Are NGOs doing more harm than good? Todd Johnson, newly returned from Ethiopia, noticed an anti-NGO sentiment spreading among struggling Ethiopian entrepreneurs he met. Johnson cites several examples, such as the Buy One Give One (BOGO) trend, which sends products to developing countries thanks to Western consumers. The hidden cost of this model lies in the fact that BOGO crowds out local enterprise.
He presented his star witness, Sammy, an Ethiopian entrepreneur in Addis Ababa:
“Africans don’t see a reward system in place for being entrepreneurial. In fact, they view it as a matter of survival, not an opportunity to lift themselves out of poverty. Rather, what they learn at a very early age is that in order to make good money, they should learn to speak English incredibly well and then maybe, just maybe, they can get a job driving for an NGO. In a few years, if they play their cards right, they might be able to land an NGO job as a project manager and even advance further.”
Given this, he continues, how can local businesses compete with the high wages and job security that NGOs offer? Why should they even try?
USAID recently released its plan for meeting the Millennium Development Goals in 2015 and will soon publish its overall strategy for development assistance, all in advance of an already-planned September UN meeting on the issue.
Matthew Collin at Aid Thoughts criticized the U.S. strategy, because it’s precisely that – a U.S. strategy. With so many donor governments devising their own aid strategies, redundancy in aid becomes impossible to avoid resulting in a few “donor darlings” recieving aid from numerous sources. Collin proposed three possible effects of this – the number of unique donors is decreased to reduce this redundancy, the US pulls away from the UN to enjoy an American feel-good stamp on its donations, and/or agencies increase their level of coordination (he forgets a fourth alternative – no agencies acknowledge the problem and nothing changes). Collin closed by hoping that USAID, assuming it intends to act on its plan, announces its intention as loudly and credibly as possible, so that other donors are incentivized to focus their efforts elsewhere.
The Oxford Poverty and Human Development Initiative just released its Multidimensional Poverty Index (MPI) as an innovative approach to poverty measurement.
The MPI certainly shakes up conventional wisdom. For example, according to the MPI, 51% of the world’s poor live in South Asia and 28% live in Africa. The MPI also asserts that roughly 1.7 billion people live in poverty, compared to previously held statistic of 1.3 billion. Furthermore, countries previously categorized as poor score higher on the MPI, whereas other countries that were considered relatively developed scored lower.
Score another one for Andrew Carnegie and his Gospel of Wealth. Paul Allen, co-founder of Microsoft, publicly announced that he would give his fortune to charity after his death.
With this announcement, Allen joins a short list of billionaires—including Eli and Edythe Broad, John and Ann Doerr—who have accepted the Gateses and Buffet’s philanthropic challenge, the Giving Pledge, which we previously covered.
According to Forbes, Allen is the 37th richest person in the world, with an estimated fortune of $37.5 billion. If every member of the Fortune 400 took the pledge, roughly $600 billion would become available for non-profits.
Dennis Whittle, CEO of GlobalGiving, kicked off a series of guest posts on Aid Watch, in which he discussed the impending obsolescence of the centralized foreign aid that is channeled through what he dubs “mainframe organizations”—lumbering, uncompetitive entities such as the World Bank, UN, and USAID.