If you only read one thing this week…

How INGOs are funded – what does this mean in the current economic situation? by Rob Neal
March 19, 2009, 12:52 pm
Filed under: Development theory

According to a new study by Development Initiatives, private contributions to NGOs account for fifty-one percent of the funding for a group of 114 large NGOs.  These NGOs, based in twenty-three countries, include some of the best known organizations like Oxfam, CARE, Médecins Sans Frontières (MSF), Save the Children, and Mercy Corps.

Some of the organizations, depend heavily on private contributions, while others are more oriented towards institutional grants.  For example, MSF gets 86 percent of its funding from private giving.  Private donations offer a couple of advantages:

  • NGOs can respond quickly to emergencies.  It can often take governments weeks to disburse funding.
  • The contributions are often unrestricted, offering NGOs flexibility on where and how to spend the funds.

You can read more about why some NGOs are more willing to seek government aid in an interesting  briefing paper by the Humanitarian Policy Group available here.

This graph from the Development Initiatives’ study breaks down the sources of humanitarian assistance funding.

Sources for Humanitarian Funding

According to this study,  “the available evidence suggests that all NGOs combined contributed an extra 24% to humanitarian assistance provided from official sources.” This is the £1.760 million seen at the top of the column.

What are the implications for NGOs when private donations are probably dropping in the coming year?  Will they turn to governments for funding, spend from their reserves, or just cut personnel and programs?  The potential decrease in private donations, and the NGOs response, could have significant impact on the level of humanitarian assistance over the next couple of years. If you have read articles about potential impacts or have comments or thoughts, please post them here.


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