Global Policy Forum

Foundations saw their assets decline by almost 22 percent in 2008, which will mean a substantial drop in their funding to NGOs. Individual donors are also cutting their contributions. The decreased resources is forcing NGOs to reduce programmes and staff, but many NGOs are also trying to find and attract new sources of funding. Some NGOs ask corporations for support and the NGOs that accept and rely on government funding currently have more secure funds, but at what costs? If major NGOs let governments and corporations dominate their funding, the sector could face problems of independence and credibility more serious even than financial problems. (Integrated Regional Information Networks)

The think-tank Development Initiatives found that 51 percent of humanitarian funding for NGOs comes from private sources. With private funds NGOs can respond within hours or days to emergencies. In contrast, it takes most Development Assistance Committee (DAC) donors six weeks to disburse funds. However, in the wake of the economic crisis, many private contributors are reducing their donations. This volatility in funding could affect 19 of the largest humanitarian non-profit networks that together spend 60 percent of global humanitarian funding. (Integrated Regional Information Networks)

A professor from New York University has predicted that 100, 000 US non-profits will go under in the coming two years due to the economic crisis. Along these lines, the author Eyal Press provides concrete examples of how non-profits in the US see funding sources disappear. Has there been a non-profit bubble? If so, the best case scenario would be more careful spending by all actors in society leading to a reduction in the number of illegitimate non-profits and more effective work by those that survive the crisis. In the worst case, important humanitarian work would be lost, which would directly affect the most vulnerable in society. (AlterNet)

Fundraising for charities and NGOs continues to do well despite economic downturns, but donation from individuals increase in a slower pace. This article argues that fundraisers are used to proving impact and "telling compelling stories" since they aspire to build a long term relationship with individual donors. Surveys also show that individuals have more trust in charity organisations than in businesses and governments.(Canadian Fundraiser)

In spite of the current global economic crisis, foundations are committed to maintaining stable aid funding levels and will have to "dig deeper into their endowments." Many foundations have handled the crisis by diversifying their investments, but if the crisis turns into a long term downturn, they will have to make cuts and will not be able to develop new programs. (Integrated Regional Information Networks)

This article argues that the effects of the global financial crisis are variable and that it is still too early to foresee the long term impact. Many NGOs report that the number of donations have not dropped compared to previous years, but that people donate smaller amounts. Other NGOs state that the growth is smaller than what they had originally expected, but that they are not facing an overall decrease in funding. (Integrated Regional Information Networks)

This article draws on experiences in post-communist countries in Eastern Europe, where international donors financially supported any NGOs that claimed to strengthen democracy and foster liberalization. The author highlights the absence of clear and realistic goals for both funders and local NGOs and argues they need to establish comprehensible indicators of what they wish to achieve. Further, international donors should allocate more funding to improve the capacity of local NGOs to carry out fundraising and strategic planning. (CIVICUS)

The global financial crisis affects the income of humanitarian NGOs who now deal with decreased funding by trying to make their operations more efficient. For many NGOs, reducing their current programs and cutting back on humanitarian relief is a measure of last resort. (Integrated Regional Information Networks)

Many donors, especially corporate donors in the financial sector, have reduced their donations to NGOs due to the global financial crisis. To cut down costs, a large number of NGOs are revising their programs and laying off staff. Funding from governments, institutions and other individuals now play an increasingly important role in preventing the crisis from affecting the poorest. (Integrated Regional Information Networks)

Donors in rich countries are cutting back on their aid funding because of the international financial crisis. NGOs in aid-recipient countries now have to compete for less money. In Cambodia for example, NGOs worry that donors will cancel hundreds of millions of dollars of development aid. (Phnom Penh Post)

NGOs worry that the Wall Street crisis will tempt governments to reduce international aid and make investors more cautious about supporting development projects. The economic crisis also affects individual donors, who have already lowered their donations to charity organizations. (Integrated Regional Information Networks)

ActionAid, UK Aid Network, Data/ONE, and a group of other NGOs initiated the Publish What You Fund (PWYF) campaign to urge donors to better share information about development aid funding. It encourages donors to give timely and accessible information on how they will spend their money and it also ranks donors according to how much access they give the public to their planning documents and their financial situation. (Integrated Regional Information Networks)

The Gates Foundation, with its US$38 billion endowment, plays a dominant role in financing development and fighting disease in poor countries and few grant recipients dare to openly criticize the foundation since they risk losing their funding. But analysts from academia and think tanks argue the foundation should take part in discussions on how it can improve its work, and also share information about both successful and less successful programs. (Seattle Times)

Private donations account for almost 90 percent of NGO funding in China and the government has had more of a "monitoring" role than a "facilitating" one. This article describes how NGOs can strengthen their independence and credibility through examining each other's work and involving the people they serve. (openDemocracy)

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)

"Online philanthropy markets" is a recent internet development which allows individuals to easily engage with and invest money in organizations and small entrepreneurs all over the world. This paper by the Aspen Institute argues that individual donors should not think of themselves as providers of short term relief, but act as "investors for social change". It therefore recommends creating common reporting frameworks and independent data sets online that allow "investors" to compare the performance of the different NGOs.

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)

This article urges donors to "recognize that they are just one of many stakeholder groups that NGOs should be accountable to." The author critically assesses the "upwards accountability perspective" with rigid project monitoring, and recommends "downward accountability" which for example would allow those who are affected by the work of the NGOs to participate more.(One World Trust)

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.

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.

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)

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.

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.

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.

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)

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)

The number of NGOs in Africa has increased from a few hundred to over 25,000 in about fifty years and their work goes beyond humanitarian aid. This article argues that the growing presence of foreign NGOs, or the "army of outsiders" as the author puts it, both results from, and causes Africa's slow development process. NGOs are now part of an aid business and spend over US$4 billion on recruiting staff from outside the continent. (openDemocracy)

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)

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)

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)