Are local NGOs altruistic and sustainable?

Development donors grant billions to local organization to implement their development programs, and often prefer local NGOs to potentially corrupt or ineffective governments. Does this make sense? And what’s the implication?

Marcel Fafchamps and various co-authors have been collecting data in Uganda to understand the effectiveness of the approach. Writing in The World Bank Economic Review, Fafchamps and Trudy Owens say the following:

…the evidence suggests that grants from external donors do not encourage a local charitable sector. Many local NGOs seem to be created simply to obtain grant funding.

This interpretation is reinforced by the numerous Ugandan NGOs that have a shadowy existence when they do not receive an external grant. For instance, of the roughly 1,700 NGOs registered in Kampala at the time of the survey, only a quarter could be located. Grants do not appear to go to NGOs that would raise funds on their own; instead, they go to a few well-educated, well-connected organizations and individuals skilled at writing grant applications.

Observing that grant recipients do not raise local resources does not imply that they deliver services poorly. But it calls into question the assumption that underlies the switch away from government services: if local NGOs are not driven by an altruistic motive, why should they be expected to behave in a less opportunistic manner than civil servants? There may be other reasons why donors prefer private service delivery, such as better control, faster response to emergencies, or the promotion of a specific message or agenda.

But based on the evidence presented here, it would be foolish to rely on altruism to economize on monitoring. Donors seem to understand this well. Survey results indicate that NGOs are subject to extensive donor monitoring.

An ungated version is here. In related papers, Fafchamps also analyzes community assessments of NGOs and NGO governance structures with Owens and Abigail Barr.

Like this subject? Also recommended are What do NGOs Do? by Werker and Ahmed, and Where Does the Money Go? by Easterly and Pfutze.

8 thoughts on “Are local NGOs altruistic and sustainable?

  1. One problem I have encountered is that the small local NGO tries to do what the donor-NGO expect, even though the local NGO know it will have only little effect. The local NGOs just tries to keep the money floating.

    I can’t blame them. I only blame the western donors for claiming that they have a collaboration with an equal partner in the developing country.

    I’m trying to start a new project, but even though my own western NGO is very small, I look for the biggest fish in the water for partner for the project. The NGO should be strong enough to speak up against my ideas.

  2. ‘Grants do not appear to go to NGOs that would raise funds on their own; instead, they go to a few well-educated, well-connected organizations and individuals skilled at writing grant applications’

    Amen to that. but then how many western NGOs would exist without grant money?

  3. In Malawi, where there have similar trouble with shady/nonexistant NGOs, we always joked about the NGO TWACIB, which stood for “Two wankers and a computer in Blantyre”

  4. Anyone who has ever spent any degree of time in pretty much any African country can tell you that though, of course, loads of ‘local’ NGOs meet needs that only those people might be able to under the circumstances, lets be honest, the proliferation of ‘local’ NGOs is as much about the entrepreneurial spirit as the presence of deep social need.

  5. I’ve seen a lot of NGOs in Central Asia that exist only to provide employment for their founders, with no particular goal or plan for the future beyond USG grants.

  6. In the Western world, NGOs and non-profit work, like the priesthood, are considered jobs with low-income potential, and therefore attract primarily people interested in non-monetary aspects of the trade. However, in most of the parts of Africa I’ve seen, both NGOs and the priesthood offer relatively high returns to the entrepreneurial and potentially unscrupulous opportunist relative to other employment options. This is especially true in the rural areas, where other skilled employment sectors are unavailable. The presence of these people doesn’t negate the valuable services provided by those locally based NGOs that are responding to legitimate concerns, and doesn’t mean that all NGOs (or priests) are corrupt. That said, donors and aid agencies should be aware that these NGOs are purely business ventures for some applicants and adjust their monitoring and evaluation processes accordingly.

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  8. With time, the country has experienced rapid growth; but, the growth has not been able to touch every level of the society in the same way. On one hand, when more and more people are becoming habituated with an annual foreign trip, a major part of the society is hardly able to earn the bread for a day. NGOs take significant steps to reach out to these grass root level and help them to have a better life through their own development.

    The responsibilities of an NGO in a developing society are not restricted within extending help to the poor, but the NGOs take a leading part in a number of other social issues, including child and women trafficking, child and adult education, extending proper medical care to people with physical or mental disability, and also in a number of other aspects, which are designed with the same motto of development of the deprived class. These organisations often provide essential services in the developing world, which are mainly taken care of by the government agencies or institutions in the developed countries.
    You can visit various online sites to know more on NGO services for instance