Saturday, May 26, 2012

Report From Madrid -- The Public Forum

As I wrote in my last post, the Annual General Membership Meeting (AGM) was held in Madrid, Spain, hosted by ICFO member organization, Fundación Lealtad.  The ICFO meetings are organized so that there is an open public session, which is attended for the most part by leaders in the nonprofit community, some academics, and occasionally government officials.  The public session generally focuses on topics of particular interest to the host country, with presentations by speakers representing those areas of interests.  The business of ICFO is then conducted at a closed, second session the following day.  This part of the AGM is attended by the membership of ICFO, together with invited guests, usually from potential member organizations, or invited individuals involved in the third sector with special interests in charity accountability and independent monitoring.

This post will focus on the public session in which the emphasis was on institutional donors and charity accountability, and on emerging initiatives in Latin America.  For most of its history, ICFO has been concentrated in Europe and North America.  More recently, within the last four years, it has been joined by new members from Taiwan (Taiwan NPO Self-Regulation Alliance) and Mexico (Construyendo Organizaciones Civiles Transparentes, dba Confio) representing an expansion of its reach.  During its meeting in Madrid on 18/19 May 2012, ICFO welcomed new supporting member, the China Charity Information Center from Beijing, China.

The focus this year on institutional donors and on Latin America was based on the major area of work and interest on the part of Fundación Lealtad.  Much of the activity within the sector in Spain has been focused on institutional donors, with attention to due diligence in their giving activities and the role of accountability and monitoring of the sector.  But, Fundación Lealtad has also been an active missionary, if I could call it that, for the expansion of the principles of promulgation of standards and independent monitoring through Latin America.  Its website is widely read in Latin America, and it has been active in working with, and training Latin Americans in the work of charity analysis and monitoring.  Indeed, the membership of Mexico's Confio in ICFO is a direct result of the work of Fundación Lealtad and its Executive Director, Patricia de Roda.

But now, the news from Madrid and the AGM there:

The first area of discussion addressed the growing attention on Corporate Social Responsibility (CSR) and its implication to civil society generally, and its investment in public benefit through charitable organizations.  For example, what is needed in this regard are objective measures to measure the level of corporate responsibility and the nature and level of a corporation's relationship with particular NGOs.  From a political standpoint, there was concern expressed that in development cooperation, both politically and corporately, there is a weakness due to the lack of effectiveness monitoring.  The main talking point here was that one cannot expect monitoring on the "fly;" that effective monitoring needs to be a regime.  But, that it can be complicated and expensive.

Part of this discussion centered around the question, "what do we value most?"  With cuts in budgets, institutions are cutting back on their funding of projects and charitable activities.  So, they need to be selective in what they fund.  One idea was to have a competition for ideas, and another was the need for monitoring from external modeling organizations.  It is at this point that, rather than invent new monitoring models, we need to use the monitoring ideas and models that exist.

The statement was made that donors like to think that the money they give is effective.  There was no data in support of that statement, and based on my observation of solicitations for funds and the actual giving through modern technology and new media, I am not sure that this is true for the average individual donor, who might give on the basis of images and emotions rather than on some vague concern about transparency and accountability at the point of giving.  My guess is that for institutional donors, with accountability to stockholders and other stakeholders, it is far more important.  Results and impact are important, but both institutions embracing CSR and the charities they support need to be more modest in reporting results, and gain trust through honest appraisal of those results.  After all, "we can't measure what we can't measure, such as some kind of results."  We need to be concerned about the ultimate beneficiaries, and not focus as much on numbers and not on the unseen.

A major problem exists, nevertheless, in the global economy.  All of the ICFO members are domestic oriented monitoring organizations.  The problem is how to handle international NGOs (INGOs) and NGOs that raise money in one country and work in another country.  How is the sector to strike a balance between the need for accountability and the work of NGOs, especially when that work is done in other countries and the reach of domestic monitoring is inadequate to address the actual use of the donated funds and the effectiveness or impact of the work?

Case studies from Latin America raised further issues for the sector and monitoring regimes.  The charity sector is large in Latin America, where grassroots organizations, traditional charities, and foundations make up the sector.  As a result of its Spanish colonialism and work, as well as the influence of the Church, the sector in Latin America is very much influenced by the Church and its Spanish colonial heritage.  Whereas the earlier sessions of the AGM focused on donor perspectives, the panel discussion regarding Latin America took a broader view of accountability from public perception and from the perspective of the state.  Accountability mechanisms address the interests and perspectives of donors, peers, the general public, and regulators.

In Argentina, HelpArgentina is a database service which is regulated by the charitable organizations that provide the data.  HelpArgentina designed a questionnaire on transparency standards that was completed and submitted by the organizations.  HelpArgentina does not itself verify the information submitted and posted on the database.

The problem in Mexico is that many people work for the NGOs, but that the government competes with NGOs for humanitarian and welfare services, and copies what NGOs are doing and then claims the work and results as its own.  There is also a problem with professionalism, or actually the lack of recognized professionalism in the sector.  Nevertheless, Confio has applied the processes of Fundación Lealtad, which helped establish Confio, with the purposes of establishing a database and a seal of approval for the compliance with 36 principles and subprinciples.  The analysis by Confio is posted on the Confio website.  Although Confio was established in Chihuahua, it is a national monitoring organizations recognized throughout Mexico.

There has been sustained growth of the sector in Latin America, with an emphasis on capacity building, which according to this panel must lead to accountability.  The idea is that there must be an independent body, that is, independent from the monitored organizations themselves. but should be a part of the sector so that it understands the sector.  The debate occurs in the decision regarding the type of model to be applied and where the financing for the monitoring is to be obtained.  Also, there is a question in Latin America, and I suppose elsewhere as well, as to the kind of information the donors want.

Further issues were raised regarding the sector generally, whether in Europe, the Americas, or Asia.  The first is that people do not generally donate regularly.  The technology creates an emotional incentive for giving.  So, what we have in the sector is a linking of globalization, and an attempt to balance bureaucracy and assessment, our resources, and context.  It is not possible to provide monitoring in one country which is the same as the monitoring done in another country. Yet, the importance of monitoring by national monitoring organizations, such as those that are members of ICFO must increase, with the exchange of information between monitoring organizations absolutely essential.

However, there were also questions about the monitoring model applied by the members of ICFO.  While transparency and trust are essential in any relationship, it is based on an implied social contract between the stakeholders and the charity.  The representative of Doctors Without Boarders was critical of some of the standards, asserting that accountability without assessments between need and normal accounting issues was a matter that needed attention.  Looking for effectiveness and impact over the long term may not work well all the time.  Doctors Without Borders evaluates the emergency at the time of specific need, and regards this as more appropriate in its assessments.  Moreover, there are too many codes of conduct that complicate the assessment activity and action.

There were several conclusions and questions that arose from this public forum.  One is that trust is indispensable to an effective charity sector, but that there are many factors that go into the nature of trust between donor (whether institutional or individual) and charity, between government and charity, between the public and other stakeholders and charity, and indeed, between the charity and the beneficiaries.  One is that relationships exist over the long term.  In the case of UNICEF, it has a 70 year history of working with, and on behalf of children.  Governments, donors, beneficiaries, the general public, and stakeholders in general understand this.  Secondly, the reports, whether annual reports or reports on specific projects, need to be honest.  When reports are all positive, with glowing reporting on projects, impact, or effectiveness, they will not be believable since that just simply does not reflect reality.  Also important is the need to address facts, the stories of what the charity has been doing, rather than to simply focus all accountability and transparency discussion on numbers.

Now, what do we do with this information and wisdom?  Clearly, independent monitoring is something that is necessary if principles of trust, transparency, and accountability are to be effective in the sector.  One problem observed by a number of speakers was the proliferation of standards and codes that created a certain bureaucratic response to the issue.  Secondly, technology poses many potential benefits, but also problems both in terms of the ethics applied to fundraising and branding, and to the effective means of transparency and accountability.  The CSR movement is healthy, and can provide better cooperation between the marketplace and banking and the third sector.  One word of caution, however, is that together with government funding and regulation, it could further blur the lines of distinction necessary to the existence of a vibrant civil society movement.


  1. "This is a nice post
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    Jake W.
    Find Funds Fundraising "

    Fundraising Consultants Birmingham

  2. "If you haven't any charity in your heart you have the worst kind of heart trouble" to cure it
    Help people, let's unite for one good cause, be a volunteer"save live"!

  3. This is a nice post.
    Keep up with the good work!

    And thanks for sharing......

    John Smithson.

    Fundraising consultants West Midlands