Aid, Nonprofit, Public: Who Defines the Rules of the Game?

I am a big supporter of the view that nonprofits should be run like businesses. Because aid has to be sustainable. In every sense of the word. However, through my experience in the field I have started to notice that some practices of many aid and international development organizations remind me of the corporate world. But not in a good way.

When nonprofit leaders are striving to streamline day-to-day communications and management within their organizations - it is excellent. When CEOs promote transparency and accountability within their companies, it is great. When nonprofits look for social investors instead of grant-makers to find their way to financial sustainability, it is superb! However, when nonprofits start paying more attention to their PR campaigns and fundraising, forgetting their original goals in the process, it is not aid anymore. A nonprofit is a business with mission. When mission is lost, nonprofit turns into a traditional business with a donate button on its homepage.

One of the articles that really inspired this post was tweeted by the mysterious @TalesFromthHood. AlertNews Can aid agencies afford to be honest? is talking about nonprofits' fundraising & PR practices that too often take general public (a.k.a. potential donors) for simplistic and narrow-minded people, pushing simple messages such as "a starving child" and forgetting to tell the not-so-pretty truth from the ground.

The article quotes OCHA's Mark Turner: "I still get the impression that the simple tale of 'give a pound save a life, here's a child with a begging bowl' is still by far and away the most effective fundraising exercise and I'd be interested see if there's any research to be done in terms of complicated messages and fundraising -- whether this public that supposedly wants a greater, more complex understanding of the situation gives money when you present it in that complicated way."

The question I want to ask is: Who started this myth that the public does not want the "messy truth"? Who defined the rules of the game that the nonprofit world is running by?

Correct me if I am wrong, but aren't the most educated people - traditionally the biggest donors? Then why do nonprofits need to simplify their messages so much? Why can't they afford to be honest? Since when fundraising and PR are more important than work on the ground? Since when is it acceptable for aid agencies to claim to "do good" without knowing their original mission or end results?

Is it because admitting failure is so hard in practice? Is it because we venerate success so much, but prefer to omit the "dirty details"? Or is it because monitoring & evaluation are legging behind, while PR machine is always on its high horse? When did nonprofit industry switched gears from need-based solutions to corporate-like, huge but unaccountable programs?

Now, I am not saying that fundraising and PR are not important. Many big nonprofits are able to receive grants namely because of the successes of their PR and fundraising departments. Working for more than 2 years for a nonprofit run by volunteers, I KNOW how important they are. However, I take comfort in that my organization is mission-driven, that it exists simply because it truly helps the people in need. THEY are our main focus, their needs is the base of our existence. Because aid is about helping others, not about my professional success, a CEO's self-promotion, or organization's ratings. Aid is about doing good, honestly, effectively, selflessly. A very idealistic view, I agree. But aid itself is by definition idealistic.

I look forward to your comments! Do you agree with me or not? Can nonprofits really combine idealistic and altruistic motives with business operations? Can aid agencies be grassroots-oriented and still financially sustainable?

Best Aid Intervention - What is it?

Best Aid Intervention. Is there such a thing as the best aid intervention? And if there is, what is it? Can we define it as a development approach that is equally successful, cost-effective, and sustainable when implemented in any country or region of the world?

Girls Education

First thing that comes to mind is girls' education, on which I wrote before in Girls and Education-Why Do They Matter? Yet despite my own devotion to the cause and many great studies on the subject(check out "Because I am a Girl" by Plan International thanks to @KeshetBachan for the link), we have to acknowledge that girls education is NOT the most cost-effective tool. Nicholas Kristof, one of the most prominent supporters of girls education, states: "While we argue that educating girls does stimulate economic growth and foster stability, for example, it is also true that one of the most educated parts of rural India is the state of Kerala, which has stagnated economically." The example of the former USSR republics (almost all of which have literacy ratings around 90%) also proves that education is not always the key to economic development and high per-capita incomes. Therefore, girls' education is not a panacea(but oh how I wish it were!)and not the best aid intervention.

Microfinance

Is it microfinance that has gained huge numbers of supporters since the beginning of the new millennia with the help of its main champion, the Nobel Peace Prize winner, Muhammad Yunus? Probably not. Not because of the SKS IPO controversy, Andhra Pradesh crisis, or the infamous Norwegian documentary, but simply because microloans do not fit the needs of all the poor people. Believe it or not, poor people are not equally poor and have different needs! To me, out of all the criticism that microfinance industry has received recently, the not-everybody-wants/can-(to)-be-an-entrepreneur seems to be the most viable. In addition, there hasn't been enough research on microfinance effectiveness, while some of the few researches that came out had actually come up with negative results.

On the other hand, there is an undeniable need for financial tools developed specifically for the poor, which is strongly supported by the research summarized in the brilliant "Portfolios of the Poor." Thus, microfinance still has a shot at becoming the most effective development tool... with two big "ifs". If the industry continues working on the diversification of its products, a prerequisite stressed in the latest CGAP report. And if microfinance shifts its focus back to its poor clients, away from the wealthy investors.

Seasonal Migration (of people)
Would you be surprised if I told you that seasonal migration is a more effective development tool than microfinance, deworming (one of the cheapest aid interventions!), or conditional cash transfers? That's exactly what this article states!



But does the success of a seasonal migration from Tonga to New Zealand mean that this approach will be equally effective in raising incomes elsewhere? Probably not. The article itself states that this type of policy will be most effective for small island nations and its results will depend on governments and international organizations. (Knowing these limitations, we can take seasonal migration down from the "best aid interventions" list right away.) Moreover, the article's daring conclusion is nothing but a suggestion based on very few one-sided researches.

Does it mean that there is no such thing as the best aid intervention, a perfect development approach creating miracles all over the world? Well, miracles do happen all over the world (look at Kenyan M-PESA for example!), it's just that they are brought about by different forces and different aid interventions.

The world and its people are simply too diverse for one aid intervention to be equally effective everywhere. There will ALWAYS be exceptions to the rule. As I see it, the best aid intervention, is actually a combination of all of the above + many more great development approaches implemented at the right time in the right place.( Concerning the last 2 points, i.e. "at the right time at the right place", I recommned to check out this great post on World Bank blog: Revisiting the "country-specific solution"

I am very interested in your opinion. Do you think best aid intervention actually exists? Maybe you have a different definition of it or would have used different examples? I would love to hear your thoughts!