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September 2010

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A former senior Department of State official, now head of a leading NGO, makes the case for a greater and continuing role for international NGOs in shaping the world of tomorrow. –Ed.

NGOS THROUGH THE LOOKING GLASS

Therefore omit him not, blunt not his love, nor lose the good advantage of his grace by seeming cold or careless of his will;
For he is gracious if he be observ’d: He hath a tear for pity, and a hand open as day for melting charity.

-King Henry IV. Part II. Act IV. Scene 4.

In the north Caucasus young men and women from different ethnic and religious backgrounds come together in learning camps and break down the stereotypes that have governed their lives in a region wracked with turmoil. Despite what is termed “Russia’s Invisible Civil War” in a recent Foreign Affairs article, life in the region will depend on how willing its youth will be to move beyond the hatreds of today to embrace hope for tomorrow. Katya Borisevich, a bubbly 18 year old camp participant, inspired her university to get involved and now has launched a social project of her own to change her community. This work is the daily fare of IREX, (International Research & Exchanges Board) of which I have had the pleasure to be president since 2008. IREX does work like this in nearly every region of the world, operating in 100 countries as an international not for profit charity devoted to improving education, community life and freedom of expression. These tasks are also the stuff of life for many other American international non-governmental organizations (NGOs) operating around the world with thousands of dedicated men and women determined to make a better world for millions of people in need.

NGOs have been around since human culture began, but the modern name dates from the San Francisco UN conference in 1945, where it was recognized that these international organizations were essential to modern civilization and a healthy UN system. In briefest terms, an NGO is an organization involved in activities for altruistic purposes, whether to provide a benefit or to advocate for a cause. NGOs include both for profit and not for profit organizations, have diverse governing and operating structures, rely on a wide mix of government and private support, and raise their funds in many different fashions. There are over 1 million NGOs in the U.S. today, and by some estimates NGOs account for nearly 10 percent of the U.S. non-farm workforce. In the last two decades, NGOs also have proliferated in the world outside the U.S. Local NGOs are a growing force in transitioning countries. It is impossible to imagine life today without accounting for the activities of NGOs wherever we turn. In this article, I will talk about on American NGOs that deliver development services internationally, including for profit and not for profit NGOs, unless otherwise specified.

WHY ARE NGOS NEEDED?
NGOs are critical because they perform services no business, government or armed force can provide. First and foremost, they are the quintessential people-to-people connection between societies working on common concerns. This is more evident for some in the humanitarian rescue and relief operations we see around the world. For those NGOs like IREX that concentrate on the building blocks of a vibrant society, the sinews of education, lively communities and open debate, this work ties people together at the individual level in ways that change lives forever, both for giver and recipient. NGOs, by standing once removed from governments, provide independent perspectives and approaches and have the flexibility to deal with local circumstances in ways that can avoid bureaucratic shackles. NGO personnel develop unique expertise in areas of care that provide focused attention to problems that cannot be pursued as easily by overburdened government officials. NGOs avoid the image of conveying a political message or a loyalty demand as the price for services. Finally, NGOs pass on the skills they possess to the people they work to benefit, empowering individuals to make their own choices and to be active participants in their own societies. To paraphrase the old homily, they teach people to fish, not to depend on someone else to provide their support.

Katya Borisevich
Katya Borisevich

WHAT IS THE CULTURE?
The culture of NGOs is important. While NGOs may compete for government and private funding, their aims and values are their own, and it is this ability to share a goal but remain independent in the delivery that highlights the worth of NGOs. For not for profit NGOs, the commitment to fulfill the organization’s mission and to demonstrate its values in beneficial ways often is the NGO’s strongest motivation. While NGOs vary widely in organization and function, what impressed me greatly about the culture I entered was the prevailing openness to debate and discussion linked to every employee’s sense of ownership in the common work. People were not working simply to follow instructions but because they saw an opportunity to shape programs and influence lives in ways that were important to them personally. At the same time, my colleagues wanted to know what others had to say, wanted to let them also grow through experience and experimentation with their own ideas.

This faith in the outcome of a rather loosely functioning multi-dimensional and multi-layered conversation was new to me. Accustomed to a more disciplined and hierarchical approach in the State Department, this approach seemed unfocused to me. But one of my colleagues said, “It’s not lack of control or focus, it’s allowing people to use their freedom of initiative and thought to come up with better solutions.” While I admit I’m still not entirely at ease with this way of doing things, I have seen its benefits, and they are impressive. Brainstorming and collective thinking about problems can produce more effective plans and at the same time earn lasting commitment to achieving the goal. This practice accords with the most modern trends in management and decision making in the corporate world as well.

WHAT ARE KEY CHALLENGES AHEAD FOR AMERICAN NGOS?
STATE AND USAID

The world of the modern American international NGO is facing critical new challenges. One of the most critical is the need for a reinvigorated and strong USAID. Under the leadership of Rajiv Shah, the new Administrator, the agency is working hard to regain its footing and its influence. Behind a forthcoming Presidential Study Review on Global Development (PSD) and the State Department’s Quadrennial Diplomacy and Development Review (QDDR) lies a genuine struggle for influence and an important policy debate. Many in USAID feel that if the agency is not accorded cabinet and independent rank, it will be restricted by the requirements of the State Department’s policy choices, whatever the priority development needs of the country or region affected. Many at State are convinced that the correct application of development aid must hew to the requirements of American grand strategy. Development for the sake of development may be wonderful in a perfect world, they argue, but it’s a luxury in a world of limited resources and limited choices. Some USAID colleagues worry that long term development progress might be sacrificed for short term political choices.

The issue of the length of projects plays into this discussion, but has not yet been fully fleshed out. While even a project for a year, two or three will change permanently the lives of those touched, that time frame is often too short to produce the lasting institutional or social structural change that translates into true sustainability for the effort. USAID traditionally has sought longer term projects, while State sometimes focuses on shorter term impact, sector opening initiatives or initiatives designed to show commitment to a political principle. The growing emphasis on accurate measures of impact on programs ought to provide pressure for longer projects, which would allow those measures to be fully developed and proven. However, political resistance to longer and seemingly open-ended projects because of the need to prove that tax money is being put to effective use can complicate the choices. As the State Department takes over the civilian-run effort in Iraq, many of these issues will take on concrete form. The interplay among State, USAID, and the NGO community will represent a new experiment in the quest for better models for development policy.

Katya Borisevich
A mother and child in an IREX family support program in Kazakhstan

DIRECT GRANTS TO LOCAL NGOS OVERSEAS
A second great challenge lies in the policy of the U.S. Government to give preference in awarding funding to the local NGOs in countries targeted for help. The reaction to the rambo practices of high-profile contractors in Iraq and Afghanistan surprisingly and mystifyingly carried over into the NGO community to some extent. People whose jobs were to bring about genuine positive change in the lives of citizens were accused of acting against the interests of the U.S. and holding up lasting change in the countries affected. A new theory, first deployed in Pakistan, came into vogue that U.S. funds should go directly to organizations in the country affected in order to do the most good. This idea, while consistent with the fully endorsed principle that societies should make their own choices, nevertheless runs risks. It is not yet clear that the monies provided can be properly accounted for in each case, or that the professed expertise of the local NGO is really that good. Given the charges of corruption that surround the government in Afghanistan and the concerns about effectiveness that are voiced regarding work on the ground in Pakistan, there may be reason to think through carefully what the pace of direct local funding should be. If, in several years, the U.S. is confronted with serious lapses in performance in those sectors where local NGOs were given large sums without adequate accountability, more lasting harm than good may result for the relationship between the U.S. Government, American NGOs and local NGOs in affected countries.

Whatever happens, USAID cannot grow as fast as it would like, and cannot simply add thousands of employees after decades of under funding without being concerned about the transition. Offices of USAID around the world now are being given new responsibilities without yet receiving the new personnel or resources to carry out the new mandates. If contracting officers are compelled to hand out local grants to NGOs but do not have the time or personnel to properly oversee them, problems will be inevitable, and USAID could suffer. In the current climate on the Hill, when all the cuts in the discretionary budget submitted by the President this year were taken out of the International Affairs Budget, the outlook for continued expanded funding for State and USAID is less bright. Making the most of what funds exist will be even more of a priority.

AMERICAN NGOS AND DEVELOPING STATE RESTRICTIONS
These debates are taking place against the backdrop of a shift in the debate between developed and transitioning countries. The very demand by transitioning societies for more control over what NGOs do in their countries seems to lie behind the new USAID policy. But the impact is not confined to the U.S. debate. In Russia, there is great resentment in some quarters of U.S. so-called patronizing approaches to local NGO projects. In the Gulf among the wealthy Arab states, there is a strong determination to develop education and cultural training consistent with local values. The apparent diminished influence of the U.S. in the region as a result of the Iraq War may have added to this conviction. Given projections for much more rapid economic growth in the developing world compared to the developed world in coming decades and the rapid growth in young populations in those countries, these developing countries’ demands will increase.

Katya Borisevich
A program in Armenia run by returning exchange students under the Muskie Exchange Program

American NGOs may find themselves increasingly on the defensive to show they know better than the locals how to improve conditions. More importantly perhaps, American NGOs that focus on the delivery of local services overseas will be challenged to be more creative than ever and to put greater emphasis on the ongoing sustainability of the projects they leave behind. If tech transfer became a mantra for American businesses negotiating with foreign counterparts in recent decades, something of the sort might just become a feature of the American NGO — local NGO discussions in the future. In the end, this is a good thing. If the good that American NGOs seek to create is carried on without them and in a way acceptable to local culture, that may be as much as we could hope for in a multi-diverse world. That still leaves the future for many NGOs open to uncertain challenges, nevertheless.

The challenge already exists, as described above, but it is going to take on new meaning.

NGOS AND AMERICAN BUSINESS OVERSEAS
The relationship between American philanthropy and American business has great potential for good. In a more competitive world, where people increasingly demand that great corporations also be good national and international citizens, there is reason for NGOs and business to focus more sharply on areas of mutual benefit. Businesses have not ignored this reality, and it appears that American corporations increasingly recognize the direct links among good corporate governance, branding and corporate social responsibility (CSR). In some corporations, the division that deals with CSR now is more directly tied to the marketing department and less so with public affairs. Nevertheless, tensions remain. In a recent interview with the Chronicle for Philanthropy, Christina Gold, the CEO of Western Union, praised the engagement of companies in solving social and environmental problems but said, “Nonprofits would do well to consider the full range of benefits they can offer their corporate sponsors and present innovative ways to deliver value to the stakeholders companies most want to reach. As a business person, I appreciate it when potential partners respect our time by coming prepared with ideas that clearly resonate with who we are and what we value as a company and a corporate citizen.”

NGOs sometimes think of corporations as motivated solely by profit and believe them bereft of social values. Corporations can see NGOs as probable enemies who are looking for avenues of attack or embarrassment. As globalization continues, as corporations continue down the path of being international entities with more nominal national identifications, and new developing world business giants come onto the stage, the issue of the role of business in providing social benefits will increase in importance. NGOs and businesses could devote much more attention to how they can do better in working with each other. NGOs too are becoming more global in approach, taking lessons from worldwide activities and adapting them to local work. It seems prudent that the two communities should still recognize Robert Frost’s good advice that good fences make good neighbors, but better ways of cooperation are an imperative.

HOW CAN NGOS MOVE FORWARD WITH THESE CHALLENGES?
How can NGOs move forward to deal with the challenges they now face? The central theme here must be one of partnership to build more effective ways of bringing positive change to people, institutions and societies around the world.

Katya Borisevich
Youth program in Russia

STATE AND USAID
The State Department and USAID relationship has had its difficult moments over the years, and professionals on both sides have allowed themselves on occasion to use stereotypical images to deal with one another. Two principles, however, seem clear. First, without a clear leadership role in development, USAID will not regain the stature it needs to guide major American efforts in the years ahead. A State coordination function in crisis circumstances and at early stages of the response process could serve very well to bring the actors together without usurping the responsibilities of USAID or any other agency. Thereafter, the two institutions could play their more traditional roles. Equally, without an accepted consensus on policy direction, USAID and State may find themselves at loggerheads too frequently. Perhaps requiring policy and budget coordination of the two agencies at the level of OMB for the President’s budget could be balanced with an independent reporting responsibility for USAID to the President and the Congress, ensuring an unfettered line of communication to Administration and Hill leadership.

NGOS AND U.S. GOVERNMENT DIVISION OF LABOR
Between the NGO community that relies on government funding and USAID and State, there is a natural order of priorities and responsibilities. The American people through their representatives in Congress and through the Administration determine the policies and principal strategies for development and diplomacy. Likewise, these elected officials and their aides and governing officials must ensure the accountability and quality of the work being done. Since many USAID and State officers understandably also see themselves as front line participants in effecting change, maintaining accurate reporting and analysis at every stage of a project is important.

As the requirement for measuring impact of programs has become more important to both NGOs and the U.S. governmental agencies, there is an opportunity here for both sets of players to fashion new and better standards. Indeed, this will have to happen even if the debate is contentious, as many people inside and outside the development community want to know how to improve implementation of projects and create more relevant data about how real change is achieved. NGOs have an irreplaceable expertise in implementation. Often with decades of experience in a functional sector like health or education or a geographic region or country, and with awareness of best practices and best people, NGOs have a well-crafted sense of how to get something done. Letting NGOs decide how a program can be best implemented within the clear constraints of policy, funding accountability and accurate reporting will bring additional benefits to the recipients and the donors.

BUSINESS AND NGOS AS BETTER PARTNERS
Relations between business and NGOs represent an area of huge potential for further cooperation, even given the good work being done today. Back to the “good fences” principle, there is a solid model of partnership between these two sets of actors. Corporations through their CSR offices provide direct funding to local NGOs in foreign countries. In many of these cases, an American NGO familiar with the country or sector could provide added value to the work being done. If the corporation is providing the “hardware” of funding, plans and physical infrastructure for projects, the NGO often can provide the “software” of best people, practices and contacts with local communities of interest to improve delivery of the benefit. Whether we are talking about the usual extractive (mining, energy) industry models or service models (tourism, banking or product support), it is to the benefit of businesses often to give NGOs the same leeway to operate that the U.S. government does in providing a grant. The corporation certainly wants to see its goals carried out, is providing the funding and requires accountability in the implementation. The NGO, by remaining as a separate player — the good fence —can make the desired change lasting by focusing on the community impact. More and more, corporations see that responsible social programs promote good governance throughout the corporate structure and aid importantly in branding. The International Chamber of Commerce in fact links branding, good governance and socially beneficial programs together directly. NGOs and corporations may benefit from sharing board directors on occasion, but this device is not necessary, and it can be seen as compromising the commitments made. The recent example of BP having an officer on the board of Nature Conservancy during the Deepwater Horizon disaster in the Gulf illustrates very well the risks involved in having NGOs and corporations too closely tied. The model of partnerships in projects is quite sufficient to ensure a good working framework for both NGOs and corporations without linking governing and policy bodies too closely.

OPERATING WITHIN TRANSITIONING COUNTRY OVERSIGHT
One of the principal features of the coming decades in development internationally will be the assertive role of transitioning countries in how NGOs, both foreign and domestic, operate in their societies. Much of this discussion at the highest level may take place within the G20. Already, there is a clear trend for countries, from Russia to Azerbaijan, to require NGOs to register locally and, in some cases, have local boards of directors. New requirements to bring NGOs under national control are almost certain to continue to appear. While the largest international NGOs may be able to deflect some of this pressure, or have Western governments intervene on their behalf, perils for the medium and small NGOs will mount. We may see much more of an effort for these medium and smaller NGOs to offer consulting expertise to foreign national and local governments or invite foreign NGOs to choose them as partners for projects.

The governments of the developed countries will face increasing demands from their own international NGOs to do more to protect their ability to operate overseas. This is not just a matter of influence by developed states on developing societies and not just important to the capacity of those societies to continue to move towards more open, equal and democratic models. American interest in the broader world at the grassroots level is more often than not directed through charitable NGOs. A restricted ability to offer help will lessen the interest of ordinary Americans in the world outside and weaken the historic American strategy of engagement globally for democratic progress based on universal values.

Katya Borisevich
A youth leadership program in Lebanon

CHINA AND THE NGO WORLD
One very intriguing question for the decades to come is how the NGO community will develop in China. Will — and the answer seems obvious — Chinese NGOs also begin to operate internationally and how will they relate to Chinese corporations, Chinese government agencies and international organizations? At the moment, the development of the Chinese NGO community internationally is only beginning. The Chinese government and Chinese companies recently have been criticized for ignoring the environmental and social impact of the projects they undertake or the purchases they are making. But the Chinese have demonstrated how well they can learn to play at a sophisticated level in international affairs in other areas. In this stage, there is a great opportunity for American corporations, foundations and NGOs to demonstrate that a model of development that delivers both wealth and quality of life. In this way, not only can American NGO and business partners use a comparative advantage in competition with China but also provide leadership in preserving and shaping the framework of positive international development. If one day we hear declarations that the “Chinese development model” is superior to that of the West, we will not have to look far to see who to blame for letting this happen.

AuthorAmbassador W. Robert Pearson, international affairs expert, business consultant, and career diplomat, became the president of IREX in November 2008, becoming the fourth IREX president in its 40-year history.
During his distinguished career he served in a variety of Foreign Service posts including as Director General of the U.S. Foreign Service from 2003 to 2006 and as Ambassador to Turkey from 2000 to 2003 He was previously posted in Paris, Brussels, Beijing, Taipei and Auckland, New Zealand. He speaks French, Turkish and Chinese. From 2006 to 2008 headed the international business division of The Spectrum Group in Alexandria, Virginia. 
IREX is an international nonprofit organization providing leadership and innovative programs to improve the quality of education, strengthen independent media, and foster pluralistic civil society development. Founded in 1968, IREX has an annual budget of over $50 million and a staff of more than 500 professionals worldwide.

 



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