Alliance Online - December 2007
Without trust we cannot stand
Caroline Hartnell
EVENT GuideStar International Assembly
Date 19-20 September
Venue London, UK
The danger of offering a new product is that untenable claims will be made for it. In the case of GuideStar, the ‘claim’ might go something like this: civil society has a vital role to play in the world, but the problem with it is lack of accountability owing to lack of transparency owing to lack of good-quality data. Enter GuideStar, supplier of the missing data: problem solved. This is of course a caricature of any argument made by the founders and promoters of GuideStar. The GuideStar International conference in London in September was useful in helping to define the role that GuideStar can actually play.
In a brilliant keynote speech, Geoff Mulgan of the UK-based Young Foundation sketched out the global context within which GuideStar is operating. He ended up by quoting Confucius, who famously remarked that rulers needs three resources, food, armies and trust, but of these trust is the most important. ‘Without trust we cannot stand.’ Mulgan appeared to agree with this judgement: we are now entering a period of economic downturn, he said, and CSOs will need to build trust. In the case of civil society, it does seem clear that food and armies (money and volunteers?) will not come without trust.
Transparency and trust
The core question, then, is: how do you cultivate trust and legitimacy through transparency? This is more crucial for civil society than for the other sectors because its legitimacy is more fragile. Good intentions are not enough, he insisted.
Mulgan placed all of this in the context of the break-up of the Soviet Union in 1989, which brought renewed emphasis to the idea that power must be answerable for its actions, and a keener focus on rights, equity and transparency. In the last 20 or 30 years, he said, the idea of third parties commenting on what the exercisers of power do has also taken hold.
But civil society is behind the public sector and public policy when it comes to accountability. Mulgan cited the UK website FixMyStreet (created by the Young Foundation), which uses the web to send messages to local councils about, for example, abandoned cars and allows others to comment. Patient Opinion gives users of the UK’s National Health Services a chance to comment on their experiences. Creation of these new feedback loops empowers citizens and puts pressure on providers.
Involvement of beneficiaries is a common theme in this discussion of accountability, said Mulgan, with 360 degree accountability a fashionable concept. The premise here is that organizations are most likely to serve the public if they have a good balance of top-down reporting requirements (regulation, funder reporting, etc); horizontal pressure and support (peer review, peer learning – and sometimes the threat of takeover); and bottom-up pressure and rights (recipients of services having a say about what's provided; participatory budgeting in Latin America).
It is critical to absorb these principles of answerability into civil society, said Mulgan, if we are to create trust and legitimacy and encourage a learning culture. Comparative data are vital if organizations are not simply to assume they're doing a great job. And this is where GuideStar comes in, helping to provide good, accessible data on CSOs.
Limitations of transparency
But transparency alone doesn't create trust, as several speakers emphasized; competence is needed too. This may be particularly important in environments that are not friendly to civil society, for example in the Arab world, where governments can close CSOs down on a whim.
Going beyond competence, David Bonbright of Keystone suggested GuideStar needs to evolve to tell us something about what organizations are achieving. ‘How much information on impact is going into the database?’ he asked. ‘What are the views of other constituents?’ His hunch, he said, was that GuideStar’s key achievement may be to create a platform for third-party reporting.
Pushpa Singh of Give India agreed about the value of third-party reporting. Donors to Give India want facts and numbers, she said. They will spend two or three minutes finding the right project to support so are unlikely to read long reports. Field-based, searchable information is vital. Singh is hoping for a vast increase in donors and CSOs using Give India and hopes that GuideStar India will help.
Not only is transparency not enough. As Doug Rutzen of the International Center for Not-for-profit Law pointed out, transparency and accountability can be used against civil society. In the US, he said, it has become ‘the tool of choice for those constraining civil society’. Information can be used against CSOs, and it may not always be right to make information available to government.
GuideStar founder Buzz Schmidt, while acknowledging the risks, stressed the risks of a lack of transparency: the powerful remain powerful, and the status quo doesn't change. Also, lack of transparency is often used as an excuse for cracking down on civil society, while fear of negative government responses is often used as an excuse by people who don't want transparency.
Without transparency there is no marketplace, Schmidt added. Few of us know enough about CSOs to allocate money optimally and effectively while the public are bombarded with tales of ‘ne'er do well CSOs’ – something that is all too possible when there is an information vacuum.
Filling the information vacuum
GuideStar is now firmly established in the US and the UK, but GuideStar International has a bigger vision. GuideStars are at different stages of development in India, South Africa and Korea, while the GuideStar Europe project is testing the feasibility of the model in the Netherlands, Germany, Hungary and Ireland, and interest is being expressed in Turkey. The potential seems great.
But the readiness of countries will vary. One key factor is the availability of data on CSOs, and the willingness of governments to make data held by them available. This will be a big focus for the GuideStar Europe project. In the Netherlands, for example, data is held by the tax office, but it claims privacy as a reason for not making it available. In Germany, there is no culture of transparency and the federal government holds no information, though 600 local government offices do hold some, and a survey showed widespread willingness on the part of CSOs themselves to provide data. In Ireland, some information will be gathered from CSOs that are registered as companies, perhaps one quarter of the total.
Relations with government has been an ongoing issue in both South Africa and India. In South Africa, the government initially agreed an MOU to provide data but in the end decided to make the data available on its own website. In India it has so far proved impossible to persuade the tax authorities to make available the information they hold, so information is being collected and the database built up through surveys and questionnaires.
Sustainability
Another issue is sustainability. Who wants information and who will pay for it? Is GuideStar a public good which government should pay for? Or foundations? In the US, Buzz Schmidt reminded people, GuideStar has received $25 million with no strings attached from foundations. But ‘the foundations made it clear they weren't going to give us $5 million a year for ever. We need to earn some revenue.’
In some countries, there is potential for raising money by mining the GuideStar data and selling tailor-made packages of data to government departments, investment advisers and others. This is starting to happen in the UK. ‘We're only now learning how to value the data,’ said Schmidt. ‘Successfully selling data in this way will bring in revenue that will allow us to deliver a public good through a free public website, with 98 per cent of users using data for free.’
A common technology platform
GuideStar International has developed a common technology platform that GuideStar systems in other countries will be able to use. This has two big advantages, Schmidt explained. First, it will save money, especially important in poorer countries, as it will make sustainability less of a challenge. While the GuideStar India website is being built using the common technology platform, the Koreans have built their own system.
Second, use of common fields in the database will encourage a common global reporting framework for cross-border use. This will not be possible with financial fields, as they need to be 100 per cent useful at the national level, but the aim is to encourage as much commonality as possible. Questions like 'how responsive is this organization to its constituents?' will apply anywhere. The more there is in common, said Schmidt, the more use it will be to donors in other countries or wanting to compare different countries.
For more information
Contact Caroline Neligan at cneligan@guidestarinternational.org or visit www.guidestarinternational.org
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