Posted by Rod Macleod.

There are many aspects to building strong and sustainable civil society organisations. Mission and values, leadership, resources and an enabling environment all play a role. Getting them right is not easy; getting them wrong can be catastrophic, even terminal. But there is one issue that is not much talked about. In fact, you might suspect that it is deliberately ignored.

Too much money.

Civil society that is ‘aided’ – from small Community Based Organisations (CBOs) to large Non-Governmental Organisations (NGOs) – too often has its vitality and independence sapped by excessive financial support.

Of course this is done with the best will in the world. The charge here is manslaughter not murder. We risk killing organisations with kindness, not malice. Donors have well-articulated policies that recognise the importance of a healthy civil society. For the most part, their staff believe and faithfully try to implement these. If a civil society organisation is a ‘good thing’, surely with more resources it can do more? It seems petty, even mean-spirited to suggest otherwise.

What is the evidence on the ground?

Stan Burkey memorably starts his book People First by contrasting experiences in an agricultural settlement project. An INGO invested US $3,000 for 200 settler families backed up by their 25 staff. But the ‘target’ households’ allotments were unimpressive and their processing factories ceased to function. Meanwhile, other plots in the settlement belonging to families not included in the project, were thriving oases by comparison.

The sad fact is that too much money can undermine initiative, distort objectives and create dependency. With aid money comes bureaucratic procedures, the need to professionalise and to fit within donor strategies and policies. In their own terms, all of these make sense, but collectively can destroy thev‘centre of the onion’ – the passionate belief and commitment at the heart of any vibrant organisation.

There are many definitions of a civil society organisation, but in its simplest form it means two or more people getting together to achieve some social objective. In the early stages of an organisation, founders are not usually motivated by thoughts of personal financial reward or career development. Until well-meaning money comes along.

The stories are legion. Of families in Cambodia who had been happy to dig their own ponds for fish cultivation without payment, whose attitudes suddenly changed after a large international organisation started a food for work scheme in the same area. Of community leaders in Uganda who would not attend a workshop to discuss their own sub-county’s development unless they receive a ‘sitting allowance’. Of a capacity building workshop in Norway that was not able to start until international NGO participants’ allowances had been negotiated.

Aid money has created a hierarchy of benefits. Community volunteers are recruited by local NGOs – often backed by international donor funding. From there, staff are lured into INGOs.  At the top of the food chain are UN organisations, donor institutions and consultants. Incredibly, there is one estimate that there are three times more staff working in INGOs in Malawi than in local NGOs. A government department official in Bulgaria recently complained of not being able to compete with superior NGO salaries. This tyranny of per diems too often sucks out the ‘civic energy’, which drives the change everyone claims to be promoting.

Why the conspiracy of silence?

You might ask the question why this situation persists – why is this not discussed more openly? Surely it is in no one’s interests that individual donations and taxpayer’s contributions sometimes achieve the opposite of what is intended?

There are various answers to this.

Firstly, there is no doubt that money can play an important, positive role if properly deployed.  It is hard to judge when ‘not enough’ becomes ‘too much’. Being a donor may seem easy (surely you just write a cheque?), but in fact it is extremely hard to do effectively.

Once organisations gear up to generate income, fundraising imperatives can take over.  Following the 2004 Asian Tsunami, a number of INGO Country Directors in India quickly realised that too much money was being raised relative to the needs of survivors. But the fundraising message continued to go out that every donation was desperately needed. On the ground, NGOs were practically fighting over villages. Only afterwards was there some reflection that the massive amounts of aid had actually amplified some problems.

Within the aid system, it is rarely in people’s interests to raise awkward questions. If programme staff fail to spend their allocated budgets within the allotted time, they will be reduced next year. The pressure to achieve the necessary ‘burn rate’ can range from small NGO budgets right up the UK’s Department for International Development.

What can be done?

So should all of us who are part of this ‘aid industry’ pack our bags and go home? 

Well in some cases, this is already happening. As aid withdrawal occurs in emerging middle income countries, local civil society organisations are either sinking or swimming with locally generated resources. It will be interesting to see where this leaves them in the longer run.  Maybe they will be leaner, but meaner.

Stan Burkey’s solution was to focus on self-reliant participatory development using change agents to mobilise local resources rather than invest large amounts of money. Donors should certainly consider whether the structures they are establishing can be sustained with local resources in the longer run and not fund beyond that level.

But at the very least more debate is needed on the potential negative effects of money on civil society organisations. It is time to talk about the cash cow in the room.