The past quarter of a century has seen a reduction in the size and role of governments around the world, leading to a growing gap in the provision of much needed primary welfare services. This gap is increasingly being filled by NGOs, whose numbers continue to grow exponentially, as has the scale of resources entrusted to them. Mirroring the rise of multi-national corporations half a century ago, a number of them now control annual budgets the size of small economies! An example of this is World Vision International, which, in 2013, reported a total worldwide income of US$2.67 billion, a figure equal to Burundi’s economy, and higher than the GDP of twenty-nine other nation states! Other international NGOs (INGOs), such as Save the Children International (with a total 2013 income of US$1.9 billion), are key recipients of taxpayer funded overseas development aid, with 53% of their income sourced from governments. Action Aid, another INGO, have positioned themselves to take a key role in helping shape a number of nation’s policy formulation and service delivery. Given this size and influence, just how accountable are INGOs (and other) operating in the non-profit sector?
While accountability is an accepted principle for responsible NGO practice, a study by Sustain Ability has found that as a whole, NGOs have tended to be less transparent and accountable than other sectors. In cases where accountability does exist, research carried out by the Global Public Policy Institute has shown it to be limited to the traditional, and very narrow, ‘top-down’ approach. There is a lack of a commonly agreed umbrella standard for accountability. An over-reliance on self-regulatory mechanisms and a weak external oversight system on one hand and being closed to external pressures on the other has inadvertently created a high corruption-risk environment. In the simplest of terms, viewed as an outcome, corruption is a consequence of the failure of accountability.
Corruption is a sensitive issue in the NGO world. NGOs are no more immune to corruption than companies in other sectors. But for development organisations it can be especially harmful and have a knock-on effect on reputation, funding and donations. Corruption, which includes nepotism, bribery, fraud, kick-backs and double funding, can divert resources, feed conflict and increase basic costs of services for the poor undermining the very work of NGOs. A Transparency International report the same year found procurement, transport, food and medicine distribution and use of building materials among the most vulnerable areas to corruption.
It’s one thing to deal with corruption within an organisation but what about operations in territories where corruption – bribery, for example – is ingrained in how business is done, for example corrupted police, non-transparent government structures and crooked judiciaries. It is also important to remember that most emergency situations occur in countries where corruption is already widespread .Thus, while NGOs have little hope of eradicating contextual corruption, they can and should take steps to prevent or address corruption within their own organisations.
A number of factors which can lead to corruption in humanitarian operations have also been identified. These include lack of planning (or even the impossibility of planning), the number of humanitarian actors present and the financial resources at stake. The way in which the international humanitarian system has developed in recent years, including the exponential growth in the number of NGOs and the development of the humanitarian ‘industry’ has also been a contributing factor. Ironically, we should not forget that corruption exists in developed countries as well as developing ones.
NGOs are often reluctant to talk about corruption for fear that it will lead to bad publicity and, consequently, a loss of funding. NGOs must widen the scope of risk assessment to consider whether their programmes are vulnerable to corruption, such as theft or misappropriation of funds or in-kind goods by warring parties, real or perceived inequities in the distribution of aid and sexual abuse and exploitation of beneficiaries by agency or partner staff. While every situation is different, in all cases NGOs have to balance their commitment to humanitarian principles with the need to control the risk of corruption so as to be truly accountable to their beneficiaries and donors. They should also be transparent with stakeholders about these challenges, and how they may affect decisions about whether or not to continue their work.
Most large French NGOs are members of the Comité de la Charte, an independent organisation whose aim is to promote financial transparency. NGOs belonging to the committee are required to have their activities (financial and operational) audited each year by a certified auditor. NGO programmes and accounts are also subject to various external audits (several per year) commissioned by donors including EUROPAID and ECHO, as well as by the Courdes Comptes (the government audit office). In addition, most French NGOs have established internal control mechanisms which enable information from the field to be verified and cross-checked.
A “briefcase NGO” exists, metaphorically or literally, inside a briefcase. It may have well-written proposals and access to western donors but for one reason or another, any funding it receives for programmes goes into the pockets of those running the NGO. These NGOs can be run by foreigners and local community members alike. Many briefcase NGOs begin with noble intentions. But international funding agencies often dictate funding and programme priorities, causing cash-strapped NGOs to chase funding and adjust strategic visions. As a consequence of chasing funding, organisations shift their focus away from their areas of expertise into where the money is to sustain them. This causes them to make commitments they can’t deliver on. Thus, the briefcase NGO can be unintentionally formed.
Are NGOs doing enough to merit the belief placed in them? At the heart of these questions is the issue of accountability.
