TSUNAMI IMPACT: Transparency Debate Puts Down Under Charities on Notice

By IPS Correspondents Reprint | | Print |

Bob Burton

CANBERRA, Jan 21 2005 (IPS) - The success of aid groups in raising over 157 million U.S. dollars from individual Australians and business for humanitarian relief in the aftermath of the Indian Ocean tsunami has fuelled a debate over the accountability and effectiveness of charities.

The success of aid groups in raising over 157 million U.S. dollars from individual Australians and business for humanitarian relief in the aftermath of the Indian Ocean tsunami has fuelled a debate over the accountability and effectiveness of charities.

Supporters of charities point to the massive level of support as evidence of the credibility of the groups while a conservative think tank has criticised non-profit organisations for not detailing how the funds have been spent.

In the aftermath of the Dec. 26 tsunami, which killed over 200,000 in the Indian Ocean rim countries in South and South-east Asia, the Sydney-based non-government organisation AidWatch was barraged with requests for information on which aid groups to support.

”We were inundated with calls after the revelations of the disaster asking ‘who do we give money to and where it will make the most difference ‘,” AidWatch coordinator Tim O’Connor told IPS.

In response AidWatch posted an eight-page guide on its website setting out which charities had existing operations in the affected countries and those that had religious affiliations. It also detailed the proportion of their budget absorbed in the form of overheads.

The response, he said, has been overwhelming with hundreds of e-mails thanking them for the information.

Besides the trail of dead in a dozen countries, the tsunami, spawned by a colossal 9.0 earthquake in northern Sumatra, also left more than 1.5 million people homeless around the region.

The Institute of Public Affairs (IPA), a conservative corporate funded think tank and critic of advocacy non-government organisations, on the other hand has demanded increased level of disclosure on how funds are being spent by what it disparagingly refers to as the ”aid industry”.

”Aid agencies need to provide the public with detailed audited financial statements showing a breakdown of exactly how the money was raised and how it will be spent,” IPA Senior Fellow Don D’Cruz wrote in a column in the ‘Sydney Morning Herald’ earlier this week.

Anticipating sustained public interest and criticism from the IPA, a coalition of the four largest aid groups in Australia has pledged to meet the highest standards of disclosure and accountability.

”There are two forms of accountability to the beneficiaries in the way we work – by ensuring maximum impact in changing people’s lives for the better and accountability to the donors,” said James Ensor, the policy director for Oxfam-Community Aid Abroad.

”The public does have an absolute right to expect aid agencies to deliver and disclose the extent to which they have delivered against those pledges. Within that frame, accountability to donors is critical,” he said.

But he cautions against getting bogged down in a debate on minor points.

”Don (D’Cruz) and the IPA’s reference point is primarily to donors, which is entirely legitimate. But if the debate centers on measuring the effectiveness of the work of non-governmental organisations by whether they spend 92 or 95 per cent of funds on beneficiaries, then it has missed the point,” Ensor said.

”What we are trying to achieve is positive change to people’s lives by restoring sustainable livelihoods and that is five years plus (and) beyond,” he added.

In the aftermath of the disaster, the Australian government announced that it would contribute 760 million U.S. dollars over five years to the Australia-Indonesia Partnership for Reconstruction and Development. Half the funds would be grants for short-term relief projects while the remainder would be 40-year concessional loans for infrastructure projects with a 10-year interest free period.

A spokeswoman for AusAid – the government’s aid arm – said details of exactly how government funds would be spent were still being worked out in consultation with Jakarta.

The death toll in Indonesia stands at more than 166,000, but the true figure may never be known. More than 6,000 people are listed as missing. The number of homeless in Aceh and North Sumatra is estimated at 800,000.

But AidWatch’s O’Connor wants AusAid to be more precise on how its money would be spent.

”People need to know what their government is spending money on and whether the aid is effective,” he said.

While D’Cruz – who has worked as a public relations consultant and a government media adviser – has demanded that charities disclose funding details, he has refrained from directing the same criticism at the Australian government.

D’Cruz rejects the suggestion that the IPA should operate by the standards it urges aid agencies to adopt.

”It is not a relevant question for the IPA. We’d love for there to be an accounting standard for non-profit (organisations) but it is different when you are delivering relief services and if you can’t see the difference between a think tank and an aid organisation,” he told IPS.

D’Cruz also wants agencies to make project evaluations public. ”Why not just put it up on the internet?” he asked.

While the IPA fellow has strong views on transparency, he agrees there is no accepted accounting standard for the non-profit sector.

Though Oxfam’s Ensor acknowledges IPA’s general point that NGOs should be accountable, he, however, believes the institute itself lacks credibility when it comes to discussing standards of transparency.

”Do they disclose their sources of government and corporate support. The answer is no,” he said. ”Do they, again, disclose their cost and administration details on specific projects. Again, the answer is no.”