Alliance Online - June 2008

Who, how and where? The tricky business of giving to charities in developing countries

Cathy Langerman

How do donors decide what to give their money to in the developing world? Should they give small amounts to most charities that ask them for money? Should they help to build schools, clinics and libraries? Should they sponsor children? Should they help to create businesses?

As part of a project considering whether New Philanthropy Capital should expand its research to charities operating in developing countries, a number of UK-based donors were approached for their views (the results can be found in the report Philanthropists without borders: Supporting charities in developing countries on www.philanthropycapital.org). In a survey of 122 donors of various types, 77 per cent of whom support international causes, over 70 per cent said they would like research and advice on charities in developing countries. In-depth interviews and group discussions with almost 30 additional philanthropists confirmed that donors face many barriers to giving internationally and would like some help.

The difficulties

While the need in developing countries motivates many donors, it can also be a barrier to giving. The scale of the problems – the enormity of human suffering and environmental degradation – can feel overwhelming, particularly for a first-time donor. As one respondent put it, ‘Africa seems a bottomless pit.’

The lack of independent information about charities in developing countries can also be offputting, as the following responses illustrate:

‘If I could get more information to help me make a decision I would be able to give substantially more.’
‘With so much government money washing around in African countries, how can we take a strategic view about where (country) and at what sector (health, education economic development etc) we should target our private pounds?’

The concern that money will not be put to its intended use was highlighted as a barrier by many donors, including these two:

‘I suspect that there is not enough accountability over how money is spent and what it is spent on.’
‘It is not always easy to evaluate the “credibility” and sustainability of charities in developing countries and to monitor that the financial or material support will truly go to those expected.’

Overcoming these barriers and concerns is no easy task. A one-stop-shop for information on charities in developing countries does not exist and, even where information is available, it can be difficult to determine which charities are trustworthy and effective. Although a number of intermediaries are emerging, including some exciting electronic exchanges, the coverage is still low, and the quality of analysis variable.

The only consensus is that there is no consensus …

Furthermore, there is no consensus on the best way to address the huge issues of poverty and environmental degradation. Many thousands of theories, studies and evaluations have not provided a definitive answer to the route out of poverty. Trends in support have shifted from skills and infrastructure development through improving the health and education of the population to improving institutions and governance. There is a long list of other factors judged to be important to reducing poverty. As the American economist Joseph Stiglitz comments: ‘If there is a consensus today about what strategies are likely to help the development of the poorest countries it is this: there is no consensus.’

Despite this, the more modest goal of improving the lives of some poor people in some places can be achieved. At the very least, philanthropy can stem the decline by preventing avoidable deaths. It can also create hope and opportunity in otherwise bleak environments. There are organizations that are achieving wonderful results that deserve support, even if identifying them is not always easy.

What needs to be borne in mind is that there is no correct answer to the question of allocating resources to development (at least not one that has wide agreement). There is no evidence proving that supporting primary education in Tanzania, say, is any more or less effective than supporting sanitation projects in India. What is important is finding an organization that is achieving good results and has the capacity to continue doing so, whatever its environment.

Some steps to resolving the overseas funding perplexities

Donors should start with issues that interest them or with which they have a personal connection. The survey found that the causes preferred by UK-based donors are education, economic empowerment, health, and water and sanitation (each cited by over 30 per cent of donors as falling in their top three). The preferred geographic locations are Sub-Saharan Africa, South Asia and Latin America. The answers to these questions may help guide donors to certain locations and/or issues:

Do you want quantifiable results?
Do you want to focus on the very worst-off?
Do you want to make a significant personal difference to few or have a positive impact on many?
Do you want to fund countries/issues that are overlooked?
Do you want to collaborate with other funders?
How important is empowering others?
In what timescale would you like to see results?
How interested are you in creating systemic change vs dealing with immediate problems?
Do you want to work in countries and areas that you can easily visit?
Do you want to work on issues where you already have experience, or new issues?
Do you want to replicate the work you support elsewhere?

Having selected a cause or country, donors may wish to identify other funders in the area. This may be done through attending network events such as The Funding Network or learning programmes like The Philanthropy Workshops, run by the Institute for Philanthropy (these are both based in the UK; see www.alliancemagazine.org for a list of similar resources in other countries). Desk-based research to identify sub-issues, experts and other funders can also be done. Joining a facilitated trip to charities in a specific country of interest is another option.

The use of intermediaries

Identifying and selecting organizations to fund within the chosen areas is the next step. It is at this point that donors with little time may wish to use the services of an advisory firm. Alternatively, exchanges such as GlobalGiving may provide, and facilitate the funding of, appropriate projects. Directing money through one of the larger international NGOs (such as Oxfam or ActionAid) or pooled funds (such as the Global Fund for Children) is another way to reach charities addressing particular areas.

When it comes to funding the selected organizations donors, should consider the impact of how they give on the grantees. Wherever possible charities achieving good results should be supported on a multi-year, unrestricted basis so that they can plan ahead with a degree of stability. Funding the measurement of results is also of benefit to the donor, the charity and the wider sector.

Whatever process is followed, giving to charities can be extremely rewarding, especially in developing countries where even a relatively small amount can make an enormous difference. The amazing work that is being done all over the world deserves support. Whether donors choose to fund a library, investigations into human rights abuses, or micronutrients for malnourished children, they can make a difference.

Cathy Langerman conducts research for New Philanthropy Capital and is co-author of Philanthropists without borders. Email cathy_langerman@hotmail.com

For more information
For more on the donor surveys, the role of philanthropy in international development, and how other funders select issues and countries, please see Philanthropists without borders: Supporting charities in developing countries on www.philanthropycapital.org

For a list of philanthropy resources throughout the world, see www.alliancemagazine.org

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