An estimated US$45.3 billion in private development assistance (PDA) flows to developing countries annually, equivalent to one third of official development assistance (ODA, or aid) flows. Like aid, PDA is a particularly important flow because it tends to target poverty reduction.
PDA is an important part of the landscape of all resources available to developing countries for ending extreme poverty. As well as being equivalent to a third of ODA, PDA flows are equivalent to around 10% of foreign direct investment flows and 13% of remittance flows.
Among PDA sources, NGOs are responsible for 58%.
The different providers of PDA – NGOs, foundations and corporations provide private development assistance. Each of these provider types tend to follow different patterns in terms of the way they give, where they give and the sectors that they focus on (see DI’s Factsheets on NGO and foundation resources for development).
Voluntary giving to development purposes grows with increasing private wealth, and so growth in developing and developed alike could represent an increasing source to tap. PDA therefore has clear potential as a key source of development finance for the post-2015 development agenda,
Recognising where the comparative advantages of PDA lie in targeting poverty, in the context of ODA and other forms of finance, will help target resources more effectively to finance development and poverty reduction.
Resource flows to developing countries from OECD Development Assistance Commitee donors -23 countries, in 2011 or the most recent year available.
NGOs include civil society organisations.
Development Initiatives, Measuring Private Development Assistance (forthcoming, June 2014)
Development Initiatives, Investment to End Poverty (September 2013)