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Are international development funders sabotaging their own outomes?

Updated: Aug 19, 2018

One of the common criticisms levelled against “charity”, all lumped together like an amorphous mass, is that it “wastes: donations". This might be anything from the high salaries of the big International charities, to the supposed rife corruption that plagues any non-global north charity that people have never heard of.

What is interesting though is that no one ever really looks at or talks about the funders. No one asks, what are funders doing to not only reduce the waste in the process, but also reduce the burdens on those implementing the activities?

Mine Is better than yours

A 2016 study by Boston Consulting Group (BCG) and Norwegian Refugee Council (NRC) showed that NRC could save 40,000 hours a year if their largest 9 donors (to name a few, DFID, ECHO, UNHCR, SIDA….) used the same financial reporting formats and accounting definitions.

Assuming an average $30k pa salary that’s almost $576,000 that NRC could save… a year.

Now multiply that across 27 of NRC’s peers (e.g. Save the Children, Oxfam, Islamic Relief…), and that saving could amount to almost $15.5 million… a year. According to Oxfam USA’s website, that’s the equivalent of helping 62,000 families start a business.

That’s just reporting.

Imagine the inefficiencies that stem from the proposal writing process, partner assessments, due diligence…. How much more money (and time) is lost for funders and NGOs because of missed opportunities to create synergies?

What does that mean?

Admittedly, in this scenario, the logic is reductive. Too many averages and assumptions. It simplifies what are probably reasonably stringent finance rules that both funders and NGOs need to adhere to in their respective countries.

Photo by Ruben Mishchuk on Unsplash

But it serves to highlight a point. This sector has such a united aim to fight the injustices of the world, and yet is so entirely fragmented and disjointed in it’s processes that it undermines its own outcomes.

Instead of creating systems that make it easier to find accountable and reliable charities, that ease the flow of resources, our systems put up barriers that exclude all but a few. Worst of all “the few” aren’t even the best at what they do, they just have more resources and are better at playing the proverbial game.

The biggest agencies have the resources, the language, and critically the cultural affinity required to successfully communicate with donors, but imagine the burden and impact on national organisations in the global south.

The complexities and time burdens of these systems are barriers to entry. Funders are essentially IMPEDING new, innovative, impactful, closer-to-the-problem actors, and ultimately putting obstacles in the way of achieving the Sustainable Development Goals. The outcome? Rather than nurturing new and fresh ideas, we’re doubling down on the dinosaurs.

If we want to have a realistic chance of achieving the 2030 goals we are going to need more, rather than fewer actors contributing to the mission.

Who could change it?

Ultimately, the funders.

Like any large, systemic problem, everyone has to play their part to change not just one group or individual. But it is also true that those with the most power, have the ability to create the biggest impact with the smallest action.

If some funders collectively decided tomorrow, that as a condition for funding all NGOs had to write their proposals on pink paper it would be done. Sure, there would be a lot of complaints, but at the same time it would happen.

Money is power, and funders have plenty of both.

In a sector whose entire purpose for existing is to reduce the inequalities and injustices for all people around the world, we need to eliminate it fast within our own systems.

Otherwise we’re no better than the systemic inequalities we claim to be fighting against.

Find out what we can do to change this

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