Eliminating barriers against grassroots NGOs
First up, I must confess my ‘interest’ in this topic. I am co-secretary of the WA Branch of the Support Association for the Women of Afghanistan, SAWA. Founded in Adelaide, there are now SAWA groups in every State. We raise money for several projects, including a Vocational Training Centre in Kabul which educates women in literacy, computing skills, handicraft skills and English. The only money we raise that does not go to our causes is the auditor’s fees and postage for the newsletter. Our partner organisation in Afghanistan is OPAWC, the Organization for Promoting Afghan Women’s Capabilities. Because of their vision for women’s empowerment, OPAWC staff receive regular death threats from the Taliban and other fundamentalist forces. They describe their program of ’empowerment’ as not ‘short-lived or humanitarian’ but focused on improving the capacities of women, who only require ‘a door to walk through, and we are the ones who could help them and open the door and let them walk through it’.
In her book, Raising my Voice, Malalai Joya talks of warlords, drug lords and NGO lords. In the recent ABC 4 Corners program on Afghanistan, one commentator claimed that less than 5 per cent of the money promised after September 11 has actually gone to improve the lives of ordinary Afghans.
It is estimated that 40 per cent of the aid money is actually returned to rich donor countries as corporate profits, consultant salaries and other costs. Joya accuses members of the Afghan government of corruption. This is combined with the inefficiency of unwieldy bureaucracies. For example, up to 60 per cent of the money for the Kabul-Kandahar road was absorbed by the three intermediate layers of administration; the final inferior road was barely an improvement.
There are countless statistics like this. It breaks my heart that small NGOs like SAWA work so hard to raise a few hundred dollars here and there, that Australians on low and average incomes give the small amounts that they can spare, while the Australian government squanders millions of dollars in large-scale projects with accountability almost completely on paper, rather than long-term on-the-ground evaluation.
Furthermore, the forms of accountability chosen by AusAID disadvantages small NGOs. AusAID runs three programs which provide funds (a meagre 4 per cent of AusAID funding) for selected overseas aid-oriented NGOs:
- AusAID NGO Cooperation Program (ANCP) (for overseas aid oriented NGOs in Australia)
- Funding to Developing Country NGOs (for NGOs in foreign countries)
- Cooperation Agreements (CA) (partnership between AusAID and one or more Australian NGOs to deliver specific outcomes … for the broader Country/Sector strategy).
Under the first program, the accredited NGOs receive either $150,000 or $300,000 a year. A ‘small’ project receives up to $100,000 per annum. This signals an orientation towards medium to large NGOs. This is further suggested by the requirements for accreditation, including OAGDS (tax deductibility) status for at least one year and ‘a rigorous assessment of their organisational structure, systems and philosophies’. A great deal of documentation is required: copies of signed partnership agreements, evidence of capacity in project design, proof of appraisal, implementation, monitoring and evaluation capacity (describing its approach to each of these phases), description of monitoring and evaluation strategies. The organisational profile is a document of 120-150 pages, requiring around 6 months full-time work to complete (AusAID offers 5 days technical assistance).
Even achieving tax deductible status is more difficult for overseas-oriented NGOs than Australian charities. A charity set up to support a local football club merely has to register as an incorporated association in the state where it operates to achieve tax deductibility. By contrast, a charity established for overseas aid has to apply through the OAGDS scheme. This process takes a minimum of two years and has more requirements, including registering for fundraising activities in all Australian states and having as its major activity development and relief rather than welfare. ‘Welfare’ appears to mean assistance that does not have ‘a clear exit strategy’. Thus SAWA’s work to raise funds to pay teachers at the Vocational Training Centre is welfare rather than development because we do not envisage a time when the Centre will be self-funding. Tax deductibility also requires agreements signed by the Australian and overseas partners, inspection visits (generally twice a year), documented policies on handling grievances, counter terrorism and child sex tourism, and professional book-keeping.
While the NGO must achieve all of the above, companies can deduct donations to NGOs from their tax liability, even if these NGOs have not achieved tax deductibility status and/or the donation is for a welfare cause. Companies are allowed to do this as ‘good corporate citizen’ contributions. But why are private citizens not just as entitled to be rewarded as ‘good citizens’ with their donations?
So we have a bizarre situation where the programs that are evaluated according to government criteria are failing to deliver to the people of Afghanistan, while small NGO-to-NGO partnerships experience unintended discrimination. How can this be improved?
The following strategies would remove the barriers which more or less preclude small international aid NGOs from achieving tax deductibility status or accessing AusAID’s funding for NGOs:
- Introduce uniform requirements to achieve tax-deductibility status for domestic and overseas-oriented NGOs, i.e. incorporation as a charity. If businesses can be trusted to donate money appropriately, why not also trust ordinary citizens?
- AusAID introduces a new category of small internationally-oriented NGOs which can apply for an AusAID grant, up to a maximum of something like $25,000 to $50,000 per annum. The maximum might also be established pro rata, based on the amount raised by the organisation (e.g. a 1:3 ratio). The following rules should be considered:
1) An NGO must be in existence for two years before it can apply and raise a minimum amount of donations (e.g. $10,000 per annum)
2) Approval for annual assistance is based on a two page application supported with already existing documentation: such as annual reports, auditors’ reports, the Constitution, newsletters, reports from the field by the partner NGO, testimonials from participants in the projects overseas, reports of visits to the institutions/activities funded, including visual documentation such as photographs and videos.
Of course SAWA and other organisations like it cannot build the Kabul-Kandahar road and other infrastructure – more’s the pity, given the waste. But the more important infrastructural development, human capital, can be delivered by small partners working together who trust each other through ongoing personal relations. The evidence suggests that these small partnerships in the voluntary sector escape the inefficiencies and corruption of large bureaucracies and profit-oriented organisations.