Gains from Co-operation

Speech to Wilton Park Conference on Foundations and Development, 5 October 2010

Imagine if instead of my old boss Valerie Amos, Jeremy Clarkson was in charge of humanitarian relief at the UN.

He would see everything in terms of cars.

He would see a project in a particular country like this: a vehicle designed to drive a certain terrain. The vehicle requires a driver, a navigator, a map and some fuel.

The vehicle is a development project or programme. The driver is a donor country agency such as DfID or an NGO such as one of Nick’s members at BOND. The navigator is local people and their government; and the map outlines the way to achieve the desired development outcome.

The fuel is, of course, money. This can come from a variety of sources including charitable Foundations.

You put the fuel in the vehicle. You sit in the driver’s seat. You have the navigator on board. You agree where you’re going on the map and the best way to get there. You turn the key, press the accelerator, and you’re off.

No problem. You cruise effortlessly – or otherwise – towards your destination.

After a while, you find the road is quite congested.

The fact that it is congested is actually good – it shows that all the cars are headed for the same place and using the same map. So, rather than sending off all the cars in different arbitrary directions, rather than have them take short cuts through unknown or dangerous territory, you have to manage the traffic flow.

Jeremy – as UN co-ordinator – can erect road signs, improve the road surface, build the odd bypass, send some off to do something else.

But the drivers are one step ahead: they have already realised that by sharing vehicles they can get to their destination at the same time, with less congestion, and they will use their fuel more efficiently in doing so.

They will be able to do more with the same amount.

Let us just step out of the metaphor.We have donor governments co-ordinating with each other through multilateral aid programmes.

We have government agencies co-operating with international NGOs.

And we have initiatives like the UN ONE programme, based on country development plans, which try to ensure that all of the formal means of funding development are working together, that the key points on the map have been covered and that all the routes are clear – sorry, I’m slipping back into the metaphor again.

So, as long as the fuel supply is maintained – the money keeps flowing – the process of development can continue. (Assuming the navigator is still on board, the driver is still willing and capable and the map is up to date).

But what’s this?

Another player arrives on the scene – Will Doors.

His Foundation has got lots of fuel to give away – but it’s the wrong sort of fuel, it won’t work with the available vehicles. A new sort of vehicle has to be created, an off-road vehicle, which can go wherever Will Doors wants it to go.

But where he wants to go may not even be on the map that everyone else is using.

And Will Doors may decide he knows what he’s doing so well that he doesn’t need the navigator, he can get there by himself. After all, he didn’t get where he is today by not knowing how to get there.

In this example – and I don’t suggest that this is either universal or inevitable when a Foundation gets involved in international development – it may be that the route he follows is parallel to that of the organised vehicles. It may be that the destination, whilst different, is equally valid. And it may even be that the route is a better one.

On the other hand, if all the vehicles have to have the words ‘Will Doors’ in large letters on them, you do ask whether the destination or the scenic route he has chosen is the more important.

I know people with off-road vehicles like that.

At the Winnie Mabaso Foundation, the off-road vehicle is a pair of clockwork roller skates. The Trust funds some of the costs of one home for AIDS orphans in one country, South Africa.

They raise money in the Tameside area of England and organise fundraising, letter writing, Skype calling and exchanges of gifts and teachers between the orphanage and a primary school in Glossop.

Like many such trusts, it started when one person went on holiday, saw the orphanage for herself and wanted to help.

Clockwork roller skates are fine, as long as:

  • People are there to wind them up
  • Their planned journey is very short
  • You don’t expect more than they’re capable of doing.

In the constituency I used to represent there must have been a dozen pairs of clockwork roller skates, besides the Winnie Mabaso Trust: they worked for a hospital in Zambia, an IT project in Kenya, a child refugee project in Nepal or a school library near Johannesburg.

In terms of bringing quality of life to a few dozen or even a few hundred people, they do a grand job – I  know, I got to visit that school library myself, it was beautiful.

But on the big scheme of things, even if we made synchronised roller skating an Olympic sport, these vehicles cannot even be seen in the ‘big picture’. They are great for bringing together a dozen socially minded fundraisers in Derbyshire and for helping people feel they are making a difference – but it’s a small one.

Let’s go back to Will Doors. When you go into a petrol station you are offered you a choice of fuels.

Let’s assume that there is no overriding reason to choose one fuel over the others in this case – although Mr Doors has loads of fuel he has no vehicle of his own.

If he chooses a different fuel from what everyone else is using, he will have nowhere to put it.

However, if he chooses the same fuel that everyone else is using, then his energy can contribute to the effort and the outcomes that the UN co-ordinator, that nice Mr Clarkson, seeks.

And if the whole Doors family does the same, uses their wealth or their pocket money to fund the right fuel for the right vehicles to drive along the agreed routes to the desired destinations then they will have performed a great service.

Let’s remember that the grown up members of the Doors family in any one country are relatively few in number, even if their fuel supply may seem inexhaustible. For that reason, perhaps there isn’t a reason to make everyone work from the same map, after all – as long as Mr Doors is not doing any harm.

Metaphor over.

Talking of doing harm, last week’s Guardian tells us that the Bill and Melinda Gates Foundation, which sponsors that paper’s Global development site, is being heavily criticised in Africa and the US for getting into bed both with notorious GM company Monsanto and agribusiness giant Cargill.

A US financial website shows that the Foundation bought half a million Monsanto shares worth around 23 million dollars. Although this is small change for Bill and Melinda, it has enraged their fiercest critics.

“This casts serious doubt on the foundation’s heavy funding of agricultural development in Africa,” thundered one. As John Vidal says in his story,

“Who knows what this corporate-speak really means, but in all probability it heralds the big time introduction of GM soya in southern Africa.”

Whatever the merits of GM or the intentions of the Gates Foundation, or its undoubted record of brilliance in other fields of development, this new private sector / third sector alliance can only make co-working more difficult politically with some players in the development field.

So how much do we need co-ordination?

Countries already share multilateral funding streams – such as through the European Union and co-funded agencies like the World Bank – but that does not mean that they have stopped funding by bilateral means.

Multilateral funding is based on agreed priorities but cannot meet every need.

Bilateral aid is often targeted subjectively; for example, since 2005 DfID has prioritised funding to Low Income Countries, which led to almost completely pulling out of South America. That decision still determines UK policy and I believe is still justified, even if 70% of the world’s poorest people do live in Middle Income Countries – because many other countries prefer to fund MICs.

Countries towards the east of the European Union focus their bilateral funding on their eastern european neighbours – for blatantly political, security reasons.

NGOs do not have formal co-funding, except through the Disasters Emergency Committee at times of crisis.

BOND, Nick’s umbrella organisation for development charities, has 370 members. It:

“…promotes, supports, represents and, on occasion,
leads the work and interests of UK international development organisations.”

It does not co-ordinate funding and it does not, as an umbrella organisation, make funding decisions itself.

However, NGOs do very much coordinate at least some of their individual funding decisions with government – and indeed are often the conduits of government funding. It is in the interests of charities to act as those conduits where doing so supports the charity’s mission; and where it is in the charity’s financial interests to do so.

In the aftermath of the Iraq war, Save the Children was very critical of the post-war reconstruction policy of the Alliance – or lack of it. As a result of that criticism Save the Children lost its contract to deliver aid on behalf of the American government in Iraq – but kept its DfID contract.

DfID, where I was PPS to Hilary Benn, took the view that it had a commercial agreement with the charity and as long as the agreed outcomes were delivered they could say what they liked about the politics.

Whether that open minded approach will be maintained, given that when the Conservatives were last in office they sought to stop charities using government funding to ‘campaign against the government’, remains to be seen.

Let me contrast two approaches from different foundations in this country.

In a certain city the previous government established a Sure Start in a poor area to support disadvantaged families with small children. At the same time, a local family who had done well, very well, was thinking of how best they could support the community which had nurtured them.

The Joan Bloggs Trust wanted to set up from scratch a nursery on the council estate with internet access so that Mums could benefit from digital inclusion. A fine idea, but when I suggested to her that this would be best done by co-funding the IT initiative within the Sure Start, she ran a mile. This was because it would have tied her funding in for a long period and she might not have been allowed to have her name on it.

A true story. The name has been changed to protect… me.

By contrast, if any of you ever get invited to attend an event with The Funding Network, go!

Prepare for an evening of great fun, based on Dragon’s Den. Five selected charities concerned with social change each give a short presentation on how they might spend five thousand pounds, then answer questions. Then a bidding auction commences.

Amateur philanthropists, often representing family trusts, debate the issues and make a series of funding offers of a minimum of £100.

Despite the five thousand pound pitch, some charities come away with significantly more; their last three events raised an average of eight thousand pounds per charity.

As far as the charities are concerned this funding is anonymous.

OK, it is project-based rather than strategic or programme-based, but I cite this example because it shows that foundation funding need not (and I would argue, should not) exist to publicise the foundation at the expense of doing good.

This brings us to discuss good practice.

Foundations tend to be project funders rather than strategic programme funders (though some of the Gates’ funding for health is an exception). The international aid and development community – led by DfID – has moved from project funding to programme funding over the years, because building up local infrastructure is more sustainable than funding a project which might be great while it lasts but invisible five years after it finishes. NGOs are very much on board with this trend.

How can Foundations be encouraged to adopt programme funding? It would entail making long term funding commitments and thereby winning the trust of other donors and host governments.

Coordination

How can Foundations be encouraged to coordinate their development work with each other?

Foundations have no mechanism through which they co-ordinate their work either in international development or otherwise.

The Association of Charitable Foundations, the largest umbrella body with over 300 members, including most of the major independent foundations in the country, exists to fulfil three missions:

  1. Supporting the work of charitable trusts and foundations
  2. Representing the interests of our members
  3. Promoting good practice in grant-making and the effective working of trusts and foundations

It does not coordinate charitable giving by foundations in development or other fields.

I guess that the vast majority of foundations engaged in development don’t want to be part of either a centralised Stalinist planning regime or a total free for all.

But then governments and NGOs don’t want those extreme positions, either.

So where is the argument against soft touch co-ordination of foundations’ spending in the interest of aid effectiveness?

Turning to transparency…

The 2005 Paris Declaration was a stepping stone on the path to MDG 8 on Global Partnerships. At the High Level Forum on Aid Effectiveness in Accra in 2008 the International Aid Transparency Initiative was launched, supported by ‘Publish What You Fund’, the Global Campaign for Aid Transparency.

18 donors have signed up so far: they include UK and many western governments along with multilateral agencies such as the Asian Development Bank, the European Commission, the Global Alliance on Vaccination and Immunization (GAVI), UNDP and the World Bank.

The US supports it but has not formally signed up to it.

An eighteen month process began in November 2008, which is currently developing:

  • A common standard, format and set of definitions for the publication of aid information
  • A code of conduct for signatories of the initiative

The Gates Foundation is unique, as far as I can see, amongst major foundations in promising to engage in this process. My view is that in future a Foundation’s credibility will depend on acceptable levels of transparency if it is to work as a partner with others.

May I very quickly just tell you about my work?

Sector 4 Focus focusses on… well, sector 4. Sector 4 is the space between the other three.

It is where relationships and partnerships are built. I am seeking to advocate, facilitate and sustain such relationships between charities and businesses on a win:win basis, with charities retaining their historic missions and companies giving substance to their CSR policies in a cost-effective manner.

Many of our major charitable foundations are, dare I say it, the tax efficient consciences of big companies.

Whilst most of my work will be in this country, much good practice exists in developing countries where the public sector is weak. Let me give you two examples, though I can claim credit for neither

VSO: is no longer the ‘gap year charity’ that it used to be. Today it takes middle and senior managers from business to work on projects in developing countries where the expertise and experience they bring is invaluable. Subsequently, the expertise and experience they gain on the project is of value to the host company on their return to UK.

I visited a Nestlé factory in South Africa a couple of years ago. They had a problem: their 15 and 16 year-old recruits were taking up valuable resources in training and work experience and after a very few years too many were dead through AIDS and related diseases. Their training was not proving to be a good investment.

So they asked local third sector organisations – in the absence of robust local government services – to help provide preschool education, a soup kitchen and health education in the local community, at Nestlé’s expense. The result was that in a very few years the life expectancy of new recruits was rising and the training budget was falling.

The investment was paying off – for the company, the community and the third sector partners.

In conclusion…

When I was at DfID I don’t recall us doing much work with Foundations, insofar as they are funding organisations and not delivery organisations. Of course, many organisations call themselves foundations when they’re not – I used to chair the Community Development Foundation, which is not a foundation; but some are both foundations and delivery organisations.

Working with DfID on a regular basis are:

  • Westminster Foundation for Democracy (for whom I have also worked), who work on creating capacity for political organisations in the developing world
  • Cambridge Education Foundation, one of the consortium partners that manages the DFID Global School Partnerships
  • And of course DfID funds much of the work of the Fair Trade Foundation.

The challenges for Foundations, who account for a small but growing sector of development funding, largely hidden from public gaze, are as follows:

  • Use the same fuel as others – make your funding available to existing projects and programmes as a partner
  • Be open about your fuel efficiency – adopt common standards of funding transparency
  • Use the same map – even if you don’t take the same route
  • Watch out for other drivers – they are always the ones who cause accidents, but if you can lead them through difficult patches or benefit from their slipstream, do so.
  • Value the navigator’s local knowledge – which I’m sure you do anyway.

I am sure that as you engage with and even join the family of international development funders you will be made most welcome.