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DEVELOPMENT: Who Spends Money Best

Sanjay Suri

GLASGOW, Scotland, Jun 23 2006 (IPS) - Just when does philanthropy become ‘foolanthropy’? The assembly of civil society organisations being held in Glasgow this week set out to debate just that on Friday.

“I think the discussion is really about the most effective way of deploying money for development,” Sylvia Borren, executive director of Oxfam Novib in the Netherlands who led the discussions told IPS in an interview later. “It’s about, should the money go from government to government, whether it should go from northern NGO to southern NGO, or directly to southern NGO. And questions like, where is the accountability.”

There is no simple answer, Borren acknowledged. “I do believe I’ve seen examples of northern governments supporting southern NGOs and being very dominating in that, and southern NGOs and northern NGOs sometimes become sub-contractors. I’m very against that.”

But south or north, NGOs should “claim part of the taxes from our own governments to build an enabling environment for civil society,” she said. “And being paid by governments shouldn’t mean they can’t be critical towards that government. So for me it’s a part of real and live democracy that government supports its own civil society, and civil society turns around and criticises that government.”

But civil society is used too little as a development route, Borren said. “In the Netherlands it’s less than 20 percent going through NGOs; it’s about 40 percent going through multilaterals, and most of the rest going bilaterally. It’s my view that at least a third should go through NGOs.”

And that proportion is better for civil society in the Netherlands than the average, she said. “I think globally it is less going through the NGOs. It should be significantly higher.”

That is necessary particularly for women, she said. “We expect to pay for things we want changed. So if a government wants ICT development, they put money out there. If you want gender development, they don’t put money out there.”

But is money spent through civil society money better spent?

“That’s what all the research shows,” Borren said. “The results are cheaper and more effective. Take for example the Global Fund for Aids and Tuberculosis. From what I read of the evaluations in general the multilaterals are the worst in terms of what overhead costs are versus efficiency. In a broad generalisation, work done by NGOs is more effective.”

But of the money that goes to civil society, most goes to civil society organisations from the North, Borren said. And how much of that do NGOs from the North spend directly, and how much do they route through Southern NGOs?

“That depends very much on which NGO you are talking about. We at Oxfam spend 9 percent on our overheads, and a vast amount of the rest of the money through southern NGOs. Oxfam has strong principles about supporting local energy and so we try to be operational only when local NGO strength is not strong enough.”

This channelling of money from NGO to NGO is good because then “you have a global civil society to civil society network,” she said. “We have a very vibrant civil society in the Netherlands, we help civil society building in other countries. On the other hand, we are also doing something called back to front development, where some of the civil society working methods in the south we bring back to civil society in the Netherlands.”

Despite the better track record of NGOs in putting money to good use, more funding is not necessarily coming the way of civil society for development work, Borren said.

“I actually think the talk about NGOs has got bigger, and the reality for the NGOs is different,” she said. And, worse for women.

“We’ve seen a discernible trend that’s been researched, that women NGOs are getting less and less. There’s a report out ‘Where did the money go?’ which shows that in the last ten years women NGOs are getting less money. This is strange, because everyone talks about gender, gender, gender. And this is the position with funding. This is stupid.”