With the best intentions

Corporate giving is fuelling a boom in NGOs seeking to help the world's poor. But are they really helping?

On a Saturday afternoon in Ghana's capital, Accra, about 100 children and teenagers, many wearing white Right To Play T-shirts, swarm the pavement court at a public sports complex. Right To Play, a Canadian non-governmental organization headquartered in Toronto, is in Accra to promote its brand of message-based games — tweaked versions of dodgeball and tag that seek to educate children on HIV prevention techniques, gender equality and the like. But the waves of T-shirts, along with a sizable banner tied to a meshless soccer net, suggest the organization is also here to promote itself. During the warm-up exercises, Tanko Yussif Azzika, an exuberant Right To Play program assistant, shouts to the crowd over a public address system. “Right To Play,” he calls, pausing a beat. “Around the world!”

Meanwhile, several miles away, a group of youngsters, five on a side, are having a game of soccer. The pitch is narrow, brown and grassless. Only one player is dressed in clothes remotely resembling an appropriate uniform; another is draped in a Green Bay Packers jersey bearing the number of aging quarterback Brett Favre. But all the participants, and several observers, appear to be enjoying themselves — embodying the “when children play, the world wins” mantra of Right To Play.

As this group proves, and as anyone who's travelled to Africa knows, children here are world leaders when it comes to good, old-fashioned play. Still, David Goodman, president and CEO of Dynamic Funds, a Toronto-based investment company that has donated $50,000 to Right To Play for the past three years, believes such fun is a basic right “worthy of protection.” Right To Play, he says, operates “in areas where it would not be typical for a child to have any excuse to even smile.” Other executives share his support: around a third of Right To Play's $14.6 million in revenue in 2005 came from individuals and corporations, part of the reason it nearly doubled from just over $8 million in 2003.

Corporate charity has inflated not only Right To Play's coffers; it fuels the work of many Canadian NGOs in Africa. At Toronto's international AIDS conference in August, the Bank of Montreal announced it was giving $1 million to Dignitas International, an organization that's working with Malawi's informal health-care givers to increase access to AIDS treatments. Aeroplan's Beyond Miles program — which allows members to donate their points to fly volunteers to Third World countries to work for Canadian organizations such as Engineers Without Borders, Schools Without Borders and the Stephen Lewis Foundation — has also taken off. Since its inception in 2003, Aeroplan and its members, as well as CIBC and American Express, have donated 36.5 million miles, which would pay for about 280 flights from Toronto to Ghana; Aeroplan's third quarter of 2006 saw a 55% increase in donations from the previous quarter. “Give a Day to World AIDS,” which encouraged Canadian workers to donate a day's pay on Dec. 1 to either the Stephen Lewis Foundation or Dignitas International, was also hugely successful, raising nearly half-a-million dollars. David Smith, the vice-president of EllisDon Construction in Mississauga, Ont., donated his daily salary and got 100 of his employees to do the same. “When you're giving money to cancer or diabetes, you don't really see where it's going,” says Smith. “With the Stephen Lewis Foundation, you're literally dealing with each village on its own.”

The Canadian corporate-giving trend echoes that of the U.S. — home to the Bill & Melinda Gates Foundation, which has more than 300 employees and a US$33-billion endowment, as well as the 200-corporation strong Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria. Aside from big names like Bayer AG, American Express Co. and even the NBA, the coalition also includes Canadian heavyweights: the Bank of Montreal, Toronto-Dominion Bank, Royal Bank of Canada, Alcan Inc., Power Corp. of Canada and Indigo Books & Music Inc.

With the support of corporate donations, the influence of NGOs working in sub-Saharan Africa has skyrocketed over the past several years. According to the Centre for the Study of Global Governance at the London School of Economics and Political Science, there were nearly 40,000 international development NGOs in 2003. Thirteen years earlier, the Yearbook of International Organizations counted only 6,000. Canada alone is home to hundreds of development NGOs. And the financial clout of some compares to that of some African countries — the annual budgets for organizations like Care International and Save the Children near US$1 billion.

So what are businesses getting when they invest in the burgeoning NGO industry? As it turns out, few organizations use their money in the ways corporate donors might expect. The trickle-down from NGOs to on-the-ground recipients can be paltry, after money is spent on research, media and marketing, office equipment and transportation. NGOs often end up losing sight of their original vision and get distracted by the day-to-day hang-ups that come with working in a developing country. And they tend to focus on changing social behaviours rather than the underlying conditions that lead to them.

NGOs don't usually see financial returns on the money they invest in communities, so they're extremely reliant on the fickle and competitive donor world — and they devote a lot of resources to garnering press and attracting funds. “We spend a lot of our time in the engagement process and selling the idea,” says Lorna Read, director of research for Right To Play. Not only does Right To Play have a communications director at its Toronto office, but it also pays a full-time staff member to act as a liaison between the organization and its athlete spokespeople.

Right To Play says it spends only $1.5 million, or 12% of its overall budget, on administration and fundraising, but the numbers are open to interpretation. Much of its $7.5-million international programs budget, for example, goes to expenses that many would consider administrative — about a quarter of the money goes to salaries (half to Toronto-based staff and the other half to fieldworkers), while the remainder is spent mostly on office rent and equipment, vehicles and fuel, staff accommodation and air travel. The actual money needed for the games is miniscule. Local coaches are not paid, and they often require only a ball.

Then again, it's not easy to keep things running when you have to deal with exorbitant mobile airtime costs, tire-sized potholes and high crime rates, to name a few of the challenges of operating in Africa. To stay afloat, NGOs tend to congregate in towns and cities, leaving far-flung regions underserviced. Katie Meyer, a native of Burlington, Ont., and a former volunteer with ActionAid in Uganda, which aims to “fight poverty worldwide,” remembers being shocked by the difference between Gulu, a town in the north full of NGO-branded four-by-fours, and Katakwi, a smaller community east of there that has a miniscule international NGO presence. Both Katakwi and Gulu are in Uganda's north, where 1.6 million people live in squalid camps, and both have been devastated by the war between the government of Yoweri Museveni and the Lord's Resistance Army, which has abducted more than 60,000 children and killed countless civilians in its 20-year-long rebellion. But Gulu has electricity, restaurants, hotels and a few paved roads. “International NGOs tend to stay in well-serviced city centres for logistical purposes and for their own security,” Meyer says. When she visited a camp outside of Katakwi to interview displaced persons for a documentary, she saw only one NGO set up there: a clinic providing bare-bones health care.

Nii Moi Thompson, a Ghanaian economist, says a major problem with NGOs is that they spend too much time selling African poverty to donors. “The case has been made that some of the stories NGOs peddle about Africa are exaggerated to get people to give them more money,” he says. And the NGO boom is intensifying the need to focus on self-sustainability, according to Dr. Ronald Lett, president of the Canadian Network for International Surgery, an NGO that trains African doctors in surgical skills. He contends it would be better if people wanting to get involved in development supported an existing NGO rather than starting fresh. “We see people starting NGOs because they want to make themselves feel good, or they want to validate their lives,” Lett says. “To be frank, they don't know enough.”

As a result of the large numbers of NGOs, duplication of services is common. During the 2004 tsunami, Ian Smillie, an Ottawa aid consultant who has worked in development for more than 30 years, saw hundreds of NGOs, including very small-scale ones, head to the Asian subcontinent. “What makes them think that they're equipped to do it?” he asks. “Why didn't they go through established organizations like the Red Cross or Oxfam?” In Uganda's Gulu district, host to the sea of NGOs that Meyer talks about, many operate in silos. About six NGOs work on AIDS prevention in the area, and many visit the same few camps. “It's difficult to get NGOs to share their information,” says Grace Akello, a worker with Uganda's chapter of the Christian aid organization World Vision.

Another trap NGOs fall into is focusing too much on situations at hand and losing sight of their original goals (assuming they had a clear vision to begin with). “Many NGOs are unable to set strategic forecasting for, say, five years,” says Franklin Cudjoe, head of Imani, a Ghanaian think-tank that favours free markets.

Consider the current record of Engineers Without Borders Canada, a Toronto-based outfit that partners with local initiatives to find innovative ways to increase agricultural production and improve water supply and sanitation, among other things. As with many NGOs, EWB's goal at the beginning of every project is simply to “build the capacity” of its local partner, with the hopes of handing over the reins to the local group after a few months or years. But neither Louis Dorval, EWB's director of West Africa programs, nor 24-year-old Monica Rucki of Victoria, an Accra-based volunteer, expect their long-term ideals to be fulfilled any time soon. “Let's just say our standards are really high of what a good service toward the beneficiaries are,” says Dorval. “So far, we've never brought a partner up to that standard — “

” — in the last six years,” Rucki finishes, before the two share a laugh.

Part of the reason NGOs have difficulty meeting their overall goals is that they often end up measuring day-to-day results rather than long-term progress. As Andrew Mwenda, a Ugandan journalist and political economist who's currently on fellowship at Stanford University, puts it, they measure “inputs rather than outputs.” If an NGO is planning to free up women's time from domestic labour, for example, instead of measuring how much time they are spending cooking and cleaning, they might typically count how many women attended their last job-training session. “An NGO will say it's trained 50 farmers in agricultural techniques,” Mwenda says, “but it won't say whether that has led to an increase in production.”

Remaining accountable to results is even more difficult when the NGO is working to change social behaviours, which aren't easy to measure — or, for that matter, to change.

At this summer's AIDS conference, Julia Porter, Right To Play's training officer, stood on a stage at Dundas Square in the heart of Toronto, calling out commands in a loud singsong voice: “Mingle, mingle, ming-all.” Dancing as if in a conga line and kicking out her leg, she attempted to demonstrate Right To Play's HIV prevention and awareness program. About 20 children from one of the city's poorest areas, Regent Park, had been enlisted to help (even though Right To Play runs no programs in Canada); they danced in circles and eyed each other with self-conscious giggles. “B,” Porter yelled — and the children jolted straight up, found a partner, linked arms and put their hands on their hearts to symbolize the “B” in the NGO's ABC (“Abstain, Be faithful, or use a Condom”) prevention strategy. Porter pointed out a couple in the middle. “Hey, you guys have a different partner than last time! You're supposed to have the same partner.”

The ABC message, widely propagated by both western and local AIDS prevention NGOs in Africa, is easy to understand. But it's not an easy one for many Africans to implement in their lives. Several studies presented at the AIDS conference showed that ABC messages were not resulting in significant behavioural change.

Why? For those living in the poorest parts of sub-Saharan Africa, where many people don't live past 40 and avoiding hunger is the main priority, the pandemic is not necessarily a major concern, according to Mwenda. “The NGOs assume that people are stupid, that if you just give them the information, the next day they'll be lined up buying condoms,” he says. “But it doesn't work like that. Only if NGOs can sort out the mortality rates will people's behaviour change.” Mortality rates, however, will be solved only with improved transportation, better health care, proper medicine and the money to pay for it.

That is where the business community can play a role. According to Care Canada, the private sector is driving a third wave of development. The first was founded on charity, with humanitarian workers scrambling to meet basic needs during crises such as famine or war. The second, beginning with the Marshall Plan after the Second World War, involved “capacity building,” or investing in infrastructure, governments and social services. The third, Care said in a 2006 report, is about “harnessing the engine of private-sector growth for significant and sustainable economic and social returns.”

Care Enterprise Partners, which aims to raise most of its $15-million goal through donations by Canadian companies and business leaders, will fund business initiatives that have the potential to lift people out of poverty or improve their health. One of the several businesses in which Care Canada invests is Casafruits, a juice company in Senegal that buys fruit from villagers in a region where a lot of fresh produce rots due to a shortage of buyers and a lack of preservation technology. Care has an 88% interest in Casafruits, representing equity financing of $422,000 and a bridge loan of $290,000.

In addition to providing loans, Care Canada will help entrepreneurs in developing countries tap into important markets and set down a solid business plan, enlisting the help of Canadian MBA students to do so. Many of those involved with CEP have hefty business credentials: the vice-president, Masood Shariff, is a former managing director of Deloitte & Touche in East Africa, and Susan Smith, senior vice-president at the Royal Bank of Canada, sits on CEP's investment committee.

Meanwhile, some businesses are partnering with NGOs — rather than simply writing cheques — in hopes that they can speed up progress and hold the organizations more accountable. David Fleck, global co-director of BMO Capital Markets' equity products division, has been shaping Dignitas's operations as a board member for almost two years. Fleck says he was initially apprehensive about getting involved in an upstart NGO, but became confident in the organization after talking to Dignitas execs. That confidence “definitely had an impact on BMO's willingness to hear out their story,” he says. James Fraser, executive director of Dignitas International, says the NGO approached Fleck because of his financial know-how. “We had a lot of experience in terms of programs and research,” he adds. “What we lacked was business savvy.”

Because NGOs have a tendency to “run after money just because it's there,” as Fraser puts it, Fleck has been working to keep operations simple. After all, money comes with obligations, which can lead NGOs to deviate from their original plans. “There's always a desire to tell a big story,” he says. “If you're saying you'll do too many things at once, you lose credibility.” When Fraser approached Fleck with a research opportunity that could bring in millions of dollars, for example, Fleck encouraged the organization to reconsider. “I said, ?David look at this, isn't this exciting?' and he wasn't excited,” Fraser recalls. “He asked, ?Did you think about how this will influence our ability to do what we plan to do?'”

European businesses are more likely to engage in NGO partnerships than North American ones, but the notion of going beyond philanthropy is catching on here, according to Ka-Hay Law, an adviser with Canadian Business for Social Responsibility, a Vancouver-based research and advisory group whose paying members include several of Canada's banks, as well as major retail and resource companies. “A big constraint of NGOs is funding; another is processes,” she says. “What business does very well is think about things strategically. They know how to really think out business plans and do risk assessments.” According to CBSR's research, businesses that get more involved with development NGOs boost employee morale. They can also encourage greater development innovation.

Rather than simply donating money, businesses have the opportunity to change the way NGOs work. But Law says a business-NGO partnership won't be effective if a company engages in development only to boost its corporate image and doesn't take the time to research and track its investment with the same commitment it would in a profit-driven opportunity. And businesses that venture into do-good territory can open themselves up to scrutiny. Earlier this year, a controversial Los Angeles Times investigation of the Bill & Melinda Gates Foundation revealed that it is a major investor in companies (including Royal Dutch Shell and Exxon Mobil Corp.) that some allege contribute to health problems in the same children the charity is trying to help.

That's not to say business has nothing to gain financially in the world of development. As a CBSR report notes, the four billion people at the bottom of the pyramid — those living on less than $2 a day — represent a colossal, and largely untapped, market. While it is not homogeneous, its consumers are united by an unpleasant truth: they often pay more for goods and services than their well-off peers do because they enjoy fewer options. They're also largely self-employed and united in their urge to move up. “There's a pretty vibrant entrepreneurial spirit among those living on the ground in poor communities,” says Law. “They're already trading and offering their goods.”

If companies can help bring that entrepreneurial spirit into the formal economies of some of the world's poorest countries, then the “third wave” of development will be just what Africa has been waiting for.