Change the Game: What’s next? (white paper)
Afgelopen weken stond de Vice Versa website in het teken van het Change the Game debat, over fondsenwerving en beleidsbeïnvloeding door lokale ngo’s. Zijn de rijken in middeninkomenslanden bereid hun welvaart te delen? En hoe kan de ontwikkelingssector daar het beste aan bijdragen? Ter afsluiting schreef Siri Lijfering een white paper (in het Engels) waarin zij de belangrijkste conclusies samenvat.
Whereas previously the majority of the poor lived in low-income countries, the majority of the poor is currently located in middle income countries. In these countries, the middle and upper classes are growing rapidly and poverty alleviation has therewith increasingly become an issue of wealth redistribution as opposed to the notion of charity. But are the rich willing to share their newly gained wealth? And how can the development sector best contribute to this? These and other issues were central to the online Change the Game debate that Vice Versa and the Wild Geese Foundation hosted this past month. Here, we revisit a selection of important issues and dilemmas raised over the course of this debate.
According to a study by the OECD, the coming 15 years will see a worldwide growth in the middle class of 165% and a concurrent 161% increase in global purchasing power. Perhaps remarkably, this growth will predominately manifest itself outside of Europe and North America, and particularly in emerging economies such as China, India and Brazil. The absolute size of China’s middle class already equals that of the United States, and the Indian middle class is expected to outsize the American by the year 2020. But as the wealth of emerging economies increases, so does the relative income gap in these countries; India is for example home to around 60 billionaires, while more than 300 million people still live below the poverty line. Tjipke Bergsma, regional director of Plan International, argues that ‘it therefore makes no sense that Dutch still have to pay for poverty alleviation in India.’ And adds: ‘It is time for the rich to show solidarity for their own poor’.
Domestic resource mobilisation
The major demographic shift in the international playing field also has an impact on the future of international development. While the economic crisis has resulted in development budget cutback in many Western countries, the economic growth in emerging economies creates promising opportunities for local philanthropy. According to Jenny Hodgson, executive director of the Global Fund for Community Foundations, an organisation that promotes community philanthropy, it is high time that the potential of local fundraising is exploited internationally. ‘Many local organisations are still heavily or in some cases even completely financially dependent on the West. But Western funding is not inexhaustible and international organisations will not continue to exist forever. For the sustainability of development cooperation it is therefore vital that alternative sources of funding are sought. This will make organisations and their projects less vulnerable.’ In recent years, the importance of domestic resource mobilisation has been put on the agenda by a number of different parties. In the Netherlands, Cordaid and Mama Cash published the report ‘Lokale fondsenwerving. Samen doen’ (Local fundraising. Do it together) in 2005. However, despite the intentions of many organisations to put more effort into local philanthropy, Hodgson finds that in practice, precious few actually translate their words into deeds and so this new approach is still really in its infancy.
Focussing more on local fundraising also has an important political aspect. Over the past decade the space for civil society in many countries has decreased dramatically. Development and human rights organisations in particular have suffered from the adoption of more stringent legislation for local CSOs (civil society organisations). In Ethiopia, critical voices from the population are silenced with excessive jail penalties and hard crack-downs on protests under the guise of anti-terrorism legislation. In countries including Azerbaijan, Ecuador, Indonesia and Algeria, bills to limit the freedom of civil society organisations have also been recently adopted. In Kenya and Russia there is even a lobby specifically pushing for legislative changes that curtail foreign funding of local organisations.
According to proponents of community philanthropy, local fundraising can boost the legitimacy and hence the political power of an organisation. This is referred to as claim-making; the ability of a local organisation to lay claim to governmental services that the population is entitled to. Once an organisation is able to mobilize local funds, it shows the government that the people themselves are behind the goal and that the organisation is not seen as a mouthpiece of the West. When dealing with the government, it means you are not only defending your own organisation’s interests, but in part also representing the voice of the people, which makes you stronger politically.
Jelmer Kamstra, who received his PhD last month at the Centre for International Development in Nijmegen on the subject of democracy and civil society, came to similar conclusions through his research. ‘To effectively lobby the government, having strong local support is very important. Foreign donor funding weakens the position of local civil society organisations. If they want to get anything done by the government, the government can easily undermine their claim by saying, “who do you represent anyway?” Raising funds locally involves citizens to a greater degree in the developmental processes of their own country and stimulates them to actively pursue their rights’ according to Kamstra.
However, there are also some strong arguments in favour of a more international approach to lobbying and advocacy. As international NGOs often have their headquarters in the West, they are less susceptible to government interference and can therefore more easily tackle controversial issues. Externally funded organisations which are registered internationally cannot simply be thrown out by governments as it would meet major international resistance. When organisations are locally registered, they can be silenced by local legislation or in the worst case scenario be arrested or even killed.
Besides a complex political context, organisations also face a significant challenge in the field of social support. The middle class in many countries is often far from convinced of the added value of NGOs. For years, international cooperation has remained an external process with no true involvement of the local population. Organisations often speak in terms of impact assessments, finance proposals and other ‘donor speak’ to which the local population cannot relate. In addition to this, financial mismanagement and corruption scandals have caused widespread distrust. The India Giving report shows for example that a staggering 70 percent of the Indian population would rather not give directly to social organisations, but prefer rather to support family or religious institutions.
To encourage a more structural giving culture a reinstatement of the potential donor’s trust is required. This requires a significant cultural change from NGOs whereby they relate to the local culture of giving and relate it to a more structural approach to philanthropy. However, these local traditions present another challenge, because in many cultures, as income increases, so too does the primary responsibility to care for ones own family. These social obligations impose a heavy burden on disposable income, making the term “middle class” rather arbitrary. Institutionalised, local philanthropy for structural poverty reduction may therefore remain something of the distant future. However, there certainly exist good causes for hope. The latest World Giving Index, an annual study conducted by the Charities Aid Foundation, has registered a sharp rise in philanthropy in middle and low income countries in recent years. Particularly in the area of “Helping a stranger”, the scores of emerging economies have increased significantly.
But how can these traditions of giving best be stimulated and what type of organisation should take the lead? Over the past decade there has been a clear trend of decentralisation, with more and more international organisations establishing their regional offices in the countries where they operate. Organisations like Greenpeace, Amnesty International, UNICEF, Save the Children and Plan International have offices all over the world. A commonly heard reason for this trend is the need to be closer to the source of the work. However, some warn that there might be certain negative side effects to this trend. When international organisations operate on the local fund-raising market, they compete with local NGOs, thereby reinforcing an already existing unequal power balance. Due to the highly developed capacity and professionalism of these international NGOs, local organisations will not only loose-out in terms of mobilising funds, but also in attracting and retaining the most qualified personnel. International organisations are still often seen as more prestigious than local NGOs. Moreover, the salary of employees in these large organisations is often several-fold higher than what local NGOs can offer to pay. Given the chance, this is an easy choice for most development workers. However, not everyone agrees and some even see it as a welcome contribution to community philanthropy. International organisations can help develop the local fundraising market and can share its skills and knowledge with local partners.
In conclusion, domestic resource mobilisation and claim-making goes beyond diversifying the donor base of an organisation, but requires a completely different approach in the field of international cooperation. In the end it is a matter of transferring power from the North to the South. But how this is done, still remains to be seen.
As we mentioned we first have the practical dilemma: how does it actually work on the ground? Is domestic resource mobilisation a viable option for international development in the future or is it just a pipe dream?
Secondly, the question remains who should take the lead in this new approach. How do you effectively work together as an international organisation and a local partner? Who is in charge?
Finally, what will the future of international development look like in regard to domestic resource mobilisation and claim-making? How can the West remain a relevant actor in international development and how do we go to a more sustainable approach to development. What’s next?