The great boom in philanthropy, partly as a response to generous tax regulation and partly as a way for a new financial capital to legitimize itself (see my friend Nicolai Guilhot’s book), has produced a jungle of foundations and NGOs who are, for the most part unregulated. Indeed NGOs and charities are often less regulated and less accountable than most business, and, overall there is no measure of the efficiency or social impact of a particular program or activity This might have been OK if the main role of NGOs was to make business and wealthy individuals look and feel good- just give some money to ‘the poor’ and your conscience clears. But in a world where NGOs are becoming ever more important as development and aid actors, often taking over from states and official bodies, we need a way to assure that their activities are transparent and the impact of what they do objectively measured. It is not just a question of making sure the money arrives to the people that need it, but also of ensuring that particular activities and programs are not directly counterproductive. As today’s Financial Times article on the subject concludes
“Of every $1,000 spent in so-called charity today,” observed a philanthropist both Warren Buffett and Bill Gates have described as an inspiration, “It is probable that $950 is unwisely spent – so spent, indeed, as to produce the very evils it hopes to mitigate or cure.”