Paul Farmer’s compelling new book, “Haiti: After the Earthquake,” suggests that international aid to Haiti, while providing relief from suffering during the worst of times, including in the aftermath of the January 12, 2010, earthquake, has for the most part failed to help Haiti build capacity in its own public institutions, including its public health and education sectors.

A capable, responsive and accountable public sector is essential to helping Haiti become a healthy, productive and ultimately resilient society—one better able to cope with the destructive forces of inevitable natural disasters such as hurricanes and earthquakes. Moreover, Farmer argues that meddling by the West in Haiti’s internal politics has contributed to the country’s chronic political instability. Periodic withholding by the U.S. of direct assistance to the Haitian governments—including democratically elected but leftist governments—and U.S. vetoes of initiatives by international organizations to channel aid directly through the Haitian government, have steadily eroded the capacity of the Haitian public sector to provide basic social services.

In testimony to the U.S. Senate Foreign Relations Committee in 2003, Farmer called for an end to the de facto prohibitions of development aid to the government of Haiti that the US promoted in forums in which it held influence, including the Inter-American Development Bank. “At the time [of the testimony], influential American institutions were effectively blocking four loans to Haiti from the Inter-American Development Bank—for primary health care, education, potable water, and road improvement—because they didn’t condone the outcome of Haiti’s 2000 elections, which brought the left-leaning Aristide back to power.” (p. 97)

U.S. aid did flow to Haiti during times when Washington was displeased with the country’s political leadership, but not to the Haitian government. Instead of aiding Haitian government organizations such as the ministries of health and education, aid was channeled to international non-governmental organizations (INGOs). INGOs set up their own health, water, education and agricultural programs, with little reference to Haitian government oversight, needs or priorities. Funding channeled through international NGOs failed to help build the capacity of Haitian public institutions that must provide health, education and other essential public services to poor Haitians over the long term. “Without real and sustained commitment to strengthening the public sector—including its capacity to monitor and coordinate services offered by NGOs—who would make sure development funds were being used efficiently.” (p. 97.) At the time of the January 2010 earthquake, 80 percent of all aid to Haiti and 90 percent of all U.S. aid was channeled through NGOs and contractors.

Haiti by the time of the earthquake had become known in humanitarian aid circles as “the Republic of NGOs,” with more NGOs per capita than any developing country apart from India, according to Farmer (p. 99). The U.S. reliance on INGO-managed assistance was to a considerable degree a direct consequence of U.S. laws that prohibited direct U.S. aid to Haiti’s public sector. “Post-earthquake Haiti needed many of the foreign contractors and NGOs because its [public sector] implementation capacity has long been weakened.” (p. 99). Ultimately, only 0.3 percent of all Haitian quake relief was channeled through Haiti’s public sector. (p. 102)

Farmer was back at the Senate Foreign Relations Committee on January 27, 2010, less than two weeks after the earthquake. Six months previously he had been appointed UN deputy special envoy for Haiti under the special envoy, President Clinton. Tasked with mobilizing international relief support for Haiti and recognizing that it is poverty that makes people most vulnerable to natural disasters, he argued that greater amounts of aid for reconstruction be channeled through Haiti’s public sector. Better education and public health care systems would over the long term bring greater prosperity, and in turn would reduce the loss of life and destruction of property and livelihoods in the aftermath of natural disasters.

There is an opportunity not only to build Haiti back better, but to build a more functional and ultimately beneficial arrangement for aid delivery. Over the past two decades, U.S. aid policies have seesawed between embargoes and efforts to bypass governments, including elected ones not to Washington’s taste. Neither the international community nor the United States provided credible, long-term, financial investment in Haiti. Restructuring foreign aid and forgiving Haiti’s crippling debts are essential to helping the country recover. U.S. laws, including the Foreign Assistance Act of 1961 and its later revisions, prevent direct investment in the public sector; we will need to revisit these policies.

Jehane Sedsky, a colleague of Farmer’s at the UN special envoy’s office, in a concluding chapter entitled “Building Back Better, provides a thoughtful discussion of why the efforts of not-for-profit community in Haiti before the earthquake often did not contribute to lasting change in Haiti or, in many cases, to even help Haitians.

• The work of not-for profits was uncoordinated and did little to reinforce the priorities of the Haitian government.

• International NGOs expended great effort determining ways to address problems they saw, but often they did not include Haitians in meaningful ways as they developed their plans.

• International NGOs are accountable to their international donors—not to the disenfranchised communities they are trying to serve.

• Often they deliver goods and services but less often pay local salaries; creating a culture of dependency rather than self-sufficiency.

• Many years of effort by NGOs has served to only weaken the already weak government, which did not, even before the earthquake, have the resources to pay its employees.

• As a result, public health and education officials are paid intermittently, hospitals lack basic medicines and supplies, and schools are 90 percent privately owned and unregulated. (p. 357)

International humanitarian NGOs do not deploy their resources or staff to work within national institutional frameworks as partners—as part of the fabric of Haitian health and education organizations. Many find it inconvenient to do so, but many of their objections to working as authentic partners, dedicated to rebuilding Haitian capacity at its core, must be answered and overcome.

Farmer and his co-authors offer a persuasive critique of the failures of international aid to engage with Haitian public sector institutions in ways that would better serve Haiti over the long term. But they don’t in my view offer enough in the way of concrete proposals for forging a new kind of relationship between donors, international NGOs, and the Haitian government. I want to offer below a few ideas, principles really, for a new kind of aid relationship.

• A considerable portion of international development and humanitarian funding should be directed to building the capacity of the public health, public education and water sectors, sectors essential to poverty alleviation and economic growth. What’s an appropriate portion of all aid? I don’t know, but for purposes of discussion, let’s consider what it would take to get 50 percent of all aid disbursements channeled through the Haitian government as general budgetary support or through projects that are administered jointly by the Haitian government and INGOs and/or contractors by 2015.

• International technical advisors and professionals—health care workers, teachers, health and education administrators, civil engineers—should in much greater number than is currently the case be seconded from aid agencies, including from the staffs of International NGOs, to Haitian ministries and agencies, filling established posts. This would mean, for instance, that Haitian health care not be augmented by building new non-profit hospitals, staffed at the top by foreigners, and drawing talented Haitian away from public institutions with better, but ultimately uncompetitive salaries. Rather, funds should be directed to building better Haitian public hospitals, and international medical staff would take up positions at the side of their Haitian colleagues.

• In addition to providing technical assistance in their respective fields, international staff will be expected to provide management expertise, including skills in financial management, reporting and program auditing. (I’ve written in a previous blog about how Botswana’s insistence that all international advisors hold established Botswana government positions left a template of good management practice that endures long after the departure of expatriates).

• Effective public service delivery in Haiti will ultimately be provided by a growing Haitian economy, capable of financing to a much greater degree than is the case today its own public services. Considerable financial aid and technical assistance should be directed toward sectors of the government and the economy responsible for promoting joint public-private investment projects, generating employment growth, and better managing public finances. Partnerships between U.S. and Haitian universities and the Haitian ministry of finance supporting training in public finance and administration of top Haitian graduates should be designed and generously funded.

• The US should consider Haiti as a partner for Millennium Challenge Corporation funding for key sectors, such as health, education and agriculture, and provide aggressive support for USAID management development projects that would help Haiti meet the pre-conditions for MCC sector funding (as is currently being done for Liberia).

Haitians deserve a better deal from their own government and from international aid organizations. The current aid system does not help deliver the kind of systemic improvements in Haiti’s public service sectors for which it is capable. It’s past time to leave behind the litany of excuses that stand in the way of helping Haiti build back better.

Steven Lawry is a Senior Research Fellow at the Hauser Center for Nonprofit Oganizations at Harvard University.

Egypt’s civil society is small, though hardly ineffective.  Civil society organizations have been working bravely for decades on severe problems of poverty, human rights, and social disempowerment.  Official policies toward independent social action have been consistently hostile. 

Laws governing nonprofit organizations impede the registration of organizations dedicated to charitable activity, especially where an organization’s mission is focused on matters that the government believes to be politically sensitive.  This includes virtually all human rights work; most work involving community organizing for poverty alleviation; and work on reproductive rights (including Egyptian-led efforts to eradicate the practice of female genital mutilation). 

Seemingly mundane efforts to help widows and unmarried women secure government identity cards that are necessary to open bank accounts and establish businesses are regularly frowned upon, ostensibly out of fear of raising the ire of Islamist groups.  Government censors understand that the arts can be powerful vehicles for expression of political dissent, through depiction of the depredations of everyday life.  Plays cannot be publically produced without the prior approval of censors.  Events often go ahead on an unofficial basis, with producers taking care not to charge admission, something only officially-sanctioned events are permitted to do.  Struggling artists struggle in Egypt more than in other places.  

Egyptian and international philanthropy operate under analogous constraints. Egypt and much of the Muslim world have a venerable tradition of charitable endeavor, in the form of religiously sanctioned charitable endowments known as Al-waqf.  Historically, wealthier members of society would legally title some of their property, often apartment buildings, as a waqf, with income from revenues designated to support the social work of mosques, and for schools and hospitals. 

In 1953, Egypt’s revolutionary government nationalized all Al-waqfs.  Al-waqf income was legally required to be paid out to the state treasury.  A Ministry of Awqaf made decisions about how the income was to be spent. Not surprisingly, few new waqafs have been established since 1953. 

Nonprofit organizations, if they manage to get registered under the NGO law, must then secure approval from the government to receive donations from domestic and international sources for each and every project they propose to carry out.  Some get around this by becoming “partners” with international organizations working in Egypt that are not subject to Egyptian NGO law. But such partnerships are necessarily limited in scope and scale, and sometimes reflect more the agenda and priorities of the international partner than the Egyptian counterpart.

The multiple constraints placed on the operation of civil society organizations and on private philanthropy are what would be expected of autocratic, insecure and paranoid regimes.  The effects are perverse.  Civil society and philanthropy in the main represent good faith efforts by private citizens to contribute to the resolution of problems that bedevil their countries and communities.  They represent a capacity for innovation, risk-taking and commitment not found in government agencies.  When this capacity is stifled and repressed, problems are less likely to be solved or ameliorated.  The problems often get worse.  People get fed up.  They eventually rebel.

U.S. philanthropy, apart from the notable exception of the Ford Foundation, has not been a serious source of support for nonprofit endeavor in Egypt, or for that matter elsewhere in the Arab world. This is regrettable.  Surely, the political and logistical barriers are large, but Ford has proven that through care and determined effort, over a number of years, vital work on human rights, women’s rights, reproductive health, poverty alleviation and the independent arts can be supported.

A democratic society must, by definition, be one whose citizens can freely form legally-recognized organizations dedicated to peaceful advocacy on any subject of public interest, and to be free also to carry out charitable activities that directly improve human welfare.  These organizations must be able to raise money from domestic and international sources with minimal legal restriction.

Egypt is blessed with a citizenry that wants to contribute to building a freer, less poor and more democratic country.  They need to be given the legal and constitutional tools to do so.  I suggest a few things that would help make that happen.

• The new constitution should affirm the right of Egyptians to freely associate and to form nonprofit organizations dedicated to public advocacy and to a broad range of charitable activities.
• U.S. foundations should direct considerable financial resources to democracy-building efforts in Egypt and other newly-free nations in the Middle East. Support for Egyptian national institutions of higher education would be a good place to start, particularly for exchange programs, and for programs on human rights, governance, and economic development.  Police reform, and work on civil-military relations, and support for nonprofit capacity-building would also merit attention.  
• Egyptian civil society needs to be represented on constitution-drafting bodies.  The fact that the interim constitution is being drafted by the Army is not encouraging.  The general absence of women in reform forums, civil and official, is alarming, and international supporters of Egypt’s democracy should speak clearly to the need for women’s representation on committees and bodies shaping the new constitution. 
• The Council on Foundations and the Foundation Center should consider establishing task forces dedicated to helping U.S. foundations plan strategically for how they can assist Egyptians as they struggle to give full flower to their democracy.

Steven Lawry is a senior research fellow at the Hauser Center for Nonprofit Organizations. He served as Ford Foundation representative for the Middle East and North Africa, in Cairo, from 1997 to 2001.

This is the second of two posts by Steven Lawry exploring why and how developing country governments should set a strong, clear frame for development efforts, and why and how donors and INGOs should work within that frame.

In my last post, I argued that INGOs tend not to work as closely as they should with governments in developing countries.  This has many causes.  An important one is that donors have found INGOs to be reasonably efficient vehicles for channeling funding to developing countries on terms that ensure the donors retain maximum control over program priorities and program management.  

This is short-sighted and undercuts many benefits to development strategy and poverty reduction that would result where both donors and INGOs worked more closely with host governments.  In this post, I offer some reflections on what can be gained by closer donor-INGO-host government management of development strategy and programming.

INGO programs can benefit from the ideas of host-government civil servants

By not engaging actively and routinely with governments, INGOs don’t benefit from the experience and good judgment of local civil servants, many of whom are similarly committed to poverty reduction.  My experience is that local officials possess hard-earned, grassroots experience, and have good ideas on how to execute poverty reduction programs.  The benefit of this knowledge is lost where INGO staff are not obliged to check in regularly with host-country officials, for reviews of program progress and effectiveness, or when these reviews are treated by both sides as perfunctory exercises.

INGOs can help governments implement their development strategies

Some INGO leaders might argue that, as civil society organizations, their role is not to work with governments, but directly with the poorest. I don’t want to argue that INGOs should be directing their staff to work principally with governments or channel their funding through government ministries.  But many developing country governments have development plans and strategies of their own.  INGOs should take cognizance of those plans, and work in concert with the government’s programs where their purposes are consistent with poverty reduction. 

INGO field work should be directed to regions of the country where government sees the greatest needs.  INGOs should make every effort to recruit staff locally to fill positions at the highest levels.  Local staff members not only understand the local context, but tend to be more attuned to host-government plans and priorities than international staff. Surely, good things can happen, in terms of the relevance and sustainability of INGO work and in terms of improved government capacity, if more opportunities were fostered to work together.

Better national policy yields more impactful INGO programming

INGOs tend to operate in a project mode, and not in the realm of policy and program. Sustained poverty reduction requires sympathetic and supportive public policies.  Governments need to join INGOs by directing more of their own resources to the education and health needs of women and girls.  Official banking regulations need to be supportive of micro-finance institutions.  Agricultural pricing policies and land tenure policies need to be supportive of small-holder agriculture. 

Too often, INGOs work in policy environments that have implications counterproductive to the outcomes they promote.  INGOs can help villagers build rural schools and health posts.  But at the end of the day, those facilities are must be staffed by properly trained and appropriately paid teachers and clinicians.  INGOs have an active interest in helping governments get policies right. 

INGOs can help governments manage aid better

A friend who works for USAID here in Juba remarked the other day that some governments, given their many concerns, including the scarcity and shortage of skilled staff, are happy for INGOs to operate more or less freely in providing essential services and needed relief. No doubt this is true.  INGOs often work in very poor countries. The incapacities of host governments are just another expression of that poverty. But the pathway to sustained poverty reduction should also include a strategy that helps governments become better at shaping and managing poverty reduction programs, even under circumstances of dire poverty and limited public finances. 

This is something that President Seretse Khama understood to be a benefit of having expatriates working side by side with Batswana civil servants. When the advisors were gone, a template of good management practice remained. 

Democratic governments will insist on better terms of engagement.

Mention of Seretse Khama and the example of Botswana brings me to the question of what it will take to bring about a new dispensation in donor-INGO-host government relations, one where all three parties work in closer unison on an authentically shared vision for poverty reduction. 

Frankly, the initiative is not going to come from donors or INGOs, despite the obvious advantages of greater collaboration.  Donor governments have their own strongly-held ideas about economic development and poverty reduction, and increasingly have found in INGOs partners willing to work to those ideas. 

The impetus for a new dispensation will likely come from developing country leaders who believe, like Seretse Khama, that their country’s efforts to reduce poverty are too important to be left to donors and INGOs alone, no matter how expert, resourced and good-intentioned they may be. These leaders, like Khama before them, will by definition be democrats, whose sense of urgency for meaningful and rapid progress will be in large part driven by the rising expectations of a citizenry prepared to hold their leaders accountable. 

Steven Lawry, Senior Research Fellow at the Hauser Center for Nonprofit Organizations, is currently based in Juba, Southern Sudan, where he heads a USAID-funded project assisting the Government of Southern Sudan to develop a new land policy.

This is the first of two posts by Steven Lawry exploring why and how developing country governments should set a strong, clear frame for development efforts, and why and how donors and INGOs should work within that frame.

As a young man starting out in international development work in the 1970s, I served as a Peace Corps Volunteer in Botswana.  But my only connection to the Peace Corps was a monthly paycheck (a very small one).  I was for all intents and purposes a Botswana government civil servant.  I held an established government post, Assistant Planner in the Department of Town and Regional Planning. 

The Department was a unit of the Ministry of Local Government and Lands.  I reported to a Senior Planner, a Swede funded by SIDA.  She reported to the Director, who was seconded by UNDP.  He reported to an Undersecretary in the Ministry, who was a Motswana, and so forth. 

I didn’t realize it at the time, but what seemed to be a sensible and effective way of integrating overseas staff into a developing country’s public service was quite unusual.  I came to learn that, in other countries, apart from a few high-level advisors, donor-funded staff usually worked in separate management units, located in aid missions or in the offices of donor-funded contractors and INGOs. 

As I came to work in other countries and under different aid staffing regimes, Botswana’s practice of integrating overseas advisors into its civil service structure seemed all the more compelling.  It helped ensure that everyone worked to a coherent development strategy, which had been debated up and down the structure (by both Batswana and expatriate staff) and agreed ultimately at the highest levels.  overnment programs were backed by donor funds and Botswana government revenues.

Any donor making its funding contingent on activities that fell outside of Botswana’s carefully established priorities would be told, as politely as possible, that they take their funds elsewhere.  Funding was important, yes.  But more important was ensuring that it was applied in a disciplined and coordinated way to the country’s own development strategy.

Donors rarely did take their funds elsewhere, as they came quickly to appreciate the advantages of Botswana’s approach.  Programs were well-conceived and well-executed.  They were scaled to the country’s capacity to actually implement them and enjoyed the full endorsement of the government and the commitment of government staff and financial resources.  They tended to succeed where similar initiatives, pursued in other countries without the benefit of full government endorsement and engagement, failed.   

One obvious lesson of the Botswana model is that operational structure—how donors and donor-supported staff and host governments interact in shaping policies, designing programs and implementing them—really matters. 

I have lived and worked in several other developing countries after my time in Botswana, and kept asking myself and others why the Botswana model of staff integration is so rarely found elsewhere.  Explanations offered, or implied, were various.

One is the nationalist argument: having donor staff so deeply entrenched in national governing institutions would be an affront to national sovereignty.  Moreover, expatriates would be holding positions that should be held by citizens. Many political leaders embrace the nationalist argument, or feel popular pressure to embrace it. 

Botswana’s greatest proponent of its integrated staffing model was the President, Seretse Khama.   Khama was a person of considerable wisdom and self-confidence, and if there were pressures to eschew this approach, he would have tamped them down with reasoned arguments on behalf of its many benefits. 

Importantly, the Botswana model was never meant to be a permanent, open-ended arrangement.  Accompanying heavy use of expatriate staff was a vigorous national education and training program, including major investment in the University of Botswana and overseas post-graduate training.  By the mid-1980s, less than 20 years after Botswana’s independence, the civil service was largely localized. 

Putting the nationalist argument aside, donors have their own reasons for not embracing the model.  One is that, despite efforts to appraise initiatives in light of local conditions, most international donors work to a strategic framework produced in Washington, London, Geneva or Paris.  Donor programming has an adaptation problem: to align their work with the needs of a developing country as defined by its internal planning process would require a tolerance for flexibility and compromise that many aid agencies can’t negotiate with their home governments.

My time in Botswana pre-dated the rise of INGOs.  Since the 1980s, INGOs have come to be major players in international development.  As direct implementers of poverty reduction interventions (especially in the fields of health, education, microfinance, reproductive health, and water and sanitation) they loom particularly large. 

For many INGOs, public funds (including contracts and grants from USAID) are important sources of funding and have allowed them to expand their funding bases significantly beyond private donations.  (In 2009, CARE USA received $240 million in revenue from private sources versus $247 million from USAID.  Also in 2009, World Vision received $344 million from USAID, about 28 percent of its total revenue. In 2008, Save the Children received $108 million, or 24 percent of its revenue, from USAID.)  

INGOs sometimes receive more direct funding from donors than host governments themselves.  Before the January 12 earthquake, 80 percent of all donor funds for Haiti were directed through INGOs; 90 percent of US government funding for Haiti went to INGOs. 

As conduits for funding or providers of advisors and staff, INGOs have even less direct functional engagement with host-country governments than bi-lateral or multi-lateral donors, which (compared to the Botswana standard) is already pretty low. 

By insisting that their money goes directly to contractors and INGOs, donors foster a parallel system of aid management and administration.  INGOs conclude, quite logically, that their principal client is not the host-country government, but the donor.  This encourages many of the dysfunctions and inefficiencies that the Botswana model minimized.

Steven Lawry, Senior Research Fellow at the Hauser Center for Nonprofit Organizations, is currently based in Juba, Southern Sudan, where he heads a USAID-funded project assisting the Government of Southern Sudan to develop a new land policy.

Several powerful donors have concluded that nonprofits make inadequate use of impact assessment tools.  They are backing up their arguments with an implicit threat: measure in particular ways or you don’t get the money.  Wise nonprofit leaders know that the problems they work on are not susceptible to simple measurement.  They know that the kind of formal impact measures some donors expect and management consulting firms prescribe are hard to come by honestly.  They collect various data all the time to inform their judgment and decision-making and to spur learning. Now, data collection (to donor-specified standards) is increasingly used for accountability purposes. 

This may have the effect of reducing the degrees of freedom nonprofit leaders have to innovate and to pursue promising but risky ideas (without the fear that failure to prove one idea will poison their chances to learn from that failure and try something else another day).   As former Ford Foundation President Susan Berresford argues, insisting that grantees demonstrate measureable, short-term impact can have the effect of “miniaturizing ambition” for doing risky but potentially break-through work.

People who impose these restrictions confuse use of prescribed tools or achievement of certain outcomes as evidence of good management.  Sometimes they are. But, in and of themselves, they hardly constitute an impressive tool kit of good management practice. 

The good judgment of experienced managers, deeply immersed in the complex social dynamics of the communities in which they work, is a formidable and essential resource in assessing impacts.  Experience and tested judgment also come into play in shaping a picture of the complex variety of social factors that might explain, for instance, why some poor children and not others attend school, or what mix of interventions are most likely to keep kids out of trouble with the police.

Effective nonprofit managers get information from a variety of sources: formal studies, observation of trends in behavior, feedback from partners and clients. They also draw on deep reserves of knowledge of the local social context, of cultural norms and values, and on the ability to empathize, to look at the world through the eyes of others. 

These sources of knowledge are particularly important in shaping untested but potentially innovative, breakthrough approaches to social change. Effective leaders first and foremost seek to explain how a given problem is responding to a given set of interventions.  Data help describe what is happening, but the interpretative powers of managers are essential to meaningful explanation.

One of my favorite examples (see working paper here) of the kinds of insights that arise from observation, judgment and experience is the particular knowledge that Muhammad Yunus gained from walking through poor communities around Chittagong University on his daily walk to work.  His knowledge of rural Bangladeshi society, combined with his advanced training and powers of intuition, spawned his ideas on social lending, or what became known as micro-finance. 

The invention of micro-finance demonstrates that breakthrough innovations, and even simple adjustments to well-established programs, are spawned by a variety of sources and intellectual attributes:  data, data intelligently interpreted, knowledge of the local and comparative contexts, and good judgment.  All four of these factors are essential to shaping development breakthroughs.  Donors should give greater weight to the latter three over the first in considering funding proposals.

A recently published book on the use of applied mathematics to help understand messy, hard-to-measure problems speaks to the importance of experience and judgment in making sense of limited data.  The book is Street-Fighting Mathematics: the Art of Educated Guessing and Opportunistic Problem Solving, by Dr. Sanjoy Mahajan.  Dr Mahajan is associate director of MIT’s Teaching and Learning Laboratory and the book grew out of a course by the same name that Dr. Mahajan taught for several years at MIT.

The basic premise of his approach, set out in the books first sentence, is that “Too much rigor teaches rigor mortis: the fear of making an unjustified leap even when it lands on the correct result.”  Many real-world problems are not easily described with the kind of precision that professional mathematicians insist upon. This is due to the limitations of data, the costs of collecting and analyzing data, and the inherent difficulties of giving mathematical expression to the complexity of human behavior.  
In the face of these obstacles, mathematicians tend to do one of two things: insist on finding the true proof, even in the face of huge methodological constraints (rigor mortis) or give up. 

Mahajan counsels a third-way: using mathematical reasoning to find a good-enough, approximate and usually valid and useful answer; or as Dr. Mahajan so adeptly puts it, “When the going gets tough, the tough lower their standards” (p. 99).  His book describes six tools for better understanding complex problems with limited data, including picture proofs, lumping, and reasoning by analogy.

There is wisdom in Dr. Mahajan’s core argument that is relevant to current debates about the place of impact assessment in program management.  Many problems, especially problems of social analysis, present huge problems of description and accurate measurement.  We can learn much of what we need to know by tracking a few data points, but knowledge of the underlying social forces and personal motivations that frame the decisions people make is essential to specifying what should be measured and interpreting findings wisely.

My concerns about the emphasis some donors give to evaluation and impact assessment lie not in their lack of value, but in a skewing of perspective.  I want to sum up with a few thoughts on getting the perspective in better balance.

• Knowledge of the local context and the insights spawned by that knowledge are hard won and accumulated over many years. External donors and many of their staff too often don’t possess such knowledge.  For large Western donors, reliance on data and impact measures can be a crutch, a substitute for the knowledge of local context they don’t have.  
• Lack of knowledge of context contributes to an overreliance on one-size-fits-all interventions based on experience from elsewhere, resulting in poorly-adapted local project design.   An obvious remedy is to place greater trust in the leadership and judgment of people who live and work close to the problems; local educators, entrepreneurs, civil society leaders.  
• Evaluation is first and foremost a learning tool, of greatest value as an aid to the judgment of program leaders and managers. The work of donors also stands to benefit from the knowledge that grantees gain in assessing changes within the communities they work and progress in pursuing particular goals.
• Of greatest relevance to predicting the merits and eventual success of a proposed grantee initiative are the wisdom, experience, judgment and reputation of the grantee organization and its leadership and staff.   These are the important qualities that should be considered when contemplating a grant.  (William Duggan’s book, Strategic Intuition, examines the qualities of leadership and management that spawn systemic impacts.)
• Donors who insist on short-term measurable impact should stay away from funding work that seeks breakthroughs on complex, long-intractable problems. 

Steven Lawry, Senior Research Fellow at the Hauser Center for Nonprofit Organizations, is currently based in Juba, Southern Sudan, where he heads a USAID-funded project assisting the Government of Southern Sudan to develop a new land policy.

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.

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.