NGOs feel the cold wind of reality

As the report of the Commission for Africa hits the weary populace, with all its demands of doubling aid, rescheduling debts and, oh yes, requests for improved governance in African countries run largely by bloodthirsty kleptocracies to the great detriment of all the people, organizations that should rejoice and benefit, the NGOs, are beginning to shiver in the cold wind of reality.

It seems that donors no longer accept unequivocally their self-defined image as the world’s true benefactors and regulators. It seems that some ill-intentioned people are beginning to grumble about the fact that, although these organizations handle many millions of dollars, they seem to be completely unaccountable to anyone except themselves.

It seems that donors have noticed repeated clashes of interest in the activity of certain directors; the spending of large sums on advertising and salaries; consistent misrepresentation of the truth of certain situations to produce shock-advertisements in order to get more money (well, they are true in essence, wail the NGOs, whatever that may mean).

The US Congress is turning its attention to the NGOs (or international charities as they are sometimes known) and their finances.

Senator Charles Grassley, the Iowa Republican and chairman of the Finance Committee, is planning to hold hearings and introduce legislation to curb abuses in tax-exempt organizations, particularly the international ones, who have greater possibilities for abuses.

In a panic, the NGOs are trying to put their collective house into order. After decades of self-assessment or assessment based entirely on paperwork submitted by the organizations themselves (and that largely in the domestic sector), some international charities have been opening their books to independent assessors.

There has been a huge increase in the amount given to charity and in aid in the United States since 2001 but with it has gone a new cynicism about the role of those saintly NGOs. There have been various scandals, some of the personal financial kind, some of the more institutional.

After the tsunami many donors demanded assurances from charities and NGOs that the money will go precisely where they want it to go, that is the victims of that disaster. Enterprising lawyers have set up websites on which readers could monitor various charities and how open they are about the way they spend the money.

Plan International and four other large charities have given independent assessors a free run of their books. And it hurts. Sam Worthington, chief executive of Plan USA, part of Plan International, has been making rather unhappy and self-righteous complaints:

“This is something new to our sector to open our organizations up to a level of scrutiny that has not been the norm in the past. To some degree, you’re becoming the non-profit equivalent or a public company.”

Well, diddums. Non-profit they may be (though there have been some questions about some of the salaries and other perks) but they handle a huge amount of public money. Should that not be properly accounted for?

In fact, it would be rather nice to think that our own international charities, Oxfam, the Red Cross UK, Amnesty International, Action Aid etc, etc will one day be inspected a little more rigorously than they are now.

What these American international charities want is a certificate to show that they have adhered to a certain set of codes. The whole process is being done under the auspices of InterAction, an American umbrella group of 160 international charities, so it is not quite as independent as certain politicians, commentators and, above all, donors would like it to be.

Among the donors, let us remember, is the US government that often channels aid through NGOs (with about the same results as the process of direct aid giving).

For the moment the process concentrates on charities that deal with child sponsoring, as there have been serious problems with the whole project, with money not reaching the children in question or same children being assigned to more than one sponsor.

It is expected that other charities will also start seeking the “seal of approval” through independent inspection, as they are afraid of losing out on the donations.

This may cause problems, as Wednesday’s Wall Street Journal Europe pointed out:

“Smaller charities, especially those based in the developing world, might find it too expensive or too difficult to get certified…. Yet those local groups often turning bring local knowledge to tough relief and economic-development efforts, and are staffed by an up-and-coming professional class that donors want to encourage in developing countries.”

This might bring about an extra, unplanned benefit: the up-and-coming professional class of the developing world will, if all these various organizations whose main task is to work out where to get more money, fail to get the certification, move to the private wealth-creating sector.

After all, whatever the Commission for Africa may have wrought, that is what that continent needs badly, not more misspent aid and endlessly multiplying NGOs.

There is one more, almost inevitable question: how soon will the arch-NGO and most important of the transnational organizations, the European Union be forced to open its books to some form of independent inspection? Personally, I would quite like to find out what good has come of Glenys Kinnock's endless jollies with her colleagues in the European Parliament round the more picturesque parts of the Third World.