It’s a fair cop

What do you do when one of the many East African NGOs rips off its donor agency? It happens all the time, and Global Giving is trying to find an answer to that. It is documented here on Aidwatch.

Over a little more than a year, GlobalGiving combined staff visits, formal evaluation, third-party observer reports called visitor postcards, and internet feedback from local community members to create a nuanced, evolving picture of a community-based youth organization in Western Kenya that had received $8,019 from 193 individual donors through the GlobalGiving website.

Initially, youth in Kisumu were happy with the organization. Among other things, the founder used the money to fund travel and equipment for the local youth soccer team. But the first tip-off that something was going wrong came when a former soccer player complained through GlobalGiving’s online feedback form that “currently the co-ordinator is evil minded and corrupt.” The view that the founder had begun stealing donations and was stifling dissent among his members was expanded upon by other community members, visitors to the project, and a professional evaluator.

Commenters give them a hard time, with some justification. There was no accountability – the conman got away with it and it’ll happen again.

In most cases – not all, but mostly – early warning signals are ignored. This can be for one of two main reasons: donor agency staff may be involved in the scam – all too common; or it is just easier to ignore it. As long as the reports look good, life can go on, money can be disbursed and the back donor can be kept happy. And court cases can drag……………

And if you can’t ignore it? Build capacity! I think of one case of an independently documented fraud that was ongoing for at least a year involving a six figure sum – US, not Hong Kong. Result? Capacity Building for the recipient NGO and continued funding.

So what can funding agencies do to deal with such fraud? The preventative measures are obvious – professional assessments of programme and management ability; coordination with other donors; not being shy about spot check audits. It’s amazing how rarely this all takes place.

When you suspect something? Independent audits; swift action; DON’T keep everybody in the loop. If guilty? Stop funding, obviously (but it needs to be pointed out, believe me); make a report to the police or anti-corruption bureau; consider suing for compensation. In one case I suggested to colleagues that we send a file to the police. The shock on their faces was something to behold. Needless to say, no file was prepared and sent.

Global Giving are on the right track by looking for ways of gathering and triangulating information as best they can. And they are almost alone in talking about it publicly. For that they deserve our respect and support.

But, without a registered office in the country, most post facto actions are beyond them, the accountability never happens and the scams keep coming. And if I was an individual donor looking to give, that would cross the Global Giving platform off my list.

UPDATE: The full paper detailing the Kenya case study, by Marc Maxson and Joshua Goldstein, can be downloaded at Global Giving’s blog

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2 responses to “It’s a fair cop

  1. Thanks for reposting this, Chris Pearson.

    As you know, we can’t do it all. You need to play your part too.

    Because we believe real, continuous, direct feedback loops are the most important under-utilized tool in international development, I’d be happy to arrange a SMS or phone interview between some of the youth and yourself.

    I would have preferred that they were the ones telling the story and not GG, but alas local justice requires local champions, local witnesses, and local processes. People are by and large afraid to go public, and often for good rational reasons. GlobalGiving tries to serve as “a fair cop” as your title implies because in the short term we can facilitate a real discussion while protecting whistleblowers from retribution.

    But you are exactly right about one thing: None of this would have been possible without multiple face-to-face visits from volunteers, some of whom stayed with the project for months trying to resolve the conflicts. See http://blog.globalgiving.org/2009/09/16/we-are-listening-real-time-feedback-loops/ for the full story.

    What we struggle most with, is, given perfect information about a project, how do we get more people to devote more of their time and money to voluntarily help people who clearly deserved it?

    Information is useless without an engaged audience. See an example of broken feedback loops on my personal blog at http://chewychunks.wordpress.com/2009/11/30/playpumps-and-broken-feeback-loops/

    And looking at the big picture, many others like yourself serve communities because they were inspired to try and help. I think too much emphasis on policing these people serves to discourage innovation. This scares away the very experts who could offer feedback in the right environment.

    • hey,

      Thanks for the comment. Chris Pearson is the name of the guy who designed the off the shelf wordpress template I use! Anyway, let me read your paper in the next couple of days
      cheers

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