Times are tough for humanitarian organizations. The growing income gaps in developed countries are having a knock-on effect for humanitarian work. Unsurprisingly it seems that as the rich less willing to share with their own communities they also become less willing to share with other communities; this despite the fact that support for humanitarian work remains high among the less-and-less advantaged segments of the population even when they themselves are suffering more and more.

But there is another more subtle force at work posing perhaps an even greater threat to humanitarian work: shareholder humanitarianism. Over on the corporate side of the fence we have witnessed the spectacular rise of shareholder capitalism over the last two decades. At its heart, shareholder capitalism represents a fundamental shift in the balance of companies’ attention away from the needs and demands of the customers to the needs and demands of investors, “shareholders”. The results, as we are all painfully aware, have not been good for ordinary consumers and the economy in general.

On the humanitarian side of the fence a similar shift in balance has taken place. Under the twin banners of accountability and transparency we have seen increasing numbers of donors and other financing agents implement more complex reporting and accounting guidelines, significantly increasing the administrative burden on NGOs and other humanitarian actors. These organizations are then placed in the position of having to divert finances from the field to the back office in order to meet the new requirements. At the same time, “overhead” remains a dirty word, and donors expect to see less, not more of it. The end result is a series of increasingly complex finance and accounting gymnastics that adds nothing to the humanitarians’ real bottom line: helping people.

Outside of the finance department we are also witnessing an increasing tendency for donors to impose their own set of performance measurements (metrics) as a (pre-) condition on their financial support. This tends to result in yet more layers of reporting (more overhead!), but can also lead to “humanitarian monoculture” where the NGOs abandon their hard-won insights based on years of trial and error at the field level in order to fit into the donors’ latest five-year plan. This can dampen innovation and diversity. For example, in the global health sector we have seen a movement towards narrowly defined disease-specific programmes and away from the principles of primary health care. This threatens to create a negative correlation between health financing and responsiveness to patient needs.

Transparency and accountability are good things. As are shareholders (and donors!). Under the right circumstances the former can stimulate humanitarian organizations to use their resources to deliver the best possible outcomes for their beneficiaries. The latter should provide increasing resources to organizations that are delivering good results. The problem with the current situation is that instead of stimulating better outcomes for beneficiaries, it is threatening to smother innovation in order to protect shareholder interests.

There are signs that the donor community is becoming conscious of the balance shift and have begun to take steps to avoid a humanitarian meltdown. For example, in the health space the US government PEPFAR programme is putting considerable effort into allocating more resources to evidence-informed programmes at the field level and less to “Big Aid”. Similarly, the Dutch and Swedish governments are putting increasing emphasis on innovation, particularly with regards to exploring new public-private partnerships.

But, humanitarian organizations need to step up their games as well. All too often we have been willing participants in this game of tick-a-box, chasing dollars/euros instead of better results. We need to put much more effort into defining success (and failures) in terms of easily understandable and readily accessible measurements. We need to get off the data train and onto the information express: less figures, more meaning. Yes, it’s great that we’ve all learned to use Excel, and pulled on (pant) suits over our wooly socks. But it does not excuse us from our obligation to constantly analyze and measure what we are doing for the people we have set out to help. We need to show donors and the public that we are behaving responsibly, but, more importantly, we need to know that we are doing good. We owe it to our beneficiaries and ourselves.

Some say that we have seen the high-tide mark for shareholder capitalism has been reached and that we are now en route to a friendlier, more customer oriented capitalism. Let’s hope we can soon say the same for shareholder humanitarianism. Hopefully before the water reaches our lips.

Mr. Luke Disney

This post was written by Luke Disney, Executive Director of North Star Alliance.

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