Roger Henke, Chairman of the Board of the Southeast Asia Development Program (SADP), a development grantmaker based in Cambodia, contributes the following guest post (the third in a three-part series):
Previous posts on development NGO corruption described a survey tool and its results in Cambodia and the conundrum of using the upward accountability relationship between local NGOs (LNGOs) and the grantmakers funding them for remedial action. The analysis of the report which underlies much of those contributions includes another foundational premise: Given the systemic functioning of Cambodia’s (and other countries’) LNGO sectors, anticorruption action to hold these LNGOs to account needs to be collective in order to be effective.
The characterization of the sector as “systemic” is meant to capture fact that nearly all LNGOs are funded by more than one, often five or more, grantmakers, while these grantmakers in turn, each fund many (sometimes more than 25) LNGO partners. To see why this matters for upward accountability, suppose for the moment that a given Grantmaker X takes seriously its responsibilities to diligently oversee LNGO Partner Y, and suppose further that Grantmaker X uncovers a problem. What happens next? The best case scenario is that the LNGO acknowledges the problem and fixes it, while the worst-case scenario is that both the LNGO and the grantmaker ignore the problem. Both of those happen sometimes. But the more common outcome is this: The LNGO fails to deal with the problem, and eventually Grantmaker X decides to stop funding it. But this affects LNGO Y only temporarily, because it has (or can find) other funders, many of which may not exercise the same degree of diligence as Grantmaker X. So nothing much changes. Even when Grantmaker X communicates with other co-funders about the problems, and more of them decide to question their support of LNGO Y, it takes a fair level of coordinated grantmaker disinvestment to put an LNGO out of business. That level of coordination is rare even in cases of obvious crisis, and absent during more mundane times.
What is needed, then, is more collective action. Many grantmaker staffs would agree with this in principle, but the dominant response is generally not action but resignation, dressed up as “realism”: “Why waste time on beating a dead horse? Even if local grantmaker offices were all willing to collaborate, aligning the diverse requirements regarding reporting, auditing, etc. of all the headquarters….forget it.” I reject this defeatism. One rarely knows that something won’t work until one tries, and my experience in Cambodia is that practical pilots are very rare. So, what would proper collective diligence regarding financial management imply in practice? Continue reading