3 July 2003 | Draft
Framing NGOs in the Market for Change
comment on a report by SustainAbility,
the United Nations Global Compact and the UN Environment Programme
- / -
Timing of the report
Institutional origins of the report
* Misleading title
* Unrecognized diversity of NGOs
* Occupying the temporal highground
* Technological sophistication
* Market focused business model
* Alternative business model
* Commodification of change
Focus of the report
Making an impact
* Financial reporting
* Inequity and disparity in benefits
* Nepotism and cronyism
* Dysfunctional accountability constraints
* Wider challenges
Engagement vs Criticism and confrontation
The international consultancy SustainAbility
has published a report entitled: The
21st Century NGO: in the market for change. The report was launched
at a meeting on 26 June 2003 at the International Finance Corporation (Washington
DC) and featured in the Financial Times on that day -- together with
an editorial entitled "Biters Bit".
The concern here is not to review the report in detail. It is a commercially
available publication. An executive
summary and related documents are available from the SustainAbility website.
Rather the purpose here is to question the manner in which the report -- co-produced
and promoted by two United Nations bodies -- may effectively serve to distort
a debate at a delicate time in the evolution of the international community.
Of particular concern is the manner in which its conclusions posted on the web
will be read -- as illustrated here by their treatment in the Financial Times.
In what follows the comments below relate primarily to how the report is
likely to be superficially understood and used on the basis of freely available
documents such as the executive summary and the promotional materials of
its sponsors -- rather than to the valuable insights it indeed contains, if
appropriately used with respect to an appropriate context, notably those insights
in a preliminary white
paper on the SustainAbility website. In this sense the comments are indeed
likely to constitute a degree of misinterpretation of the body of the report
itself. The comments endeavour to explore the significance of the misinterpretation
arising from the superficial understanding to which greater numbers will be
exposed -- in an international community increasingly governed by spin.
Issues of concern include:
The following comments are produced in the light of experience as managing
editor of the Yearbook
of International Organizations: Guide to Global Civil Society Networks
(5 vols, now in its 40th edition) and the Encyclopedia
of World Problems and Human Potential (first produced in 1976). These,
and related databases have been managed by the self-funded Union
of International Associations (UIA) in Brussels since its creation in 1910.
The data has been published in various forms via a multinational corporation
since 1982, following a brief period of cooperation with the International Chamber
of Commerce to that end. These publications are the source of the standard statistical
data on international nonprofit organizations over many decades (see Volume
5 of that Yearbook) and their adaptation in the Global
Civil Society Yearbook (2002). These international NGOs now number in
excess of 40,000 (depending on definitional preferences). The related work on
problems and strategies has been enhanced in the environmental field through
a contract with the Commission of the European Communities Info2000 programme
(1997-2000) [more], and
was successfully evaluated for development-related enhancement by the World
Bank's InfoDev programme [more].
Timing of the report
The report is published in an exceptionally curious period for NGOs in the USA.
- the declaration on 21 May 2003 by Andrew Natsios, the head of USaid, regarding
activities of NGOs. According to Naomi
Klein (Guardian, 23 June 2003), author of No
Logo (2000), he gave a speech "blasting US NGOs for failing to
play a role many of them didn't realise they had been assigned: doing public
relations for the US government.... From now on, NGOs had to do a better job
of linking their humanitarian assistance to US foreign policy and making it
clear that they are "an arm of the US government". If they didn't, InterAction
reported, "Natsios threatened to personally tear up their contracts and find
new partners". [more;
more]. If indeed
US NGOs are to act as an arm of the US government, as was the case with Soviet
NGOs, this will totally change the nature of their participation as members
of international NGOs
- the establishment of "NGO Watch"
on 11 June 2003 by the American Enterprise Institute
(AEI) and the Federalist Society for Law
and Public Policy Studies in order to "bring clarity and accountability
to the burgeoning world of NGOs". Again according to Naomi
Klein (Guardian, 23 June 2003) this could be seen as a "a
McCarthyite blacklist, telling tales on any NGO that dares speak against Bush
administration policies or in support of international treaties opposed by
the White House".
Given the well-documented association of the neoconservatives with the Bush
administration, the coincidence of these two events is not surprising. What
is surprising is that these declarations were then followed by the launch of
a UN sponsored report in Washington -- a report stressing both the "enterprise"
theme dear to the American Enterprise Institute and the issue of accountability
raised both by Natsios and by the AEI. What is to be deduced from this? Has
the report been knowingly designed to reinforce the two earlier statements --
themselves seen to be highly unusual issues of public policy at this time?
In an extraordinary period of transformation of the international community
in the light of the emergence of a new American "imperial" strategy,
articulated in large part by an American NGO [more],
and given form in the response to 9/11, there will be numerous implications
for international NGOs who struggled mightily for the many international treaties
that have now been effectively shredded -- in a number of cases to the specific
advantage of multinational corporations. It is therefore most curious that the
report appears to make no mention of this changing context and would seem to
be based on an assumption of "business as usual". This would suggest
that it is conceived in consonance with the framework of this new American global
strategy -- to which many international NGOs are viscerally opposed.
Is the SustainAbility report -- on behalf of the UN's Global
Compact and the UN Environment Programme (and with support from the International
Finance Corporation) -- to be considered as the international extension of the
domestic neoconservative agenda in the USA? Is it part of the new process of
exporting American democracy to the world? Why the misleading generalizations
(see below) that, in a period of massive information spin,
suggest that the welcome insights of the report should be questioned because
of the context in which they are placed and the agendas that they seem particularly
to serve at the expense of others?
Institutional origins of the report
SustainAbility defines itself to be "a strategic management consultancy
and think-tank. Founded in 1987, we are the longest established international
consultancy dedicated to promoting the business case for sustainable development".
Furthermore: "We are a for-profit limited company, although many of our
key goals are non-financial.". And: "SustainAbility is not a marketing
or PR agency. Nor are we neutral in our work: we take a public stance on issues
which we think are important." [more]
Despite the clarity of this statement, the Financial Times editorial
(26 June 2003) was able to state of the report's criticisms: "The criticisms
are all the more telling because the study is the work of SustainAbility, itself
an NGO". How was that impression created and to what end? Is there some
effort to confuse the nature of "NGO" with that of "for-profit"
businesses? By such criteria is the Financial Times itself an "NGO"?
Is it the case that any organization that is "non-governmental" is
now to be understood to be an "NGO", whether it is a for-profit body
or not? If this is so, how is it that so few for-profit bodies, if any, have
ever been admitted to the "NGO" consultative relationship with the
United Nations -- co-producers of the report?
SustainAbility is also very clear in providing its client
list. Of the 135 clients listed on its website, the following are identifiable
as international NGOs:
- European Partners for the Environment
- Greenpeace International
- IUCN / World Conservation Union
- Society for the Promotion of LCA Development SPOLD
- World Resources Institute WRI
- Worldwide Fund for Nature WWF
The following clients are identifiable as intergovernmental bodies:
- Commission of the European Communities CEC
- European Environment Agency EEA
- International Finance Corporation IFC
- Organisation for Economic Co-operation and Development OECD
- Society for the Promotion of LCA Development SPOLD
- United Nations Environment Programme UNEP
The remaining 123 clients would appear to be business organizations, of which
many are recognizable as multinational corporations typical of membership of
the Global Compact.
The report is described as a first product of SustainAbility's Pressure
Front Program. The nature of the support for it by a "wide consortium
of NGOs" is indicated in the website material as: Accountability,
Oxfam, Partners in Change, and Transparency
However the launch invitation indicates that it was "based on over 100
interviews with NGOs, foundations and thought leaders worldwide" [more].
The Maitland article states the study was based on interviews with "200
NGOs and opinion formers" as indicated in the SustainAbility press
The report clearly represents a very well prepared document, which according
to the press release
was "undertaken in partnership with United Nations Global Compact and the
United Nations Environment Programme and supported by Novo Nordisk, VanCity,
DuPont, Holcim, the International Finance Corporation, AccountAbility, Oxfam,
Partners in Change, Transparency International and WWF
The Financial Times (26 June 2003) opened its Page 1 article by Alison
Maitland on the report with the statement: "International non-governmental
organisations (NGOs) must become more accountable if they are to retain their
influence, says a United Nations report out today". This wording reflects
the phrase in the launch press
release that it is "a new study by SustainAbility and the United Nations".
As with the Global Compact itself, it is not clear to what degree its conclusions
are a reflection of United Nations policy -- and to whom the initiative is accountable
within the United Nations, and whether the "United Nations", as a
particular intergovernmental body with a complex policy regarding NGOs under
71 of its Charter, is in any formal way associated with its conclusions.
Such bodies do not reflect the variety of NGOs -- for example in consultative
relations with the United Nations as co-producers of the report. It is perhaps
more appropriate to assume that the report is based on NGOs relating directly
to business in the environmental and development areas. It is an extreme irony
that in the 50 years of the consultative relationship of NGOs with the United
Nations, one of the very few reports to be co-produced by two United Nations
bodies on "NGOs" -- and presumably to be widely publicized by them
-- should create the misleading impression that its conclusions apply to all
NGOs of the type with which it has a relationship. It will be interesting to
see how the report is promoted by the UN system in the light of the agenda of
the Global Compact.
The report claims to be the "seventh survey of the NGO landscape, but
it is the first to be supported by a wide consortium of NGOs as well as public
and private sector partners". The first such survey is claimed to have
been made in 1987. As ardent collectors of bibliographical material (and of
academic citations of published and unpublished materials) on NGOs for several
decades, it is curious that no such previous documents were registered in the
bibliographical section of the Yearbook
of International Organizations (Volume
4). Presumably any such surveys of the "NGO landscape" were of
sectors in which NGOs were active, such as the environment, and/or for private
clients. Indeed its report The
Green Wave Survey (1990) focused on 150 environmental organisations;
its report The
Green Keiretsu Survey focused on business alliances and networks for
sustainable development (1994). This would suggest that the "NGO landscape"
is understood to be restricted to the environmental sector.
There appears to be a gap between the spirit of SustainAbility's Pressure Front
progamme, as reflected in the valuable preliminary white paper, and the spirit
of the final report. This may be due to constraints by some of the supporting
partners. Or possibly it reflects an unfortunate effort to "engage"
with the neoconservative agenda in America.
What agenda is the report really serving? Indeed, given the stress on trustworthiness
(see below), it might well be asked to what extent are the
report's conclusions to be considered trustworthy in the light of how they may
be spun and misused?
Misleading title: The report claims to explore "the
very different ways that NGOs are now trying to leverage change in individual
businesses and across markets" [more].
This implies that NGOs, or some NGOs, are focused on changing the nature of
businesses and markets. Whilst this may indeed be true for some NGOs, the extent
to which this claim is relevant to most NGOs is quite unclear. To that degree
the statement is misleading -- whether deliberately or not.
The report launch statement continues: "A key feature of the report is
an analysis of the strengths and weaknesses of NGOs in this area, and of the
likely opportunities and threats of the next decade. The 21st Century NGO looks
at NGOs AS businesses, as well as NGOs AND businesses" [more].
The emphasis here on "this area" is very clear -- but would appear
to be contradicted by the title of the report: The 21st Century NGO: In the
Market for Change. The title suggests that its conclusions apply to any
"21st Century NGO", raising the question of the "left-behind"
NGO's from the 20th century that are somehow both included and excluded from
the generalizations about NGOs. This completely loses sight of the myriad NGOs
who have no preoccupation with business, or markets or change -- whether or
not they have academic or other concerns with any of these phenomena individually.
Many may indeed be concerned with "change", but few may define it
as a "business" -- and fewer still as a business opportunity to be
exploited and in which they need to compete with others in a "market for
change". They may actually operate on a non-business model that stresses
the importance of cooperation with others and service of the traditional voluntary
The notion of nonprofit entrepreneurship is not as new as suggested by the
presentation of it as a 21st century phenomenon to be developed. It has long
been explored by NGOs (as with the UIA since 1982) and by enlightened companies.
The notion may indeed be new to the business world as a whole, but this would
then fail to recognize the extent to which business schools now provide courses
in the matter.
Unrecognized diversity of NGOs: The co-author of
the report, John Elkington, is cited by Alison Maitland as
indicating with respect to "NGOs", that "Unless they recognise
and address growing financial, competitive and accountability pressures, their
impact will be significantly reduced". This statement suggests a profound
ignorance of the range of 40,000-plus "NGOs" -- that may indeed be
understood as an ecosystem as an interesting Pressure Front working document
21st Century NGO: Roles, Rules and Risks). As that document notes with
respect to the definition of NGO:
"One definition that closely reflects our understanding of the term
is that NGOs are 'self-governing, private, not-for-profit, organisations that
are geared toward improving the quality of life of disadvantaged people'...While
capturing some environmental issues through viewing future generations as
'disadvantaged people', this definition does not address groups which ascribe
intrinsic value to organisms or ecosystems".
This is an unfortunately narrow -- even dangerous -- definition. It is regrettable
in the light of the welcome recognition of "ecosystems" of organizations
in that same document. Why the failure to recognize that the species of NGO
recognized by that definition is one among many in a rich variety of interlinking
ecosystems -- which presumably are to be found on other mental "continents"
from those which are the focus of the report? Most of them have little or no
direct interest in business or markets -- but do they have no "intrinsic
value"? This mis-framing matters because most readers of the report will
be even less knowledgeable about NGOs than are the authors and will readily
accept the conclusions as applicable to all NGOs.
The underlying problem with Elkington's statement is that it completely marginalizes
tens of thousands of NGOs in sectors such as technical issues, religion, sport,
the arts, education, hobbies, peace, philosophy, self-help, personal development,
etc, etc) -- all valuable in improving the quality of life on the planet. There
is also the case of the numerous trade associations and labour unions. The report
then becomes yet another exercise in appropriating the term "NGO"
for a particular sub-group of "NGOs" in support of a particular agenda
whose nature may not be totally transparent -- perhaps because of some assumptions
about their relative importance to business as agents in exploring the market
for "improving the quality of life of disadvantaged people". This
tendency towards "definitional game-playing" has been a common feature
with respect to discussion of NGOs and civil society -- whether by the academic
community (who should know better) or with the United Nations itself [more].
The problem is illustrated by the statement of Gavin Power, Public Affairs
Director of the UN Global Compact and a partner in the research said (according
to the press release)
"The trends illustrate that many NGOs are moving beyond a culture of criticism
to one of engagement with business and other partners in a search for solutions.
While at times it may be difficult for NGOs to collaborate, the scale of today's
social and environmental problems requires it." Given the number of NGOs interviewed,
this could either be described as wishful thinking, completely unsubstantiated,
or an unfortunate effort to frame the debate about NGOs in the interest of the
clients of the Global Compact.
For an extensive review of the variety of international organizations (whether
governmental or nongovernmental, profit or nonprofit, or hybrid) see Types
of International Organization (1984), especially Classification
Categories . The latter includes many examples, notably of the kinds
of NGOs apparently not represented by the report.
As co-producers of the report, the United Nations should recognize that, in
engaging in definitional game-playing, it effectively ignores a large percentage
of NGOs with which the UN actually has established formal "consultative
relationships". This is notably the case with respect to the NGOs working
with its specialized agencies (UNESCO, WHO, FAO, etc). These should however
be considered only a subset of the larger universe of international NGOs --
even though the unfortunate term derives from Article
71 of the UN Charter. This is a shameful misrepresentation of the range
of non-commercial human activity.
Occupying the temporal highground: The title of the
report: The 21st Century NGO: In the Market for Change, as well as some
of its key distinctions (see below) endeavours to distinguish
between the organizations appropriate to the 21st century and those characteristic
of the 20th century. This is the "new is good metaphor" -- implying
that "old is less good".
This is a standard marketing ploy of the style "the modern woman uses
Persil" -- which is an unfortunate framing of some valuable arguments made
in the report and its ancillary documents. Those NGOs appropriate to the 21st
century are thus framed as being "in the market for change". Presumably
the "old" NGOs are thus to be defined as ineffective in a 21st century
world that is held to be increasingly influenced by market models and government
alignment with such. This ignores the reality of life on the ground in many
countries where "prehistoric" organizations must co-exist with the
most modern and are appreciated by them -- if only in religious and cultural
Technological sophistication: The editorial in the
Financial Times (26 June 2003) starts with the statement: "A fiercely
competitive, brand-conscious $1,000 bn industry that uses global communications
technology, media manipulation and high-powered marketing to impose its agenda
on people and policy-making round the world. A caricature of multinational business,
drawn by non-governmental organisation activists? No, it is NGOs themselves,
according to a United Nations-backed study published yesterday".
Having been responsible within the UIA for ensuring the tracking of the uptake
of modern communications technology by NGOs since the 1970s, it can be affirmed
that this statement in its totality applies to only a small sub-sector of NGOs.
This again reflects the misleading framing that the report appears to set out
to achieve. Curiously the United Nations was remarkably slow in its own uptake
of such technologies over that period. The judgement echoed by the Financial
Times might more accurately derive from a perception by such UN bodies that
NGOs were more flexibly able to use such communications technology and to extend
its capacities -- namely they constituted a threat to some degree because of
their relative technical advantage (as illustrated by the NGO confrontation
with the OECD concerning MAI).
The fact that the statement does not apply to NGOs in general is only too evident
from the inability of the UN bodies, even now, to enable NGOs in developing
countries to maintain more fruitful relationships with its various secretariats
and officials -- or even to recognize that this might be a solution to the challenge
of thousands of NGOs seeking "access" to UN meetings [more].
The focus remains, despite budgetary restrictions, on providing tickets for
travel expenses for attendance at meetings.
Market focused business model: The producers of the
report would undoubtedly like to reframe every human activity as a "business"
that has to deal with a "market". SustainAbility is frank about its
mission in "promoting the business case for sustainable development".
Such a framing can of course be forced upon any situation. The sustainable development
of any partnership, including a marriage, can indeed be defined as a "business"
faced with "marketing" problems and a concern for "change".
So can a church. But why should human relationships, activities, and interests
all be deliberately distorted into this particular framework?
The report concludes with respect to NGOs:
Governments and business may resist their advocacy, but there is now real
interest in the potential roles NGOs can play in developing and deploying
solutions. As a result, a new market-focused opportunity space is opening
up, but this often requires solutions that are not simply based on single-issue
responses. This represents a challenge even for most mainstream NGOs, so public
and private sector partnerships are increasingly essential in leveraging change.
In the process, new forms of competition are evolving in the 'NGO market',
with new entrants like companies, business networks, NGO networks and social
entrepreneurs blurring traditional boundaries....Finally, we sense an urgent
need to review -- and further evolve -- NGO 'business models' [more].
Many "non-profit" bodies were in fact created to provide a space
in which the for-profit business focus was secondary if not absent. Why does
business, faced with the success of the NGO phenomenon, seek to suggest that
any such success can only be due to the operation of NGOs according to a business
model -- any inefficiencies being due to the failure to operate according to
the best standards of for-profit businesses? Is this an example of one sector
seeking to impose its standards and values on another -- effectively to annex
it to its mode of operation without learning the reasons for its successes?
Is the purpose of the report indeed to have an impact to that end?
Whatever the "market-focused opportunity space", it might be usefully
asked when the application of a "business model" was ever proven to
be a guarantee of sustainable development -- other than for the careers
of those advocating it, or perhaps for the organization in question? The report
makes two recommendations:
- the first declares with respect to what NGOs should do: "The first
thing is to recognize that markets are central to their future. Markets are
becoming legitimate channels for social change -- and are also likely to be
'on balance' more efficient and effective than many traditional approaches.
But the rules of the game,clearly, will be very different.".
- the second recommends that NGOs "need to establish where they are and
need to be against the five-stage model" -- copyrighted, not surprisingly,
by SustainAbility [more].
This exemplifies the nature of the business approach to commodification of
change (see below).
The many disastrous applications of business models to operate newly privatized
public services -- such as in the UK -- are indicative of their questionable
relevance to the wider community. As currently conceived they are not a panacea
-- and it is irresponsible to imply that this is the case. It is noteworthy
in this respect that the Financial Times (12 June 2003) carried an extensive
feature article by Simon London (Why are the fads fading?) tracking the
increasing lack of enthusiasm for new "management models" in the light
of the limited success of the many that have been advocated and franchised over
the past decades by consultants and management gurus -- increasingly faced with
It is ironic that a recent report on gangs operating in parts of the UK concluded
that the most sophisticated operated using a business model that would have
ensured their success in normal society (Hugh Muir. Criminal
captains of commerce. Guardian, 20 June 2003). The same may be
said of the Mafia. It is not the fact of using a "business model",
and operating as a business, that ensures the achievement of non-profit and
value-centered objectives. It is not to be forgotten that, prior to associating
itself so closely with multinational corporations in the Global
Compact, the United Nations through its Centre
on Transnational Corporations, documented extensively the depredations of
society provoked by such businesses.
Alternative "business" model: Despite the
financial figures presented in the report as the prime indication of the impact
of NGOs -- according to the criteria found meaningful by the business world
-- these figures disguise a range of phenomena. The figures necessarily focus
on real costs and funds. They do not take account of the fact that many NGOs
depend to a large degree on unpaid volunteers -- often including highly qualified
professionals. Furthermore any paid employees they have, including those with
higher qualifications, may accept salaries significantly under the market rate
-- and especially under the generous, tax-free rates of the employees of intergovernmental
organizations responsible for development programmes. Facilities and services
may also be provided to NGOs under the market rate -- and not necessarily by
The result is that many NGOs operate with a level of costs and overheads that
would be totally unacceptable according to the kind of business model that the
report implies that 21st century NGOs should adopt in order to have an increased
impact. In fact, many NGOs who sought to operate according to that model would
suffer the fate of the many businesses currently forced to downsize -- and ultimately
to file for bankruptcy. It might be asked how responsible it is to focus uncritically
on encouraging NGOs to adopt a model that would in all probability increase
their vulnerability -- unless this is a ploy to destabilize what are perceived
to be a class of competitors that operate more effectively in terms of the triple
bottom line in areas where both businesses and integovernmental bodies have
been severely challenged. How feasible would be the operation of Médecins
sans Frontières if it was required to operate according to the models
of these non-NGO sectors? Given their lower costs, it might also be asked whether
NGOs are not already demonstrating a capacity to operate in a manner more consistent
with sustainable development than that of high-cost businesses that must operate
with a "gated community" mentality in order to survive.
Front Program asks the question: "But which NGOs will make up the leading
edge of this 'sector' in 2010?". This reflects a carry over of business
competitive thinking -- with the winners on the leading edge and the losers
"left-behind" (see elsewhere on Seeking
the "Cutting Edge" of Sustainable Community, 1997). This notion is totally
antithetical to the ecosystemic approach to the world of organizations that
SustainAbility advocates elsewhere. Is this a desperate search for those NGOs
that can equip themselves to be "on top of the food chain"? Surely
sustainable development is primarily about caring for the ecosystem as a whole
rather than for those "mega-fauna" who seek to make it to the top?
It is unfortunate that the notion of "business models" should be
so closely associated with "business", failing to recognize the numerous
pioneering initiatives of NGOs with respect to models of social entrepreneurship
that seek to add value -- creative innovations they were often obliged to develop
because of their straightened circumstances. It is indeed the case that business
is primarily concerned with adding value -- one which must necessarily take
monetary form in the expectation of its shareholders. Whilst social entrepreneruship
seeks to add value in other ways, it is unfortunate that "business"
should seek to appropriate the ways of doing so as constituting a "business
model". It is almost as though business chose to use alternative models
as a public relations disguise for the model that is necessarily basic to their
prime directive. The cheek of the report might be said to be the implication
that NGOs should learn these models from business -- tantamount to selling processed
and repackaged products back to the natives from which they were in large part
To put the theme of the report in perspective, it might be asked what an alternative
report would contain, if it bore the title: 21st Century Business: Associationizing
the Culture of Change. Given the "Type II" initiatives promoted
as a result of the Earth Summit, perhaps consideration could also be given to
the nature of partnerships in which instead of NGOs taking on the often alienating
working style of businesses, the latter might take on the working style of the
former -- as some creative corporations endeavour to do (partly in response
to pressures from employees). More radically, instead of NGOs being required
to adapt to the working style of intergovernmental bodies with which they are
in collaborative partnership, perhaps the latter could endeavour to seek ways
to adapt to the NGO style -- as explored to some degree in Scandinavian countries.
Beyond such perspectives is the recognition that over time, and depending on
the area of concern, different forms of international organization (whether
NGO, corporation or intergovernmental) may transform one into the other.
Commodification of change: The subtitle of the report,
In the Market for Change, suggests that change -- and the process of
development in general -- needs to be framed as a market opportunity. It is
unclear to what extent the report is effectively advocating that the business
model is to be understood as the vehicle of choice for change in the 21st century.
It is equally unclear whether there is a sense in which NGOs are to be framed
as potential customers for change products and services to be provided by business.
Business has a highly problematic track record in the change process, as can
be seen in the case of:
- transformation of luxuries into necessities by skilled marketing
- destabilization of the market for traditional local produce in favour of
goods that are more costly according to triple
bottom line criteria
- planned product obsolescence and its effects on waste and exporting of recycling
- efforts to lock clients into dependency relationships that ensure that they
are on a continuing, expensive "upgrade" path of questionable necessity
(as frequently as the market will tolerate); the promotion of GM "terminator"
seeds is an exemplification of this
- deliberate lengthy delays in the implementation of new technologies to ensure
that investment is "milked" to the extent possible (an example is
roll-up computer screen replacement of cathode-ray tubes); this may extend
to withholding development of cheaper technologies of value to the disadvantaged
How is this to be understood as related to sustainable development -- other
than for the business itself? The contrast has become dramatically evident in
the case of open source software -- an anathema to conventional business thinking
as documented by Eric S Raymond (The
Cathedral and the Bazaar). This brings into focus the importance
of property, intellectual or otherwise, to the conventional business model.
It is curious how the application of the business model has focused on the
acquisition of rights over land and species previously recognized as a common
good -- now to be understood as vital to the sustainable development of the
peoples concerned, but only if they "engage" in the appropriate deals
for goods of which they previously had free use. This leads to perverse situations
in which business can complain that indigenous peoples are failing to "engage"
with them in the development process whereby their own common goods are converted
into products they are then obliged to buy. This becomes increasingly obvious
in the case of river water through traditional lands (as recently exemplified
The process of commodification of change is especially interesting in the case
of the transformation of new insights into intellectual property to be appropriately
marketed. The copyright on most academic papers, as carriers of the advancement
of knowledge, has now been acquired by corporations which market them at a cost
that may constitute a major barrier to the transfer of know-how to developing
countries. This process has not yet evolved to the point that a new theory can
itself be copyrighted. But this is certainly the case with the packaging of
educational and know-how delivery processes relating to change -- many of which
are now franchised after copyrighting any supportive documentation and helpful
mindmaps (as with the copyrighted model that SustainAbility recommends that
all NGOs should use [more]).
From this perspective the business challenge is to discover how to copyright
and package human values in order to protect and market them appropriately for
the benefit of the community. The UN's Global Compact, co-backer of the report,
may indeed be seen as an effort to move in this direction -- namely as a device
for selling human values. Unfortunately this would appear to be in both senses
of the term "selling".
This raises the issue of how change agents should position themselves to achieve
their ends. How should the many NGOs concerned with "raising awareness"
organize themselves in relation to a property-oriented acquisitive environment?
The challenge is partly evident in the more extreme examples of "gurus"
-- whether with a spiritual or sustainable development focus. Relatively few
NGOs have gone the route of franchising their insights. Given the support of
the Christian Right for the neoconservative agenda, it is worth speculating
on how they would seek to commodify any reappearance of the Christ -- as an
agent of change !
The great irony of a report replete with such warnings is that it essentially
fails to understand why NGOs have multiplied and thrived despite their failures
in the light of a business model. It is forgotten that those in the organizations
responsible for the report, a consultancy and intergovernmental agencies (with
generous, tax free salaries and perks) benefit far more financially from their
participation in "development" programmes than the average participant
in any NGO (or the disadvantaged for whom the programmes are designed). The
notion of a psychic income and dividend is indeed difficult to comprehend in
the business world to which the report would have all NGOs adapt if they are
to have an impact.
Focus of the report
Distinguishing "old" NGOs from "new" NGOs: The report
distinguishes 20th century NGOs from 21st century NGOs according to six criteria
-- without making it clear to what degree all NGOs can, will or should shift
into the new mode, or whether it is only for the select few (to then be considered
as "leaders"). The criteria are:
- status: with the conclusion that "old" NGOs have been outsiders
and "new" NGOs will be insiders. This may be a necessary simplification
but it is clear that some NGOs have always been "insiders" such
as those with the more privileged form of consultative status in the UN system
(including the International Chamber of Commerce), the Bilderberg Group, or
the World Economic Forum -- whose "access" is facilitated by the
Global Compact for example. It is also clear that any NGO that fails to conform
to the neoconservative strictures articulated in the USaid-AEI initiatives,
will necessary be perceived as "outsiders", stigmatized as such,
and possibly criminalized. It is unclear how any NGO articulating views outside
mainstream mindsets can be seen, or see itself, as anything but an outsider.
- focus: with the conclusion that "old" NGOs identified problems,
emphasizing them as evidence of market failure, whereas the "new"
will focus on solutions delivered through markets. This suggests that NGOs
have in the past not been involved in the identification of solutions and
instrumental in their implementation -- which does not match the situation
with regard to humanitarian relief operations, for example. Such NGOs tend
to be so focused on immediate solutions to dramatic problems that they would
consider it a complete waste of time to speculate on the part played by market
mechanisms. It is true that the issues relating to globalization have focused
the attention of some NGOs on the failure of the market. But the effort to
suggest that "new" NGOs will employ the "market" to deliver
solutions returns to the framing by economists that every form of social activity
is part of the market -- surely a mindset inappropriate to the 21st century.
- structure: it is concluded that many "old" NGOs grew into
major institutions and that this will continue. The point is rather that relatively
few NGOs ever grew to be major institutions -- again indicative of the focus
of the report on NGO "mega-fauna" abstracting from the ecosystem
in which they function. It is then suggested that "new" NGOs will
invest heavily in networks. This is a strange conclusion given that "old"
NGOs have been investing in networks since the 1970s when the notion was first
explored as a model. Indeed, as indicated, the Yearbook
of International Organizations carries the subtitle Guide to Global
Civil Society Networks precisely for that reason and because the profiles
of the many bodies therein (intergovernmental and NGO) have for decades indicated
the working networks of some 150,000 relationships in which they are embedded.
It is these links that have been transformed into hyperlinks in the web
version of this publication.
- funding: it is concluded that much "old" NGO funding was
"fuelled by public anger or guilt". Again this distorts the nature
of the range of NGOs and is again indicative of the kinds of NGOs on which
the the report is focused. Whilst the statement may be to some degree relevant
in the case of some NGOs, it obscures the reality of many NGOs that operate
out of completely different mindsets -- including those that might be defined
as "care" rather than "guilt". It is regrettable that
"care" should be cynically disparaged in this way. Furthermore,
it is unlikely that an international fan club, a sports federation, a trade
association, or a social science NGO, etc could be usefully framed in this
way. The report then suggests that "new" NGOs will endeavour to
persuade their supporters that they are "good investments". Again
this may be true of some NGOs, but it is worth noting that defining support
as an "investment" may be an ideal way to ensure the alienation
of those who do not define their relationship to the NGO's mission in the
pecuniary terms which have been the focus of economic thinking of the 20th
- worldview: it is concluded that "old" NGOs communicated
in terms of "sound-bites" in relation to "single issue"
campaigns. Elsewhere it indicates that "Activist NGOs are the shock troops
of civil society". Since the few NGOs who adopted these practices tended
to be those who "understood the media", could acquire commercial
marketing expertise, or in fact engaged in campaigns of any kind, this would
suggest a sophisticated emulation of best business practice with which they
were forced to compete. As framed the statement is not correct in that many
NGOs devote considerable effort to articulating their concerns in extensive
statements -- as evident from the voluminous conference proceedings and their
efforts to communicate through accepted procedures under the rules of consultative
relationship. Presumably this assessment is further evidence of the very particular
subset of NGOs to which the report's conclusions apply. Sadly the reference
to "sound-bites" suggests that the only exposure of the authors
(or their potential readers) to NGOs may have been as a result of dramatic
media coverage of their demonstrations -- with single-issue banners and sound-bites
indeed. Where lies the responsibility for creating a situation in which communication
can only be achieved in this manner -- and where there is no effort to study
the articulated case behind the sound-bites? Is it assumed that NGOs prefer
to operate as "shock troops" -- using the shock of "naked
female bosoms" and the awe of massed demonstrators evoking brutal
police response? By contrast the report suggests that the agenda of "new"
NGOs -- the "most successful" will be "multidimensional"
in consonance with the multidimensional problematic of the 21st century. There
is much in this suggestion to be welcomed. However, once again, many "old"
NGOs have had multidimensional agendas for decades -- as reflected by the
networks of problems with which they are concerned as profiled in the problems
and strategies databases of the Encyclopedia
of World Problems and Human Potential. The data is in large part derived
from their documents. These databases each cover some 30,000-50,000
profiles. Both the problems and strategies profiles are themselves extensively
networked -- and linked to NGOs or intergovernmental organizations. The multidimensionality
of the resulting conceptual ecosystem can indeed be explored over the web
using new interactive visualization
tools. That said, it is indeed the case that in a world of information
overload, it is not yet clear how organizations can give operational form
to "multidimensionality" -- although many will claim to do so, as
was done through the second half of the 20th century under such token banners
as "multidisciplinarity", "interdisciplinarity" or "transdisciplinarity".
But it should be recognized that efforts by NGOs to seek funding on the basis
of "international", "interdisciplinary", "intercultural"
and "multilingual" programmes normally encounter predictable requirements
for single discipline, nationally focused, unilingual proposals -- in conformity
with simplistic programme agendas of funding agencies (subscribing to the
- accountability: (discussed below)
Paradigm shift: The second chapter of the report is concerned with the
market and political changes that are driving a paradigm shift that is understood
to be transforming the NGO "market". Paradigm shift is widely used
as a term and much sought after as the Holy Grail of sustainable development.
It might indeed be said that a range of interesting NGOs were precisely concerned
with creating such a paradigm shift, through raising awareness and consciousness,
as well as suggesting and demonstrating in practice -- "walking the talk"
-- what such a shift can mean. It is interesting that the report suggests that
it is the market and political changes which are transforming the environment
in which NGOs function. When NGOs perceive themselves as change agents of any
kind, they would tend to perceive the "market" and the "political"
environment as tardy in their engagement in any paradigm shift. This argument
is in line with the belief within the UN system that it sets the agenda and
leads the way in social change. It is curious that so many NGOs endeavour to
persuade such intergovernmental bodies, and their multinational associates within
the Global Compact, that more enlightened modes of behavior are appropriate.
Is this framing a competition to lead the paradigm shift?
Making an impact
Elkington's statement (above) threatens that unless NGOs
respond to the report's prescriptions "their impact will be significantly
reduced". Again this is a massive failure in recognizing that many NGOs
do not in fact seek to make an "impact" whether on business or markets.
Indeed NGOs have thrived and grown over many decades despite the disparagement
of business, government and the academic world -- however their "impact"
is to be understood. They are not necessarily "impact-focused" in
the manner envisaged by the threat. It might be useful to recognize the extent
to which the term" impact" is a metaphor -- like development "targets",
and other military metaphors -- which may be totally inappropriate to the needs
of the development process (see Enhancing
Sustainable Development Strategies through Avoidance of Military Metaphors).
"Impact" is suggestive of macho-thinking inappropriate to 21st century
sustainable development -- having demonstrated its weaknesses in the 20th century.
Many NGOs, as some social scientists will hopefully continue to recognize,
exist purely for their own sake. They do not necessarily seek to change the
world into their own image or exploit the world for their own private profit.
Many international academic NGOs concerned with the long-term pursuit of highly
specialized topics do not seek to "make an impact", for example. If
they are not career promoting environments, they may well be solely concerned
with advancement of knowledge in their domain -- or the pursuit of their chosen
form of recreation! Many NGOs exist only as a network of relationships in which
members have no interest in impacting the outside world.
Such social phenomena can indeed be forced into a framework of "making
an impact" along the lines of the report. Indeed, as an extreme example,
the partners in any marriage relationship may each be seen as endeavouring to
"make an impact" on the marriage -- and they may indeed seek to do
so competitively. Whether this is an appropriate way to safeguard the relationships
in a marriage, or in any pattern of relationship within a group (like an NGO
or a network of NGOs), is of course a matter of opinion. A worldwide prayer
group may also be seen as in the "business" of having an "impact"
on God. Given one emphasis in the report on environmental and ecological relationships,
it might be asked whether individual species -- other than man -- should necessarily
be seen as endeavouring to have an "impact" on the ecosystem ? The
advocated sense of impact may correspond to the predator/prey relationship between
species, where a variety of other relationships also need to be active in a
viable ecosystem (commensalism, symbiosis, etc) (see Through
Metaphor to a Sustainable Ecology of Development Policies, 1989).
An important reason put forward over the years for evaluating the "impact"
of NGOs [see Judge, 1972,
1978] has been
the concern of UN bodies as to whether NGOs were wholeheartedly supportive of
the intergovernmental development agenda -- perhaps associated with the concern
of funding agencies more generally to determine the "bangs they got for
their bucks". Perhaps this mindset is to be seen as echoed anew in the
coincidental thrust of the USaid/AEI/SustainAbility pronouncements. One is reminded
of the tale as to why Stalin was so lengthily applauded in any meeting -- it
was fatal to be the first to stop!
Unfortunately the need to evaluate impact has often been used in procedural
game-playing as a device by intergovernmental bodies to delay appropriate recognition
and support -- as with the focus on repeatedly monitoring endangered species
rather than actually addressing their condition. It might, for example, be asked
what form of legal recognition has ever been given to international NGOs, as
the focus of the report, to enable them to carry out their activity appropriately
-- if only with respect to fund transfers from and to members and engaging in
contractual relationships [Judge, 1980,
1996]. In the
absence of the minimal facilities accorded to business, how are NGOs supposed
to demonstrate impact according to business criteria?
Framing the challenge of change and sustainable development in terms of impact
is especially regrettable in the current context. It might be argued that it
has been the failure of policy-makers to allow the impoverished and marginalized
of the world to have any significant impact on their thinking (possibly through
the representations of relevant NGOs) that has resulted in the current pattern
of terrorism. Resistance to the impact of weak signals (possibly articulated
by NGOs) may encourage the sender to increase the strength of the signal, perhaps
Although outside any "business model", terrorism on the part of nongovernmental
networks -- exemplified by 9/11 and suicide bombers -- is indeed an effort to
achieve "impact", which from the most cynical economic perspective,
has been highly successful in terms of "bangs for bucks". How successful
it will prove to have been as an agent of change in the eyes of history remains
to be seen. It is however the case that many countries, achieved their independence
through processes that would today be defined as terrorism -- following the
failure of others to take account of "weak" signals. Many NGOs have
been created to facilitate the kinds of dialogue which mitigate against recourse
to such exaggerated impact. It is useful to ask questions about the responsibility
of the receiver of signals in any sustainable development process, whether in
a democracy or not. In the terms of the report, it might even be argued that
Al-Qaida is a 21st century NGO engendered by a failure of mainstream organization
to respond to weak impact signals!
Given the totally problematic track record of conventional development programmes,
the modesty of the funds officially accorded to NGOs (other than as "front
organizations"), it might be asked whether the contributions of NGOs in
many areas have not been as appreciable in the longer-term as that of mainstream
programmes. For example, a representative of one NGO working with the development
process of 100,000 villages on the west coast of India, when invited to a recent
FAO conference on poverty and hunger, complained that no one wanted to talk
to them -- either they were potential donors (and that NGO did not accept external
financial support), or they were potential recipients (and they did not want
to know how to avoid the need for external financial support).
The question is whether there are subtler ways of understanding "impact"
than the mechanistic one implied by the report? Does the report help to recognize
them -- or does it inhibit such understanding?
Financial reporting: The report identified the issue
of accountability (see below) as one which was a legitimate
challenge for NGOs. It is the question of accountability, notably in the USaid-AEI
statements, that is currently attracting much attention. This notably follows
publication of the One World Trust's Global
Accountability Project (GAP) which assesses the accountability of three
key actors on the global stage: Inter-governmental Organisations (IGOs), Trans-National
Corporations (TNCs) and International NGOs (INGOs) [more].
Accountability is the theme on which the Financial Times editorial chose
to focus by indicating that according to the report many NGOs "are less
accountable and transparent than the companies they presume to judge. Some NGOs'
attitudes to accountability are said to resemble those in board-rooms a decade
ago. And a few have financial and governance records so poor as to invite comparison
with Enron". The Financial Times lead article indicated with respect
to NGOs: "But most lack the accountability they demand from companies."
Again we have a situation in which the study's conclusions, based on an extremely
limited sample of NGOs from a particular sector with a particular operating
style, are generalized so as to apply to the whole universe of NGOs. There is
a tendency to emulate a Machiavellian style of accusing accusers of precisely
those sins of which one stands accused. The business world has indeed been confronted
by a chain of highly embarrassing major corporate scandals in the USA -- including
the case of Enron with which members of the Bush administration had close links.
International NGOs have in no way been associated with scandals of such a dimension.
It is therefore curious that both the Financial Times and the SustainAbility
report should refer to the possibility of an "NGO Enron", supposedly
lurking in the wings..
The Financial Times editorial concludes: "Some of the global NGOs
that are the study's main focus have recognised the danger and are starting
to put their house in order. Others have yet to grasp that a passionate dedication
to issues, slick organisation and a self-righteous belief in their own moral
superiority may no longer be enough. If they are to continue to thrive, they
need to start practising the lessons that they preach to others."
Perhaps the best example of a recent international NGO scandal is the bribery
associated with International Olympic Committee decision-making. But in fact
the continuing scandals associated with the accounting of one of SustainAbility's
own intergovernmental clients, the Commission of the European Communities is
more indicative of the challenge for "nonprofit" organizations and
for bodies such as the UN's Global Compact. The volume of revenue and expenditure
subject to audit by the European Court of Auditors represents approximately
4-5% of the total budgets of all the Member States. About 5% of the entire EU
budget, five billion dollars, is lost to straightforward fraud -- from non-existent
tobacco farms to imaginary decontamination plans to help deal with Chernobyl
-- while another 5% or so is misappropriated, and not spent on the programs
for which it was designated. One-tenth of the Union's budget, which the European
Court of Auditors accepts is misspent, amounts to almost 10 billion dollars
The report concludes that most NGOs followed "charity sector rules".
Given the precarious legal status of international NGOs and their need to adapt
to the particular rules of their secretariat host country, this statement is
misleading. In fact there is only a handful of countries that enable international
NGOs to set up in their country as "international NGOs" -- Belgium
has been one of them. The notion of a "charity" is particular to the
UK legal system. Other legal systems use other terms and definitions which may
be relatively strict or relatively relaxed. Indeed "NGOs" may use
a variety of forms to carry out their business. The accounting requirements
imposed on NGOs may then be largely determined by such legislation -- which
may indeed be strict, especially if legislation has been reinforced as the result
of scandals of creative accounting. Furthermore the nature of such legislation
may make it difficult for NGOs to open bank accounts or engage in normal financial
transactions -- making it difficult for them to be as accountable as they might
wish. But it is the case that NGOs are required to submit their accounts to
national authorities in addition to their submission to any statutory assembly
-- which may require that they be audited.
Inequity and disparity in benefits: There are increasing
income disparity gaps as illustrated by :
- the exorbitant salaries and golden handshakes of the top management and
CEOs of corporations, increasingly inequitable both in relation to the average
salaries of their employees, and with respect to the outside world -- and
increasingly challenged by shareholders. A feature article by Michael Skapinker
(CEO: Greedy liar with personality disorder, Financial Times,
2 July 2003), reporting on an FT survey of UK public perceptions and on a
panel of the US Academy of Management,
indicated that the conclusion could be: "Top executives are liars. They
are overpaid. They cannot be trusted to pay their workers' pensions. And a
fair proportion are sociopaths". With respect to salary inequity he notes:
"In 1970, the average US chief executive's total remuneration was just
over 25 times that of the average worker. By 2000, it was 600 times as much.
Today, even after falling share prices have slashed the value of their options,
chief executives still earn 360 times as much as the average worker. Worse,
chief executives do not seem to care". Ironically, although it is recognized
that top executive pay is out of control, one of the reasons reported on why
it got there was "greater disclosure" to shareholders. "Yet
disclosure has had an unforeseen consequence. The moment remuneration becomes
public, chief executives' pay begins to rise...Because no chief executive
can be seen to earn less than the average. If he or she does, it implies that
the company has a below-average leader." Skapinker quotes one panelist:
"Isn't there some element of shame or social sanction that should persuade
them to rein themselves in? Well, apparently not".
- the exorbitant tax-free salaries (and the incredible range of unpublicized
life-long benefits and perks) of regular employees of intergovernmental organizations
(funded by tax-payers) exceed many-fold those with equivalent qualifications
in their host countries. For example, in a 1995 article, Money magazine
revealed that UN employees commonly earn more than twice the pay of comparable
positions in New York-based private-sector jobs. In addition to their tax
free salaries, the roughly 10,000 U.N. bureaucrats in New York receive an
array of special perks including rent allowances and education grants for
their children. Such examples contribute directly to damaging hostile perceptions
of the United Nations [more]
There is therefore a strong case for extending the notion of accountability
to challenge such misuse of private and public funds -- according to the triple
bottom line (TBL) criteria relating to sustainable development -- with which
the intergovernmental bodies may be primarily concerned, and with which multinational
corporations may be concerned in the spirit of the Global Compact. TBL widens
the scope of traditional financial reporting to include the social, environmental
and economic performance of an organisation. Quadruple bottom line (QBL) has
been proposed to add a governance or cultural dimension. Proposals for a quintuple
bottom line have focused on the importance of inter-sectoral interaction (for
example, agriculture, environment, economic, social, political). Beyond such
proposals, there is perhaps a case to reflect appropriately the principles of
equity that guard against the maintenance of a nomenklatura claiming
to act towards sustainable development. Modern day "missionaries"
for sustainable development are unconstrained by the vows of poverty that, for
good reason, governed the practice of religious missionaries -- as the change
agents of the past.
At what point does the disparity between (a) the benefits accrued by the change
agent and (b) those accruing to the changed, become incompatible with sustainable
development? How is this to be reflected in assessments of accountability?
According to such a perspective, very few NGOs could be said to constitute
the abuse of scarce public resources that is characteristic of all intergovernmental
bodies -- including the co-producers of the report. What indeed is the principle
that constrains further increasing the exorbitant salaries and perks for individuals
engaged in programmes commited to sustainable development?
Nepotism and cronyism: Such phenomena are widely
recognized as a challenge in organizations of all kinds. The "boss's son"
phenomenon is well-recognized in corporations, and may indeed be part of an
appropriate grooming process in a family-owned corporation. It is however also
the case that one of the prime functions of alumni networks, and "networks
of the boys", is to facilitate career advancement. This easily gives rise
to the perception of "mafias". Such challenges to appropriate accountability
are aggravated by the phenomenon of cross-linking directorships (John Scott
(ed), The Sociology of Elites. Volume III: Interlocking Directorships
and Corporate Networks, 1990).
Similar phenomena are widely acknowledged in intergovernmental organizations
and contributed to the dramatic resignation of the European Commission (Committee
of Independent Experts First Report on Allegations Regarding Fraud, Mismanagement
and Nepotism in the European Commission, 1999). Similarly reports exist
on nepotism and cronyism in United Nations bodies (cf Steven Edwards. Nepotism
and excess found rampant at UNESCO, 2000) whose reports comment frequently
on the constraints on sustainable development imposed by such phenomena in countries
around the world. Should accountability investigations extend to determining
appropriate proximity of kinship and "friend of a friend" relationships
in international bodies?
Clearly such phenomena also exist in international NGOs. They may indeed avoid
costly personnel engagement procedures especially with regard to compatibility
in a team (as recently noted in a Financial Times article with respect
to corporations). Given the advantages of such relationships, at what point
does this become dysfunctional?
Representativity: It is useful to recognize that
within the framework of the UN system, the concern with accountability has in
effect substituted for, or refined, a concern with "representativity".
This was the main challenge made to NGOs throughout the Cold War period. Following
the relaxation of criteria for association of "NGOs" with the UN system
at the 1992 Earth Summit, NGOs were increasingly valued more for their effectiveness,
whether as sources of expertise, field-level capacity, documentation, media
skills, or funding capacity. In the light of this earlier concern, the question
is the degree to which the accountability issue is being used as a weapon to
threaten a sector in which some bodies have indeed proved to be powerful players
-- according to the criteria of business.
Again, in the light of Machiavellian techniques, it is a useful weapon for
those in the corporate world required to explain the dramatic challenges of
accountability (Enron, etc) or in the intergovernmental world (EU, etc) with
similar unresolved problems -- despite supposedly stringent accounting and auditing
in both cases.
The other aspect of accountability, relating to representativity, is the relationship
of the NGO with its membership or constituency. The government and business
sectors are irritated by the unchecked capacity of some NGOs to speak freely
and effectively on a wide range of matters. Hence George Bush's interest in
ensuring that NGOs receiving funds from the US government should reflect government
policy or suffer sanction following the pattern of "NGOs" in the Soviet
Bloc. It might be argued however that it is less the number or quality of members
that empowers many NGOs but rather the quality of insight, questions, and field-level
evidence that guides or challenges the initiatives of intergovernmental organizations
or multinational corporations.
Dysfunctional accountability constraints: The irony
in the case of the majority of NGOs is that they operate on such low budgets
that stricter accounting and accountability controls are of questionable value.
As it is, the committees within the UN system that periodically review the accounting
and other reports, from hundreds of NGOs in consultative relations with the
UN, are unable to do more than give them a cursory examination -- unless special
It is worth noting the impact of inappropriate accountability procedures on
a sector that can have unfortunate consequences:
- a study by Hernando de Soto (The Other Path, 1989) regarding establishment
of a small sewing business in Peru determined that some 100 administrative
forms had to be completed by people who might well be illiterate.
- in developing countries over-regulation (for example regarding building
safety or hygiene) inhibits the population in responding to immediate needs
at costs they can afford. Similarly NGOs may be well aware of what it would
be appropriate to do but without the resources may be faced with the choice
of whether to abandon any initiative or to await the arrival of resources
already proven to be scarce
- in the UK, within the health service, the dysfunctionalities of new performance
"targets" to ensure the accountability of individual health trusts
has become only too apparent, especially in terms of the effects on patient
- excessive regulation directly encourages the emergence of an informal (black)
economy, as is so evident in Italy. It is worth speculating on the nature
of a NGO analogue -- of which criminal and terrorist groups are only the most
Although the executive summary recognizes the technical sophistication of some
NGOs in the internet environment, it fails to recognize that this environment
has effectively completely reframed the possibility of international non-governmental
action. For many purposes it is now a waste of time and resources to seek to
pass through the unfacilitative national regulations for the establishment of
a legal entity. Given that NGO activity is primarily based on communication
and information, establishment of a website and a mailing list may suffice --
and be much less costly and cumbersome. "Coalitions" of NGOs may now
effectively be defined by mailing lists, web portals or even by "web rings".
The challenge of "accountability" has already been addressed with
the regard to such operations, notably through the requirement imposed on ISPs
to store transactions for several years and the freedom given to security agencies
to troll through them. Plans by neoconservatives to ensure "control of
the internet" are already foreseen or partially implemented [more]
There are some particularly pernicious implications of calls to accountability
in the case of international NGOs, that derive from inappropriate imposition
of models from the less resource constrained multinationals or intergovernmental
bodies. They include:
- Equality of member representation: With members distributed around
the world, any requirements for the physical presence of members at meetings
from distant locations may have costs that are impossible for an NGO to carry.
Suggestions that funds should be set up to ensure such representation fail
to address the roots of the problem
- Recording of meetings: Any requirement to record (and transcribe)
and interpret meetings for distribution to all members has similarly ill-thought
out cost implications. Even intergovernmental bodies make judgements on the
appropriateness of recording, transcription and translation that may be considered
- Recruitment procedure: Requirements that staff positions should be
advertised in all member countries and be open to people from all member countries
if appropriately qualified are completely naive in the case of NGOs -- given
the costs and challenges of conducting interviews under such circumstances,
providing for relocation costs, and overcoming work permits constraints (notably
at a time when employment in NGOs has been abused as a channel for economic
immigration by asylum seekers). The resulting recruitment may indeed be regretfully
drawn from an exclusive group of nations or members. Hence the merits of shifting
to internet-based organizations. Suitability to some tasks may not lend itself
to immediate determination in an interview, creating the further risk of costs
for dismissal and relocation during the trial period.
- Personnel policy: Such policies may be far from ideal in practice
because of shortage of funds and the nature of the relationship with staff
employed at relatively low salaries, especially when the tasks involve a significant
period of learning. NGOs may have to depend on such inappropriateness in order
to make best use of their resources in relation to their mission.
- Periodic independent evaluations: Again, whilst desirable, the challenge
is what proportion of resources should be allocated to this function. And,
given the vagaries in the quality of evaluations by consultants in relation
to the NGOs mission, the question is how many "second opinions"
should be sought? A further tragedy of such evaluations is that the resources
may be totally lacking to implement the recommendations.
- Equitable and effective stakeholder participation: Again this raises
issues of costs of ensuring such participation, especially when it is desirable
to ensure equitability between North and South, linguistic groups, and areas
of expertise relevant to the mission. Furthermore, at a time when even corporations
are challenged to ensure appropriate representation on their boards, the task
for NGOs is even more problematic.
- International standards: Whilst it is desirable to assess all major
decisions in the light of international standards on human rights, sustainable
development and international law, the priority given to such requirements
must take into consideration practical constraints.
All such considerations need to be evaluated against the capacity of an NGO
to perform its mission with best use of its resources. There is little point
in having an NGO which devotes 80% of its resources to meeting such desiderata,
then leaving only 20% for its mission -- as is the case of an unfortunate number
of intergovernmental bodies. In the case of an organization concerned with sustainable
development should this be considered an appropriate use of resources?
On the other hand, it might be asked at what point response to accountability
constraints, according to the ideals reflected in international sets of principles,
becomes incompatible with the ability to act. In the game-playing environment
of the market for change, as envisaged by the report, to what extent is accountability
incompatible with sustainability for any organization aiming to make an "impact"?
And, by analogy, in interpersonal relationships and courtship?
Wider challenges: Corporate scandals have focused
questions on the accountability of multinational corporations and the challenges
faced by boards of directors -- even if they are motivated to act with total
rectitude. The United Nations has long been confronted with challenges concerning
the need for its own institutional reform, especially in the light of the control
of the Security Council and the undemocratic representation of "we the
peoples" in its General Assembly. It might be argued that both sectors
face much larger challenges than the NGO sector.
Because of the effective focus of the report on a particular cluster of NGOs,
it fails to recognize the special challenge with respect to other types of "international
non-for-profit, non-governmental organizations" which technically should
be understood as NGOs and may give rise to investigations that distort the image
of other varieties of NGO as does this report. Examples include:
- business alliances, including price-fixing rings, shipping conferences and
cartels (which may be both legal and not-for-profit per se)
- "coordination centres" as not-for-profit administrative centres
for multinational corporations (notably in the case of Belgium)
- sects with which many conventional NGOs may be easily confused in investigative
studies with a view to restrictive legislation (as in the case of Belgium)
- secret societies, such as the Freemasons or Opus Dei, with which executives
of intergovernmental, business and NGO bodies may be intimately involved --
which may be successfully excluded from any investigation either as "sects"
or as "NGOs"
- foundations, notably in the case of the special provisions in the Netherlands,
which may be included or separated from consideration of "NGOs"
- international trade associations and chambers of commerce which are typically
aligned with business priorities
- secretive elite clubs such as the Club of Rome, Bilderberg Group, Trilateral
Commission, etc -- which, as in the case of the Club of Rome, may perceive
themselves to be "non-NGOs"
A number of these sub-groups attract much attention from conspiracy theorists
on the web.
The Financial Times (page 1) review of the report was entitled: "NGOs
told to be more open to retain trust". The piece opens with the statement:
"International non-governmental organisations (NGOs) must become more accountable
if they are to retain their influence and position of trust, says a United Nations
report out today."
One difficulty with this statement is that to a very large extent NGOs have
operated for many decades without being allowed to "influence" policy-making
of any kind (as noted above in the extreme case of terrorism). Within the UN
system, the procedures that purport to provide for such influence may be questioned
on grounds of: costs of lobbying, access, secretariat overload, rigid agendas,
etc. It has long been recognized that government delegates leave meeting rooms
when NGO representatives are scheduled to speak. These procedures could then
indeed be seen as cynical exercises in tokenism to placate those who can buy
into the level of recognition and influence they appear to achieve. In communication
terms, and from a purely mathematical point of view, at what point does a consultative
meeting between a UN official and a group of NGOs cease to allow for meaningful
engagement -- when there are 10 in the group, 100, 1,000, 10,000? The number
of NGOs in consultative status exceeds 1,000. Who is to be trusted under such
It is certainly the case that NGOs have played valued roles in assisting some
government delegates to build cases in international gatherings. In part this
is because such delegates may be ill-equipped to assemble such briefs themselves.
But in a period of increasing levels of spin by government policy-makers and
corporate public relations officers, it has become clear from surveys that the
confidence of people in either the government or the corporate sector is being
eroded fast. SustainAbility itself produces a report with the title Trust
Us: The Global Reporters 2002 Survey of Corporate Sustainability Reporting
(2002) that is indicative of the problem. Whether or not NGOs retain any trust
from such sectors, there is little likelihood that the trust of individuals
in NGOs with which they choose to be associated will be significantly eroded.
After all, they can always create another in which they have greater confidence!
This is the great strength of NGO governance -- especially in an internet environment.
But this is a much more challenging task for an electorate faced with dubious
governments or intergovernmental institutions that supposedly represent their
Engagement vs Criticism and confrontation
The complaint of the business world (exemplified by multinational corporations
associated with the Global Compact, the World Economic Forum, and the International
Chamber of Commerce, or various business alliances) is that NGOs should "engage"
with business rather than criticize it in a spirit of confrontation. This perspective
is central to the report and to SustainAbility's own philosophy.
The challenge of this argument for NGOs is perhaps best illustrated by a metaphor.
If pedestrians are endeavouring to cross a busy highway with high speed traffic,
there is a real difficulty for a pedestrian to "engage" effectively
with the drivers of vehicles -- especially if one is young, old or suffering
from some disadvantage. One can signal a desire to cross, but this may well
be ignored -- as with pathetic attempts to shout at drivers. One can start to
cross, and this may be fatal -- or one may be shouted at! One can complain and
criticize to appropriate authorities if one has the skills and energy to do
so, and this too may well be ignored or subject to tokenistic procedures with
that effect. The very volume of traffic, and the resources invested in its movement
at speeds much greater than the pedestrian, creates a situation in which the
suggestion to "engage" is a cynical displacement of the pedestrian's
There is a fundamental problem of disparity which is similar to that experienced
when confronted with a column of tanks or encroachment of armed settlers on
the lands of the unarmed. It is understandable that some activist pedestrians
-- the "shock troops of civil society" -- then demonstrate in various
ways -- whether peacefully with picket lines, or by obstructing the traffic,
or by throwing fruit (or possibly rocks, or petrol bombs in the most extreme
situations). Some may engage in hunger strikes -- or even self-immolation [more].
This metaphor illustrates that there is a real challenge in enabling non-confrontational
engagement between differently resourced parties having very different priorities.
Within the metaphor, sustainable development would suggest a reconciliation
by constructing a footbridge or underpass (appropriate for the physically challenged),
use of traffic lights, or diversion of high volume traffic. None of these addresses
the immediate challenge for the pedestrian -- needing food located on the other
side of the roadway, for example.
The report's recommended solution is that NGOs use better business models --
namely that the "pedestrian" get an "automobile" and get
on the "highway" of change. This solution is typical of the situation
created in many American neighbourhoods where using an automobile is often the
quickest and safest way to cross the highway. It does not address the condition
of those who do not have the resources to get or operate an automobile -- nor
does it reflect concern about progressive depletion of resources to operate
vehicles, nor about their cumulative effect on the the quality of life -- especially
if one just wants to walk the dog in the field on the other side of the highway!
The irony of the above metaphor is that, to some degree, it is the volume of
popular protest against globalization, articulated through some NGOs, that has
come to represent the "traffic", and business -- like the "pedestrians"
-- is now having difficulty crossing the "highway". And criticizing
the "drivers" does not help!
It takes two to get "engaged" -- but with the glass-ceiling
mentality of concern to feminists in many corporations, is it possible there
may also be a "glass wall" mentality inhibiting meaningful engagement
appropriate to partnership in the 21st century?
Betty Kovach and Simon Burall. Global Accountability Project. Charter 99 /
One World Trust, 2001. [text]
Centre for the Study of Global Governance (LSE). Global Civil Society Yearbook.
Oxford University Press, 2002 [text]
- Tank-thoughts from Think-tanks: constraining metaphors on developing
global governance. 2003 [text]
- Global Civil Society: strategic comments on the path ahead.
- "Globalization": the UN's "Safe Haven" for the World's Marginalized
-- the Global Compact with Multinational Corporations as the UN's "Final Solution".
- Undermining Open Civil Society: Reinforcing unsustainable restrictive
initiatives. 1999 [text]
- Sustainable Occupation beyond the Economic Rationale: Reframing
employment, non-profit-making and voluntary. 1998 [text]
- Sustaining a pattern of alternative community initiatives:
based on their differences from the conventional economic rationale. 1998 [text]
- Interacting Fruitfully with Un-Civil Society: the dilemma for
non-civil society organizations. 1996 [text]
- Legal status of international NGOs: overview and options. 1996
- Evaluation of the Cooperation between UNESCO and Non-Governmental
OrganizationsBrussels, Union of Internation Associations, 1995 (draft)
- NGOs and Civil Society: Realities and Distortions. 1994 [text]
- Policy Options for Civil Society through Complementary Contrasts.
- Through Metaphor to a Sustainable Ecology of Development Policies.
- Enhancing Policy Forums through Ecological Metaphors. 1988
- Types of International Organization. 1984 [text]
- Classification Categories [text]
- Problems Hindering Action of International Nongovernmental Organizations.
- Assessing the Impact of International Associations. 1978 [text]
- Principles of Transnational Action: an attempt at a set of guidelines.
- Comparative Evaluation of Different Types of International Organization.
Naomi Klein. Now Bush wants to buy the complicity of aid workers: Relief groups
have been told they must be an "arm of the US government". Guardian,
23 June 2003 [text]
Naomi Klein. No Logo. HarperCollins, 2000 [extract]
David C. Korten, Nicanor Perlas and Vandana Shiva. Global Civil Society: the path
ahead. 2002 [text |
Caroline Neligan. Accountability Matters for INGOs. 2003 [text]
One World Trust. Power Without Accountability? 2003. [text]
Project for the New American Century (PNAC). Rebuilding America's Defenses:
Strategies, Forces And Resources For A New Century. Washington DC, PNAC, September
Chris Rumford. Confronting 'Uncivil Society' and the 'Dark Side of Globalization':
are sociaological concepts up to the task? Sociological Research Online, vol
6, no. 3 [text]
Union of International Associations. Yearbook of International Organizations:
Guide to Goblal Civil Society Networks (5 vols, annual), 2003-4, 40th edition
[hardcopy | CD |
Union of International Associations. Encyclopedia of World Problems and Human
Potential. K G Saur Verlag, 4th edition [hardcopy | online]
Martin Woollacott. Collaboration and coercion is building this new Rome. Guardian, 20 June
2003 [archival version]