Private Development Aid in Europe

Foreign Aid between the Public and the Private Domain

Paul Hoebink, L. Schulpen

• Publisher: Palgrave Macmillan
• Year: 2014
• Print ISBN: 9781137009784
• eBook ISBN: 9781137009777
• Topic: Politics & International Relations
• Subtopic: Development Economics
• Index: Politics & International Relations

The authors present anoverview of private development aid in Belgium, Denmark, Finland, France, Ireland, Italy, the Netherlands, Spain, and the EU as a whole. They illustrate how private aid organisations receive support as well as the relations they have with their respective governments.

1

Private Aid Agencies in the 21st Century: An Introduction

Lau Schulpen and Paul Hoebink

The 1980s have been dubbed the ‘golden age’ of Non Governmental Organizations (NGOs) or the period when NGOs ‘started to lose the “security of obscurity” and enter the realm of recognition and embrace by the official aid system’ (Fowler, 2011, p. 45). Positioning themselves as ‘alternative’ to the work of their bilateral and multilateral peers, they have become accepted as central actors in development, as donors, as a channel to transfer aid funds, and/or as recipients of the same. Moreover, they managed to become part of international negotiations either as organizations with a consultative status or as participants in social movements trying to influence such negotiations from the outside. As part of civil society, they are thus considered to be ‘independent development actors in their own right’ within present-day aid architecture (OECD, 2011a).

As with all actors in that architecture – and certainly those that are heralded as ‘essential development partners’ (OECD, 2011b, p. 6) – their position is not without critique. In fact, some (for instance, Banks and Hulme, 2012) sincerely doubt whether NGOs (still) deserve being regarded as a ‘central theme of development’. Central in this critique are not only more and more ‘collective action problems’ (Severino and Ray, 2009, 2010; Shafik, 2010) with an accompanying revival of the role of the state and international organizations but also the emergence of a large number of alternative actors particularly also in the private sphere. Foundations are then among the most important and certainly among the most visible of these alternative private actors. Although some of them (for example, the Rockefeller, Kellogg and Ford Foundation) have been active for a longer time already, a new group of philanthropists has appeared on the scene who earned their money in the international capital markets (George Soros, Warren Buffett), in software (Bill Gates) or in hardware (William Hewlett, Gordon Moore, Michael Dell).

It is, however, not only such alternative actors that are rocking the boat of NGOs by demanding new relations among a growing diversity of development actors. NGOs are also plagued by questions about their legitimacy (Tujan, 2012). They suffer from increased questioning of their moral and ethical legitimacy referring to their recognition ‘as representing the people, or a group of people, which comprises their constituency’ (Tujan, 2012, p. 32). Generally, these claims are questioned by many when asking in whose name NGOs are actually talking. Such critical questions are not only asked by those outside of civil society. Even CIVICUS (2013, p. 20) notes that – because of changes in the ‘understanding of what civil society is and does’ – it is pertinent to ask to what extent these private actors are ‘accredited to multilateral meetings, such as those of international financial institutions, representative of the breadth and depth of civil society?’ and ‘whose interests can they claim to represent?’.

This discussion is particularly clear on the international stage where, Smith (2012) and Paul (2012) point out, the intense exchange between NGOs and the UN that was clear at various global UN conferences ‘today has drastically diminished’. Paul (2012) adds that those who predicted ‘a steady upward path of civil society influence at the UN proved to be wrong’. In fact states have ‘become less tolerant of civil society’ and ‘increasingly wary [of its] activism’. This process had started already in the 1990s but really took off after 2000. It should be noted, however, that the legitimacy of the UN system itself is also under attack. CIVICUS (2013, p. 11), for instance, in expressing its dissatisfaction with the Rio+20 negotiations felt that these tell us ‘definitively that the multilateral system as it stands is no longer fit for purpose, and needs a major overhaul’. The same sentiments have been expressed elsewhere if only because of the changing geo-political situation.

Besides questions about the moral and ethical legitimacy of NGOs, also their ‘relative legitimacy’ or the extent to which they act ‘in solidarity with [their] constituency, in representing their interest, in acting on their welfare, in being enablers for the people to claim their rights’ is under examination. Essentially, this refers to their effectiveness (although not necessarily in terms of the ‘bang for a buck’ ideas that are central to development cooperation). In that sense, it is correct to point out the specific limitations of NGOs as development actors. The AIV (2010) mentions three such limitations: (1) some problems are way beyond the scope of what NGOs can address; (2) their accountability structure is diverse, some NGOs are not sufficiently transparent and are thus not automatically accepted as legitimate representatives or interlocutors; and (3) they deal with limited, unpredictable financing while their dependence on private funding and subsidies of their home governments can come at the expense of independence.

In addition, Banks and Hulme (2012) bring together several critiques on NGOs and conclude that they have major problems living up to their ascribed grassroots orientation, because they have been taken up in the international aid chain making them ‘too close to the powerful, and too far from the powerless’, moving them away from ‘broader goals of empowerment’ to ‘measurable outputs’, making them accountable to their donors and less to their constituencies, and making them more concerned with the sustainability of their own organization than with the sustainability of outcomes. Besides, there is still little empirical evidence for their presumed innovative power.

That the Accra Agenda for Action recognizes civil society organizations (CSOs – and thus also NGOs) as ‘actors in their own right’ and many (including Development Assistance Committee (DAC) members) see CSOs as essential development partners should thus not distract us from the fact that particularly those private aid organizations that have been central to the world of international cooperation up to now are not necessarily the favored ones anymore. Already in 2005, Lewis stated that with more prominence ‘to wider concepts of public action […] it is now more widely recognized that NGOs play a part, but no longer form the central theme of development’ (Banks and Hulme, 2012, p. 25). Besides, it should be acknowledged that there have been ups and downs in the importance attached to NGOs and that at present the overall picture is more ‘down’ than ‘up’.

Apart from the discussion on whether such changes in the importance attached to NGOs are indeed true, the discussion is much broader and essentially also more rudimentary. Considering the wide diversity within this private aid group, this starts with the questions of what NGOs actually are and how many there are. Connected to this is the ongoing discussion about their roles, their funding, their relationship with other development actors and in particular governments, and their role in creating, strengthening or broadening public (and political) support for international cooperation. These in turn are the issues central to this book. With a focus on a selection of European countries (Belgium, Denmark, Finland, Ireland, the Netherlands, Spain and the ‘new EU members states’ of the Czech Republic, Hungary, and Slovenia) the different chapters paint a historical picture of the NGO sector in these countries, government policy and funding of NGOs, their role in public support for development cooperation, and what is known about the effectiveness of NGOs.

1.1 NGOs: what’s in a name?

Although official donors slowly move away from equating civil society with NGOs (Giffen and Judge, 2010), the terms are still often used interchangeably. Incorrectly so, considering the overall accepted idea that NGOs are essentially a subset of the much broader concept of civil society defined as ‘the arena – outside of the family, the state, and the market – which is created by individual and collective actions, organizations and institutions to advance shared interests’ (CIVICUS, 2011). The definitional discussion on the concept of NGOs seems to be a never-ending one meaning as well that Fowler (2011, p. 43) is quite correct in stating that ‘there remains no universal definition, nor a robust or uncontested “positive” characterization of what NGOs or NGDOs are, what they do, and why they exist across the world’. It is not our intention to solve this here or to come up with an all-encompassing definition. Instead we follow a more pragmatic approach by using as a starting point Vakil (1997) who broadly described NGOs as ‘self governing, private, not-for-profit organizations that are geared to improving the quality of life for disadvantaged people’. Important to add then is that we are mainly concerned with NGDOs – that is, those NGOs that are active in ‘development’ and particularly those that ‘acclaim and utilize the tenets of international aid as a substantive basis for their existence’ (Fowler, 2011, p. 45). Finally, we principally (but not exclusively) are concerned with Northern NGDOs; those that reside in European countries and are still the main receivers of official aid from the respective European donors going to private aid agencies.

Even with narrowing down our focus to Northern NGDOs it is impossible to be certain about the number of such private organizations. Two earlier studies (Smillie and Helmich, 1993; Hulme and Edwards, 1997) pointed at the rapid growth of NGO-sector in the North in the 1980s, with a 50 per cent growth in the number of organizations. Meanwhile, de Haan (2009, p. 49) in citing Desai states that ‘in 1989 four thousand organizations existed in OECD countries alone devoted to international development’. Getting an understanding of the magnitude of the NGDO-sector as well as its growth is then one of the first tasks taken up by the authors in this book for their respective country. They add to this a perspective on the funds this (presumably) growing group of private aid organizations has at its disposal and the role of their governments in providing (part of) this funding.

1.2 On NGO finances and funding

Overall, getting a grip on the financial contribution to development from NGOs (or private agencies more generally) remains as elusive as finding hard data on their number. International statistics on private aid provided by the DAC are amongst the few data sources available. However, they are far from reliable which is already clear from two guestimates from 1993 using that same database with one estimating the volume of private aid at between USD9 to 10 billion (Smillie and Helmich, 1993) and the other at US$5.7 billion (Hulme and Edwards, 1997). The unreliability is mainly due to governments reporting only fractions of or haphazardly on private aid. Some DAC-members, like Norway, France and Spain, do not report aid by private aid agencies at all, or only in some years. Despite all this, the DAC statistics still might give us a first view on the flows of private aid and its growing importance in relation to Official Development Assistance (ODA).

Table 1.1 then shows private aid to have grown fast in the last decade (from around USD5.5–6 billion during the 1990s it tripled to more than USD18.3 billion in 2007, quadrupled to USD$23.6 billion in 2008 and grew further to USD30.6 billion in 2011). In percentages of total ODA it now stands at about 6–7 per cent. Looking at specific countries, and keeping in mind that these figures are not very reliable, the United States clearly stand out as the major ‘grants by NGOs’-provider with some USD17 billion in 2008. The latter, however, is a far cry from the estimated total charitable giving in the US of more than USD300 billion in the same year (Giving USA Foundation, 2010). This figure, however, includes individual giving (for example bequests) as well as giving from corporations and foundations (with the latter contributing the lion’s share to the reported growth in private giving in the United States over the last decade).

Over that last decade, several authors have come up with wildly different figures on private aid as is shown in Table 1.2. Partly this divergence in data is due to the fact that some only include specific organizations while others add foundations, individual giving or even volunteering. More important, however, is that there is no reliable database that provides a clear answer to the question of what NGOs add in financial terms to development assistance flows. All in all, it shows that data on annual international aid flows (whether classified as ODA or not) are by definition estimates or, more precisely, wild gu...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures, Tables and Boxes
• Preface
• About the Authors
• List of Abbreviations and Acronyms
• 1 Private Aid Agencies in the 21st Century: An Introduction
• 2 Mapping the Belgian NGDO Landscape in Relation to Development Cooperation: Dealing with Fragmentation and Emerging Complexities
• 3 Corporatism and the Development of Private Aid Organizations in Denmark
• 4 Non-Governmental Organizations and Finland’s Development Policy
• 5 Irish Development NGOs and the Official Aid Programme of Ireland: A ‘Special’ Relationship?
• 6 From Favoritism via Abundance to Austerity – NGDO-Government Relations in the Netherlands
• 7 Spanish Development NGOs and the State: A Continuously Evolving Relationship
• 8 Development Cooperation in New EU Member States: The Role of Non-Governmental Organizations
• 9 From Plains and Mountains: Comparing European Private Aid and Government Support for Private Aid Organizations
• Index