Interesting aid news and debates from 2009

Posted on January 2, 2010 at 4:16 pm

On Sundays I usually compile a list of the news stories and blog postings that caught my interest during the week. In reviewing the posts from 2009 I found that six topics had significantly more articles than the others: the explosion of nonprofits, administration costs, aid transparency, microfinance, orphanages and poverty tourism. I’ve included some of the articles I found most interesting for each topic. Feel free to add any that I missed that you think were key to the debate.

Are there too many Charities?

With a new nonprofit registered in the US every 15 minutes, and all of them competing against each other for donor dollars during these tough financial times, the topic of whether or not there are too many nonprofits came up often.

Grab Bag of Charities Grows, Along With U.S. Tax Breaks – New York Times – Talks about the explosion of newly registering aid agencies.

Alternatives to forming a charitable nonprofit – American Bar Association looking at other ways to meet goals other than forming a nonprofit as only one third survive beyond five years,

Too Many Non-Profits? – from eJewishPhilanthropy.com – Looks at the pressure for aid agencies to merge to save on administrative costs and why this may not always be the best solution

Support TWACIB - Owen Abroad – Discussing the proliferation of very small aid agencies and its impact

Avoiding more Useless Charities: 3 questions to ask yourself – from Cashewman listed three things to consider before creating a new charity. These questions are worth considering before giving to a charity as well

Administration costs

Using administration costs to rate aid agencies has been roundly debunked by the aid industry. There were a series of articles reinforcing this idea throughout the year.

Beware of Highly Efficient Charities – The third of a series of articles by Harvard Business examining the commonly held belief that charities should be judged on the percent spent on overheads.

Letting nonprofits act like businesses – Harvard Business article that discusses the Boston Foundation’s change in their grant making to support unrestricted operating expenses.

The 50-cent rule – an article Slate.com discussing the folly of judging an aid agency based on their administration costs

Overhead isn’t Evil in the Nonprofit World – Fast Company

The nonprofit starvation cycle – Stanford Social Innovation review on the damage done to the long term viability of a nonprofit when it cannot invest in itself

The Worst (and Best) Way to Pick A Charity This Year – Philanthropy Action – A joint letter from several charity rating agencies discussing why evaluating aid agencies based on their overheads does more harm than good.

Unfortunately, despite all of this, evaluating an agency based on its administration costs is still presented as sound donor advice in the mainstream media such as this article by the Wall Street Journal Charities: Tough Times Call for Smarter Giving

Aid transparency

The need for aid agencies to be more transparent about their work, their successes and failures, and how they spend their money came up throughout the year as well.

David Burrows: Finding out how money is spent should not be such an ordeal – Third Sector – discusses how difficult it is to find both aid agency mission statements and a breakdown of their expenditures

Auditing Aid Providers – How do They Fare? – An IRIN report on progress and areas still in need of improvement in transparency, accountability, communication, and monitoring.

Nonprofits in Northeast Ohio are being required to provide hard facts to get funding - Metro-Cleavland.com – discusses the necessity of using data to show impact

Charities Fake their Numbers to Look Good - Money Watch

10 Things Nonprofits Won’t Tell You - Smart Money

Microfinance

David Roodman ignited a firestorm of debate with his post Kiva is not quite what it seems

The blogosphere debate was tracked by Philanthropy Action in their post A mostly comprehensive guide to the Kiva and Donor Illusion Debate.

The New York Times picked up the controversy with Confusion on Where Money Lent via Kiva Goes

As did the Market Place on American Public Radio Beware of charities’ ‘donor illusion’

The Financial Times moved on with Perhaps microfinance isn’t such a big deal after all on how microfinance might not live up to it’s promises and savings accounts might be just as useful

GiveWell did a series of posts evaluating current microfinance research.

All this was nicely summed up in Change Charity’s post 2009: The Year Micorfinance Died.

The Tourism Debate

Is it ok to pay to look at poor people?

“Poverty Tours Travel a Fine Line” Christian Science Monitor

“Should Starving People be Tourist Attractions?” Aid Watch

Slum tourism – from CNN.com – a different look at disaster/poverty tourism

Giving tourists a look at gang culture – LA Times – Yet another form of poverty tourism, this time in the gang area of L.A.

Development Tourism, Thinking out Loud Tales From The Hood Blog

Orphanages and foreign adoption

Orphanages and foreign adoption made the news several times this year, mostly dealing with the problems associated with them and alternatives to orphanages.

Aid gives Alternative to African Orphanage in the New York Times,

Egypt Jails US “adoption” couple in the BBC

Two IRIN articles about orphanages Protecting children from orphan dealers and Why family is best for orphans

China babies sold for adoption – An article from the BBC on families with more than 1 or 2 children unable to pay the fine so children are placed in orphanages and adopted to westerners.

A Protest Against Orphanage Tourism - in the blog LessonsILearned about orphanages that prey on tourists

With all the negative stories it was interesting to see a New York Times article – Study suggests orphanages are not so bad. The study’s findings showed that orphanages may be not be as bad as previous studies show and may be as good as keeping children in the community if they are done right. I’ll be blogging on this study later this month.

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