Scraps from big brother’s table

“How do you find working with [name of BINGO withheld]? How could the relationship be improved?”

These questions, and others in a similar vein, were asked of me and my colleagues last week by consultants hired by a major donor of a BINGO that supports us with some of said donor’s money. The donor wanted to see whether they were getting fair value for money from the relationship.

Equal partners, right?

As with so many other ‘partnerships’ in the aid world, the relationship between a BINGO and small local NGO is far from an equal one whatever anyone claims. Indeed, just like recovering drug addicts, so for BINGOs: the first step in dealing with the problem is to recognise that it exists and that simply mouthing endless platitudes will not make it go away.

There is also no avoiding the fact that societal pressures (aka donor preferences) mean that both sides, the BINGOs and the local NGOs, are addicted to such relationships, with little hope of being weaned off. Moreover, for both sides there is often very little choice in who they partner with: at least in tropical conservation BINGOs largely try to stay out of one another’s territories, whilst vice versa the choice of capable local partners for a BINGO to work with may often be quite small. So to a significant degree partners are stuck with one another.

A more reflexive, self-critical approach will certainly help; being honest about the nature of the relationship does not have to mean being arrogant about it. As with so many things in life, that understanding, personal touch can make all the difference to the relationship. But is there anything more that could be done?

Ultimately I think it comes down to a question of how and to whom the BINGO are accountable. This echoes one of the main themes in development aid in recent years to which a leading response has been a call for more transparency, and the emergence of things like the International Aid Transparency Initiative. I think the same trick could work again here.

One of the things we found frustrating about our relationship with the BINGO was being drip fed small amounts of money that covered only a few months and were then micro-managed, e.g. budget lines of only $1-2,000. (The BINGO did not have systems that could differentiate between capable, trusted local partners, and others about whom they were more cautious.) The micro-management was a pain, but in many ways it was the drip-feeding of funds that caused the bigger problem, because they were almost impossible to plan for.

Partly, I think, the BINGO did this to remain in control, but partly also I think because it kept us in Oliver Twist mode – always asking for more but rarely seeing the bigger picture – and thus allowed them to prioritize their own management costs and strategies. I would like to see BINGOs being much more open about their own funding streams; how they are divvied up, managed and reported. The middle-man role is an important one, and for our part, those of us in smaller NGOs need to recognise that performing this role does not come cheap.

So when a big chunk of the donor money goes on BINGO bureaucracy (no doubt disguised as technical assistance) we shouldn’t bleat too much. Proposing standards for what is an appropriate slice to take is likely to be counterproductive (in the same way that misdirected focus on overheads has proven). Instead the BINGO becomes accountable to some degree to their small NGO partners (who are already have to do lots of accounting to their bigger brethren), and both sides of the partnership can better evaluate whether or not they are getting value for money from the relationship. Longer lasting commitments of funds would also help the smaller NGOs to plan better.

Burying criticism

Chris Blattman thinks that NGOs are atrocious in the way they bury criticism. This was his opinion given in response to a paper showing NGOs were twice as likely to want to work with outside, independent academics who appear to have an a priori view that is supportive of the sector in which they work (microfinance in the study) than they would if the a priori view was critical.

I work for an NGO and largely agree with the Blattman. Indeed this blog has covered NGO unconstructive responses to criticism before (here and here). I also like the study design which reminds me of those experiments where identical CVs were sent out but with different names on top to test latent racist attitudes. But I think there are some important points to make in response.

1. As pointed out in a comment on Blattman’s post, in the study the negative treatment email’s opening sentence of paragraph 2 is pretty uncompromising: “Academic research suggests that microfinance is ineffective.” This blunt approach, which mirrors exactly the positive treatment email, unfortunately does not conform to social norms in how we express disagreement, which is usually hedged in a way to give due acknowledgement of the correspondent’s position. In short the negative email approach does not make them sound like great partners.
2. People in glass houses shouldn’t throw stones. We all struggle to deal with countervailing views. Science is littered with examples of where prominent academics of the time have suppressed publication of a paper that ran counter to their view of the world, only for it later to turn out the author was correct and the bigwigs wrong.
3. NGOs live, work and fundraise in the real world, not some idealised planet populated by homo rationalis. The robust battle of ideas that lies at the heart of academic life may be the anomaly, not NGO responses to criticism. Inaccurate or inappropriate criticism can do a lot of damage to an otherwise successful programme. NGOs may conclude it is better to do their learning behind closed doors, and then change direction if appropriate, than to admit their failures. Like it or not, I suspect many of the most successful NGOs are probably those which more carefully burnish their reputations by controlling the release of bad news about their work.

However, in my view, none of the above constitute sufficient justification for the lack of openness amongst many NGOs in the conservation and development sectors. The time has come for admitting failure and other exercises in honest self-assessment and humility. Though the road may be tough, eventually we will all be stronger for it.

The future of Big Aid

A friend and colleague has challenged me to respond to this post on IIED’s blog that reported on a debate asking whether “development aid has a future”?

Much as I might be up for a bit of blogosphere wonk-warring, I find it hard to disagree with the main points made in the post. In fact, if I wanted to be facetious for a moment, I might suggest that maybe the panellists had been reading this blog:

• Alex Scrivener is dead right when decrying the pointlessness of the focus on countries giving 0.7% of GDP … which is not so very far away from my views on whether we need more aid.
• David Satterthwaite’s point on Aid’s lack of accountability to beneficiaries is a familiar refrain, e.g. see here.
• Thirdly, Andrew Simm’s query as to how Aid can help in climate-constrained world has echoes of my recent musings that in future Aid may turn into guilt-inspired climate reparations.

Of course that would be facetious since none of those posts of mine were particularly original thinking, and you will find many similar thoughts expressed by others both in and outside the blogosphere. And, yes, many of us find it hard to contemplate throwing the (development) baby out with the (aid) bathwater, because most of us are swimming in that same bath water!

But I do find it ironic that just when big Aid is enjoying some of the highest levels of political support it has ever received, the entire model is under question perhaps as never before. Many countries classified by the World Bank as low income are expected to follow Ghana and graduate to middle income status in the next decade. Aid is believed to have played only a very small part, if any, in this success, but may well have made many millions of lives better in the mean time.

“What is aid for?” asked Scrivener. Apparently it’s not to help the giver win big commercial contracts. My guess is that most private donations for development are motivated out of compassion and simple altruism, and yet when our governments give money often politicians seek to justify it in terms of self-interest. Are they just responding to a right-wing vocal minority or is this what we expect of our leaders?

In light of the above points I would recast Scrivener’s question into three parts:

• Why do people/institutions/governments give money?
• What can we reasonably expect to achieve with that?
• How will these motivations and ambitions change in a rapidly changing world?

Big, awkward questions all, tailor-made for ducking by politicians. Like all such challenges, I suspect we won’t really get a chance to find out the answers till a big (climate-driven?) crisis comes along and yanks us out of the status quo. So actually it may well be the third question which ends up driving answers to the first two.

Fat cats make good accountants

Amidst all the kerfuffle arising from the  revelations last month about supposed ‘fat cats’ of Aid gobbling up too big a portion of DFID’s budget (and that led to the line by line review of DFID’s budget I blogged about yesterday), I have yet to read any analysis of why this has happened. Those stony hearts on the right want simply to reduce the aid budget, whilst those on the left lament that more money should go to the intended recipient countries.

I’ll give you the answer in one sentence: many would be contractors from developing countries do not generate reports to high enough standards nor keep good enough accounts to keep busy aid bureaucrats confident that money is being well spent. This, of course, is a sweeping generalization, and ignores elements of culture (sharing a common culture can greatly increase ones sense of confidence in a contractor). I have no doubt that many people and organisations in developing countries are capable of this, and the fact that at least one Indian company apparently got a big contract is testament to that. However, in the least developed countries (often the biggest aid recipients) this capacity is likely to be lowest.

The Daily Fail may well rage at these ‘fat cats’ of Aid, but imagine their scorn if they were to read reports written in mangled English by people for whom this is not their first language, and/or who just did not get good enough schooling in writing proper English. (A skill which is quite distinct from analytical thinking and empathy with poor people that are two of the most important abilities in doing practical development work.) And this whole storm in a teacup would quickly be recognised as such if it were instead discovered that significant corruption had occurred in DFID-funded programmes. If there is one person the Daily Fail hates more than a fat cat it is a corrupt foreign official!

If, as seems apparent, the proportion of DFID funds spent on UK-based consultants is going up, then I would suggest one simple reason: DFID’s own budget is rising quickly while staffing levels have been reduced. In such a situation DFID’s remaining staff will naturally look for good ways to get rid of big chunks of money at once. As I have previously noted, I think this is a false economy: at some point larger transaction overheads (as a proportion of funds disbursed) will have to be incurred if you are going to achieve high quality results in countries where government capacity is low.

For this reason, although I disagree with their reasoning (e.g. see Terence Wood’s demolition of Lord Ashcroft’s ill-informed ‘golden taps’ diatribe), I actually agree to some extent with the aid critics. DIFD should drop its misguided focus on the entirely artificial target of spending 0.7% of GDP on international aid and development, and instead simply seek to generate the best development outcomes that it can. If DFID can demonstrate that a budget increase will effectively deliver more good and the British Treasury can afford it, then it should spend more, but if not then it should not spend money just because it has it in the department budget (the standard donor failing). If development aid is a ‘race’ then it is not a sprint to 0.7% of GDP; it is a marathon, and the finish line is elimination of widespread poverty, which despite significant progress in recent years regrettably remains a distant target.

My conclusion from two years ago still stands:

“Few people would disagree that the aid system needs serious reform. Many say we need both more and better aid. I think that’s too much to deal with at one time. First make it better, much better, then add more if the absorptive capacity really is there.”

Accountability and Overheads

Mike Jennings isn’t the only one concerned (and blogging) about accountability. Chris Blattman is peeved about excessive administration costs in humanitarian aid:

17% is an unfortunate expense but a rather common rate for administration, and even low by many standards.

It’s a requirement driven not so much by the multilateral donors, but a consequence of the fact that the giving public and governments have close to zero tolerance for misuse of funds.

This drives a Byzantine and expensive accounting system which partly reduces risk of misuse, and partly gives the multilaterals cover (“we did the best we could”).

This discomfit with misuse gets amplified by the press who tend to tend to report on graft and mismanagement more than success.

So the root cause is the failure of the public and donors to think about the high cost of extreme accountability.

I agree with much of what he says, and have experienced this directly. Having won a biggish grant from a bilateral donor to pilot an innovative new community conservation project, we were surprised to find them apparently more interested in the upgrades to our accounting system that we had promised. At one point I posed them the question: “Did you set out to fund a CBNRM project, or an NGO capacity building project?” Their response was that they considered the accounting system a bottom line requirement for a grant of this size.

I can sympathise with them. The least whiff of a scandal has the minister for international development phoning them up to find out what is going on, demanding answers as of yesterday.

However, as Chris Blattman points out, cost-effectiveness just goes out the window. For a particularly excruciating example of this, see this bizarre episode we experienced last year. Unfortunately, in my experience, the byzantine accounting systems are at best only a partial protection against fraud. (I’ve heard of a couple of examples of money gone missing in bigger NGOs of late.) And I would be prepared to bet that well run small NGOs (you can spot them amongst their briefcase counterparts because they deliver real impact), are probably the least susceptible to such failings due to the strong ethos and commitment that will permeate the entire organisation. (Greedy people tend to work elsewhere where the salaries are higher.)

To me this demonstrates the shortcomings of the bilateral donors in particular. We find the large trusts and private funds much more flexible and understanding of the challenges faced by a small but growing NGO.

Dave Algoso acutely observed last year that “increasing accountability will increase your overhead, every single time”. It seems this trade-off is here with us to stay. But maybe not. Owen Barder recently wrote about the need to move to a ‘post-bureaucratic’ aid system. Aid that is conditioned on results not management of inputs, i.e. contracted like a business, could do away with a significant chunk of this accountability versus overheads tension. (I think it would be naively over-optimistic to expect it to do away with it all.) In a business relationship, you do not worry if, for example, there is a case of corruption in your electricity supplier; you just pay for the electricity you get, and it is the power company’s job to sort out its accounting failures, and ultimately the shareholders loss.

If donors saw themselves more as commissioning agents, doling out money based on results achieved (Cash on Delivery) then the issues such as corruption and the appropriate level of overheads become just something for the service provider to manage.

We’ve got a long way to go, but here’s hoping!

Time to call in the lawyers?

Mike Jennings suggests homeless Haitians should be able to sue international NGOs for leaving them in temporary tented camps for so long, and not providing more permanent housing. You do not have to know anything about Haiti (I don’t!) to see how this would be a spectacularly bad idea.

We can start off with a roll call of those countries with strict NGO regulations: North Korea, Burma, Sudan, Ethiopia … The list goes on but you get the idea.

Dr Jennings is a lecturer at the School of Oriental and African Studies (SOAS) at the University of London, so may be familiar with the results of the growing litigation culture in the UK with respect to public services. It’s affected the health sector, but I know more people in education. There it has resulted in an extremely risk averse approach; pupils are taken on far less school trips because schools and teachers are scared of getting sued. Just the paperwork involved for the simplest trips can put teachers off organising them. The outcome is a poorer, narrower and less engaging education for our children.

Now let’s compare with humanitarian aid. At least in educating our children teachers and schools mostly know what they’re doing. Despite the odd ideological battle, we more or less know how to educate a large proportion of our children to become welcome members of society. In contrast, the long list of disappointing outcomes from various humanitarian aid missions and projects shows just how little we understand what makes for a good project.*

If NGOs were to be made legally liable for delivering outcomes to some minimum standard (as determined by whom??) then they would retreat into the least risky kind of projects. Instead of a tented camp for destitute refugees they might provide scholarships to study in the US and Europe – not much that can go wrong there, but only a tiny number of people (probably already middle class to have the necessary education to benefit from tertiary study overseas) and substantial cost per person supported.

Mike Jennings appears to acknowledge this problem when he says:

By their nature, efforts to alleviate poverty, suffering and vulnerability in some of the most economically, socially and politically challenging parts of the world are risky. But risky for whom? Risky for the organisations who may face financial difficulties or a loss of prestige? Or risky for the communities in which the intervention has taken place?

I’ve never worked in emergency humanitarian situations such as post-earthquake Haiti, but I would imagine for most beneficiaries their initial risk was very low, as they had lost a large part of what they had before, and were likely dependent on outside assistance for the most basic needs such as food and clean drinking water. In general, in the aid industry, we strive to ensure that aid dependency is only short term, but it can be awfully difficult for both sides to extricate themselves from that rut once they are in it. Compared to where they started I cannot see what the big downsides are for people so desperate. This is not to say that we should not aim to give them the very best assistance we can for a given input of resources, but it seems perverse to me to paint such people as ‘victims’ of the international aid industry.

My experience, however, is in non-emergency work, and actually I think poor communities can be quite good at risk management. Although, by nature, conservative (a sweeping generalization, I know) communities welcome most proposed projects with open arms even where they do not fully understand the project design. However, they do know they’ll get two things: investment into their community of some form or another, and participants will be paid per diems for their time. As project implementers we hate this requirement as it smacks of aid dependency; we shouldn’t have to pay people to be permitted to help them. But that’s the way it is, and that way the community can be assured as to some benefit even if the project peters out in a few years without ever coming close to achieving what it set out to do. The development professionals will move away to the next big thing / step up on their career, and the community got some pocket money. Plus ça change …

All of which reinforces the need for strong accountability and transparency in aid work – and not just to the donors – in which all aid actors perform poorly (don’t just blame the NGOs), that lay behind Mike Jennings’s proposal. Just please leave the lawyers out of it!

* Actually I think quite often we do know how to do a successful project, but either the donor wants to reduce the costs and cut the time available, and/or the recipient country politics constrain the list of options, but that still leaves a long list of things we still really do not know how to do, such as providing new permanent accommodation in a country with a completely dysfunctional land registry.

The Converse of Accountability

A few years ago a donor asked us (informally) whether we would be prepared to partner up with another local NGO that they were also considering supporting in order to reduce their transaction costs. (An illusory goal – in effect they were asking to pass their transaction costs on to us.) We wanted the donor’s money, so we said yes we’d be prepared to partner in that way, but due to political concerns and doubts about our proposed partner’s capacity, we said that we would not be held accountable for what the supposed partner did or did not do, or how they spent their money. The donor quickly realised the sense of what we were saying and dropped the idea.

Accountability is one of the major pillars of good governance, and a regular buzzword in development-speak. With responsibility comes accountability. But, as the above example shows, with accountability also needs to come responsibility. We rightly object to being held accountable for something we cannot control.

And yet in efforts to improve local governance in developing countries I fear this is exactly what we may be in danger of doing. Around here at least, service delivery over the last mile is often poor to abysmal, so pushing local officials into being accountable for the performance of their departments seems like a good idea. But department heads have remarkably little control over their juniors. They have minimal say over who is hired, and even corrupt officials are very rarely fired, just transferred to another province, to become somebody else’s problem. Patronage is also a problem; disciplining some local bigwig’s distant relative is always going to be a dicey proposition. So officials lapse into the inevitable semi-comatose apathy.

Civil society advocates for accountability should take note. So should donors. My suggested rule of thumb: never give money to someone who lacks professional authority over his/her own staff. Unfortunately that would rule out a lot of government to government aid.

The Charges against Big Aid

Terence, the Waylaid Dialectic, tears a couple of fair sized strips off Jonathan Starr’s self-righteous polemic about Big Aid. Terence’s points are well made, but I think not the whole story.

For a start, stripping away the pomposity, Starr is surely right when he says Big Aid has an accountability problem. As I and many other bloggers have remarked time and time again, our ‘customers’ are not the same people as those who pay the bills and that leads to massively misaligned incentives. Starr thinks he’s solved this by charging for his Somaliland school’s services, but (as Terence points out) since that only covers a fraction of the true costs – most of which are subsidised by volunteer teachers providing their time for free and him donating a pile of cash – I am not convinced he’s closed that case.

Still, for those of a certain political persuasion, the suggestion that our governments may be throwing millions of dollars at an unaccountable bureaucracy with a poor record of delivering its stated target results will be a like a red flag to a bull. International aid is surely not the only programme funded by Western governments to be susceptible to such a charge, but nonetheless we need to be able to justify aid spending in economically straitened times, and at present I do not think we can do so convincingly for large portions of government aid budgets.

Part of the problem, I think, is what Terence alludes to at the end of his piece when he states:

“Some aid fails because it’s bad. But a lot of aid is actually pretty good. And the reason why it still fails, when it fails, is only sometimes to do with the qualities of the people and organisations delivering it. More often, failure stems from the simple fact that the problems aid is being asked to solve are frequently close to intractable.”

There are two responses to calls for cash to be spent on problems that are “close to intractable” (aka wicked problems): (a) conclude that any investment of resources is highly unlikely to yield any results and thus refrain from any attempt to tackle said problems, or (b) determine that such problems are too important to be just ignored, and that it is fair and reasonable to take a few risks and try a few different approaches to see what might work. (Whatever you do, just don’t equate big problems with the need for big amounts of cash!)

Whilst some donors may decide that approach (a) is what best suits them, we can surely also support the idea that taking option (b) can also be a good idea. The problem, as I see it, is that we are very rarely upfront about the risks of failure. Far too much of the conservation and development industry is extremely reluctant to admit to failure (or even just disappointing results); glossy brochures proclaim an unending procession of success stories.

So by all means we should try to tackle these almost intractable problems, but we should be honest about our expectations of success in advance (sensible risk management), and we should also balance our portfolio with a good number of projects which follow more tried and trusted routes.

ps. Disclaimer: I helped setup and run what must surely be the most ‘perfectest’ of NGOs (according to Terence’s classification), so may not be regarded as entirely neutral in the basis for my above-stated views.

CI screws up

I couldn’t ignore the big scandal about Conservation International’s apparent willingness to greenwash the biggest arms company in the world. That this story should break just after my post In defence of BINGOs is unfortunate.

Greenwashery?

The scandal raises many issues, but let’s start with the notion of greenwashing. The allegation is that a seat on CI’s ‘Business and Sustainability Council’ somehow absolves a corporation of all their eco-guilt. Whilst to a certain extent CI’s corporate relations officer was clearly peddling that line in the video, I don’t think that anyone really believes that. Just sponsoring a few conservation projects around the world did not give BP a free pass on the Gulf of Mexico oil spill. It wouldn’t surprise me if the greenwashing value of membership of that council is not far off from CI’s price of under $40k per year.

Should we take these guys’ money?

Next up is the question of whether conservation organisations should take big polluters’ money. I’ve been part of groups faced with this question several times. Each time our answer has been: “Yes. We can do something good and worthwhile with this money, and that outweighs any minor symbolic good we would achieve by rejecting it.” As above, we have tended to believe that the greenwashing value of our individual projects is fairly minor, although when put into a portfolio maybe that is less true. But then to overcome that problem we need to face down the tragedy of the commons; my guess is that there’ll always be conservation projects out there will to take the polluters’ grubby cash.

Certainly some organisations, especially campaigning outfits such as Greenpeace, need to steer clear of dirty money lest their campaigns be tainted and undermined. But for on the ground conservation work I am not so sure. What I can tell you is that corporate donors tend to be much more flexible than institutional donors with their myriad rules as to how we can and cannot spend money. So just as the greenwashery may be worth more to the polluter than they are paying, so can the financial support provided be worth more to a conservation project than the headline dollar figure.

Should we even be talking to them?

This kind of suggestion, which unfortunately comes up far too often from deep green types, I find most disappointing. I am very happy that the likes of Greenpeace and Friends of the Earth are out there screaming from the rooftops about all the eco-crimes being committed around the world, many of them by these big, bad corporations. They are there to keep everyone on their toes, although sometimes they have been known to get it wrong, as with Greenpeace’s complaints about Shell’s plans for disposal of a North Sea oil rig ~15 years ago.

But equally we need to engage with these big companies on less emotionally charged levels and to understand their issues and their concerns. Most people working for these companies are not inherently evil, they are just working from a different starting point than we are. (If environmental degradation externalities are ever priced properly into accounting standards maybe this will change.) Some people work to change from within (the Gorbachev approach), others from without. I think it is right that conservation BINGOs talk to big business. When Greenpeace or someone else gives a company a PR beating (which they probably deserve), then they need to be able to turn to someone to advise them on how to fix it (and not just the PR but their underlying failings too). Importantly, big business needs to believe they can trust this organisation.

In addition, we need to remember that, as with the Asian sweatshops supplying multinational sports good companies, that often the risk aversion of big business, especially with respect to corporate reputation, tends to ensure that they are often far from the worst environmental offenders. Chinese mining and oil companies tend to cause more environmental damage than their western counterparts. We want everybody to improve, but if you beat up on the not-so-bad guys too much, they’ll just pull out leaving the field to the even-worse guys.

The fallout

I have previously discussed NGO accountability on this blog. It seems there is now a new kid on the block to keep us accountable. Overall I think this is probably a good thing. Suggesting, as one commenter did on the Ecologist article, that this is undermining the environmental movement, and that we should instead seek solidarity misses the point: such thinking leads to arrogance and poor responsiveness by BINGOs.

But, nonetheless, apart from the damage done to CI, and, by extension, other conservation NGOs, I am sad about the implications of this exposé. CI were naïve in how they responded to the journalists’ approach. Next time they will be less so, but more caution comes at a price. Lawyers and managerial checks get inserted into the system, gumming it up; conservation BINGOs will be less open in future.

Conservation International clearly need to clean up their act a bit, and I guess the ‘Business and Sustainability Council’ has now lost all credibility. Other conservation NGOs will learn important lessons. But I really hope that after this storm has blown over conservation NGOs continue to engage pro-actively with big business, balancing positive and negative, and that, as a result, big business continues to improve its environmental performance.

UPDATE 25/05/11: See my discussion of CI’s response here.

Aid efficiency & focusing on the important things

(with apologies to DR who doesn’t make the rules)

Informal chat with a Donor Representative (DR), 2009

MJ	Presumably the NGO projects will be much more efficient than the government ones.
DR	Yes, we expect that. But they won’t be the most efficient.
MJ	Oh? Who will be the most efficient?
DR	The private sector.

Meeting with Donor reviewing progress on a grant we have from them, 2011

(Same donor representative, DR)

DR	We’re a bit concerned about this capital expenditure here [value < 0.5% of budget] which was not in the original budget and not approved by us.

 

And that, my friends is why the private sector will always be more efficient than NGOs.

But seriously, putting aside the nit-picking, what, at the end of the day, are your public interested in? (This is a bilateral donor.) The answer is impact. If you stopped worrying so much about the little things (including in your work with government), and instead focused on the impact bottom line, everybody would be much happier. If an aid recipient can deliver great service to its beneficiaries who cares how many Land Cruisers they buy? I guess this is what COD aid is all about.