Private Foundations, Accountability and Development

This week the UK Parliament’s House of Commons International Development Committee published its report on private foundations and international development. Overall, it welcomed the role private foundations, large and small, could play in international development, noting some of the more widely known successes from those such as the Gates and Clinton foundations, the Wellcome Trust, the Mo Ibrahim Foundation, amongst others.

Highlighting the financial clout of private foundations (the OECD-DAC estimated philanthropic giving at $22.2 billion in 2009, although the Hudson Institute suggested a more accurate figure was $52.5 billion when including corporate philanthropy), the report suggests the main area of competitive advantage lies especially in the abilities of such foundations to take risks and innovate. Whilst noting this was not absolute nor universal, relying on private funding as they do, foundations are potentially more flexible, able to test new approaches without fear (or with less fear than government agencies) of failure, and develop innovative policies to alleviate poverty and marginalisation.

The report also highlights the growing influence of foundations on development policy, using the example of the influence Bill Gates has had. The financial clout of the larger foundations gives them a place at the table, potentially skewing donor’s own priorities and shifting the terms of the debate. As the report notes, whilst this can lead to positive outcomes, it also contains dangers.

Overall, the report is relatively interesting, and is the first official parliamentary response to the changing architecture of aid, philanthropy and international development. Foundations are not new, and if many of the concerns raised in this report might seem familiar to politicians in the US and Europe of the late nineteenth and early twentieth century, the last decade or so has seen a return to prominence of the ‘great philanthropist’ choosing what to fund and how to do it. How DFID engage with these organisations, where foundations might best engage with poverty, and what challenges exist both for donors seeking to work with them, and with sector more widely, are critical questions.

One issue of potential concern to emerge is that of ‘accountability’. The report notes a potential deficit in this area, suggesting that whilst foundations might be accountable to their board or benefactor(s), they do not have the same level of accountability of institutions responsible to a ‘taxpaying public’. This is, of course, a ridiculously high benchmark for accountability (and raises interesting questions about the extent to which a department, as opposed to a government, is meaningfully accountable to electorates). But more importantly, it gives an indication of how ‘accountability’ is being defined, i.e. accountability to whom?

The report suggests that DFID should assist foundations in:

setting up decision-making structures that involve local grantees and funding partners; increasing co-ordination with partner country governments; and improving monitoring and evaluation [p.22].

Accountability means, in other words, being accountable to donors, and to governments. But what about the communities in which interventions are actually undertaken? How can accountability be improved there?

To be fair, some of the expert witnesses called for greater engagement with local communities. But this highlights another potential weakness in the report. What is there in here that speaks to private foundations alone, and not to the broader non-state non-profit sector? Many of the challenges and issues (and especially that over accountability and transparency) might equally be applied to NGOs as to private foundations. If the key question is accountability to donors, then NGOs who receive donor funding might, indeed, be more accountable. But is this where we should really be focusing on this issue?

If foundations can be accused (quite correctly) of lacking transparency in decision-making processes, in lacking accountability to communities and beneficiaries, to local and national governments in areas in which they operate, such charges have also been laid at the door of NGOs and other non-state non-profit actors. One proposed solution – to encourage greater contact and engagement with ‘NGOs and civil society organisations’ – entirely misses the point that these actors are themselves seriously compromised.

Accountability matters. Donors will always be primarily concerned about their own influence on funding and policy matters. But development interventions carry the capacity to do great harm to individuals and communities, as well as great good. When the report talks of foundations being able to take risks, they don’t ask a perhaps more important question: can communities in which risky ventures are undertaken accept that risk? What happens to them when things go wrong? It isn’t just about a collapsed project, the failure to build a school building or deliver goats. It can destroy livelihoods, increase risk of economic and social marginalisation, even increase risks to wellbeing and life itself. When we think about accountability, too often it is those on the receiving end who are forgotten. This is not a challenge for private foundations alone, but for any organisation – private, public, profit or non-profit – who operate in conditions of poverty, marginalisation and vulnerability.

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About Mike Jennings

I am a Senior Lecturer in Development Studies at the School of Oriental and African Studies (SOAS), London. I am also the Chair of the Centre of African Studies, University of London, the largest centre of expertise on Africa outside the continent. My work is on the history and politics of international development in sub-Saharan Africa. Research areas include: - The history of development in Africa, from the late nineteenth century to the current day - Politics of East Africa (Kenya, Tanzania and Uganda) - the role of non-state providers (NGOs, FBOs and self-help groups) in welfare service provision - Social aspects of health, including HIV and AIDS, and malaria
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