Skip to content

Till Bruckner Responds to Critics on Meaningful Transparency

The following post was written by Till Bruckner, PhD candidate at the University of Bristol and former Transparency International Georgia aid monitoring coordinator.

In response to my recent post here, Scott Gilmore of Peace Dividend Trust argues that asking NGOs to share their budgets is misguided. He correctly points out that we should be concerned more with project outcomes than with financial details. However, while aid beneficiaries can and do judge NGO projects by their impact on the ground, Western taxpayers and private donors are unable to do so from afar. Transparency has many dimensions, including financial transparency. As a taxpayer, I have the right to ask what my money is being spent on as well as the right to ask what those expenditures actually achieved. Plus, if I cannot even find out what the total cost of a project was, how can I judge whether it was worth my money?

Scott Gilmore also states that access to budgets will not help to curb corruption, and recommends a focus on audits instead. While it is true that I cannot look at a budget and see whether the money was misappropriated in a legal sense, it does enable me to see what the money was allocated for in the first place. My original aim in requesting these budgets was not to muckrake, but to analyze what percentage of NGO project funds in Georgia flows back into donor countries in some form or another. I need to be able to distinguish between expenditures for local versus international salaries in order to find this out.

The aid industry has created a system that conveniently defines corruption so that expats can live a good life within the rules, whereas locals on far smaller salaries and with larger family commitments frequently get branded as corrupt for breaking these rules. In my experience, Afghan villagers do not share this narrow legalistic definition of corruption. When a project fails to deliver benefits to the poor, and the expat project manager at the same time lives a life of (locally) unimaginable luxury on designated poverty alleviation funds, villagers logically conclude that the project is failing due to corruption: instead of helping them as originally promised, the NGO is only helping itself. NGOs’ arrogant attitude – “we’re accountable by our own standards so we don’t need to tell you where the money goes” – does little to change this perception.

Finally, Scott Gilmore raises the question of competition within the aid industry. I suspect many private donors would be dismayed to learn that some charities seem to orient their practices around the competition for government contracts. In any case, competition for a project ends when a funding decision has been made and taxpayers’ money gets disbursed. Putting all successful proposals into the public realm as a matter of course will not only improve inter-agency learning, but will also discourage backroom dealing on contracts. This will create a more level playing field for all aid implementers, whether they are commercial contractors or NGOs. If Oxfam, UMCOR, Mercy Corps and AIHA can share their budgets, it is hard to see why other aid agencies cannot do the same.

Original post and responses:
Till Bruckner: The accidental NGO and USAID transparency test
Scott Gilmore: Transparent, Yes. But Transparent What?
Transparency Extremist: Transparency in the Aid process
Scott Gilmore: Useful Transparency vs. Meaningless Paper Chasing

This entry was posted in Accountability and transparency and tagged . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Both comments and trackbacks are currently closed.

7 Comments

  1. Carla wrote:

    This bit, down to the commas, could’ve been written for how Haitians in my experience, feel about NGOs in their country:

    “The aid industry has created a system that conveniently defines corruption so that expats can live a good life within the rules, whereas locals on far smaller salaries and with larger family commitments frequently get branded as corrupt for breaking these rules. In my experience, Afghan villagers do not share this narrow legalistic definition of corruption. When a project fails to deliver benefits to the poor, and the expat project manager at the same time lives a life of (locally) unimaginable luxury on designated poverty alleviation funds, villagers logically conclude that the project is failing due to corruption: instead of helping them as originally promised, the NGO is only helping itself.”

    Posted August 20, 2010 at 12:29 pm | Permalink
  2. Adam Baker wrote:

    It seems like there are several issues going on here. If it is generally expected that we be able to obtain itemized budgets from government subcontractors, that is new information to me. (I doubt that many people care how much the local construction company spends on office supplies; I’m not sure how I would interpret that information if I had it.) If the overall budget size is not disclosed, that seems to be a problem with the State Department’s reporting practices and not with the sub-contractor.

    “I suspect many private donors would be dismayed to learn that some charities seem to orient their practices around the competition for government contracts.” If it were put that way, yes they probably would be dismayed. But if it were put that aid efforts are being coordinated internationally at large conferences that determine spending priorities, they would probably be encouraged. It’s two ways of saying the same thing.

    The issue of whether aid recipients view aid services as cost-effective is sort of a conversation-stopper, from my perspective. Expatriates will always be unimaginably wealthy. Eating fresh fruit daily would be considered luxurious by regular Afghans. If you want start an NGO with expat salaries that don’t permit your staff to have apples every day, let me know how far you get with that.

    Posted August 20, 2010 at 1:14 pm | Permalink
  3. Ned Breslin wrote:

    Shocking comment – “However, while aid beneficiaries can and do judge NGO projects by their impact on the ground”. Clearly not from a person who works on the ground…

    Posted August 20, 2010 at 2:08 pm | Permalink
  4. Scott Gilmore wrote:

    Till: Great post. I agree with a lot of what you say, but you are talking about economic research, and the debate was more about using budget data as a tool for combating corruption or improving impact.

    Props & counterpoints here: http://2.ly/cpps

    Posted August 20, 2010 at 2:14 pm | Permalink
  5. didier wrote:

    Two points.

    1. As an individual contributor, you do have access to the financial information of international NGOs. They are transparent and to keep saying they are not is somewhat disingenuous. You can get the information for free from the IRS where they file their 990’s or if you prefer something more comprehensive, you can pay for a membership with Guidestar which will provide you with 990’s, budgets, and even some analytics. They have been in the forefront of promoting transparency of 501-c-3 non-profits working in the United States or based out of there. I would also note that as an individual contributor, my first thought is not about line item breakdowns at the project level for a particular country. However, if I am interested in those things, I can probably get much further in obtaining information if I am an individual donor to an NGO. Someone mentioned Haiti in one of the comments, and I get pretty good reports from the organizations I contributed to on what they are doing and how much they are spending. Granted – I did not inquire about the relationship of their overhead rate to project outcomes, but somehow I know that isn’t a big deal because I’ve studied their general overall financials and checked up on their reputations enough to know that’s not the type of issue that will be a problem. I imagine that as an independent outsider not coming from an institution or contributing to it, your access to information is more limited because you are not perceived as a stakeholder.

    2. With regard to transparency at the USAID level, I think you have a more legitimate issue; but even here they are pretty clear in the laws that limit their ability to share information. First, I imagine that the laws that constrain the Pentagon from publishing bids made by Boeing are the same ones that apply to AID. Second, it might be instructive to look at the warren of earmarks that have emerged to get USAID to report. In looking at Microenterprise for instance, it took a special act of Congress to require that USAID submit a report annually showing the levels of expenditures it made on microenterprise development and how it was broken down. Note that “broken down” here again did not refer to line items in proposals, but a bottom line figure for a project and what organization it went to. Further breakdowns were also required as to whether the grants were centrally funded out of Washington or made overseas by Missions and then the numbers were broken down according to country. The only output indicators looked at tended to be the number of clients served and how many got loans for less than $300 and how many got loans for more than $300 (this was used as a proxy for targeting of resources). The process of getting that report to Congress was always an ordeal….according to the AID people involved….point being it’s not as easy as you might think.

    Note that transparency and accountability are not the same in this case. I think that USAID has the tools for accountability from their evaluation professionals to the audits they require of their grantees and contractors to the Inspector General’s Office to the Government Accountability Office to the Congressional testimony they have to provide on Capitol Hill before they get their money. There seems to be a lot of focus on keeping USAID accountable – whether it is successful or not is a matter for others to judge. None of this is readily transparent to people not involved in the process, but most Americans can’t be bothered to learn how much the overall foreign aid budget is let alone the line item detail of a particular project in a particular country. I would even venture to guess that if polled (and they probably have been already), most would assume the money goes to evil dictators, corrupt officials, fat cat contractors and projects determined to take cherished jobs away from the US. I doubt they have time to think about overhead rates and international versus national salary compensation structures – so please don’t hide behind the taxpayer when you’re extolling the virtues of getting information for your research.

    Finally, I’m not knocking your research. I think it is a good thing to do. Just treat the organizations you want data from as customers, let them get to know you and what you are doing, perhaps guarantee them some degree of confidentiality in handling particular data items they deem to be sensitive, show them how what you are doing could be useful to them – e.g. benchmarking – and you might find them more cooperative.

    Posted August 20, 2010 at 3:44 pm | Permalink
  6. Ash Sarangi wrote:

    The corruption point is an interesting one. While the perspective of local communities in areas where aid projects are being carried out is certainly a valid and important perspective, it is also by its nature a partial one.

    I’m not sure that many people who worked in the sector would recommend defining the work or the way we work around what is going to look best to the beneficiaries, as a sole criterion. That would tend to slant projects even further towards big, visible impact activities and distributions, already the kinds of things that donors like better for the same reasons of easy to show measurable output, though not necessarily impact. It would also skew things further towards projects being carried out by under-skilled, under-resourced and under-equipped teams.

    I understand that from the outside it may seem that NGOs set their own working conditions, salaries, etc, in a structure that unlike the private sector has no built in limiting factor – if you pay people way more than what they are worth in the private sector, you will eventually go bankrupt – this is generally very far from the case.

    While international aid workers are in general very well paid by the standards of the countries they work in, they are also generally quite badly paid by the standards of the countries they come from. Pressure from donors to cut costs and show measurable outputs means that in my experience (in the humanitarian part of the ‘aid industry’) the average NGO is already under-staffed, under-equipped, and under a massive amount of pressure to deliver, far in excess of a developed world private sector professional job.

    While it’s understandable that people want to know how money they give is being spent, we shouldn’t conflate this issue of the complexity of trying to explain why certain choices are made in how that money is spent, with the idea that all aid workers are living lives of luxury, setting their own salaries in their fat government contracts and accountable to no one.

    In my experience, there are many poor choices made in how to carry out aid projects, and there always will be, but by far the majority of the mistakes actually occur in the other direction. Being under pressure from donors, governments and NGO headquarters to develop skills of the national team, cut expensive expatriates, do more with less money the tendency is to try to promote people before they are ready, take risks to see if a project can run without any international staff, and generally err in that direction much more than on the side of keeping expats longer than needed.

    Similarly with equipment, and with staff in general, international or from the country – donors always want fewer staff and more direct activities so already there’s a tendency to err on the side of doing things like distributions of seeds (more visible), when agricultural training might be a more effective activity (but just shows lots of staff costs in the budget), as an example.

    I also have an issue with this idea that you can ‘judge whether a project is worth your money’ by ‘the percentage of NGO funds [that] flow back to donor countries, in one form or another’. There are definitely donors who favour expats, consultants and NGOs from their own countries ahead of open competition, and there are NGOs who exist largely or partly from this attitude. The big NGOs you cite in the article though, are not of that nature, and have pretty diverse funding bases. Then what proportion of money goes where will depend on the needs of the project. Projects with more money staying in country (by your definition) – why are these better projects, a priori?

    If there is a sense in which this could be an indicator I think it’s in exactly the opposite sense to what you intend – big NGOs who are running projects with a lot of international staff are probably doing so because they need to, and have a well-enough defined needs analysis and project design to be able to justify that to their donors (large projects for most big NGOs are mostly funded by institutional donors such as USAID, to whom one would need a good justification for running a project with a lot of expatriate staff and few measurable outputs). In that sense these projects, because they have been able to get funded despite the tendency of donors towards easy impact visible activities, are actually more likely to be better quality projects, I would say.

    Posted August 22, 2010 at 5:56 am | Permalink
  7. Roving Bandit wrote:

    All of this is why good policy on migration, trade and investment are such good substitutes for aid.

    Posted August 26, 2010 at 7:43 pm | Permalink

5 Trackbacks

  1. [...] This post was mentioned on Twitter by William Easterly, RED TV, Scott Gilmore, Molly Winston, james smith and others. james smith said: RT @bill_easterly: Till Bruckner responds to critics of his NGO transparency post on @aidwatch http://bit.ly/9Sgfbv [...]

  2. [...] Bruckner came back to me with a very thoughtful response at AidWatchers.  In reading it, I found myself agreeing with much he said.  This is because I am [...]

  3. By Thought of the Moment « Planning the Day on August 20, 2010 at 9:19 pm

    [...] That’s Till Bruckner, guest posting at Aid Watch. [...]

  4. [...] made a similar point recently in the mini-controversy between us and Bill Easterly’s AidWatchers site over budget transparency.  In those exchanges I argued that overhead is a meaningless [...]

  5. By Corruption in USAID Georgia « geonews on August 27, 2010 at 4:34 am

    [...] 20 Bruckner comes back with a response to Gilmore.  He says, “As a taxpayer, I have the right to ask what my money is being [...]