear. Yet beyond COP17, CSOs must keep working on discourse. CSOs are a source of new ideas, and ideas can bring about change in politics. The formal adoption of REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) in Cancun is but one example of CSOs helping craft a concept that becomes the backdrop for a UN decision. We are in dire need to think our way out of the impasse on a post-Kyoto framework, and CSOs are best placed to do just that.

As Durban approaches, should CSOs be ‘making more noise’? And what are the possible alternative scenarios that do not entail a second commitment period for Kyoto?

Alexios Mantzarlis is a Junior Analyst at The European House-Ambrosetti. He obtained a Double Master’s from the universities of Bocconi (Milan) and SciencesPo (Paris) with a thesis entitled: “Civil Society and the UN: developing a framework to measure influence in the intergovernmental decision-making process”.

The women are sitting in a circle on the ground under a tree. They were brought together by an international development NGO. An NGO staffer is facilitating the discussion and drawing lines on a large sheet of paper.

This could be in Bangladesh, Mali or Peru. All of us working in international development have participated in or seen photos of such meetings. They are a key element of what is called “participatory programs” and have become a popular tool in development processes. Arguably, the knowledge shared through these bottom-up processes informs development policies and practices that are better adapted to the local context and targeted to the specific needs of local people.

Two weeks ago, David Bonbright and Nicholas van Praag wrote on this blog, “it is easier to listen than to act on what you hear”. The International Institute for Environment and Development (IIED) has come to the same conclusion.

In its latest issue of “Participatory Learning and Action” (How wide are the ripples? From local participation to international organizational learning), IIED looks at grassroots participatory learning programs led by international NGOs (INGOs). The report looks at the impact of such processes on INGOs’ decision-making and strategic planning. It asks the following questions:

1. How do INGOs use and manage local, traditional knowledge?
2. Is this knowledge translated into wider organizational learning, and if so how – or why not?
3. Does local knowledge inform INGOs priorities and policies?

IIED found that most, if not all, INGOs do want to hear and respond to the voices of the poorest and most marginalized. They strive to contextualise their priorities with strong local input. That is why they initiate and fund participatory learning programs.

Yet, it is difficult. There are practical knowledge management issues to systematic sharing of knowledge from local to national and international levels. It is challenging to move information across national and cultural borders, and to interpret and use that information outside of its original context. The report argues that this is not only a practical, technical issue: it is also one of culture, accountability and power. It is not just a question of whose voices can be heard, but of whose knowledge and opinion counts.

IIED identifies two clear trends in the development sector, which effectively create divided loyalties and accountability for INGOs:

1. The trend toward stronger, top-down management and greater professionalization of the development NGO sector, where staff are recruited and valued for their technical management abilities more than their personal commitment to social justice. Development is increasingly seen as a technical, rather than political, process. This culture avoids discussion of the politics of poverty or power and powerlessness and presents development as straightforward, linear and predictable.

2. For those organizations analyzing the distribution and impact of power structures on poverty through a rights-based approach, the difficulty lies in linking grassroots participation and policy advocacy. While participatory processes require slow and long-term relationships on the ground, policy advocacy tends to be carried out using complex, technical language, focusing on fast-moving and highly technical policy processes. Especially in large INGOs, where these two areas of work may be carried out by different teams in different countries, listening to the grassroots – from where INGOs derive their legitimacy as the ‘voice’ of civil society – and engaging in the global development dialogue can be difficult to balance.

I think that at the heart of the problem lies the tension some see between the relevance of traditional knowledge and the prerequisites of economic growth and poverty eradication. How much do policy makers truly trust the holders of traditional knowledge to provide solutions for the development of their communities?

The insight and analysis, evidence and stories generated during participatory processes are just the kind of information which good development policy and planning should be based on. International and local NGOs as well as international development agencies have a responsibility to bring grassroots knowledge and information to bear at the international level. The logistical and ethical issues in making such information available and letting people know that it is there are great. This is why tools are being developed to help INGOs in this endeavor.

Stay tuned for more on the issues of participation, listening and learning on this blog.

Elisa Peter is pursuing a Masters Degree in Public Administration at the Harvard Kennedy School. She is a mid-career
fellow at the Hauser Center for Nonprofit Organizations.

The next session of the NGOs & Development study group, organized by the Humanitarian & Development NGOs Domain of the Hauser Center, will be held on Thursday, April 8^th from 4:00-5:00pm in Weil Town Hall (Belfer L1) at the Harvard Kennedy School.  The session will be lead by Shalaka Joshi, Vice President of Global Strategies, CSO Partners, and Salimah Samji, who was formerly a Program Manager, Google.org.

Please RSVP to Balu at ramaswami_balasubramaniam@hks10.harvard.edu .   

Shalaka Joshi began her career in social enterprise with the United Nations Children’s Fund.  She later worked with the Give India Foundation where she advised business leaders on innovative strategic philanthropy models, and Ashoka, a global association of the world’s leading social entrepreneurs. Her private sector experience includes ICICI Bank – India’s largest private sector bank – where she led the process of integrating private sector partners into the Bank’s initiatives in health, education and micro finance. She also served as Vice President of the IFMR Trust, a for-profit social enterprise dedicated to ensuring complete access to financial services for rural India. She was part of setting up their Network Enterprises Fund(tm) – India’s first equity fund focused on fixing rural supply chains across 14 sectors. Shalaka is currently Vice President of Global Strategy for CSO partners, a non-profit collaborative focused on increasing the scale and effectiveness of Indian civil society.

Salimah Samji is currently taking time off after two years as a Program Manager at Google.org, leading efforts to develop the transparency and accountability initiative in India. She spent three years at the World Bank in South Asia (based in India) as a social/rural development and monitoring/evaluation specialist.  Born in Kenya, Salimah has a bachelor’s in mathematics from the University of Waterloo (Canada) and a master’s in public administration in international development from the Harvard Kennedy School. She is a qualified Casualty Actuary who decided to change careers after spending 18 months working in Afghan refugee camps with a Canadian NGO based in Pakistan.  She has worked in Kenya, Canada, USA, Pakistan, India and Tajikistan. 

More About the Study Group 

The Study Group on NGOs and Development is organized by the Humanitarian & Development NGOs Domain of the Hauser Center for Nonprofit Organizations at Harvard University.  The group meets biweekly to consider, discuss and debate issues related to emerging paradigms in development, evolving roles of NGOs, and specific management, leadership and governance challenges.  The study group brings together interested students, practitioners dealing with these questions in real time, and academics investigating similar questions.  The goal is to create a climate for genuine discussion and lively exchange, in which all participants come to the table with a commitment to share, listen and reflect.  The study group is a space for building relationships, exchanging ideas and connecting real-world challenges to scholarly study of NGOs and their role in development.  Guests will serve as resource people and catalysts of discussion. 

To me, Steven’s point holds up a mirror to international NGOs as well, and cautions against the articulation of programmatic frameworks, organizational goals and performance metrics in a way that undermines flexibility and local knowledge.  As much as foundations can over-specify outcomes in relation to grantees, international NGOs can over-specify outcomes in relation to local NGOs with whom they partner – and local NGOs can do the same in relation to community groups with whom they work. This cascading effect happens because, at every level, organizations want to ensure accountability and effectiveness.  This is understandable and important.  The trick is to find the right balance, where shared accountability, enduring impact (which may not be synonymous with short-term impact) and empowered communities are possible.
 
Second, the search for impact in the short-term is not just a feature of foundations.  Many donors – from large multilateral and bilateral institutions to individual philanthropists – want to know, at a minimum, that their money is not being wasted.  Ideally, they want to know that their contribution is making a tangible difference in people’s lives.  In so many ways, foreign aid and private philanthropy are square pegs, and the problems they are trying to address are round holes.  Foreign aid and philanthropy typically flow along program or sector lines, and are organized around time-bound projects.  Underlying causes of poverty and social injustice, manifested in issues like hunger, disease, poor education, insecure livelihoods or bad sanitation, cannot be confined to sectors and are poorly addressed by projects. 

Increasingly, we are recognizing these problems can only be addressed by profound social change that might be assisted by donor-funded projects, but must be led by local constituencies and movements that find their voices and assert their rights – and by governments who govern responsibly and equitably.  Donors and international NGOs must be humble about their role in bringing about these changes – and be ready to work in ways that facilitate social change without unintentionally dictating terms or unwittingly encouraging a short-term mindset.
 
Finally, two important messages woven thought Steven’s series stood out. 

First, that setbacks and failures are par for the course when it comes to investing in ideas that could be truly game-changing. So the measurement systems we set up should not discourage responsible risk taking and learning from failure.  This is easier said than done.  Few grantees are willing to acknowledge failure (this is different from putting a very positive spin on a setback!) unless donors are deliberate about creating a climate in which very honest reflection is valued and embraced. 

Second, that investments in people and organizations might be more strategic than funding of projects and interventions.  Of course, this is not necessarily an “either or” proposition; it could very well be “both and”.  The tendency, however, is that both donors and international NGOs often focus more attention on project implementation than on building the capacity of people and organizations more broadly.

In Part IV of this series I argued that large, conventional foundations, staffed by highly-qualified and increasingly specialized professional staff, are over-specifying the solutions to poverty in-house and, in the process, are increasing the possibility that potentially breakthrough ideas coming from outside of foundations get over-looked and go unfunded.

New philanthropies, founded by living donors, are bringing another kind of hands-on practice to the field, based on principles of social entrepreneurship.  They are also bringing with them a critique of the nonprofit sector, including of traditional philanthropies, that questions whether nonprofit leaders are sufficiently bold or innovative to bring about real social impact. 

In some cases, this skepticism is warranted and can be healthy.  But it is more often than not accompanied by a kind of hubris that says success in business is a predictor of success in bringing about social change.  So while entrepreneurs have brought to the field needed attention to impact assessment, the horizon for measuring impact is too near and the impact questions asked too shallow.  As a result, work essential to bringing about meaningful change, such as building movements and knowledge, networking and advocacy, is less likely to get supported by the entrepreneur funder.

Funders who approach social problems as entrepreneurs often don’t understand the complexities of the lives that poor people lead, nor have they developed the knowledge of social and cultural resources present in poor communities necessary to placing good bets.  They tend to fund small organizations headed by smart people who come from social backgrounds and experiences similar to their own and, who like their entrepreneur funders, don’t have a lot of direct experience of poor communities (or political and social standing within them).

Some entrepreneurs have extended their critique of the failures of the nonprofit sector to the work of the large traditional foundations.  Sadly, some foundations have not mounted vigorous and nuanced defenses of their achievements as funders of patient, long-term approaches to complex problems, but actually embraced their critics’ analysis of their presumed failures.

I worked for the Ford Foundation from 1992 to 2006.  I was lucky to be present at the meeting of Ford’s trustees in 1996 in Cape Town where the presidency of the Foundation was passed to Susan Berresford from Franklin Thomas.  Mr. Thomas had led the Foundation since 1979.  During his tenure, he changed fundamentally how this leading U.S. philanthropy saw its role in relation to the leaders and organizations it funded. 

At the Cape Town board meeting, a trustee M.S. Swaminathan read out a tribute to Mr. Thomas on behalf of the entire board.  One sentence especially stuck with me: “Franklin Thomas transformed the Ford Foundation from a technical assistance organization to a humanistic organization.”  

We can each attach various meanings to the word “humanistic,” but in the context of Franklin Thomas’s leadership of Ford, it came to mean something very particular to me.  It means that the important social problems, the ones worth attacking, are complicated and often deeply entrenched, our knowledge of them is imperfect and progress in addressing them will be hard, slow and fitful. So the long view and patience are essential.

Persistent poverty is, to a significant degree, the result of political and economic arrangements that deny poor people access to resources, knowledge and opportunities. So while technical interventions can have a role, access to rights and good governance matter tremendously.  And finally, the really powerful ideas are most likely to come from outside the foundation, from people living and working closest to the problems.

This last insight speaks most directly to the notion of a humanistic philanthropy.  But it is also the one that gives foundations working internationally today the most difficulty.  A large portion of funding meant to support anti-poverty work in the Global South goes to large intermediary organizations and universities in the Global North.  These organizations often do fine work, and given their proximity to contemporary intellectual currents in universities and reporting expectations of donors are better able to generate credible measures of short-term impact than their counterparts in developing countries. But local organizations and their leaders possess qualities of insight, persistence and legitimacy that will yield potentially greater impact, over the long term.

I argued in Part II of this series that foundations as private organizations are freer than public funders to get behind new and untested ideas for reducing poverty that show promise. Foundations are less subject to the political, economic and bureaucratic orthodoxies that channel public funds and for-profit investments to tried and true approaches that might work in certain contexts but which are not up to the task of helping people get out of deep poverty. In fact, essential changes in public policy and public funding can result from evidence generated by foundation-funded initiatives that doing things differently yields better outcomes.

I then went on to argue in Part III of the series that foundations, by insisting that grantees produce evidence of short-term, measurable impact as a condition for funding, were actually undercutting the very advantages they enjoy as private donors.  Foundations are sanctioned by society to support risky, complicated work—work that often only shows results over the long-term and is not susceptible to easy measurement, but which has the potential of reducing poverty significantly.

Experience has shown that private philanthropic funding is most impactful when grant support is put behind the ideas and work of leaders and organizations outside of foundations.  Communities and local organizations do the hard work of building capacity and knowledge over time.  They and their leaders do the work of holding public and private interests accountable to the needs and interests of the poor.   Their leaders are more likely to know how to bring about change in the myriad institutions that shape policy and allocate public and private resources.

Foundations are not in a position to lead change from the front lines, but they can put resources behind people and organizations that are.  Moreover, foundations, though ideally staffed with people of broad experience and tested judgment, are not think-tanks.  Or put differently, when they try to act like think-tanks, their ideas too often take the form of technical or overly-simple approaches to hugely complicated phenomena.  Foundation staff should rather focus on understanding major social and economic trends and identifying talented change leaders and effective organizations, which should be funded with the fewest possible constraints. 

US philanthropy is stepping away from making full use of its particular advantages to support the innovative and potentially breakthrough work of people who live and work close to problems. 

Managerial cultures are taking hold in some of the large, traditional foundations such as Gates, Ford and Rockefeller.  Increasingly more specific programmatic frameworks in these institutions run the danger of excluding consideration of good ideas that don’t fit their frames. 

The Ford Foundation’s office in Bangladesh did not have a program in financial services when Muhammad Yunus approached Ford staff for funding in the early 1980s.  Rather, Ford had a poverty program that recognized that the country’s poverty problems were vast and acute, and welcomed good ideas from any quarter.  Today, a number of foundations, including Ford, have large microfinance and financial services programs.  But funding for financial services is an almost ubiquitous element of poverty programming in much larger and wealthier institutions, including the World Bank and USAID, and increasingly among commercial lenders.  Foundations made distinctive and arguably essential contributions to the development of the field of financial services for the poor when mainstream donors and commercial banks still thought that poor people were unbankable.  This is no longer the case.  Shouldn’t foundations have their doors wide open to leaders and organizations that are testing new and unexplored ground for reducing poverty, regardless of sector or discipline?

Not enough funding is getting directly to leaders in developing countries who have the situated experience, intuitive insights and qualities of judgment that spawn good ideas, and the patience and local standing to see them to maturity.  The Gates Foundation does not accept funding proposals under its global Agricultural Development and Urban Development programs from organizations that are not registered under section 501(c)3 of the US statutory code.  Gates appears to accept proposals from non-501(c)3 organizations seeking funding from its Financial Services and Emergency Relief programs.  However, as a general rule, Gates does accept proposals not submitted in response to an RfP.  Would the next Muhammad Yunus with a potentially breakthrough idea, especially an idea that does not fit within Gates’ program frame, get a hearing from the Gates Foundation?   It would not be easy.   

While large traditional foundations are over-specifying the solutions to poverty in-house and reducing the possibility that potentially breakthrough ideas get the attention of program staff, new philanthropies, founded by living donors, are bringing another kind of hands-on practice to the field, inspiring a new kind of philanthropy based on promoting  social entrepreneurship.

This movement, despite its embrace of entrepreneurial principles, is failing also to give reign to the leaders and organizations with the best ideas and in the best position to have significant impacts on poverty.  I will return to this topic next week in my final posting in this series, along with some concluding reflections on how philanthropy can embark on a new era of innovation and achievement.

One of the principal criticisms proponents of so-called new philanthropy direct toward old, or traditional large philanthropies is that old philanthropies, in assessing the merits of grant proposals, don’t require prospective grantees to provide sufficiently rigorous estimates of the likely impact of their proposed work. 

For instance, Paul Brest, Hal Harvey and Kelvin Low, in a recent article entitled “Calculated Impact” in Stanford Social Innovation Review, assert that, “Philanthropists grant billions of dollars a year without assessing whether their chosen strategies are likely to solve the problems that motivate their giving, and without attempting to assess the effectiveness of the organizations they fund.” 

Brest and his co-authors proffer a formula for estimating returns to philanthropic dollars invested (either through grants or loans) as measured in some social benefit.  For instance, they compare the number of person years of life protected per dollar by either investing in a factory that would produce insecticide-treated mosquito nets on a commercial basis or by producing and distributing mosquito nets as a traditional charitable activity.  Another example assesses the expected increases in income per dollar of grant funds invested accruing to poor people as a result of Hewlett Foundation funding for anti-corruption initiatives in Nigeria.  (I’ll return to these examples at the end of the post.)

I believe that philanthropy’s current focus on short-term, quantitatively measurable impact is distorting the practice of strategic grant-making and reducing the prospects for meaningful social change. 
 
Social change is complicated, and systemic social change is more likely to happen over the long-term and as a result of a variety of interventions, including securing changes in law that expand rights, changing public policies, and creating and strengthening vital institutions. The short-term impacts of these kinds of efforts are sometimes hard to measure but history and experience tell us that pursuit of ambitious goals is essential to meaningful change.

Susan Berresford, former president of the Ford Foundation, argues that new philanthropists, by insisting that grantees demonstrate short-term, measurable impact, run the danger of “miniaturizing the ambition” of foundations and grantees alike to work on deeply entrenched problems such as racism, poverty and inequality.  Berresford wonders if “decades of support by Ford and others for the world’s human rights movements, assistance to the U.S. civil rights movement or the anti-apartheid struggle would not have fit the short-term planning formula.” 

Seasoned grant-makers know that nonprofit leaders base their plans on evidence that they are likely to be impactful, and gather evidence along the way that things are working (or not), using a variety of methods and skills.  Tested leaders have learned from both success and setbacks.  Their knowledge, which is routinely informed by empirical evidence, has helped them shape sophisticated theories of change that guide their planning and decision-making.

Effective leaders possess qualities of judgment, intuition and political adroitness that are forged through many years of working close to the problems that bedevil their societies.  They know which levers need to be pushed and pulled in moving essential institutions toward more just and pro-poor policies.  These qualities of leadership are not given the kind of weight they merit, especially when donors are fixed upon knowing how things are going to end before they begin. 

To over-focus on measurable, short-term impact runs the danger of drawing foundation attention and resources away from ambitious and complicated problems, the kinds of problems that philanthropies are best suited to address.

Let’s return to Paul Brest’s and his co-authors’ “Calculated Impact.”  Take their mosquito net analysis, for example.  I would rather see foundations, as private donors better able to bear risk than public donors and traditional charities, investing in the development of the next generation of malaria prophylactics, whatever these may be.  This is the uncertain but pioneering ground.  Leave distribution and marketing of tested technologies to the public sector, private investors and charities. 

And to the extent that Nigerians will benefit in coming years from reduced official corruption, surely the groundwork laid by decades of anti-corruption work undertaken by Nigerian human rights and good governance groups would have been essential to whatever progress is ultimately achieved.  Many of these groups were funded over many years by foundations such as Ford and MacArthur with little expectation of social return in the near term.

I am arguing in this four-part series that US foundations working internationally are not making full use of their freedom to support innovation and help people claim new rights—and that progress toward reducing poverty and extending essential rights and liberties may be casualties.  In my post of March 25, I offered three reasons for why foundations may be stepping away from risk and, in turn, innovation.

Today I write about the first factor:  confusion about accountability.

Indeed, foundations have public accountability requirements.  But these are different from those faced by public funders such as the World Bank and USAID.  I believe that the accountability frameworks governing foundations gives them greater rein to fund innovative and risky work.   

It may be useful to think in terms of two forms of accountability faced by donors, including private foundations and public donors such as the World Bank and USAID: operational accountability and programmatic accountability. 

Operational accountability refers to a set of legal obligations that foundations use tax-exempt funds and public agencies use tax revenues (and other publically-guaranteed financial instruments) to pursue bona fide charitable purposes.  Federal law further provides that foundations payout roughly five percent of the value of their endowments annually.  The law imposes restrictions on use of tax exempt funds to benefit personally contributors, trustees and staff.  US private foundations are required to file annually with the IRS a form 990-PF, showing a list of grants made. The great majority of grantees demonstrate their tax-exempt charitable purpose by virtue of qualifying as a tax-exempt organization under section 501(c)(3) of Federal law.

While the law is somewhat unclear with respect to granting and reporting on grants made to foreign organizations, many large foundations working internationally have developed 501(c)(3) equivalency standards.  In other words, if an organization is organized and registered in its own country to serve nonprofit purposes on terms broadly analogous to US nonprofits, then grants can be made fairly freely. These practices have so far passed muster with the IRS. 

Programmatic accountability is a different matter. Qualifying tax-exempt purposes for foundations and nonprofits as set out in section 501(c)(3) are broadly defined as charitable, religious, educational, and scientific.  The IRS provides a broad working definition of charitable.  The framers of the law have had the wisdom not to require foundations to demonstrate that, in addition to serving charitable purposes, the funds expended have resulted in tangible, indeed measurable benefit to society. To do so would introduce imprecise, uncertain, and contested social science analysis, and widely disparate political points of view, into questions of what interventions have been more or less impactful, and thereby worthy of tax exemption.  This would be a costly and unfruitful exercise and one almost certain to diminish the appetite of foundations to fund innovative, and inherently risky, work.

Once again, Congress has not proscribed that foundations be accountable to the public for programmatic outcomes.   Herein lies the freedom of foundations to support programmatically innovative work. They can do so while fully observing their obligations to demonstrate operational accountability—essentially that funds support bona fide tax-exempt charitable purposes. 

Public sector donors face their own sets of operational accountability requirements.  But they are also subject to high levels of public scrutiny and control over their programs. 

The World Bank’s board consists of 22 member governments.  World Bank staff members work to a set of orthodox approaches to development that will get board support and that will reliably generate results.  This pushes decision-making toward tried and tested approaches and discourages risk-taking on behalf of innovation. 

USAID is subject to intense Congressional oversight of its spending.  Project failure, and the presumed waste of taxpayers’ money, is the bane of any USAID administrator. This reduces the appetite of administrators for risky, untested ideas, even when they appear plausible and promising.

By virtue of the programmatic freedom enjoyed by foundations, I believe they are freer, legally and politically, to support new, promising but untested approaches to poverty reduction and social change.  Regrettably, foundations today are not taking advantage of this freedom.  This retreat from freedom is largely self-imposed.

Full disclosure: I have not read the book, so my impression of Moyo’s arguments is only based on her presentation at Harvard.

I’m glad that Dead Aid and the strong reaction to it (both positive and negative) help to stir the pot. We should be asking fundamental questions about the effectiveness and sustainability of foreign aid. So I was disappointed that Moyo’s sweeping generalizations missed the opportunity to use evidence of impact (or the gaps in such evidence) as a basis for critiquing important weaknesses in aid models. Instead, she seemed to assert that almost every failing in Africa – from inefficient bureaucracies to inflation and from corruption to Dutch Disease – was either caused by or directly related to foreign aid.

Moyo argues that aid has disenfranchised Africans, and that the celebrities who have embraced Africa routinely convey only negative images of Africans. Moyo is correct that badly-designed aid skews accountability of governments (away from their citizens and toward donors) and that fundraising for Africa more often uses stories of misery and desperation than narratives of hope and strength.

Ironically, the image that Moyo conveys of African leaders and citizens is extremely negative and disempowering. She paints a picture of helpless victims held hostage to a harmful aid model imposed on them by western donors. Moyo applauds President Kagame’s leadership in Rwanda and his efforts to establish parameters for donors. But she does not allow that Africans – from national leaders to community groups – have the agency and ability to articulate their priorities and exert some control over how aid is used.  Rwanda, being both a donor favorite and a perceived success story, is an interesting case study against which to interrogate Moyo’s thesis – but she did not do so.

In her introductory comments, Moyo stated that Dead Aid does not refer to humanitarian assistance or the work of NGOs because that was “charity”. I am not sure why Moyo took NGOs off the hook!  They are major implementers of aid from donor governments.  So why should they be less accountable for achieving positive impact?

One could argue that humanitarian assistance, to the extent that it involves rapid infusions of resources into crisis settings, is ripe for the kind of negative impact that Moyo points to. Also, in settings where disasters or conflicts unfold over years and people live in crisis every day, humanitarian assistance is part and parcel of the longer-term aid model that Moyo critiques.

It is clear that Dambisa Moyo’s message is striking a chord – and that she is tapping into a significant vein of skepticism about the current aid model. I hope that her arguments – whether or not one agrees with them – propel efforts to increase the effectiveness of foreign aid and expand the range of strategies (beyond aid) for ending poverty, advancing dignity and promoting economic growth.