This week I visited Riga, Latvia’s capital, to take part in the 6th international conference on philanthropy, hosted by the European Research Network on Philanthropy (ERNOP) and the University of Latvia.
Private development assistance flows
The work I discussed, in a presentation titled “Better data, better philanthropy: transparency and the future of development planning”, looks specifically at flows of ‘private development assistance’ (PDA). By PDA we mean aid-like flows from private actors, such as the private finance channelled by NGOs, public and private foundations, charitable trusts and corporate giving. This analysis is part of the wider Development Initiatives Investments to End Poverty project, which aims to map all resource flows to developing countries.
Given DI’s strong focus on data, my research has begun by mapping the best available data sources and identifying data gaps. I am attempting to identify the scale of PDA flowing to developing countries and its composition. This analysis will be launched in September as part of the Investments to End Poverty report.
Why is this analysis important?
Because private actors now represent an increasingly significant share of all development finance; they represent a group of important emerging donors. For example, the Bill & Melinda Gates Foundation disbursed US$2.6 billion in development assistance in 2011, and Médecins Sans Frontières received US$1.2 billion in income in 2011, of which 92% was from private sources.
By way of comparison, Haiti’s net government expenditure was US$2.4 billion; and Ireland gave a total of US$914 million in official development assistance (ODA) in that year.
As my graph on our Charting Progress blog demonstrates, our estimate of PDA from 16 European countries is equivalent to 15% of the ODA provided by those countries. However, PDA, though often aligned to developmental objectives, remains opaque and difficult to trace to its final beneficiaries. These flows are not being captured in a timely and systematic way that complies to open reporting standards by any international body, and only unevenly by national bodies. Private actors are often only formally accountable to a board and trustees, or to donors. Incentives for reporting may be lacking, and therefore the quality and coverage of data on PDA varies by country and is often patchy at best.
Transparency in PDA: Mission impossible – or moving towards change?
Development Initiatives’ research on PDA, along with important work carried out by the Worldwide Initiative for Grant-maker Support (WINGS), the Center for Global Prosperity and the OECD’s ‘netFWD’ initiative, aims to fill gaps in the data and quantify PDA at a global level. Our concerns about the data are supported by both the UN High Level Panel report on post-2015 (which called for a “data revolution” to include “foundations and other philanthropists”) and by a 2012 inquiry into private foundations by the UK parliament’s International Development Committee (IDC).
My colleagues on DI’s Global Humanitarian Assistance (GHA) programme came to similar conclusions in their 2012 report, ‘Private Funding: an emerging trend in humanitarian donorship’:
“[There is an] absence of dedicated tracking mechanisms […] it is the lack of consistent reporting on the income and expenditure of private aid funding globally that makes any attempt at tracking [private funding] a near impossible mission.”
My presentation at ERNOP 2013 outlined what can be known about PDA from Europe based on current data availability. It also highlighted the potential value of transparency for improving development planning. Researchers from various European countries shared their recent findings on giving trends including to international development. PDA remains mostly outside the system of global governance and dialogues on development finance. Philippe Galiay from the European Commission talked of “Putting philanthropy higher on the EU agenda”. He acknowledged there is a “long way to go” with regards to access to information, as discussed in a 2012 recommendation on open access. Mr Galiay also highlighted the importance of formal and informal data education.
I am encouraged by the positive developments in transparency of PDA, as foundations and NGOs increasingly commit to global standards of transparency like the International Aid Transparency Initiative (IATI, endorsed by developing country stakeholders). Earlier this year, the UK Secretary of State Justine Greening brought in new rules requiring NGOs receiving DFID funding to report in IATI format. I do recognise the challenges, particularly for smaller organisations, in meeting some of these reporting standards. However, good decision-making, better development policy and improved allocation of development resources will depend on getting as true a picture as possible of the total finance available and the actors providing it. Citizens and decision-makers must be able to get an accurate understanding of all the resources available for eradicating poverty. Civil society must be able to hold all funders – not just governments – to account.
Sarah Hénon’s research on PDA will be published in September as part of the Investments to End Poverty report. She can be contacted on email@example.com