Category: Governance

Corruption is perverting NGO missions – but are its leaders up to the challenge?

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Photo of Hands-upAccording to the UNDP, funds lost to corruption in the Global South are 10 times the amount of official development assistance (ODA), while the World Bank estimates that each year between 20% and 40% of ODA itself is “stolen” by public officials.  It does not end here though, as its pervasiveness and magnitude –  when combined with the risks inherent to the non-profit sector – has now reached the point where corruption is perverting NGO’s missions.  At stake here is the accountability and credibility of the sector as a whole.  But are its leaders up to the challenge?

Acknowledging the elephant in the room

A simple litmus test for this is to ask an NGO’s leadership the following question: ‘Is corruption a problem within your organisation?’  In a 2014 survey of Australian and New Zealand NGOs, while 90% felt that corruption was a problem for the sector, 72% (or three out of four) stated that it was not an issue for their organisations.  In other words, while it was a problem, it wasn’t theirs, but someone else’s! So if most non-profit leaders don’t see corruption as an issue, why should their staff? More

For the Love of the Game: Corruption and Sports NGOs

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Photo - Football player and man in suit shacking handsSport is now the dominating source of entertainment worldwide. Just under the surface though, is a darker, shadier world where corruption (usually in the form of bribery, match-fixing, extortion, doping and money laundering) is common place.  Sports NGOs are particularly vulnerable to these activities, with this article exploring why – and what can be done about it – in more detail.

Sports NGOs and ‘Corruption as usual’

It seems that barely a month passes without yet another report of corruption in sports being splashed across newspaper headlines. In relation to large sports NGOs, these have included: members of FIFA’s executive committee accepting bribes, a former president of CONCACAF being charged with fraud and money laundering, hosting nations paying bribes to win Olympic hosting rights, match-fixing, and the IAAF’s involvement in corruption and cover ups. More

10 corruption risks keeping charities / NGOs awake at night

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Photo of man sleepless over corruptionWorking for a charity or NGO? Getting enough sleep at night? If you’ve answered ‘yes’ to both these questions, then you should be asking yourself how much you really know about corruption risks within the non-profit sector.

The following article was subsequently published by Pro bono Australia.  Titled ’10 Corruption Risks Keeping NFPs awake at night’, it appeared in their Hot Topics section on 15 October 2015.

While Charities are the most trusted institutions in the world …

I’m always surprised when talking with people working in the charity/NGO sectors, at how little many of them know about the inherent corruption risks facing their industry.  While consistently ranked as the most trusted institutions’ globally (topping the Edelman Trust Barometer for the last seven years in a row), the sector faces a number of inherent vulnerabilities that significantly raises its overall corruption risk ranking.  Having a knowledge of these is essential if a charity/NGO is to put an appropriate risk mitigation strategy in place. More

Corruption: What NGOs don’t want you to know

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See no evil, hear no evil, and speak no evil!

The three monkeys: hear no evil, see no evil, and speak no evilDespite the growing level of funds channelled through NGOs (or maybe because of it), fraud and corruption continue to be a highly sensitive topic, with most NGOs reluctant to openly discuss it.  This was highlighted a few years ago, when Médecins du Monde initiated a study in an attempt to open up discussion on corruption within the humanitarian aid sector (one of the most corruption prone areas of development).  Of the 17 largest French NGOs contacted for a confidential interview, accounting for more than 80% of all French humanitarian aid, 11 refused to participate. Attitudes such as this, a general lack of transparency within the sector, and a scarcity of empirical evidence available on fraud and corruption, has resulted in the topic avoiding appropriate scrutiny.

Following on from my article on NGO accountability, this is the second in a series of three articles examining NGO accountability and corruption.  Its focus will be on what we know about actual corruption within the NGOs.

‘Rose-tinted’ glasses’:  Corruption only happens in NGOs working in the developing world … or does it!

When the topic of corruption is raised, the natural inclination is to point the finger elsewhere.  In the case of Northern NGOs, this tends to be at their counter-parts operating in the developing environments of the South.  This was brought home to me in a discussion with a CEO & President of a North American based INGO last week, who stated with absolute conviction, that the ‘real’ need for anti-corruption measures was in Southern NGOs, as those in the North (like his) could safely “rely” on their external auditors and internal risk management systems to prevent it from happening.  When I pointed out that the latest ACFE fraud survey showed that he had twice the chance of uncovering a fraud within his INGO by accident (at 6%) then it being uncovered by his external auditors (at 3%), he was a little taken aback.  That aside, just how accurate was his assertion that the problem of fraud and corruption within the NGO / non-profit sector is limited to certain parts of the world? More

Trouble in Paradise: NGO Accountability & Corruption

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‘Lies, damn lies, …  and NGO accountability’.

Street Sign showing accountabilityIn the simplest of terms, the stability of the non-profit sector is based on a collective public trust, built on the innate belief that nongovernmental organisations (NGOs) are intrinsically trustworthy.  Just how warranted is this faith? Are NGO’s doing enough to merit the belief placed in them?  At the heart of these questions is the issue of accountability.

In the first of a series of three articles on corruption and the NGO/non-profit sector, I will explore the issue of NGO accountability, a concept that goes to the very heart of the sector’s legitimacy.

NGOs are now the size of small countries!

The past quarter of a century has seen a reduction in the size and role of governments around the world, leading to a growing gap in the provision of much needed primary welfare services. This gap is increasingly being filled by NGOs, whose numbers continue to grow exponentially, as has the scale of resources entrusted to them.  Mirroring the rise of multi-national corporations half a century ago, a number of them now control annual budgets the size of small economies! An example of this is World Vision International, who, in 2013, reported a total worldwide income of US$2.67 billion, a figure equal to Burundi’s economy, and higher then the GDP of twenty-nine other nation states! Other international NGOs (INGOs), such as Save the Children International (with a total 2013 income of US$1.9 billion), are key recipients of taxpayer funded overseas development aid, with 53% of their income sourced from governments. ActionAid, another INGO, have positioned themselves to take a key role in helping shape a number of nation’s policy formulation and service delivery. Given this size and influence, just how accountable are INGOs (and other) operating in the non-profit sector? More