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By Vilyen Pidgornyy — April 10, 2012

NGOs in the Developing Countries – Evolution or Devolution?

The political instability, currency volatility and investment uncertainty have all become key factors in today’s rapidly changing world. Non-governmental organizations follow the suit. From a friendly third sector they evolved into larger and savvier players on the political and economic arena. In the second and third world countries the tendency seems to be most noticeable. The local governments can no longer ignore NGOs. But how will this relationship proceed further?

This article is to focus on two types of NGOs: operational and advocacy. In the past, NGOs paid low salaries and employed volunteers and enthusiasts. They provided public good in the areas where the private sector or the government could not (or would not) help. Nowadays, some operational NGOs partner with large corporations. This is done to be better equipped to respond to the daily challenges and try to become financially sustainable.

The objective of such organizations remains to design and implement the development related projects. Nevertheless, now they become profit oriented and tend to look more like business entities. At the same time there is a tendency among large businesses (Danone, Coca-Cola, Kroger, etc.) to establish their own NGOs. The businesses support such entities by diverting there part of their income. This way they are able to establish better control over their corporate social responsibility spending in a particular sector and manage tax issues. NGOs get a chance to engage in promotional campaigns for their products or even encourage lobbying activities on behalf of the non-profit entity.

Apparently, establishing closer ties with businesses is vital for certain types of NGOs. Similarly, it might seem obvious that such “closeness” is likely to have social and political impact on the community. One such impact is employing management styles similar to those used by corporations.

In Ukraine, for example, NGOs have appeared not so long ago. The gap between the private sector and third sector managers in terms of professional training is very little there. They may successfully run an organization of any kind, said Lina Myroshnychenko, the director of a Ukrainian recruiting agency. When an NGO becomes so efficiency oriented though, one may ask whether it stays “true”. Is it an NGO or a new form of business? A twisted form of business – yes, but business and not non-profit. The new “breed” of the third sector may not be as friendly faced as before though. The spirit of such efficiently running and goal oriented organization might change.

Advocacy organizations are focused on promoting the specific cause. They seek ways to influence policies. Funding of such NGOs has been traditionally done through large international granting organizations, multilaterals (UN, FAO, etc.,) and foreign governments. Local fundraising was not a strategic priority for this type of organizations. This is why, in the tighter economic conditions they may be more concerned about staying afloat and promoting their issues.

In addition, many capacity building and civil society NGOs cause concern to politicians and draw their attention. That happens because they promote human rights and democracy – pillars of civil society values.

NGOs were designed to fill the gap in the services provided by the government. That is why they get first-hand experience as to what the civil society wants and needs. In some countries like India, for example, such organizations have become so powerful that they influence the decision making process at the state level. Not surprisingly the local governments wonder whether they hear the voice of their own society or the message transferred from their “imperial” foreign counterparts. Critics among the government officials claim that some aid groups propagate western values. This is why many public officials may be alarmed that such NGOs are likely to cause social disruption inside the country. They question whether their western donors are saviors or spies.

In recent years the European Union has been encouraging partnerships between its NGOs and NGOs in the developing countries. This was done to promote democracy, reach out to the poor, and give them a voice. To no surprise NGOs in developing countries happily receive international support. This helps to further foster trainings, consultations, and capacity building activities.

At some point though, the civil society starts questioning the effectiveness of such trainings. It is indeed very hard to evaluate. Especially, if political and economic conditions remain the same or even worsen. The goal oriented efficiency may be the answer but not to advocacy organizations providing intangible assets and not in the short run. If they want to survive, advocacy NGOs in the third world countries would have to continue receiving their funding from foreign donors. Whereas, NGO-business operational hybrids are likely to have more development leverage on their own and face more understanding from the local government.