The Case Against Foreign-Funded NGOs

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November 16, 2012; Source: MinnPost

In all the debate about countries such as Russia and Israel trying to regulate NGOs receiving financial assistance from foreign donors and governments, it is worth stepping back and asking whether U.S. support for some NGOs is a matter of “good intentions, bad policy,” “morally attractive but [potentially leading to]…unintended consequences.”   That’s the argument of Kendra Dupuy and Aseem Prakash of the University of Washington and James Ron of the University of Minnesota.

“The time has come for western and international donors to reconsider the way in which they support human rights, democracy, gender equality, and other liberal causes in the developing and former Communist world,” they write. “Supporting liberal NGOs can be useful, but it must be done carefully and modestly, lest it undermine the same agendas it seeks to promote.”

Dupuy and her coauthors suggest that it isn’t just Russia and Israel, but many countries reacting against foreign-funded NGOs. They count one-third of the nations of Africa as having passed restrictive laws or tightened existing laws governing the activities of local NGOs receiving outside financial support.

To the authors, despite the donors’ best intentions, they helped support “many local NGOs [that] became top-down groups nourished from abroad, rather than local products of a popular, grass-roots civic movement.” They argue that external aid reduces the incentive and need for these NGOs to raise money from indigenous sources. That made NGOs vulnerable to charges that they are foreign-controlled, following the agendas and dictates of the donors. In other cases, the foreign aid created phantom NGOs or what they call “briefcase NGOs,” citing for example that 75 percent of the registered NGOs in Kampala, the capital of Uganda, did not really exist.

The argument of Dupuy and her colleagues is understandable in one sense, but debatable in another. In the U.S., there is a strand of the nonprofit sector that suggests eschewing foundation and other large institutional grant support in favor of local, grassroots fundraising as more authentic and less subject to control by foundation bureaucrats. One could also suggest that the existence of phantom NGOs in some of these countries is not much different, except perhaps in degree, with the number of U.S. 501(c)(3)s that proved unable to even send an e-postcard to the IRS to prove their continued existence.

Moreover, in some of these countries, the structure of indigenous civil society is thin and underdeveloped. To suggest that fledgling voluntary organizations turn to local sources for funding support when most people give not to organizations, but family and community for survival purposes, may be unfair. Moreover, even in wealthier countries such as Israel and Russia, the NGOs needing external support may be organizations fighting for democratic practices or for the protection of minority populations that don’t get a fair shake from government and society.  

That doesn’t mean that the argument of Dupuy et al. is incorrect. They are pointing out that it is mechanically difficult for foreign donors to create and sustain local NGOs in environments of weak local support. Building a democratic civil society requires more than money. As the authors conclude, “You can’t buy love, and you can’t buy a vibrant civil society either.” –Rick Cohen

  • Ben

    The idea that people in one country should be unable to give to an NGO in another is fundamentally flawed. Why should we heavily regulate the resources going back to struggling nations when we allow foreign corporations to extract reaources and exploit people so freelbearings the world? It’s true that donors need to do more homework, but no policy should prohibit generosity. Borders should be broken down, not built up higher.