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InterAction’s statement on NGO accountability

Editor’s note: Aid Watch asked InterAction for a contribution to the debate originally sparked by Till Bruckner’s post The accidental NGO and USAID transparency test. See below for a list of all related posts.

Statement from Barbara J. Wallace, InterAction’s Vice President of Membership and Standards, on NGO Accountability

Washington, DC (September 27, 2010)—InterAction appreciates the active discussion about NGO accountability and transparency, and has been monitoring the debate. The variety of opinions and information is valuable. This is not a new conversation for us. Our community of U.S.-based international NGOs has been discussing these issues for more than 20 years and they are the basis for development of our Private Voluntary Organization (PVO) Standards. These standards state that each member organization ‘shall be committed to full, honest and accurate disclosure of relevant information concerning its goals, programs, finances and governance.’ The issue at hand is what constitutes relevant information, and to whom specific information should be disclosed.

We deplore the nature of the debate taking place on your blog.  Highly inflammatory accusations have been made against NGOs—now proven to be untrue—using faulty research and questionable methodology. Whistleblowers bring disturbing information to light, but also bear responsibility for sharing accurate information based on fact. Instead of igniting a constructive conversation with a different take on accountability and transparency, this blog chose to smear the NGO community using conclusions from incomplete information that fit the author’s premise rather than engage in constructive discussion about what constitutes sufficient transparency, generating a lot of attention, but little constructive change.

InterAction purposefully does not define in our standards specific mandates for disclosure, nor do we dictate to any organization the details of their organizational management. InterAction’s membership is wide and diverse. Our largest members are worldwide and have total budgets over $1 billion. Our smallest has an annual budget under $60,000, works in one country and has no paid staff. Our members have varying operational models, methodologies and organizational capacities. This makes it almost impossible to compare the raw data from one organization with the raw data of another. The following caution in evaluating comparative detailed financial information may be useful as an example of this pitfall.

The ratio of indirect cost to direct cost or total cost varies and depends on many factors. It will be difficult if not impossible to get a definitive or measurable indicator for cost reasonableness since each organization has a different accounting/allocation methodology. That is to say there are numerous differences in both workforce and accounting classifications as to direct or indirect costs, as well as other variables such as the extent to which subcontractors are used, the structure of an organization, the expanding and declining business base for individual organizations, and the differing accounting methodology of one organization verses that of another. For example: one company may have a large labor overhead ratio to direct labor because it includes vacation and sick leave along with other types of overhead costs directly related to labor, while another organization will have a lower ratio because they direct charge vacation and sick leave. Neither practice is preferred over the other and both are equally acceptable. They are merely different.
(www.usaid.gov/business/regulations/BestPractices/pdf)

In our working groups, annual Forum and CEO Retreats ongoing discussions about the responsibility of accountability and definition and value of transparency in a newly technologically advanced world are common themes.  In addition to the request of some donors to keep their financial support private (and the NGOs legal responsibility to honor that request),  organizational capacity, security concerns and other circumstances all have to be taken into consideration when determining whether or not specific information should be made public in part or in its entirety. All NGOs are not the same. That said,InterAction member organizations believe that informed citizens provide important insight, and they value the participation of informed local citizens in project design, implementation and evaluation and have used such insights to improve practices and methodology.

As we become an increasingly technologically advanced and interconnected society, NGOs will need to keep pace with new requests for information, and to balance questions of security, law, individual privacy rights, and proprietary methodology with this ever increasing demand.  InterAction and member organizations will continue to discuss NGO accountability, transparency and the impact of technology on our standards within its communities of practice, and will continue to wrestle with the increasing demands for public information and the reduction of unrestricted funding for operating expenses, which include this kind of public information management.

The discussion about what constitutes accountability under what circumstances and to whom continues. The most important focus of that discussion is what difference the NGO makes to the population it serves.

Related posts:

The accidental NGO and USAID transparency test
Till Bruckner Responds to Critics on Meaningful Transparency
NGO Response: CNFA Reaffirms Commitment to Transparency
World Vision responds on transparency
USAID and NGO transparency: When in doubt, hide the data
Response from Mercy Corps on Transparency
NGO Transparency: Counterpart International to release budget
Transparency International clarifies the debate, deplores attacks on Till Bruckner
Statement from CARE on Bruckner FOIA Request
Return to TransparencyGate: Humanitarian Accountability Partnership weighs in

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5 Comments

  1. skeptic wrote:

    Wow. Some PR training may be in order here. A vague, defensive, overgeneralized, ad hominem response that basically says “we’re dealing with this issue internally (in our CEO Retreats thank you very much!) and don’t poke your nose in our business because your questions are not relevant to the bigger discussion of the difference we are making” is unintentionally revealing, but is not going to be very reassuring or convincing to critics.

    Posted September 29, 2010 at 12:08 pm | Permalink
  2. Jane wrote:

    Maybe some PR awareness would have been good to tone down the emotion in Interaction’s response, but this blog has also gotten on charity’s cases for being too smooth, say-nothing, and PR-speaky, right? So maybe Interaction felt like you all wanted to see an honest response.

    I was really excited to find this blog and follow the twitter, as it introduced me to new and provocative ideas, but I’m getting tired of the “I’m always right, others are always wrong” condescending, near-sneering attitude that comes through every other post and tweet. It just gets exhausting to read after a while. Is there a way to offer a new take and provocation and dial back the condescending attitude, or not? Is the charity world so bad that sneering is all you can offer? Apologies if this has already been debated on this blog – only been following for a few months.

    Posted September 29, 2010 at 3:00 pm | Permalink
  3. William Easterly wrote:

    Jane, thanks for the honest feedback, we always like to hear how we are coming across from the readers, and where we get convinced that it’s necessary, we try to take corrective action. Your suggestion is a very strong candidate for such a correction, which we have addressed before but probably not enough. Thanks, Bill

    Posted September 29, 2010 at 4:04 pm | Permalink
  4. Hervé wrote:

    Ouch! I am all with Skeptic here.
    I remember being told off by my previous NGO employer for wanting to publish evaluations of our programmes and giving broad categories of our budgets. We don’t do this at XXXX.
    Obviously, nothing changed. Big NGOs will push governance, transparency and accountability principles on local sub-grantees but are not ready to practice what we preach. (in all fairness, I know also a few NGOs that are quite transparent on their websites – warts & all).

    At least, HAP in the previous post offers ideas on what meaningful accountability could be. This blog might not agree with HAP (but what this blog agrees with – right, Jane?) but HAP bring a contribution to the debate. Whereas Interaction’s statement is… urgh… As Jacques Chirac famously said, in a very different context : they just lost a good opportunity to remain silent.

    Posted September 30, 2010 at 11:22 am | Permalink
  5. Jane wrote:

    Thanks for responding and not biting my head off, Bill! I appreciate the important part your discordant voice plays in the aid world.

    Posted September 30, 2010 at 1:25 pm | Permalink

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  2. By TransparencyGate: The End of the Road on October 1, 2010 at 12:02 am

    [...] actors reveal wildly divergent understandings of what accountability should mean in practice. As InterAction points out, “the issue at hand is what constitutes relevant information, and to whom specific information [...]