NGOs - losing the moral high ground?

It may seem odd to find the topic of non-governmental organizations (NGOs) on the agenda of a conference on anti-corruption. For many years, NGOs have occupied the moral high ground - often thought of as forces for good, representing the true voices of the grass roots. We are prepared for Governments and business to be self-seeking and corrupt, although we may fight against such tendencies, but we are not prepared for NGOs to be so. Our image is of Cesar Chavez and the Farm Workers Union battling with meager resources on behalf of poverty-stricken agricultural laborers, or Herbert de Souza ("Betinho") in Brazil persuading 24 million of his compatriots to donate food to hungry Brazilian citizens.

So why should we be addressing the topic of NGOs and corruption today? In my opinion, two factors are at play - the dramatic increase in money available to NGOs and the confusion about the role of NGOs.

Transparency International defines corruption as "behavior on the part of officials in the public sector, in which they improperly and unlawfully enrich themselves or those close to them by the misuse of public power entrusted to them". Obviously, NGOs have no public power, but they do have public and private resources entrusted to them.

Over the last ten years, those controlling the development assistance purse strings have increasingly allocated funds directly to NGOs, based on the assumption that they were the ones best able to deliver cost-effective services, engage stakeholders, promote participation and effectively represent the needs and interests of the poor. Much money has gone not only to existing NGOs but also to new NGOs created to avail themselves of the financial boon. Not surprisingly, however, the dynamics of the marketplace have begun to rule, as people have sought access to and control over these newly proffered resources.

Pressure on NGOs

The biggest pressure faring NGOs by far is raising funds. We would expect that a value-based NGO would start its operations in a small way, seeking funding from local sources representing individuals or organizations who share the same values. In time, as NGOs gained experience and a clearer understanding of what greater resources are needed, they would seek resources from outside the community. A worrying scenario often played out, however, is the formation of an NGO, swiftly followed by application to a foreign donor, sidestepping the involvement of a local funding partner and the learning from experience on the ground. This occurs partly because external sources hold out the availability of sizable funding and, indeed, aggressively look for ways in which to distribute funds and partly because in many countries local philanthropic institutions are not well developed.

Government influences

In spite of the new paradigm of market supremacy and the rolling back of State functions due to structural adjustment policies, many Governments in the South continue to obstruct the growth of NGOs. Instead of seeing them as a means by which Government can extend its functions, they have seen them as competitors and upstarts, people who potentially might shame the Government or win away popular allegiance. Indeed, many Governments not only have refused to provide funding, but have created bureaucratic and procedural barriers to impede effective NGO performance. In other cases, particularly in emerging democracies, States encourage the growth of NGOs, but do not apply the checks and balances necessary to regulate them. In this case, States risk NGOs being taken over by unscrupulous people who see the advantages an "NGO" identity can bring.

Shadow characteristics

A listing of significant NCO characteristics might include:

* values that reflect a desire to improve people's lives;

* voluntary association (i.e., formed by choice, and involving voluntary contributions of time and money);

* private and independent governance;

* not for profit (i.e., not distributing profit to staff or shareholders);

* a clearly stated and definable public purpose legally constituted.

Interestingly, in each of these characteristics we can find an obverse or shadow characteristic. For NGOs to retain or recapture the moral high ground, they need to recognize these shadow characteristics.

One of the most common forms of corruption is found when an NGO's commitment to improve other people's lives changes to a desire to improve its own. In a global situation of increasing unemployment, the highly visible wealth of NGOs has encouraged some people to hawk fraudulent proposals, with the main though obscured purpose of personal gain. Such people rarely have a constituency to which they relate.

A second form of corruption occurs when a State, business or political party puts forward an organization as an NGO that is not independently controlled by private citizens. The State often does this to gain access to funds available to NGOs but not to Governments or to set up a rival to a perceived NGO competitor. Businesses, likewise, do this when commercial advantages can be gained (e.g., tax concessions) or safe hiding found for criminal activity. Political parties do this to benefit politicians or political constituencies.

A third form of corruption happens when an NGO creates an income source that ostensibly benefits its public work, but then allows a portion of the income to be channeled into the pockets of the board of directors or staff. A similar case is found when an NGO pays its officers or provides other benefits that far exceed the usual rates of compensation. The proportion of income used for programme activities dwindles as the amount pocketed by the board or staff increases.

A fourth form of corruption occurs when an NGO becomes a "gun for hire" - a contractor who takes on any job for which funding is provided. Far from having a constituency whose needs and well-being provide the driving force behind the NGO, the NGO does anything for anyone.

In many countries, such abuses have created an image of NGOs as operators of self-interested scams. This has placed the onus on NGOs to prove their bona fides. ln the past, NGOs have failed to spend enough time and energy to educate the public about the work they do. It will now take even greater time and effort for them to prove themselves as honest, responsible and accountable civil society organizations.

Fighting corruption

One way to address corruption is for NGOs to set up self-regulating bodies, the same as doctors, accountants and other professional organizations have done for their professions. Another is for NGOs to advocate for enabling environments that promote transparency and accountability, and discourage abuses of the public trust. Kenya is an instructive example of both. All registered NGOs automatically become members of the National NGO Council of Kenya. A code of conduct, devised by the Council members, is now attached to the national law on registration. A third way to reduce corruption is for the donors, whose money is unbalancing the system, to be more discriminating in deciding to whom money is given, commit adequate training and technical assistance to support effective project implementation, and responsibly monitor and evaluate project activities as they take place.

Each country, depending on its culture, history and legal structures, can provide examples of corrupt, self-interested organizations that call themselves "NGOs". Fortunately, each country also has examples of exemplary NGOs that represent the best that civil society organizations can offer. Responsible organizations must realize the extent of the problem and work together to seek ways by which NGOs can regain the moral high ground.

RELATED ARTICLE: Look What They've Done to my SONGO - or the Some Other NGOs Refrain ...

Below are few examples of spurious NGOs, many of which were drawn from Alan Fowler's book, Striking a Balance, published in association with the International NGO Training and Research Centre.

BRINGO (Briefcase NGO) - an NGO that is no more than a person with a briefcase carrying a well written proposal for activities meant to improve the lives of people in the community, but in actuality meant only to improve the life of the person with the briefcase.

BENGO (Bent NGO) - an NGO that pays staff and board benefits beyond what good practice would dictate by over invoicing, sweetheart deals with contractors or other procurement abuses.

CONGO (Commercial NGO) - an NGO set up by business in order to participate in bids, win contracts and qualify for tax concessions, but lacking ties to a local constituency.

GONGO (Government NGO) - an NGO used to capture or redirect non-profit funds allocated by the official aid system.

MANGO (Mafia NGO) - an NGO providing money laundering and enforcement and protection services.

MONGO (My Own NGO) - an NGO that is the personal property of an individual who operates as if he or she is an NGO, but without any organizational affiliation.

PONGO (Politician's NGO) - an NGO established to capture or direct NGO funding to the home constituency as a defense against incursion by opponents.

Reproduced from "Impact," a newsletter published by Pact.