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Funding for NGOs
NGOs rely on funding from individual donors, foundations, corporations and governments. Critics charge that funding sources can seriously affect NGO policy, making these organizations potentially the creatures of special interests. Such charges challenge NGO legitimacy especially when funds come from "outside" - including rich foreign governments, corporations or foundations.
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Credibility and Legitimacy of NGOs | NGOs and States
Articles
2008 |2007 |2006 | 2005 | 2004 | 2003 | Archive 2008
The Global Links Initiative Story (March 11, 2008)
There are numerous NGOs in urban areas in China, but none can acquire non-profit status due to the lack of a legal framework. Without access to domestic funding, Chinese NGOs must rely on international aid. But as the Chinese economy develops, donor countries and foundations are decreasing their financial support. The absence of NGO help during the heavy 2008 snow storms in Southern China is a tragic consequence. This article by the executive director of Global Links Initiative looks to the emerging class of “new rich” Chinese philanthropists to remedy the domestic funding dilemma. (Policy Innovations)2007
Silences in NGO Discourse: The Role and Future of NGOs in Africa (2007)
This collection of essays argues that NGOs are Africa’s new missionaries. They dispense services in a spirit of “charity and pity” as puppets of “neo-colonial” powers. NGOs rely on their funding partners in a paternalistic relationship where foreign “true friends” – as one US ambassador termed donors – treat the poor as recipients of aid and exclude citizens from policy-making. The author recommends that NGOs in Africa stop pretending neutrality and engage in political activism. (Fahamu)2006
Does Foreign Funding Make NGOs into Puppets? (October 11, 2006)
In light of a debate among Turkish NGOs on the subject of credibility, this New Anatolian article examines the sometimes obscure relationship between NGOs and their sources of funding. By stipulating conditions for the use of funds, foreign donors can strongly influence recipient groups, which raises questions about the NGOs’ accountability to the communities they serve. Therefore, legitimate NGOs must display openness about – and independence from – their financial supporters to maintain their “honor” and credibility with the citizenry.Strengthening Democratic Governance: The Role of Civil Society (September 21, 2006)
This Wilton Park report delves into the challenges that grassroots organizations face in their efforts to promote government accountability and citizen participation. In their intertwined activities of advocacy, monitoring and providing services, NGOs often encounter government interference, unreasonable donor demands and questions about their own legitimacy. The report encourages NGOs to focus on attaining sustainable results and to “not be diverted” in their operations by such obstacles.Managing Globalization: Bad News Traveling Faster, But So Is Aid (August 22, 2006)
As technological developments allow news to travel faster, aid groups can better alert potential donors. Furthermore, international aid agencies have begun to solicit donations from individuals and groups on a global scale, rather than just in the wealthiest countries. However, although widespread coverage may benefit aid collections, it may also endanger aid workers who wish to remain inconspicuous in conflict-ridden zones. (International Herald Tribune)How Genuine Are NGOs? (August 7, 2006)
According to this New Times opinion piece, western donors, particularly the US, have historically used NGOs to exploit economic opportunities in poor countries or to counter hostile political ideologies. Citing US-led wars and the ensuing relief efforts in Vietnam, Afghanistan and Iraq, the author strongly criticizes what he calls the “mockery of humanitarian aid.” This occurs when donor nations use NGOs to provide humanitarian assistance in countries occupied by their troops. The article concludes that government-dependent NGOs work more to attract funds than to strengthen democracy.All (Reasonably) Quiet on NGO Front- For Now (June 21, 2006)
The NGO community in South Africa fears that Pretoria’s threat to introduce laws to prevent whistleblowing will discourage NGOs from voicing their concerns about government policies. NGOs that actively lobby for policy change also tend to receive less funding than NGOs which only provide services. This TerraViva article draws attention to the limits that financing problems and conservative legislation can impose on NGOs’ activities.Aid Harmonization: Challenges for Civil Society (May 2006)
This newsletter from the International NGO Training and Research Centre (INTRAC) looks at how the Paris Declaration on Aid Effectiveness affects NGOs as providers of international aid. The declaration urges governments to transfer aid directly into the budgets of poor countries, rather than funding their own development projects. While this could prevent rich countries from using aid as a tool to achieve their own political and economic interests, INTRAC warns that Northern NGOs could lose much of their funding and political influence. Southern NGOs, although benefiting from poor countries’ increased aid budget, could lose their political independence since national governments would fully decide which NGOs to fund.2005
Do Donors and NGOs Speak the Same Language? – Part II (April-June 2005)
While the influence of large and wealthy international NGOs continues to grow, governments and donors still tend to regard small, local grassroots groups as less important and less “legitimate” actors. Citing trends in Lesotho, this article criticizes the seemingly paternalistic attitude of foreign donor organizations, which sometimes “drastically” change their funding schemes without consulting recipient NGOs. The author urges greater financial and strategic support for NGOs, saying a lack of funding could “cripple the democratic function of civil society.” (Lesotho Council of NGOs)Do Donors and NGOs Speak the Same Language? – Part I (April-June 2005)
This article discusses the issue of foreign donors channeling funds for NGOs through local governments, focusing specifically on Lesotho. The author suggests that due to the often underdeveloped administrative capacity of fledgling democracies, funds may not trickle down to the groups that most need financial support. Additionally, those organizations that monitor government policymaking risk losing their credibility if they receive state-controlled aid. Therefore, donors must establish “deeper partnerships” with NGOs in order to better understand and strengthen their work. (Lesotho Council of NGOs)NGOs Tiptoe through Africa’s Political Minefields (October 11, 2005)
Spurred by fears of neocolonialism, many African governments view NGOs as “Trojan horses for Western governments.” Many Northern NGOs receive a large amount of funding from their own governments, and are thus inclined to support that government's foreign policies on the ground. Countries like Eritrea, Zimbabwe and the Sudan have passed laws limiting the functionality of foreign-funded NGOs within their borders. Critics of these new policies accuse the African governments of espousing undemocratic values, and attempting to conceal human rights abuses. (Reuters)Russia: Putin 'Foreign Funding' Remarks Draw Civil Society Concerns (July 21, 2005)
Russian President Vladimir Putin accused foreign-funded NGOs of serving “dubious group and commercial interests,” and instead offered financial support from the Kremlin. While some experts applaud Putin’s proposal, it seems very unlikely that a “not free”-rated country would support groups that monitor human rights abuses and that criticize the stifled political atmosphere. (Radio Free Liberty/Radio Europe)Stop Sending Us Money, French Aid Group Says (January 4, 2005)
Medecins Sans Frontieres (MSF) has angered some NGO community members by asking donors to send money to the medical aid agency’s general funds rather than specifically for Asian tsunami relief. The unprecedented move was to ensure “honesty” for MSF donors about where their funds go. But other NGOs claim MSF’s report was “irresponsible” because it failed to clarify that other organizations, which focus on long term assistance rather than emergency relief, still want and need funding. (MSNBC)2004
African NGOs Urge More Aid Through Local Agencies (December 21, 2004)
Northern aid agencies often dominate humanitarian action in Africa, mainly because they have the attention and funding of wealthier communities. But even international agencies need good local networks in order to deliver aid, said delegates at a symposium on African NGOs. As security concerns of independent aid workers become an increasing concern in the humanitarian arena, Northern donors should channel more funding directly through local African NGOs. (AlertNet)This Fatal Compromise (November 19, 2004)
In light of CARE International Iraq Director Margaret Hassan’s killing, former aid agency director Ian Brown claims that exponential growth of aid agencies since the mid-1980s has led NGOs like CARE to trade in their independence for necessary government funding. Perhaps CARE and several other organizations “failed to condemn the war outright,” says Brown, because they did not want to “bite the hand” that fed them? (Guardian)Help That Hinders (November 2004)
In a scathing critique on NGOs, this Le Monde diplomatique article claims that financial support from Western governments, multinational corporations and “multilateral” institutions makes NGOs “accountable to their funders, not to the people they work among.” Such organizations, “secular missionaries of the modern world,” mean well but instead dampen local resistance movements.Untying Aid and the NGO Co-financing Budget Line (October 2004)
British Overseas NGOs for Development presents arguments for and against a European Commission proposal that would allow developing country NGOs to access the European Union NGO budget as well. While budget access would greatly benefit Southern NGOs, the author fears the already “over-subscribed” budget also faces political and organizational bias.Cancer Charity Turns Down £1m Nestlé Donation (May 6, 2004)
The British charity “Breakthrough Breast Cancer” rejected a £1m donation by Nestlé fearing that the company wanted to use Breakthrough’s positive image to boost its own reputation. Activists accuse Nestlé of jeopardizing the lives of mothers and infants by pushing powdered baby milk sales in developing countries where water supplies are often polluted. (Guardian)NGOs in the Hot Seat (March 8, 2004)
Zambian President Levy Mwanawasa accused NGOs of monopolizing funds provided by donors and lashed out at the UN for favoring NGO distribution of AIDS funds. NGO representatives responded by saying Mwanawasa should “deregister the NGOs which are misusing donor funds, instead of giving all civic groups a bad name." (Inter Press Service)2003
With Us or Against Us? NGO Neutrality on the Line (December 2003)
Many US NGOs feel that US aid policy leaves no place for “neutral humanitarianism” in the “war on terror.” In Iraq and Afghanistan the US government dramatically increased funding for private companies in sectors where NGOs traditionally work, such as health and education. (Humanitarian Practice Network)Charity Faced US Pressure on Gaza (November 29, 2003)
The Guardian publishes a second story on the internal disputes and funding pressures within Save the Children. In this case, the US branch of the international charity objected to a statement demanding an immediate lifting of an Israeli blockade of Gaza, released on May 23, 2003. The US government accounts for 60% of the funding of the US organization.Save the Children UK Not Silenced on Iraq (November 28, 2003)
In this press release, Save the Children UK denies allegations made by the Guardian and affirms its own independence from any financial source. (Save the Children UK)How British Charity Was Silenced on Iraq (November 28, 2003)
This well-documented story from the Guardian shows how Save the Children UK came under heavy pressure when it criticized the US-led Coalition for blocking humanitarian aid in Iraq. Its partner, Save the Children US, demanded that Save UK withdraw the criticism, fearing that the US charity would lose financial support from Washington and other US-based donors.Corporate Money Co-opts Nonprofit Groups, Says Report (July 9, 2003)
Can Coca-Cola buy the American Academy of Pediatric Dentistry’s for a $1 million gift? According to the Center for Science in the Public Interest, corporate financial support of prominent US health-related nonprofit organizations undermines their independence and credibility. (Common Dreams)India Blacklists 800 NGOs (June 18, 2003)
A senior Indian official condemns numerous NGOs for using foreign sources and government development funding to finance separatists in the north-east of the country. (BBC)Aid Agencies Reject Money Due to Strings (June 6, 2003)
Mercy Corps and Save the Children have refused US government funding for their work in Iraq. The aid organizations object to the Washington's attempt to censor their press contacts. (Oregonian)The Effect of Change (June 2003)
The author evaluates the growth of international NGOs and outlines the key factors that helped some organizations develop while impeding others. Mostly looking at middle sized NGOs, the article focuses on the issues of funding and success in advocacy. (BOND)European Union's Enlargement: Opportunities and Challenges of Western and Eastern NGOs (May 2003)
EU common development policy turns the accession countries from aid recipients into donors. By gaining access to government funding, Eastern NGOs risk undermining their independency. (INTRAC)Working with NGO: Funding Issues (May 6, 2003)
This article analyzes whether NGOs compromise their credibility by accepting funding from the private sector. Some NGOs feel that they can remain completely independent despite private funding while others believe it is like “sleeping with the enemy.” (BSDGlobal)A Global Dilemma for NGOs (May 2, 2003)
This article argues that local resource mobilization is the path to sustainable development yet many NGOs in developing nations rely on international donor funding. Support is more effective from local allies such as the media, private companies, private individuals and the public, as they appreciate the countries’ specific needs. (Mail and Guardian)Belligerent Funding (April 2003)
Humanitarian NGOs often refuse funding from belligerent governments that create the crisis they seek to fix. This article challenges this idea of “dirty money,” arguing that in many circumstances the monetary contribution outweighs NGO concerns about where it comes from. (BOND)UK Offers Iraq Crisis Cash to NGOs (March 12, 2003)
Oxfam, Care International and Médecins Sans Frontières will not accept aid funding from belligerent governments in the war against Iraq. NGOs say this will compromise their neutrality and fear donations may be used by aggressor nations to justify war. (AlertNet)Donor Input into Aid Operations Growing (January 24, 2003)
A London-based research group asserts that donor states are compromising NGO independence by earmarking funds to suit their interests. NGOs should control fund allocation as much as possible to avoid becoming the executive arms of donor states. (AlertNet)Local NGOs Develop Creative Financing Strategies (January 15, 2003)
The Citizen Based Initiative Awards reward NGOs for innovative financing techniques that shift from a reliance on a small group of international donors to a diversified base of local support. The winning financing strategies of five South African NGOs are outlined. (One World)
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