Brands And The Corporatisation of NGOs

Of the $46 billion given in humanitarian aid, only 1.2% is put in the hands of local actors and far less is put in the hands of leaders from communities affected by forced displacement. (HPG, November 2023) When donors choose to give, be they tax payer funded donor agencies, private philanthropic agencies or individual donors, they are largely giving to institutions from the global north that they know. Within this statement we should read that they are giving to organisations that they “trust”.

In this blog series, I am looking at the significance of trust and human relationships in humanitarian giving. Moreover, by picking apart instruments and approaches used for trust building in the process of giving, I am exploring what a lack of trust in people affected by forced displacement reveals about prevailing prejudices and a reluctance to relinquish power by those who have it. In the first blog I looked at how increasingly authoritarian due diligence processes not only demonstrate a total lack of trust but also serve to further sever genuine trust relationships between givers and receivers as well as within communities receiving aid. In this blog I will look at how misplaced trust in global brands by donors reveals the same prejudices and leads to the same divisive results. I will look at the relationship between brand positioning and the corporatisation of the humanitarian sector and how this further fuels inequalities and wastage.

There are explicit reasons given by donor agencies for putting their trust in large well-known brands. A common one is that donor agencies are often made up of relatively small teams and it is more efficient for them to give large donations to organisations that are so well-known that most of the “know-your-customer” protocol is either already available in the public domain (such as annual accounts) and that has an established reputation for delivering impact without having to check details. An example of this explicit choice to place trust in large brands was in 2020 when Cohere received downstream funding from a large public fund for education in emergencies - the funders made it clear that they would only be granting to UN agencies or one of the ten or so largest international NGOs - everyone else had to find a way to be part of a consortium led by one of these actors. The reason given was that they wanted to be able to disburse the funds rapidly without doing arduous due diligence.

A second explicit reason given for choosing large brands is that they are registered in the global north and are scrutinised by well-respected government agencies and risk mitigation protocols. For example, the England and Wales Charities Commission is seen as a more reliable government body than the NGO registration bureaus in Africa. This demonstrates the same tendency of donors to judge and compare organisations by their level of compliance to standards set by imperialist institutions that I discuss in my first blog of this series.

In both of these cases larger brands are given a free pass when it comes to scrutiny and, yet, unfortunately many of the large iNGOs have at some point demonstrated that they did not deserve this trust, and that perhaps they would have failed more thorough diligence exercises had they been carried out. Sometimes transgressions were being led by rogue operators, such as Edward Mackenzie-Green of Oxfam, sentenced to prison in 2014 for the embezzlement of £65,000, or Ernest Havilov from GOAL who shared inside information and steered USAID-funded tenders in Syria towards preferred vendors in return for kickbacks. However, in some cases fraud scandals demonstrated sustained co-ordinated efforts by offices of large aid organisations. In 2020, a review was published covering the preceding years of aid and corruption in DR Congo, finding that networks of fraudsters have infiltrated humanitarian organisations, including UN agencies, introducing an array of corrupt practices that affect everything from staff recruitment and supply procurement to aid delivery. These same brands have put a huge amount of work into repairing the breaches of trust in their interactions with donors and, we would hope, with the direct victims of the discrepancies - and this seems to be working for them. Irwin Loy has written an interesting piece in the New Humanitarian on how when a local organisation transgresses a compliance standard (usually standards imposed from the outside) they are met with the “one strike and you are out” attitude leaving them unable to function as an organisation. So in comparison, large brands seem to be trusted without justification and trusted by default, while local organisations are distrusted by default and struck off without justification.

There are also more impervious reasons donor agencies trust and choose large brands that are less commonly shared in explicit ways (though amazingly some donors admit these factors). One, from public donors, is that large agencies are likely to employ nationals from their own global north country, sometimes thousands of them, so the public funding is not going so far from home. DFID for around 20 years had a policy of providing up to 40% of total costs for UK charities working overseas, with no limitations on spending used to cover UK headquarter costs. Rather than promote spending in parts of the world affected by crisis, this approach, in contrast, incentivised UK based iNGOs to balance their spending towards their UK expenses and recruitment.

A second obvious reason that donor agencies trust iNGOs and large brands is that there is a revolving door between the two types of agency. There are clear career incentives for building strong links between donors and iNGOs when employees expect to jump between the two and there is a natural tendency for donor staff members to help out mates they used to work with in previous roles. This cronyism is the more sinister for the fact that this revolving door revolves around a cohort of humanitarians that overwhelmingly originate from the global north. Again, they trust the people they know, and they don’t really know leaders from communities affected by crisis so they don’t trust them.

On the part of individual donors giving small or regular monthly donations it is also the case that trust must come into the decision to give. In their case they are targets of hugely expensive communications campaigns by iNGOs designed to build legitimacy and trust and then convert the targets to give funds. This goal of converting the public into donors is significant because iNGOs have for decades used messaging more likely to extract the most money, such as the negative tropes about the suffering “third world”, than messaging that changes for the better the way the global north public perceive parts of the world such as Sub-Saharan Africa. In so far as the prize goes to the agency that most thoroughly captures the attention of general public, it can follow that those that spend the most on their campaigns gain the most revenue, which taken to its logical conclusion means relatively low returns on a massive spend. This has become acceptable and even celebrated. This talk by Dan Pallotta, which came out towards the beginning of this trend, is enthusiastically delivered and may come from a good place; it was also instrumental in launching the celebration of competitive growth and the corporatisation of the non-profit sector - his summary is that charities should not be criticised for their investments in generating revenues, just as long as in the end they can do just that and expand their reach.

While it is at its most blatant when attracting funds from the general public, the large scale investment in visibility and brand awareness in programme locations is also seen as an effective strategy in competing for funds from donor agencies too. NGOs spend thousands of dollars on signs for outpost offices in places that are not frequented by the general public but may be in the gaze of donor officials on their infrequent their field trips. Donor agencies even request this and accept investment in marketing and visibility as a crucial component of every budget. Everyone in the sector is in on the deal - this is a market and it is a competition, if we play by the rules of the competition the fittest will survive.

Visibility and the investment in building a strong brand is one feature among others of the corporatisation of NGOs and the humanitarian sector. Behind this more exposed element of competitiveness are other behaviours that speak to the same issue of putting the survival of the NGO above all other interests. I have come across this when negotiating with a household name iNGO who was acting as a consortium lead we were a part of. From beginning to end it was quite clear that the processing and managing of this consortium was primarily of interest to them as a way of paying for their core costs and covering a bulk of their alarmingly high country leadership salaries. At no point in the intervention did they show any interest in the work the consortium was doing as long as we met the minimum requirements of their upstream donor, who also seemed pretty uninterested in the work. Once the funding was over and the final report was submitted, emails from us proposing to continue programmatic conversations went unanswered. An apologist to this situation might argue that such organisations are in a bind - the machinery works and bills and salaries are paid, but only as long as the leaders and fundraisers are the best in the industry - and the best paid. But even if organisations find themselves in this catch 22, the race to the top of the salary scale for superstars who will keep their ship afloat, they could at least show a bit of interest in the projects in their proposals.

Even for those with the right intentions it is this bind that prompts me to issue a word of warning about trusting in brands and organisations too heavily. The corporate structure of the NGO means that even those with a genuine commitment to their vision and stated cultures have to follow the rules of organisational survival. They have to draw a clear ring around those who are in (employees, board members) and those who are out (everyone else) - which seems strange when preaching about inclusive vision statements and programmes designed by the whole community. Long term commitments made within the corporate structure, such as permanent employment contracts, multi-year lease agreements and even the repayment of debt financing mean that at some point a conflict will arise between fulfilling these commitments and living the letter of an organisation’s charitable mandate. In a landscape of scarce funding they have to foster an allegiance to the company and the brand from employees that will always move in the direction of competitiveness. In turn this carries features of concealing industry secrets and networks as well as nervously guarding intellectual property on humanitarian best practice - a contradictory mindset if ever there was one.

I will admit that at Cohere we have experienced these pressures and this conflict and I would be lying if I said we had always made the right decision, especially with the clarity of retrospect on my side. At the same time, I am of course proud that Cohere is a brand that is trusted to a high degree and I hope we can continue to deserve that trust. But I would also venture to say that some donors trust us too quickly without spending time to get to know us as the people who will be making decisions about how the funds they give us are spent, which is a missed opportunity.

My suggestion to this problem is simple to say and not so simple to do - trust in the brand if you like, trust in due diligence if you really must (see first blog), but go beyond the brand and certainly go beyond due diligence- get to know the people and ensure that meaningful human relationships are at the core of the process of giving. This will take time, investment and new approaches but the fruits of this approach could be bountiful in terms of holistic, meaningful and sustainable change. It will put humanity back into the centre of humanitarian aid and in so doing will discard the limbs of the sector that have been for so long infected by a creeping corporatisation, self-interest and imperialism. In the final blog in this series I will explore in a bit more detail what this could look like and give examples of how it is already happening. But first, in my next blog I will look in more detail at how some actors, especially public funders, are not set up to make this change, because for them humanitarian aid is not about the humans at the centre of the story but more about their own interests - we should not hold out for them to lead the changes we need to see.

This blog is Part Two in a five part series written by Cohere’s CEO & Founder, Edmund Page.

(HPG, November 2023)