Is it morally wrong to donate to NGOs? Part two

Collecting water in Rafah, Gaza (Mohammed Al Baba-Oxfam International-Flickr)
Collecting water in Rafah, Gaza (Mohammed Al Baba/Oxfam International/Flickr)

Philosopher Larry Temkin was once a champion of the moral case for donating to aid NGOs. As I explained in my first blog post, his views have now changed. He explains why in his book, Being Good in a World of Need.

Temkin still supports donations to NGOs in some situations, but he no longer thinks we should donate to NGOs working in the poorest, most aid-dependent countries. This is because he no longer believes we can simply assume NGO work succeeds. He also believes that Effective Altruists are far too confident of their ability to choose the most successful aid projects or NGOs to support. On top of that, influenced by the arguments of economist Angus Deaton, Temkin believes that there is a real risk that aid, including aid from NGOs, makes governance worse in countries where aid flows are high, and that this ultimately impedes development progress.

I have some sympathy for what Temkin has to say (full disclosure: I was sent an earlier draft of the book to comment on). Aid sometimes fails, and Temkin is right to worry whether tools like randomised control trials (RCTs) really allow us to spot the best interventions, or choose the best NGOs. (I’ve discussed the pros and cons of RCTs before.) I’m no naive aid optimist. Helping is harder than it’s sometimes made to seem.

But while NGO work isn’t perfect or guaranteed to succeed, it can be done quite well. Temkin focuses a lot on the worst examples of NGO failures in his book, ostensibly because he is trying to demonstrate that aid can’t be assumed to help, but his book would be better if he’d focused on what NGOs typically achieve.

In my experience studying aid, including NGO aid, many NGOs do some good quite often. Some NGOs work very well most of the time. And, even if we can’t draw on evidence with the certainty that some Effective Altruists claim to possess, it’s possible to use heuristics to pick better NGOs. Do they conduct meaningful evaluations of their work? Do they publish them online? Are they signatories to broader codes of conduct? Do they have enduring partnerships with local organisations? It’s possible to thoughtfully give aid to NGOs, even ones working in poor, poorly governed, aid-dependent countries, and be fairly confident that your donation funds do some good.

Of course, if Angus Deaton is right and aid undermines governance, this could still be the wrong thing to do. We might be able to find good NGOs and donate to them, but if NGO aid undermines the crucial link between citizens and governments, the achievements of individual projects don’t count for much. This is a serious concern. Or it least it would be if Deaton was right. Is he?

I doubt it.

For a start, there’s the question of volume. Temkin provides examples of some countries where inflows of aid from government donors and multilateral organisations are very high compared to the revenues of those governments. Maybe aid distorts the political economies of these countries. Yet the subset of the world’s aid-recipient countries that are actually this aid dependent is small. Averaged over the years from 2015 to 2019, in more than half of all aid-recipient countries, aid from governments and multilateral organisations was less than 10% of the size of total recipient government revenues (see my workings). What’s more, NGO aid is much less than aid from governments and multilaterals. (In Australia, where we have good data, NGO donations are about a quarter the size of government aid.) In most developing countries donation-funded NGO work is too small to seriously skew politics.

It’s also questionable whether Deaton’s argument is relevant to NGO work even in very aid-dependent countries. This is because his argument pertains to money from donor governments to recipient governments, which supposedly spares recipient governments the task of taxing their citizens, thereby – in theory – reducing accountability. NGO aid, however, doesn’t go to governments. It goes to communities or families. It doesn’t free governments from the task of raising tax revenue. Conceivably, perhaps, thanks to NGO work, people might find themselves affluent and complacent, and stop holding their governments to account. But people are comparatively affluent in Australia, and it doesn’t stop them from demanding accountability. Indeed, people who are better off may actually be better able to hold their governments to account in the way Deaton wants (this would fit with the findings of work on clientelism in political science).

What’s more, Deaton’s argument is primarily theoretical. Yet there’s also a rich body of empirical evidence from studies of the impact of aid on governance, which barely gets referred to in Temkin’s book. The evidence comes in many forms, ranging from regressions to experiments to qualitative work. Much pertains to government aid but most is relevant to Temkin’s concerns about NGOs. The findings are nuanced, and suggest different types of aid have different effects, but overall the body of literature does not fit with the belief that aid, particularly NGO aid, is likely to undermine governance. (See, for example, work on aid’s relationship to citizens’ legitimating beliefs and their demands of government, democracy and democratic change, political institutions and trust in them, government spending, regime type in recipient countries, and the long-term effect of NGO provision on political attitudes and behaviour.)

The chance that donations to NGOs, even NGOs working in the world’s most aid-dependent nations, are likely to seriously damage governance in those countries is slim.

In Being Good in a World of Need Temkin takes an interesting journey from philosophy into the often complicated world of aid practice. Some of his conclusions are eminently sensible – particularly the important point that there are other ways we can help above and beyond donating to aid NGOs. Yet his claim that we shouldn’t donate to NGOs in aid-dependent countries is dubious. It would entail abandoning people in acute need, on the basis of very questionable beliefs.

I can’t see how this could possibly be morally desirable.

This is the second blog in a two-part review.

image_pdfDownload PDF
Disclosure

This review was undertaken with the support of the Bill & Melinda Gates Foundation. The views are those of the author only.

Terence Wood

Terence Wood is a research fellow at the Development Policy Centre. His research focuses on political governance in Western Melanesia, and Australian and New Zealand aid.

15 Comments

  • Just to elaborate on my earlier comment as it relates to NGOs (from local CBOs to NGOs to INGOs): it seems that when they repeatedly unite and patiently collaborate together around the same goals as citizenries articulate and come to share (which are also enabled/enableable processes), evidence points to their increased and at times, critical importance as interlocutors (in solidarity with others sharing these goals – eg media; officials , traditional & religious leaders ..) in fostering synergies between government and citizenries to which I referred. (eg see also evidence from IDS, ISS/Alan Fowler’s and mine)
    As already emphasised, this process of enabling & giving collective voice to citizenries is (or need not be) aid-intensive and in strengthening governance (eg of health systems) and its fruits, tends to have democratising outcomes . Part of such voice needs to have an objective basis, such as institutional ‘inputs’. Part needs to be subjective (drawing on and translating lived experiences of failed/failing institutions) and through deliberation/dialogue part needs to be intersubjective, with local citizenries triangulating all three. Such synergies can be scaled up.
    The point is NOT that media etc automatically share the shared goals of citizenries (they dont necessarily do so), but that within them (as within governments, starting locally) are often allies willing to increase such goal-sharing.
    Rather that it is possible to create more inclusionary ‘virtuous cycles’ of change where local institutions important to local citizenries are blocked, or worse (eg ‘zombie’ or ‘ghost’ institutions) – which collective counter vicious cycles of poor governance, into which external donors, whether INGOs or official donors, otherwise (eg if unaware of these cycles or complacent about them) are locked and have become complicit. (eg collectively their funding of or towards services allows governments at all levels to free-ride, when it is disconnected from accountability to local citizenries; who, unsurprisingly, are reluctant to pay taxes for ‘blocked institutions’ (examples of these are public schools, clinics, water supply systems, child protection systems, social protection systems, systems for PLWD, with low levels of accessibility, availability, acceptability and quality)

  • Practical implications of several of Angus Deaton’s key arguments – about the importance of government responsiveness/accountability to their own citizenries, so citizenries become the pipers who call the tune – and what facilitates citizenries in response being to pay increased taxes for what they can monitor seem, surprisingly to me, to have been left underexplored.

    While not suggesting these are panaceas, there is some evidence suggests that enabling them (alongside other factors which close the gap and facilitate better, more trusting citizen-government) help contribute to better governance. Importantly, compared to traditional kinds of aid, this kind of aid is often relatively inexpensive.

    If this is so, perhaps we need less of a binary discussion about aid/no aid, and more which asks what evidence shows about the conditions under which modest amounts of aid contribute not merely to better governance but more especially, over time, to a) mutual trust arising between governments and their citizenries, from the bottom up and b) this facilitates them paying increased taxes as they ‘see’ and ‘believe’ government is becoming more responsive and accountable to them which then helps not only close gaps between them but even foster collaboration (and other kinds of positive-sum power).

  • Hello Terence,

    I find Nik Soni’s comments with respect to delineation of NGOs by size and master to be spot on. His observation that I-NGOs cannot be genuine agents for advocacy when they take their money and instructions from Canberra or its equivalent is mostly correct.

    The wash up is they are by almost any measure completely ineffective outside government-to-government at central agency level and even then their impact is arguable.

    Take Australian bilateral aid to PNG since independence. I suggest you would be hard-pressed to find one example of lasting impact beyond the odd infrastructure project. Certainly nothing of substance or sustainability in the health or education space where it counts: beyond the halls of Waigani.

    Take the myriad of local NGOs. By that I refer to the non-official church and non-political groups that exist at community level almost everywhere. Almost none are registered with the Investment Promotion Authority or Internal Revenue Commission and this effectively makes them ineligible for funding by I-NGOs.

    In many cases they have good ideas and represent the voice of their communities. If the development assistance dots could be connected more readily to them, I would suggest it could have real impact.

    To give you an example of how the system works, I am aware as I write of a PNG health professional who works for a Port Moresby based I-NGO and wishes to deliver valuable health awareness messaging to communities in a maritime setting. To do this she needs to hire a local dinghy operator but can’t because none have IPA registration.

    This is the kind of nonsense that cruels progress. In my view the development assistance effort suffers from a gaping disconnect between the reality for people on the ground and what managing partners based in POM or HON are expected to do. And I suggest this is a genuine impediment to achieving longer term impact where it matters.

    In Australia our governments wish to “close the gap” with respect to indigenous disadvantage. In more recent times there has been a recognition that greater community consultation and genuine partnerships towards mutually agreed solutions is an essential part of the pathway forward.

    In PNG and the Solomon Islands we should look to adopt the same strategy for the same reasons that apply in Australia. Customary land ownership equates to deep time occupancy of place, culture and language equates to identity in that place and how these factors play out in decision making and the uptake of new ideas at community level.

    As an independent community empowerment facilitator, with thirty-five years in PNG and time in the Solomon Islands, much of it with a community focus I cannot think of a better time for a step change in our approach to international assistance in Melanesia.

    In a region with burgeoning populations, increasing pressure on land, freshwater resources and fisheries, faltering services, increasingly dissatisfied youth and where human capital development indicators have long been in retreat, it is of strategic importance to do something better than pour money in at the top and glad hand the idea of the Pacific Family.

    In partnership with people where they live and within the resources at their disposal, we have to do better at empowering them to achieve the outcomes that are important to them.

    In my view, one that takes in collapsed school buildings and abandoned clinics, it is past time to direct a concerted focus on identifying and working with communities through effective local NGOs to assist them become part and parcel of the solutions that government alone cannot solve.

  • Interesting, one issue is the lack of clarification of what constitutes an NGO. In the past they were synonymous with charity. In the Pacific most I-NGO’s are now primarily managing contractors for Development Partners – so essentially not for profit private entities.

    However, most I-NGOs still see themselves as charities – so you will here them say things like “their role is to advocate” but you cannot be a genuine advocacy agency if your income source defines what you do and you are paid to deliver a certain output. So, here the sceptics have a point.

    Then their are local NGO’s who in the Pacific often are more like charities but so small in scale they could never meet the fiduciary requirements of almost any authority.

    So the mere term NGO is quite problematic. In the Pacific I-NGO’s are technically not for profit private companies and local NGOs are more like charities. If seen in this light then the arguments for who to give private charitable donations to and the risks involved become a lot clearer.

    Then to add confusion there are churches – who act like charities but fall under a different set of regulations again. This also does not cover the plethora of CSO’s especially state funded CSO’s that we see in Asia and Africa who also often come with “interesting non developmental” agenda.

    However, any attempt to actually clarify and define this – no matter how genuine – is often met my cries of “Government interference” which is why it remains such a murky space to the detriment of everybody in the development industry.

    The regulation of charities, churches and not for profits in the Pacific still relies on legislation drafted in the 70’s that has not been updated to meet the requirements of the twenty first century.

  • Thanks Terence. Very thoughtful and comprehensive. I have also read the other comments with great interest. I guess evaluating performance of NGOs in an objective and unbiased way is very difficult. On the other hand, institutional donor market is often very concerned about reaching SDGs in a way that is scalable. Hence, we are seeing the emergence and growth of approaches like inclusive market systems development that facilitate important market actors such as the government and the private sector in achieving inclusive economic growth.

    One thing to add in this discussion is the role of the private sector, especially in a fragile war-torn context with very thin markets. Instead of distributing direct aid, NGOs and contractor alike work with the informal private sector (e.g. intermediaries such as shop owners or local service providers) to establish pro-poor businesses. Direct deliveries like the start-up fund and training towards these entrepreneurs could be considered the social investment, while the effort and energy contributed by the entrepreneurs can help establish local solutions to development problems that create incentives for the change to continue.

    Perhaps, it’s high time NGOs stopped “sponsoring the change” by overtaking the current system and rather put all the weight (except emergency response) to create sustainable incentives within the system to make change attractive.

  • Is it morally wrong to donate to NGOs? In relation to Papua New Guinea, I would argue it would be morally wrong not to direct more funds through local competent NGOs.

    This is because these types of entities tend to best represent the wishes of people at the grass roots level where they have contacts, lived experience and influence to make a lasting impact.

    However, under the current system it is the structures of command and control that determine outcomes. This is a bit like an inverted pyramid with those with lived experience occupying the lower levels in small numbers where too often they watch an intervention fail without the authority to influence a possible solution.

    To this add the churn of internationals in large NGOs who rarely develop a deep well of in country knowledge or experience. No sooner has the most recent country manager learned “which way is up” their term expires, a new face appears and the merry go round continues.

    When PNG citizens do take the helm, they more often than not remain at the beck and call of a governing body in some offshore location with little freedom to improvise or depart from the given hymn sheet.

    In my view development assistance is very much a two-tiered system with coordination and financial control heavily vested with entities that operate from Port Moresby while often a few PNG citizens on the ground have to achieve the desired results. For anyone seeking to understand issues facing communities, Port Moresby is the last place they need to be.

    The long run output from the present structures is that those who should wield the most influence over outcomes often have little or no influence on program delivery, while those with limited appreciation of the actual issues, wield the most power.

    Add the often decried, call it what you will, nonalignment of world views between these two settings and you have another failed intervention in the making. And when the inevitable happens it is not the international NGO that takes it on the chin. There is always a force majeure that prevented the program from succeeding.

    I suggest we get far more serious about the role of local CSO and NGO entities. While it is acknowledged their involvement must be accompanied by an appropriate level of due diligence, they should nonetheless be the target for development assistance.

    They draw their people from communities we wish to empower. They have the lived experience, local knowledge and understand the critical nuances, many hidden from outside view.

    Agreements that affect communities are more often than not reached through widespread face to face consultation and acknowledgment of customary authority.

    This essential stakeholder management skill is not within the ambit of international NGOs who place great sway by MOA that are often not worth the paper they are written on.

    So my vote is to reward international NGOs that deliver program results through local actors. They should be clearing houses for the distribution of funds to local entities that deliver sustainable results with measurable impact.

    It believe that until the volume of funds favours local actors and sets the distribution of resources pyramid back on its base we will continue to see little sustainability and poor results where it matters: on the ground.

    And this I suggest is moral incentive to support more local NGOs.

  • Thanks as ever Terence for thought provoking pieces. I just want to add my appeal to better disaggregate aid. The historical tendency to categorise aid as a single thing led to the unproductive ‘aid works’ versus ‘aid doesn’t work’ debate. Similarly the idea that ‘NGO aid’ falls into a single category is just not accurate. It can include humanitarian work, local community development, service delivery, advocacy, or as Rose points out, working with governments in policy development, legislative reform and so on. Some types will be more effective than others depending on the context, and of course how well it is implemented.

    We haven’t yet found a satisfactory way of categorising aid. In 2014, for example, Stephen Howes proposed dividing it by technical assistance for improved governance, budget support and projects. But ‘project’ in my view is too broad because projects work in different ways. An infrastructure project might work by providing finance and building capacity of the recipient government agency to build and maintain a road; a community development project might be about empowering local citizens to engage with local government. Both are ‘projects’ but operate according to different mechanisms.

    In order to measure what type of aid works best in what contexts, we should disaggregate aid according to the main mechanism by which we believe it can achieve its aims. Such a typology might build around areas such as knowledge brokering, empowerment, accountability, advocacy, solidarity, community mobilization, coalition building, incentivization and influence.

    • Thanks Jo, great comment, I completely agree. Aid is so varied, it doesn’t really make sense to talk about it as a singular thing.

      That said, I think the Deaton/Temkin argument that aid undermines governance via reduced need for taxation is unlikely to be true for most types of aid in most instances.

      To be fair to Temkin, at points in his book, he does note that aid isn’t a singular thing. And remains supportive of humanitarian aid. He also approves of other aid in some contexts (non-aid dependent countries). However, the diversity of aid still doesn’t inform his conclusions enough.

      Terence

    • Good to have this discussion, thanks, Terence.. clearly,one must avoid rhetorical positions and generalities… yes, big NGOs are corporations with characteristics and sometimes budgets of corporations or government agencies, but that does not make them all competent or incompetent, any more than community based organisations necessarily are altruistic and achieve positive outcomes at the community level… although they have a higher probability of doing so, with generally less risks of costly mismanagement.. There is a need to research and examine your NGO and CSOs, if considering providing support. Local NGOs and CSOs are usually harder to reach by contributors but more effective on the ground, but widely sidelined or squeezed out…the NGOs and CSOs certainly need support to be effective and accountable ( ticking off the various boxes), but doing such research in remote Melbourne, New York or London can be challenging, and requires some assistance…how do you know that NGO on the ground isnt just a scam or pyramidal money operator? Accessing reliable locally-based information sources are invaluable for those willing to make the effort

      • Thanks Paul, good comment.

        I only have one, very minor, pedantic, point of disagreement. Large NGOs aren’t corporations per se. They may be large, have-multilayered management structures, and so on, but they are not-for-profit organisations, which is an important distinction from for-profit businesses.

        Thanks again

        Terence

  • Thanks again Terence for this. I started my career in the NGO space in the Pacific and have seen some wonderful transformation from the work of NGOs, and some not-so-great outcomes as well. Yes to independent evaluations sponsored by donors that sit outside of the project for obvious reasons.

    I’d love to see aid, through NGO to be contextualized and promote government-NGO partnership, not only for implementing social and economic initiatives but also support for policy development and legislative reform for improved governance, planning, budgeting, monitoring & evaluation and resource allocation.

  • Thanks Peter and Stephen. I agree with you both. It would be much better if we had an abundance of quality evaluation based evidence on what worked and where. Thanks again. Terence

  • Thanks (times two) Terence, for your welcome for-and-against comments.

    Having been involved with foreign aid lobbying since 1986, I always shuddered when single examples of aid “failure” were brought up (rather too frequently). This more than often morphed into allegations that “all aid is wasted”, or “why give aid to corrupt governments”.

    Not having read “Being Good in a World of Need”, my first observation was in the title – not starting with “Doing” as an active verb. My next thought was in the proportions of aid that “failed” versus that which “succeeded/was demonstrably effective”.

    As I’ve commented elsewhere, Australian Foreign Ministers (and elsewhere) do not seem inclined to highlight positive aid stories. So that anyone interested in such outcomes has really to go hunting to find the evidence. Stories about the amount of money in the aid budget or being given to particular recipients are neglectfully inadequate.

    Examples of microfinance lending to rural women in Bangladesh by the Grameen Bank, (especially under the leadership of Professor Yunus) are largely unknown in Australia. Small amounts of $50-100 were shown to transform their lives.

    Arguments about local governments needing to raise sufficient taxes in the place of foreign aid seem to reek a little of condescension about the realities of political life overseas. I support Medecins San Frontiere precisiely because in too many places it provides the only local health services.

    Instead of bemoaning self-described “aid failures”, I’d prefer balance with stories of aid that works and not so much generalisation, either.

  • Thank you Terence. I think you have just strengthened the case for evaluating NGOs, particularly locally based ones and supporting good models of development to create greater impact.

Leave a Comment