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The virtures of non-profit humanitarian aid

Guest Blogger

Humanitarian aid has long been a key component of U.S. foreign policy, and it takes many shapes. U.S. funds are funneled through for-profit firms, the military, and non-profit organizations to provide assistance around world. In “Global Compassion: Private Voluntary Organizations and U.S. Foreign Policy Since 1939,” published by Oxford University Press, Rachel M. McCleary explores the relationship between the federal government and non-profit aid organizations such Oxfam, CARE, World Vision and Catholic Relief Services. Here, McCleary, a senior research fellow at Harvard’s Kennedy School of Government and a visiting scholar at the American Enterprise Institute, argues that the United States should enhance the role of the non-profits in its overseas aid efforts.

By Rachel M. McCleary

President Barack Obama has promised to double U.S. foreign to a total of $50 billion a year by 2012. But while the increase in funding is laudable, the president needs to tackle a longstanding problem with the dispersal of American assistance.

Obama has inherited a system that sends the flow of foreign assistance mostly through for-profit contractors. United States Agency for International Development (USAID) reported that from fiscal year 1996 to fiscal year 2005, the share of funds awarded to for-profit contractors rose from 33 percent to 58 percent. In fiscal year 2005, USAID awarded 51 percent of total funds to for-profit entities, an increase from 38 percent in FY 2004.

Furthermore, the for-profit firms receiving federal funding are increasingly fewer and are concentrated in the Washington, D.C. area, in geographic proximity to USAID. Close geographic proximity to USAID makes it easier for those contractors to lobby Congress and the executive branch for funding.

By contrast, the headquarters of private voluntary organizations are geographically dispersed. These nonprofits include such organizations as Catholic Relief Services, headquartered in Baltimore; CARE in Atlanta; Save the Children in Westport, Conn.; and World Vision in Federal Way, Wash.

At the same time, the Department of Defense is broadening its role in assistance overseas. Its efforts are wide-ranging and include peacekeeping, humanitarian efforts, economic development, counterterrorism and counterinsurgency assistance. The ranks of Defense Department personnel engaged in these activities is expanding.

But the nature of the military and its organizational structure make it ill-suited to such operations. Political and social development in foreign countries is outside the military’s traditional mandate. The Defense Department lacks the necessary expertise in these areas.

The United States needs to support and enhance the missions of humanitarian and development organizations for several reasons. First, the primary comparative advantage of private voluntary organizations is that they are guided by the principle of impartiality: they provide assistance (long and short-term) to people in need regardless of creed, ethnicity, or political affiliation.

Second, they are transnational, that is, not identified with national ideologies nor driven by short-term policy agendas. Third, these are flexible organizations, meaning they can move quickly into a region, assess needs and set up operations. Flexibility also means that they are in a position to take a case-by-case approach to their operations.

The private voluntary organizations can get funds and expertise they may not have on staff through their affiliation with international organizations, alliances, or associations such as UNICEF, EU Common Market Funds and the Bill and Melinda Gates Foundation.

In addition, they can work through networks to assist and support other similar organizations that are already in a geographic region. Finally, unlike the military, private voluntary organizatons are structured to make a long-term commitment to a humanitarian crisis, if necessary, and to invest in the development of the people they are serving.

The concentration of assistance in commercial enterprises and the military poses serious threats to the democratic character of U.S. foreign policy because it limits the participation of civil society organizations in international humanitarian aid and development. The trend needs to be reversed. If U.S. foreign policy is to be successful, the civil participatory aspect of our democracy needs to be reclaimed.

By Steven E. Levingston  |  September 2, 2010; 5:30 AM ET
Categories:  Guest Blogger  
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Thanks for this important piece. I'm a little confused by the USAID statistics provided, and hoping for clarification. You report:

"(USAID) reported that from fiscal year 1996 to fiscal year 2005, the share of funds awarded to for-profit contractors rose from 33 percent to 58 percent. In fiscal year 2005, USAID awarded 51 percent of total funds to for-profit entities, an increase from 38 percent in FY 2004."

This appears to give two different figures for FY 2005, 58% and 51%. Which is it? Please clarify.

Posted by: naiman | September 2, 2010 9:36 AM | Report abuse

This is a very one-sided view of who does international development based on the misinterpretation of data and an obvious anti-coporate bias. For a more balanced view of aid project implementation, see this blog post on the Professional Services Council site:

Posted by: LJHalloran | September 8, 2010 3:48 PM | Report abuse

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