In the wake of the pandemic, what has been the impact on global aid and philanthropy? Has civil society funding or human rights funding been sacrificed for COVID or migration responses? The Transparency and Accountability Initiative (TAI) embarked on a comprehensive investigation of the funding picture to try to find out, drawing from the data provided by the Organisation of Economic Co-operation and Development (OECD). The findings present a compelling narrative of how international funding to government and civil society in the Global South evolved during these challenging times.
A major response in funding to the pandemic and then a return to baseline
Last year, we covered the major increase in funding in 2020 to international governance and civil society. However, in 2021, international funding directed towards government and civil society in developing countries experienced a significant dip compared to 2020 and approached levels reminiscent of 2019. Total disbursements plummeted from over $34 billion in 2020 to slightly above $26 billion.
This data bolsters some narratives in global aid and philanthropy and challenges others. Digging into it, we noted some interesting trends. In the data, we can see the response to the pandemic in 2020 and then the end of some of that extraordinary support in 2021.
Public loans and grants from governments fell
The OECD data includes various financing types, including official development assistance from public funders, loans from multilateral development banks, and philanthropy and charity, which are labeled private development finance.
A major cause of the decline was due to a fall in loan disbursements to governments. Another cause was that the United States and European Union institutions decreased their grants to the sector by over $1 billion each.
Delving deeper into the sub-sectors, noteworthy decreases were observed in public finance management and public sector policy and administration funding. This was followed by reductions in support for macroeconomic policy and decentralization. For more, see our brief.
Developing country governments tend to be the recipients of funding for these issues. In contrast, funding that went through non-governmental organizations (NGOs) stayed about the same at about $4 billion. Most of this went through donor-country NGOs rather than developing country-based ones.
Interestingly, facilitation of migration, human rights, democratic participation, and women’s rights organizations saw increases. Funders may have been responding to other pressing issues considering global crises and challenges.
An increase in philanthropic support to governance AND health AND the environment
Although there was an overall decrease in total funding to governance and civil society, philanthropy increased by $93 million to these causes. In fact, looking across all sectors, in the OECD data, we find that private development finance was up by about $1.5 billion in 2021 compared to 2020. Internationally, philanthropy was responsive to the crisis.
When we first conducted a funding scan in 2020, interviewees expressed concern that governance and civil society would lose funding while donors shifted to health and environment under fixed budgets. Civil society organizations and advocates were worried: would issues like human rights be left behind?
At least in 2021, this was not the case. Funding increased to governance, health, and the environment.
In fact, the increase in philanthropic spending to global health and the environment was substantial. From 2019 to 2020, disbursements to international basic health increased from $2.2 billion to over $3 billion and then went to almost $4 billion in 2021. For environmental protection, it went from $386 million to over $701 million in 2020, then reached almost $1 billion in 2021. Support for renewable energy generation totaled $310 million in 2021 compared to $112 million in 2020.
We checked, and it was not due to completely new donors coming in. Rather, previous donors like the Gates Foundation, Mastercard Foundation, and Wellcome Trust increased spending on health, while the Bezos Earth Fund, IKEA Foundation, and the Packard Foundation increased spending on the environment. Almost the entire increase in renewable energy was from the Rockefeller Foundation.
Key philanthropic entities, particularly members of TAI, played a pivotal role in maintaining funding levels to governance. The Open Society Foundations, Ford Foundation, Gates Foundation, Oak Foundation, and MacArthur Foundation emerged as top funders, prioritizing areas such as democratic participation, human rights, and women’s rights.
Increasing cross-sectoral work as a way forward?
As funders grapple with an array of global challenges, we encourage those engaged in governance issues to continue their focused efforts while exploring opportunities to catalyze change in other rapidly evolving sectors.
Many philanthropies and civil society organizations have turned to systems change and more integrated programming, crossing sectoral boundaries. Approaches like transparency and accountability can inform other sectors.
For example, transparency and anti-corruption advocates have argued for good governance in global health and pandemic response, and last month, partners including the Global Partnership for Social Accountability and TAI released a discussion paper on accountability and transparency in climate finance.
Inclusive governance and human rights funders and advocates have much to offer, and there will be myriad opportunities given the challenges we face.
Jenny Lah is an independent consultant specializing in public finance, international development strategy, governance, and gender equality. She works with the Transparency and Accountability Initiative (TAI) on funding flows and transparency, inclusion, and accountability in fiscal policy issues.