With the tsunami causing major destruction and loss of life in Samoa, and nearby American Samoa and Tonga, and the strong earthquakes causing major damage and loss of life in Indonesia, charities once again mobilize for rescue, relief, and related operations, even as governments mobilize to address the immediate needs in the affected areas. Once again, issues of transparency and accountability come to the forefront.
As I noted in my previous post concerning charitable activity with respect to disaster relief, major international non-government organizations are becoming increasingly involved in addressing both natural disasters and man-made disasters, such as war, civil strife, and the attacks on the World Trade Center in New York and the Pentagon in the Washington, D.C. area. Fundraising is increasingly taking place on a world-wide and cross-border basis, as reflected on a much smaller scale in the Hein Persche decision.
The use of the Internet has dramatically increased the possibility of fundraising across international borders, often without many of the controls and accountability present in nationally based fundraising activities. What I mean by fundraising is simply the practice of soliciting donations for a public benefit or charitable purpose. This is different from the common use of the word, “fundraising,” in Europe to identify non-government organizations dedicated to charitable or public benefit activity.
There have been several questions at the forefront of the discussions concerning the possible accreditation or certification of the large international non-government organizations operating internationally. The responses to these questions have divided the leadership of ICFO for many years.
It is important to understand that ICFO, which was founded in 1958, was established primarily to foster a sound approach in fundraising and administration of charitable programs. Historically, ICFO did not have a direct role in monitoring and accrediting or certifying public benefit organizations. Rather, as an association of national monitoring agencies, its activities have been centered on the sharing of information between national monitoring agencies, formulating standards for non-government charitable organizations working internationally, helping establish new national monitoring organizations, and providing information about the various national monitoring systems and activities. Nevertheless, ICFO has also been involved in monitoring or assessing the international headquarters of non-government organizations working internationally, but has done so on a very limited and voluntary scale.
The principal issue in any international assessment program has been the role of ICFO verses the roles on the national monitoring agencies. My personal bias is in favor of strengthening the national monitoring organizations rather than simply strengthening the overall presence and status of ICFO. This is really a personal bias in favor of national sovereignty rights and responsibilities as distinguished from a regional or global approach to monitoring charities.
This simply is an acknowledgment that laws, regulations, customs, and traditions differ from country to country, and that statutory and regulatory regimes may vary significantly from country to country depending upon how active governments may be with respect to the regulation and monitoring of charities. While some of these laws and regulations may be harmonized through regional agreements or regimes, there will always be some differences.
Where there are tax consequences to the status of the non-government organization and to the donations made, minimal monitoring may be done by the governmental tax authorities. Moreover, tax laws frequently are the authoritative sources for the definition of charity and charitable organizations.
If transparency and accountability are important to the trust accorded non-government organizations and their capacity to perform their charitable activities internationally, then some monitoring scheme must be done at a level in which the funds are solicited, and were the charitable activity is taking place. My guess is that donors tend to trust charities governed by national and local laws more often than they trust large international organizations that are assessed and monitored by some regional or international monitoring body or organization.
The issue, therefore, is how can ICFO assess and monitor the headquarters of large public benefit organizations operating internationally without undermining the authority and reputation of the national monitoring organizations and their accreditation, or denial of accreditation of the national affiliate of the large international organization being assessed.
Closely related is the issue of how the ICFO certification of the headquarters of the internationally operating NGO is to be interpreted by donors to the affiliate where the main solicitations for funds are made. Here, the problem is an affiliate that has not been accredited or certified by the national monitoring organization because the affiliate is not in compliance with the national standards or does not satisfy certain firmly held national public policies. Where the affiliate claims that it is transparent and accountable by resting its laurels on the ICFO certification or assessment of the international headquarters, donors may perceive that the affiliate is in full compliance with the national standards.
A third issue is the absence of clear international standards that are sufficiently articulate to provide meaningful assessment and monitoring. Meaningful guidelines for charitable activities, operations, fundraising, and governance, on a world-wide basis would be ideal, but difficult to promulgate in a way that could offer adequate monitoring of the large international NGO’s, because standards and guidelines must be country specific in their adaptations.
There are no cross-border fundraising laws that are country specific, although this issue may be mitigated a bit in the EU as a result of the Hein Persche decision. Thus, although the headquarters of the major NGOs operating internationally may be required to comply with the laws of the country in which it is incorporated, and domiciled in a different country, in the country of domicile as well. The problem, however, relates to the many affiliates that are required to comply with the laws of the countries in which they are fundraising, or performing their public benefit operations, but may not be expected to comply with any local or national standards and guideline relating to public benefit organizations.
Some ICFO national monitoring agencies favor a global ICFO accreditation because they believe that otherwise they would not have access or the ability to scrutinize an international organization based in another country. According to this argument, if a national monitoring agency would accredit the national charity which is an affiliate of the international charity, that national affiliate would be required to produce the audited financial statement of the international organization if it was to be accredited by the national ICFO member.
Moreover, without a tie-in to what the national ICFO member monitoring agency was doing in its country, ICFO assessment of the international NGO or charity could lead to conflicts with at least some of the ICFO member monitoring agencies or other potential ICFO member organizations. That would be the case where the national charity is not accredited in its own right by the ICFO member agency but can refer to the ICFO positive assessment of the international NGO.
The ICFO International Standards cover five key areas of scrutiny. These include: the membership and the responsibilities of a governing body or board; the fulfillment of public benefit goals; the fiscal control, management, and reporting; fundraising practices; and the provision of public information. Each of these standards contained sub-elements that more specifically defined the Standard. These are set out on the ICFO website, www.icfo.de, at ICFO International Standards.
ICFO developed these International Standards for international NGOs or not-for-profit organizations that directly or indirectly through subsidiary bodies, raised funds from the public for charitable or public benefit purpose. World Vision International headquartered in the United States and Plan International, headquartered in Britain, and chartered in the United States, are examples of NGOs that coordinate the activities of their respective many national organizations.
In 2003, a group of prominent civil society leaders came together as a result of the efforts of the International Advocacy Non-Government Organisations (IANGO) Workshop. See www.ingoaccountabilitycharter.org. Discussion of the background to this workshop is beyond the scope of this post other than to say that there were several IANGO workshops over the next few years during which the conceptualization and creation of the INGO (International Non-Government Organisations) Accountability Charter emerged as one tangible outcome of the workshops. The launch of the Charter in June 2006 was the beginning of the process to establish and implement a system that included common standards of conduct for INGOs and created a mechanism to report, monitor, and evaluate compliance as well as provide a means of redress.
There were eleven leading INGOs comprising ActionAid International, Amnesty International, CIVICUS World Alliance for Citizen Participation, Consumers International, Greenpeace International, Oxfam International, International Save the Children Alliance, Survival International, International Federation Terres des Hommes, Transparency International, and the World YWCA. These have been joined by additional signatory Charter INGOs, including Cordaid, International Council for Adult Education, Panos Network, Plan International, and World Vision International.
The INGO Accountability Charter provides for reporting, monitoring, and compliance. The signatories are required to submit annual reports outlining their goals, activities, and achievements. The Charter specifies the contents of the annual report, however does not set forth the monitoring and compliance regime to enforce compliance with the Charter.
During the Annual General Membership Meeting in Milan, Italy in 2007, Dr. Burkhard Gnärig, the Executive Director of the Berlin Civil Society Center and one of the founders of the INGO Accountability Charter, introduced the members of ICFO to the INGO Accountability Charter and to the need for monitoring the major international organizations to insure transparency and accountability. His challenge basically was that if ICFO did not assume this responsibility, then some other organization would, and he suggested that it could well be an organization with a commercial background and less qualified to assess the charity sector.
Therefore, the Board of ICFO once again took up the issue seeking to find some resolution the debate that had prevented the adoption of an ICFO assessment policy that would serve as the mechanism for promoting an international assessment program that balanced the interests of the national monitoring agencies, the interests of the NGO sector operating internationally, and the interests of the donor of the donor public all in the interest in promoting transparency and accountability.
Accordingly, the ICFO Board recommended the following policy proposal to the international membership at an Annual General Membership Meeting. The membership approved the policy statement for publication to the major international NGOs and consultants and experts in the public benefit sector for comment and advice.
The International Committee on Fundraising Organizations (ICFO) may assess organizational headquarters of organizations acting internationally for compliance with ICFO International Standards under the following conditions:
The national affiliates of such international organization are accredited by member organizations in the countries in which they operate.
If one of the national affiliates of the organization seeking ICFO assessment and certification is not accredited or otherwise certified by an ICFO member organization in which the affiliate is located and operating in that country, the reason for non-certification must be clearly known to ICFO. The members of ICFO (not just the ICFO Board members) must authorize, with a majority of two-thirds vote, the ICFO Board to proceed with the assessment.
If the national affiliate entity of the organization to be assessed is not accredited by the ICFO member in its country, such ICFO member may veto an ICFO decision to assess the international headquarters and thereby prevent ICFO from proceeding with such assessment until the matter regarding the affiliate member has been resolved to the satisfaction of all ICFO members.
Berlin, February 2009
In light of ICFO’s consideration of adopting this international assessment program, I invite comments, either directly to this post, or alternatively to me at my email address or to the Secretary General of ICFO at email@example.com.