December 26, 2003

NGO Watch I really dislike

NGO Watch

I really dislike this meme--that the big, bad NGOs often harbor nefarious political agendas and need to be reined in and policed soonest. And the often related argument that the corruption in said charitable entities is worse than the Enrons, Parmalats and Worldcoms of the world is laughable.

Don't believe me? Click on the links and, employing that old adage that money talks and B.S. walks, take a look at the aggregate dollar amounts at play (in terms of the specific fradulent activity rather than the total bankruptcy figures) for some of the recent private sector scandals.

I challenge anyone to point me to systemic corruption on that scale in the NGO world. (I mean, the dollar amounts associated with Enron's legal fees alone are likely higher than much of the alleged naughty shenanigans afoot in NGO-land).

I may be biased on this point. I worked for two years in the Balkans for the International Rescue Committee (founded, at Albert Einstein's urging, to assist Jewish refugees fleeing 30's Europe).

When I worked at the IRC, it was headed up by the very able and compassionate Robert DeVecchi. I know, from conversations with DeVecchi, that the IRC prided itself on how little of its total donor funding went to administrative costs, related overhead, or fundraising. This metric is known as "charitable committment" in the trade.

Put simply, the major lion's share of the income coming in went directly to humanitarian relief programs and the like. And it's not just the IRC.

Check out this compilation (from that NGO-friendly, socialist ragsheet Forbes) for a long list of worthy charities/foundations whose "charitable committment" rankings give the lie to the thesis that this sector is worse than our friends (almost literally) pissing away cash for grotesquely crass Sardinian soirees (Tyco), looting the company store (Adelphia), and taking aggressive accounting to new and riveting vistas (Enron, Worldcom etc--see above).

But permit me to briefly return to my specific old neck of the woods out of old institutional loyalty. Note that Forbes has granted the IRC top honors in terms of this charitable committment metric.

More important than all this, of course, is the actual work performed on the ground by groups like the IRC. Very literally, the IRC saved many lives in places like the besieged "safe" havens in Bosnia (for instance, Fred Cuny, who tragically disappeared later in Chechyna, just about single-handedly restored the water supply to Sarajevo in cooperation with the IRC).

Sure Glenn is right to say, like any sector, that NGO's need to be more closely monitored (ed. note: maybe after we're done with hedge funds and derivatives? To be sure, these are complex issues too and I would err on the side of keeping the regulatory burdens as de minimis as is responsible).

But it would be gracious of him to make mention of the amazing work they perform day in, day out--from some of the most miserable corners on Earth.


Glenn has more and writes:

"Greg Djerejian, who works in NGOs, says I'm wrong to compare NGO corruption to Enron and Parmalat. (Though his suggestion that we should compare dollar amounts seems to miss the point.)"

I was merely reacting to Glenn writing this: "The kind of financial shenanigans that go on in this world make the for-profit business scandals look minor." [emphasis added]

Reading that, I thought it was pretty fair to use a dollar metric to compare and contrast without missing the point.

That said, the old TNR article Glenn quotes at length is certainly of interest, particularly this part:

"Foundations enjoy their present tax-free moorings because they claim to operate as a nonpartisan force dedicated to the pursuit of innovative solutions to our pressing social ills, sheltered from the shifting partisan winds. The preponderance of foundation grants to advocacy groups, however, suggests that foundations are less devoted to the reasoned pursuit of the public good than to the multiculturalist dogmas propounded by their staff...."

But you can certainly still argue that, in terms of necessary regulatory attention now and going forward, the Enrons are more critical to the general American national interest than, say, the Ford Foundation issue Glenn blogs about (unlike Paul Krugman, however, I would never make the absurd claim that Enron will have a greater longer range impact on the U.S. than 9/11, or related claptrap).

Anyway, I agree this is an issue of some concern. And that more monitoring is a good idea.

Glenn's take on the TNR piece author's concerns:

"Samuels isn't so much concerned with bags-of-cash corruption, exactly, as with the pumping of huge amounts of money into politics instead of actual effort to help people, and he notes the way in which many foundations have abandoned, or shifted, metrics for "success" so as to make real accountability difficult. Though that's a form of corruption in itself, and it tends to lead to more traditional kinds of corruption, as well."

What make me somewhat concerned is the pumping of cash, surreptitiously, into politics. At this point, I guess, I'm more sanguine than Reynolds on the perils of the metrics of "success" shifting and that then leading to more 'traditional' corruption.

Posted by Gregory at December 26, 2003 05:46 PM

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