Big Ideas Kill International Development and Relief?

Big Ideas Kill International Development and Relief?

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I’m fairly new to the international development community, but I just read this great article on the New Republic site about how new disruptive ideas for humanitarian aid and international development get massive funding because they seem like great ideas, but then dwindle and die long term. I’d love your comments as to whether my ideas below are actionable, right, wrong, and your thoughts on the article. You’ll have to join our forums to comment, but that’s free and only takes a couple of minutes.

I was shocked to read this quote.. “Governments and rich people (“major donors” in NGO-ese) are embracing terms like “philanthrocapitalism,” “social entrepreneurship,” and “impact bonds,” arguing that donations are investments, not gifts.”

There’s a great story about the fact that sometimes what you THINK is the problem that needs solving with international development and aid  isn’t the actual root issue. Apparently, providing textbooks to kids in Kenya didn’t improve their academics, but providing de-worming pills to make the kids healthier resulted in higher attendance rates at schools and better education – at a cost of 49 cents per pill vs. $2-$4 per textbook. But then they tried to say that this one study proved out that de-worming could be a great global solution, so they went global. Studies have now shown that it increases LIFETIME earnings of recipients by $30. Yes, $30 for their entire life.

The article talks about “success, scale, fail” – the trend to find and tout a single successful program, then scale it to try to solve global issues, and then failing to make it work.

It also talks about the fact the international development donors want 100% of their money to go to help people as opposed to administrative overhead. This results in the receptionist doubling as an HR person, researchers acting as accountants, everyone tripping over each other to ask the same people for donations (and everyone spending time researching the same people), poor management, poor training, etc. Another quote I like… “For most charities, 10 percent overhead probably isn’t enough, and 90 percent is just fucking around. But the whole point is that we shouldn’t pick just one number to stand in for efficiency.”

Lots of problems.

They suggest a few solutions in the article. One that is mentioned briefly is what I’ve hear said before. When you provide international development aid to a group, you need to train them to be self-supportive so that when the aid ends, the benefits continue. It’s not just about swooping in to provide some new technology or benefit. It’s about finding ways to make a community better, and ensuring that this betterment is sustainable. That means training the local communities on the how, the what and the why. How does it work? What does it do? And most importantly, I think, why is it going to make your lives better?

But the problems continue. Again, to quote the article: “This is the paradox: When you improve something, you change it in ways you couldn’t have expected… A project in Kenya that gave kids free uniforms, textbooks, and classroom materials increased enrollment by 50 percent, swamping the teachers and reducing the quality of education for everyone. Communities in India cut off their own water supply so they could be classified as “slums” and be eligible for slum-upgrading funding”

So how do we fix things? ” Successful programs should be allowed to expand by degrees, not digits (direct cash payments, which have shown impressive results in Kenya and Uganda, are a great candidate for the kind of deliberate expansion I’m talking about)… NGOs need to be free to invest in the kinds of systems and processes we’re always telling developing countries to put in place.”

Great ideas. Now we just need the donors to allow their money to be used, partially, for THINKING as opposed to just DOING.

I’ve been involved in working with for-profit businesses for many, many years. Let me tell you a little secret. For profit businesses hate overhead too. They want to spend as little of their money as possible on supporting roles, and as much as possible on profitable roles. There’s not really a lot of magic to this. YET – they still spend a lot of money to hire really smart people to be accountants, marketers, technology experts, salespeople, trainers and managers. 

Why? Because it lets them use their money more effectively. Even though overall compensation costs are higher, they get more juice out of each dollar they earn.

So why do the large donors hate overhead? I’m sure it has something to do with all of the “exposés” on non-profits and how all of their money goes to overhead. The groups that contract our for fundraising and only receive 10% of the money raised. The organizations that pay 80% of their funding to the executives who run it,and dash around the world on their corporate jets. Perhaps it has something to do with the fact that the IRS approves 95% of all organizations who apply for not-for-profit status.

But the quote above is very accurate – “10 percent overhead probably isn’t enough, and 90 percent is just fucking around.” There is a middle ground, and donors needs to start trusting again. Newfangled ideas with lots of technology that requires training and spare parts to maintain just aren’t sustainable in the regions of the world that need the most help. These “big ideas” just haven’t been proven, and the money is paid to the inventors WAY too quickly.

We need to find that middle ground between sustainability and disruption, and then place trust in traditional NGO leadership to execute on their mission – to help people.

Your thoughts?

Chris is the owner of Disaster.Com, along with being a business consultant and entrepreneur. In addition to working 80 hours a week on Disaster.Com, Chris is spending another 80 hours a week building a small business consulting company called Fair Winds Strategies. When he’s not working, you can find Chris hanging out with his wife and kids, or on his sailboat (which he spent two years living on and cruising down to the Bahamas from New York, and then back).

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