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C H A P T E R 8

FUNDING GLOBAL CIVIL SOCIETYORGANISATIONS

Frances Pinter

Introduction

The funding of civil society organisations (CSOs)that operate globally or even regionally isconsiderably more complex than the funding of

local CSOs. For a number of reasons, what happensat the international or global level is not simply a

mirror image of what goes on at the local or statelevel. This chapter seeks to highlight some of thedifferences between the local and the global, andoffers suggestions for further research. It does notdiscuss the whole array of resources employed byCSOs, such as social capital, information, reputation,and so forth, though the need to do so in subsequentstudies is discussed in the conclusion.

The term civil society organisation is used here asan umbrella concept that includes NGOs, socialmovements, and grass-roots organisations. A globalCSO is not necessarily global in the sense of having

representation in all four corners of the globe, butmay also include regional and bilateral cross-borderinitiatives. Collecting data on such a diverse range ofbodies is a formidable challenge, as this chapter willdemonstrate. Most data sources are national ratherthan international and focus on subsets based ondefinitions that do not work well in a cross-bordercontext.The environment in which funds for global CSOs areraised and through which funds must move is bydefinition multinational. At an operational level, globalcivil society organisations are more expensive to fundthan local civil society groups. Money needs to befound for travel and long-distance communicationcosts. Variable exchange rates and currency risks needto be taken into account. Fundraising tends to bemore difficult as issues may be perceived as irrelevantto the localities where the money is raised. Morecomplex fundraising strategies are often employed.Each country has its own methods of funding civilsociety bodies and its own traditions of sharingfinancial burdens between the state and the individual.The regulatory and institutional arrangements for civilsociety bodies, whether local or global, affect the

funding capacity of the state and its people. The statealso plays an important part in both resourcingtransnational activities and facilitatingor hinderingthe flow of funds between countries through theirvarious tax regimes.

The political agendas of the larger funding bodiescan be difficult to influence and are often at odds with

grass-roots organisations (Edwards 1999). Foundations,particularly a handful of larger American ones, alongwith the main multilateral donor agencies, play asignificant role in determining the activities of NGOsworldwide, yet they are subject to no democraticcontrols. While the number of funders may bepotentially greater much funding is actually derivedfrom a limited pool of big participants.

Methodological health warnings

It is useful at this point to distinguish between (1)

sources of funding, (2) types of bodies funded, (3)forms of funding, (4) types of activities funded, and (5)core issue areas funded. This chapter focuses primarilyon the sources of funding and types of bodies funded,with some reference to forms of funding.

The forms of funding include grants, support foroperating programmesthese are programmesconducted primarily by the funding bodys internalstaffloans, programme-related investments, venturephilanthropy, membership fees, subscriptions,donations, income-generating activities, in-kinddonations, and volunteer work. Grass-roots organis-ations and social movements tend to rely on moremeagre resources; social movements usually dependon their own members and their friends and families.The more formal the organisation, the more formalis the source of funding. Large multinational NGOstend to find it easier than grass-roots organisationsto raise funds from the larger donors.

Significant methodological difficulties arise withattempts to identify types of activity. Much of whatis funded is a mixture of different kinds of activities.Some organisations need funds only for advocacyand activism. This includes primarily salaries (for

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some only), overheads and travel, and communi-cations and promotional expenses. Other types of

bodies receive funds and act as intermediaryorganisations that carry out projects on a contractualbasis, for example to deliver servicessuch as ruralhealth; or to dispense aid, for example, disaster reliefto smaller organisations on the ground. The chainof intermediaries can be a long one, giving rise todisputes over the allocations of funding. Confusionmay also arise when, for example, NGOs take a sliceof a grant and effectively charge a management feewhen acting as intermediaries.

Dissecting the global from the local is a formidablechallenge. However, a starting point might be to lookat the methodology employed in comparative studies

of nationally based non-profit organisations whichconstitute a large part of civil society. The JohnsHopkins Comparative Nonprofit Sector Project,covering 22 countries, provides some useful para-meters for identifying the non-profit sector. TheInternational Classification of Nonprofit Organisa-tions (ICNPO) was conceived and designed to beconsistent with the International Standard IndustrialClassification (ISIC) developed by the United Nations(Table 8.1). The organisations included share fivecommon features: they are (1) collections of peoplethat are institutionalised to some degree, (2) private,

(3) non-profit-distributing, (4) self-governing, and (5)voluntary in the sense that they are not statutorybodies and time and/or money are voluntarily do-nated to them.

In the study of global civil society organisations,the above definition might need to be stretchedsomewhat to include social movements and grass-roots organisations as collections of people who arenot necessarily institutionalised to some degree butrather devote a portion of their time to a cause,which may have some full- or part-time organisers,but which can consist of considerably larger groupsof people with strong commitments to the cause.

Tracking funding flows across borders, to formalNGOs, social movements, and grass-roots organ-isations is also problematic. Such statistics as exist areoften simply totals of national statistics. Funds maybe double-counted because of the circuitous routesthat money can take; or, with the use of offshorevehicles, they may not be captured at all. Withelectronic fund transfers, tracking has become bothsimpler and more difficult as funds leapfrog fromone jurisdiction to another at the click of a mouse.The UN System of National Accounts, a much utilised

statistical resource, is an inadequate data source forsuch cross-border studies because NGO and

foundation flows are lumped together within theresidual household category, which includes toomany other flows to provide accurate figures for thecivil society sector.

Some of the problems associated with datacollection are evident from even a cursory glance atnational statistics. For example, American foundationsare reported to have disbursed a total of over $23billion in 2000 (11 per cent of which is for inter-national work). This figure is based on data collectedby the US-based Foundation Center (URL), assembledprimarily from the yearly and monthly information(Form 990-PF) submitted to and collected by the

Internal Revenue Service. The study is augmented byannual reports, other foundation publications, andquestionnaires mailed out to over 18,000 largerfoundations (Renz, Samson-Atienza, and Lawrence2000). Nevertheless, it takes into account only fundflows reported inside the US. Other countries employsimilar methods. Newer foundations that sourcefunds from around the world with a view to givingglobally may have no need whatsoever to bring fundsthrough the US or any other home country. Manyfoundations produce consolidated reports on theirgiving on a geographical basis but provide less

comprehensive information on the geographicalorigins of their funds.

The Foundation Centers method of recording datadoes not account for grants made from onefoundation to another. For example, it reported$124.6 million of giving by the New York based OpenSociety Institute (URL) and $108.8 million from theSoros Foundation (Renz, Samson-Atienza, andLawrence 2000: 48). The total given in the table of thetop 50 givers includes both sums. However, the bodyof the text makes it clear that the $108.8 millionwas given from the Soros Foundation to the OpenSociety Institute, which acted as an intermediary foronward giving. Re-granting of funds, for examplefrom one large foundation on to several smallerfoundations, is a common practice worldwide. Thereis no way of identifying how many of the fundsflowing through foundations are in effect double-counted as a result of re-granting.

In Cross-border Philanthropy, which draws itsdata from the Johns Hopkins Comparative Non-profitSector Project, Helmut Anheier and Stefan Listaddress many of the methodological problemsassociated with such research. The survey concludesFU

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that, in addition to flows from institutional actors,those from non-institutional units such as individuals,

unincorporated enterprises, or informal associationsneed to be taken into account (Anheier and List 2000:16). The less formal the source, the more difficult itbecomes to identify it and then separate the globalfrom the local.

A variety of funding methods support the oper-ations of civil society organisations. Transfers of fundsfor which no formal exchange is expected includedonations and grants. Where an exchange such as thesale of goods or services has occurred, there is atransaction, as when an NGO sells a T-shirt and fundssome of its operation out of the profits. An NGOmay operate on a not-for-profit basisthat is, it

does not distribute profits to shareholdersbut itmay have a trading arm that generates income.Contributions of an in-kind or voluntary nature areusually treated as transfers since no tangibletransaction has taken place, though some may arguethat the satisfaction derived from making a non-financial donation does, in effect, constitute atransaction. The significance of the distinctionbetween transfers and transactions will becomeclearer later on when the role of intermediaries in thefunding process is examined.

Most global civil society organisations operate

primarily on a not-for-profit basis. The mix of feesand charges, public-sector funding, and philanthropicdonations in the not-for-profit sector varies consid-erably from country to country. However, it would beincorrect to equate global civil society with the not-for-profit sector. A growing number of for-profitsestablished by social entrepreneurs are committedto creating a public good through the operationalvehicle of a commercial entity (see ChangemakersURL). The increasingly blurred boundary betweenpublic and market delivery of goods and servicesaffects the study of how CSOs go about raising andemploying funds.

With a potential multitude of sources of fundingand of constituencies of recipients of funding,funders, and funded must come to terms with amultiplicity of tax regimes that affect the movementof funds. The net amount left for a cause in aneighbouring country after taxation may beconsiderably less than the amount that could begenerated locally. However, before looking at some ofthese technicalities it would be useful to glancebriefly at the history of global civil society funding.

The History of Global CivilSociety Funding

The history of global civil society shapes thecontext from which todays donors haveemerged. Before the mid-nineteenth century,

religious organisations were the main funders of civicworks. Missionaries were motivated by philanthropyand a desire to make converts to Christianity.Originally their charitable works focused on educationand health. In many ways these men and women ofGod were the first development project managers,setting up schools and clinics in countries far fromhome. Towards the latter part of the nineteenthcentury organisations emerged such as the Red Cross,

founded in 1864, initially as religiously sponsoredrelief organisations, though they subsequentlybecame increasingly independent. Such organisationsrelied on volunteers and contributions fromindividuals around the world to deal with problemsof natural and man-made disasters wherever theyoccurred. The Anti-Slavery Society founded in 1839was probably one of the first human rights inter-national NGOs (Risse 2000: 188), though it may nothave considered itself as such.

Women formed cross-border links over a varietyof causes. The international suffrage movement

began shortly after the womens peace movement inthe second half of the nineteenth century. Thesocialist feminism campaigns began in the latenineteenth century, as did the internationaltemperance movement. Between the two world warswomen founded international bodies championingthe causes of newly emerging institutions that wereintended to deal with matters such as equalemployment rights. Many of these movementswere funded by local fundraising initiatives andmembership fees paid by affiliated national bodies.

International trade union co-operation also beganaround the mid-nineteenth century, with the firstInternational Trade Union Federation following on in1901 and the first World Federation of Trade Unionsestablished in Paris in 1945. The cold war caused asplit in the WFTU in 1949, when Western trade unionsformed the International Confederation of Free TradeUnions. These and other trade union bodies engagedin various charitable works around the world.

After the Second World War the post-BrettonWoods institutions such as the World Bank and theInternational Monetary Fund found themselves inneed of implementation partners. The development FU

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industry to some extent discovered civil society almostby accident. Those involved in funding aid and

assistance came to rely more and more on local NGOsto implement their projects. At times this counter-balanced authoritarian and corrupt states; in otherinstances it led to a weakening of already marginalisedstates. Such interventions often had unintendedconsequences. Projects were launched and fundedthat required skilled people for their implementation.NGOs mushroomed as employment opportunitiespresented themselves. Huge sums of developmentmoney in the region of $50 billion a year (see Table 8.2)spawned a correspondingly large implementationinfrastructure. There are now thousands of organ-isations, large and small, that, whether for ideological

or for practical tax reasons, prefer to work as not-for-profit entities. These organisations often competewith for-profit companies and consultants offeringthe same services. However, the NGOs not-for-profitstatus usually, though not always, provides them witha perceived moral advantage.

In the 1960s young people across Europe andAmerica felt uneasy with the emergent status quo, asreflected in student demonstrations. The war in

Vietnam attracted unprecedented internationalprotest. The founding of Amnesty International inthe 1960s spawned numerous country committees

and, in the 1970s, organisations with a wider humanrights brief. Other movements galvanised around theinequities of the development process and thedegradation of the environment. The funding forthese movements was ad hoc and small-scale, thoughthese issues, being cross- border by nature, generatedtransnational responses at both the intergovern-mental and the civil society levels.

The aftermath of the cold war changed theenvironment in which civil society operated. The fallof the Berlin Wall was to create a completely newconfiguration of relationships. First, an indigenouscivil society emerged in the post- communist bloc,which would have been inconceivable before theevents of 198990. Second, related but not solelydue to the fall of communism, the globalisation ofcapital and financial markets created a morefavourable regulatory environment for fundingtransfers that also benefited NGOs. Third, improvedinformation and communications technologies (ICTs)made access to information cheaper and faster, thusenabling groups that had previously operated inignorance of one another to link up, create leverage,and improve the quality of information employed. The

benefits of ICT are abundantly evident and dealt withelsewhere in this volume.

The final quarter of the twentieth century saw anexplosion of NGOs, with over 40,000 internationalNGOs registered with the Union of InternationalAssociations (URL) by the year 2000. The increasingnumber of democratic countries suggests thatselforganising organisations will grow ratherthan contract. The position of global CSOs in thisincreasingly complex array of participants is likely toattract more attention.

Who Funds?

This section looks at the sources of funding

available to global CSOs. They include individuals,the stateat the national and the local levels-

providing grants and contracts as well as taxconcessions, multilateral agencies providing loansand grants, bilateral aid programmes, foundations-state, private and corporatereligious organisations,and trade unions. Recipients of funding usually seeksupport from more than one source within and acrossthese categories.

Individuals: donating money and time

Contributions from individuals, whether in the formof money or of time, are a significant factor in theoperations of any NGO. This is especially so for socialmovements and grass-roots organisations that rely oninformal means of fundraising. Some countries keepnational statistics on giving, but even these do notreflect the funds raised informally by committedactivists at grass-roots levels. Cake sales, jumble sales,and raffles are all part of their stable of fundraisingtechniques. Celebrities offer their time and names freeof charge. Musicians, actors, and comedians arewilling to perform, artists donate their works tocauses close to their hearts. Activists often use theirown funds or contributions from their friends andfamilies to cover the costs of travel, communications,and publicity.

Most advocacy campaigns begin with a singleindividual or small group committed to a cause anddonating their own resources to turning an idea intoan organisation. For instance, Peter Eigen, a WorldBank regional director for East Africa, took earlyretirement from his secure job to form TransparencyInternational (TI) when he could no longer tolerate thecomplacency he found towards corruption (GaltungFU

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2000). It was several years before his organisationcould afford to pay professional staff. TI now operateson a $5 million annual budget. Individual giving in theform of donations and membership dues plays asignificant role not only in providing much-neededcash but also in demonstrating the presence of a

constituency of concern for a particular cause.Greenpeace (URL), for example, raises 81 per cent of itsfunding from donations of less than $1,000.

Reported patterns of giving vary from country tocountry. The causes supported also vary. US giving isdirected primarily to causes close to home with only1.2 per cent allocated to international affairs (GivingUSA URL). In the UK three of the top twelve nationalcharities are devoted to overseas aid (Wright 2000).These and other patterns reflect a variety of culturaland historical differences.

Individuals are also a source of funding foun-dations. In addition to establishing foundations, theymay give directly in order to fund projects or add toa foundations endowment, which then provides anincome stream. In some cases individual donations areearmarked specifically for investment purposes only.For example, the World Scout Foundation receivedover 2 million Swiss francs in 1999 to augment itsendowments. Again, patterns differ from country tocountry. Some of the differences in preferencesbetween nations are captured in Table 8.1, whichcompares giving and volunteering patterns in threecountries based on the ICNPO categories. Any FU

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Table 8.1: Giving and volunteering, selected countries, by INCPO group, by country, 1991, 1992

ICNPO major group

Culture & Recreation

Education & Research

Health

Social Services

Environment

Civic & Advocacy

Philanthropy

International Activities

Business Associations

Religious without church tax

Religious with church tax

Other

Percentage of respondents giving in:

US

15.7

21.1

32.9

49.6

16.3

12.0

16.2

3.5

16.0

51.3

-

2.8

Germany

8.9

1.8

13.2

13.1

9.4

2.8

1.0

14.8

1.5

23.9over 90%

2.5

France

2.4

8.0

23.2

9.8

1.7

2.2

1.3

6.7

1.5

9.1-

1.1

Percentage of respondents volunteering in:

US

12.5

15.4

12.9

26.8

8.6

4.7

8.7

2.3

7.1

26.8

-

2.7

Germany

6.4

0.6

1.0

0.9

0.9

1.8

0.4

0.3

0.6

3.1-

0.6

France

8.7

2.0

1.7

3.3

1.0

0.7

0.3

0.7

1.2

2.0-

1.4

Table 8.2: Major aid flows: net flows frommajor donor countries ($m)

Country

AustraliaAustriaBelgiumCanadaDenmarkFinlandFranceGermanyIrelandItalyJapanLuxembourgNetherlands

New ZealandNorwayPortugalSpainSwedenSwitzerlandUnited KingdomUnited StatesTotal

1993

953544810

2,4001,340

3557,9156,954

813,043

11,25950

2,525

981,014

2351,3041,769

7932,920

10,12356,486

1998

960456883

1,6911,704

3965,7425,581

1992,278

10,640112

3,042

1301,321

2591,3761,573

8983,8648,786

51,888

Source:OECD (2000)

Percentages do not add to 100% because multiple answers were allowed.

Source:The Johns Hopkins Comparative Nonprofit Sector Project (Salamon et al. 1996: 57).

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companies such as Kodak, Ford, and Unilever(Mackintosh and Wainwright 1987). Porto Allegre in

Brazil burst forth on to the global map when, earlyin 2001, it hosted the Global Social Forum, a parallelsummit held at the time of the World EconomicForum in Davos.

States may make substantial contributions toNGOs through favourable tax treatment of not-for-profits. Since most NGOs take on a legal status inwhichever jurisdiction they are registered, decisionson where to locate global or regional CSO officesmay in part be influenced by tax regimes. Some ofthe issues surrounding the legislative and taxenvironments that facilitate and or restrict cross-border activities are examined later in this chapter.

Bilateral aid

Bilateral aid has always been motivated by self-interest tempered with a dash of idealism. Historicallymuch bilateral aid has been in the name of helpingthe poor but has been structured in such a way as tobring benefits to the donor. Table 8.2 shows thatmost countries providing bilateral assistance reducedtheir expenditures between the first half and secondhalf of the 1990s. Some of the shortfall is beingmade up by private foundations and multilateral

agencies, but the contraction of funds has politicalimplications which are widely discussed in thedevelopment literature.

With the end of the cold war, democracy took ona greater significance. Its role in promoting stablemarket economies led to substantial bilateral-aidfunds being devoted to democracy building. This hasbeen an important development for the recipients ofbilateral aid. USAIDs funding for democracy assist-ance, for example, rose from $165.2 million in 1991to $637.1 in 1999 (Carothers 1999: 49). Within thatbudget, support for civil society also grew in thesame period from $56.1 million to $230.8 million. In1999 $146.9 million was spent on rule-of-lawprojects, $203.2 million on governance, and $58.9million on elections and political processes. Over$100 million was allocated for democracy buildingfrom a number of other departments and agenciessuch as the US Information Agency, the State,Defense and Justice Departments, the NationalEndowment for Democracy, the Asia Foundation, andthe Eurasia Foundation. Table 8.3 shows the allocationby region over a nine-year period.

Thomas Carothers (1999: 210) describes theinternational civil society assistance priorities of the

US and other Western countries as follows:

NGOs dedicated to advocacy on what aidproviders consider to be sociopolitical issuestouching the public interest including electionmonitoring, civic education, parliamentarytransparency, human rights, anticorruption, theenvironment, womens rights and indigenouspeoples rights. Three other areas of U.S.democracy assistancecivic education, mediaassistance and aid to labour unionsalsorepresent efforts for the development of civilsociety, though when US aid providers use the

term civil society assistance they are usuallyreferring specifically to their work withadvocacy groups.

Two US-funded public foundations, the Inter-American Foundation and the African DevelopmentFoundation, were established specifically to channelfunds to developing country NGOs. The Asia Foun-dation, which conducts similar activities in Asia, usesa different funding model that combines funds frompublic and private sources.

Bilateral aid is increasingly administered through

NGOs. In 1999 Norway channelled 24 per cent of itsbilateral aid through NGOs, Sweden 29 per cent, Finland11 per cent. The Canadian International DevelopmentAgency (CIDA) established a separate division in 1975devoted to supporting international NGO bodies thatworked towards strengthening developing countries.Other countries have similar units.

Table 8.4 tracks 28 countries official developmentassistance over a decade and provides information onthe extent of their reliance on NGOs for disburse-ments.

Multilateral agencies

Most funding for global CSOs, broadly defined,emanates one way or another from the developmentindustry and is led by the multilateral agencies.Distinguishing projects that build bridges from thosethat build civil society does not always aid analysis.Many of the projects that rely on NGOs for deliverycontribute to capacity building and networking whichis crucial to global CSOs. According to the UnitedNations Development Program (UNDP), 250 millionpeople are now reached by NGOs (as opposed to FU

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Table 8.3: USAID funding for democracy: assistance by region, fiscal years 19911999 ($m)

Year

1991

1992

1993

1994

1995

1996

1997

1998

1999*

Latin America

83.5

101.2

132.8

75.4

110.0

67.3

65.9

82.2

86.8

Eastern Europeand the formerSoviet Union

22.0

43.1

68.6

156.4

136.8

119.8

107.3

216.3

288.4

Sub-SaharanAfrica

30.6

55.3

72.3

102.9

70.8

85.9

67.4

96.9

123.4

Asia and theMiddle East

27.7

22.0

30.4

35.6

80.0

83.2

64.2

112.4

111.5

Global

1.4

3.2

11.4

10.3

38.0

31.0

17.4

23.9

27.0

Table 8.4: Overseas development aid distributed through NGOs

Canada

Norway

United States

Japan

Belgium

Sweden

Australia

Netherlands

United Kingdom

France

Switzerland

Finland

GermanyDenmark

Austria

Luxembourg

New Zealand b

Italy

Ireland

Spain

Portugal

Total

Net official development assistance

(ODA) disbursed

Total (US$m)

1997

2,045

1,306

6,878

9,358

764

1,731

1,061

2,947

3,433

6,307

911

379

5,8571,637

527

95

154

1,266

187

1,234

250

48,324

As % of GNP

1997

0.34

0.86

0.09

0.22

0.31

0.79

0.28

0.81

0.26

0.45

0.34

0.33

0.280.97

0.26

0.55

0.26

0.11

0.31

0.23

0.25

0.22

Share of ODA

through NGOsa

(%)

1995/96

8.5

8.6

2.1

0.3

6.0

0.6

9.2

2.0

0.2

5.8

0.7

2.60.5

0.5

12.5

2.0b

1.0

0.1

0.8

3.4

Ranking by

% of GNP

1997

7

2

16

14

9

4

10

3

11

6

7

8

101

11

5

11

15

9

13

12

Ranking by %

disbursed through

NGOs

1995/1996

4

3

8

15

5

13

2

9

16

6

12

714

14

1

9

10

17

11

* 1999 figures are budgeted expenditures rather than actual expenditures.

Source:USAID Democracy/Governance Information Unit (Carothers 1999).

aOn a disbursement basis. bData refer to 1994. Source:UNDP (2000).

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100 million in the 1980s) and their rising budgetof $7.2 billion is equivalent to 13 percent of netdisbursements of official aid (Pearce 1997: 268). Thelead agencies such as the World Bank have beenlooking increasingly to engage in partnerships rather

than acting alone, even though such relationshipsinevitably involve cultural clashes. Many NGOsquestion the value of such collaboration. The WorldBank (1998) claims that half of its operations involveNGO participation in some capacity. Table 8.5 indicates FU

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Table 8.5. Patterns in World Bank-NGO operational collaboration, fiscal years 19871998

By regiona

Africa

East Asia and

Pacific

South Asia

Europe and

Central Asia

Latin America

and theCaribbean

Middle East and

North Africa

Total

By sector

Agriculture

Education

Electric power

and energy

Environment

Finance

Health,population

and nutrition

Industry

Mining

Multisector

Oil and gas

Public sector

management

Social sector

Telecomm-

unications

Transportation

Urban

development

Water supply

and sanitation

Total

Number of

projects

680

378

239

225

443

180

2,145

443

190

165

74

109

134

86

16

190

53

141

60

37

233

113

101

2,145

Total 198795

Percentage of

projects run

through NGOs

34

20

33

16

24

12

25

41

29

5

42

2

66

27

12

4

26

7

92

-

7

37

16

25

Ranking as

percentage of

projects run

through NGOs

1

4

2

5

3

6

4

6

12

3

14

2

7

10

13

8

11

1

11

5

9

Number of

projects

59

45

25

69

68

20

286

47

36

15

18

17

24

2

4

19

2

28

12

3

27

19

13

286

1998

Percentage of

projects run

through NGOs

54

51

73

37

51

52

50

74

63

40

78

6

79

33

100

30

-

24

80

-

71

55

62

50

Ranking as

percentage of

projects run

through NGOs

2

4

1

6

5

3

5

7

10

4

14

3

11

1

12

13

2

6

9

8

a refers to percentage of NGO-involved projects in all World Bank-approved projects in the region. Source:World Bank (1999).

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the patterns of World Bank-NGO collaborations, whichdisplay considerable diversity.

The other development banks, such as the EuropeanBank for Reconstruction and Development, the AfricanDevelopment Bank, the Asian Development Bank, andthe Inter-American Development Bank Group, as wellas sub-regional financial institutions such as theIslamic Development Bank, also engage with NGOs.Most of their grants are for technical assistance,advisory services, and project preparation, thoughsome also run scholarship programmes.

Regional bodies

Regional bodies also engage with civil society. Theextent to which trans-border activities are supporteddepends on the issues concerned and the strategicobjectives of the funding body. OPEC may fund a few

educational projects, but this is not central to itsaspirations. The European Union, however, sees funding

of multinational education and research as central toits mission of furthering European integration. Theintroduction of line items such as human rights in itsgeneral budget is a relatively new phenomenon. Table8.6 demonstrates that a fair proportion of the EUsbudget for 2000 of nearly 90 billion euros was devotedto activities that either fostered the development ofcross-border civil society activities or employed theservices of NGOssome of which are trans-borderCSOsin their delivery.

Foundations: private and corporate

There are now hundreds of thousands of foundationsworldwide whose historical development goes backseveral centuries. The largest private and corporatefoundations are now so big that they themselves arebecoming significant players on the world stage.Clearly, typical community foundationsusually localgrant-making entities that receive funds andendowments from a number of sourcesbear littleresemblance to the likes of the Ford Foundation, oneof the largest privately endowed independentfoundations. However, there are some structuralsimilarities. Foundations are usually asset-holding

bodies. They are concerned with charitable orphilanthropic causes. Their organisational structuresvary; and here it is useful to distinguish betweenoperating and grant-making foundations, since theformer are more involved in carrying out intendedactivities than the latter (Anheier and Toepler1999:163). Foundations may make grants to otherbodies or deliver services themselves.

Foundations range in size from the very small,handling only a few thousand dollars a year, to thelargestcurrently the Bill and Melinda GatesFoundation with an endowment currently standingat $22 billion. Each country has its own laws on howfoundations must be structured, how funds may bedisbursed, and what activities they may undertake. Inthe newer democracies laws governing foundationshave either just been introduced or recently beenconsiderably amended under pressure to ensuretransparency and accountability. In the first few yearsafter the collapse of communism, many of these lawsof central and eastern Europe countries were veryloose and encouraged tax evasion. The secondgeneration of legislation in the late 1990s was agreat improvement.FU

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Table 8.6: EU budget headings with someelement of funding for civil society

Budget heading

Education, vocationaltraining and youth

Culture and audiovisualmedia

Information andcommunication

Social dimension andemployment

Environment

Consumer protection

Trans-European networks

Areas of freedom, securityand justice

Research and technologicaldevelopment

Pre-accession strategy

Food and humanitarian aid

Cooperation withdeveloping countries

Cooperation withMediterranean and MiddleEast countries

Cooperation with C&EE,Balkans & NIS

Other external cooperationmeasures

European initiative fordemocracy and humanrights

Appropriation 2000

(Euros)

481,500,000

111,500,000

104,000,000

144,615,000

157,700,000

22,500,000

688,000,000

68,700,000

3,630,000,000

3,166,710,000

935,996,000

905,738,000

1,142,923,000

941,769,000

356,850,000

95,373,000

Source:European Commission (2000).

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Foundations may provide grants to one another,either as part of a co-funding arrangement or as

subcontracted agents. Like corporations, they enterinto partnerships and alliances. Sometimes joint fundingdecisions are taken simply to minimise risk. Close tofour-fifths of the grant makers surveyed by the US-based Foundation Center in 2000 reported partneringwith other donors (Renz, Samson-Atienza, andLawrence 2000). This tendency is leading to increasinglystandardised procedures of decision-making, withfoundations often using the same advisers.

There is a certain degree of overlap ofgood causesfunded by some of the wealthiest foundations in theworld. Many of the issues themselves are global, theenvironment, for example, and foundations can

effectively fund globally even if the organisations theyfund are themselves local. New forms of support includeprogramme-related investments, whereby a foundationmay make what appears to be commercially basedinvestmentswith an expected return on capital andexit routein business ventures that further the socialcauses served by the foundation. Venture philanthropy,though lacking a commonly agreed definition, isanother new form of funding. It refers to a hybridconcept marrying high-risk investment approaches withaltruistic actions. Venture capitalism usually refersto investments in the form of equities or loans

accompanied by professional guidance, usually to start-ups or relatively new companies. Philanthropy isassociated with the giving of money or time to goodworks. Venture philanthropy, then, might be definedas the act of investing capital in businesses that havea social purpose and where a capital return is desirablebut not paramount. However, many foundations use theterm loosely to designate grant programmes thatconcentrate on projects that are high-risk in terms oftheir likelihood of achieving their stated objectives. Anexample of the first definition of venture philanthropyis the Markle Foundation (URL) that has taken equitystakes in dotcoms that are expected to produce sociallyuseful services. Zoe Baird, Markles President, hasdefended her foundations position in the face of publicattack as being the most efficient way of encouragingcompanies to focus more on public rather than privategoods.

Hybrid models, mixing the philanthropic with thebusiness modus operandi, are becoming increasinglypopular with foundations willing to finance pro-gramme-related investments, while NGOs arebecoming more comfortable adopting a multiplicity ofapproaches to accomplishing their mission. MamaCash

(URL) is an interesting example in terms of both itsgeographical focus and its mix of support for both not-

for-profit and for-profit activities. In The Netherlands,its home country, MamaCash provides guarantees forbank loans to support women entrepreneurs as well asgrants and loans for local feminist cultural and socialprojects. At the same time grants are provided togroups concerned with womens issues in the southernhemisphere as well as central and eastern Europe.Although the average grant size is small at less than$3,000, this body has concentrated on providing seedmoney for groups that encounter difficulties in raisingfirst-round funding because of the controversial natureof the issues they wish to address. MamaCash relies onprivate donations and loans from individuals and

carefully guards its independence.The growth of both privatethat is, established

through individual wealthand corporateestablishedby a companyfoundations has followed the rapidgrowth in wealth creation of the 1990s. USfoundations endowments nearly doubled between1994 and 1999 to $385 billion (Lawrence, Camposeco,and Kendzior 2000: 3). Foundation giving alsoincreased from $11.3 billion to $22.8 billion duringthose five years (Lawrence, Camposeco and Kendzior2000: 1) and rose to $27.6 billion in 2000 (Renz andLawrence 2001:3). The largest percentage increase in

the late 1990s was in corporate giving

18 per cent in1998though a slowdown followed the stock-markettrend in 2000 with corporate giving rising by only 9per cent (Renz and Lawrence 2001: 4). As capital andmarkets have become global so too have the interestsof foundations, particularly the large US ones. This isless so of other developed countries such as Germany,which has concentrated primarily on domestic issues.

Of total US foundation giving in the 1990s, justover 11 per cent was allocated to internationalactivities. Unsurprisingly, the largest foundationsdevoted a higher percentage14 per centof theirgiving to international projects (Renz and Lawrence2001). However, the giving of funds to domesticNGOs for foreign projects increased at a greater pacethan giving directly overseas65 per cent versus 57per cent. Highlights from the Foundation Centersreport provide some insight into the changes infunding patterns that occurred towards the end ofthe 1990s. It remains to be seen whether this trendcontinues. Based on a sample of 1,020 foundationsin 1994 and 1,009 in 1998, the survey included grantsof $10,000 or more and covered over half of allfoundation giving in the US each year and an FU

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FUNDING

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1994

Science 2%Religion 2%

Human rights5%

Arts6%

Environment

6%

Internationaldevelopment

7%

Health17%

Social sciences10%

Inter-nationalaffairs15%

Education12%

Public/societybenefit 4%

Total amount = $679,432,522

Figure 8.1: US Foundations: international giving by sector

The public/society benefit category includes grants for public affairs, philanthropy, and general grants to promote civil society. Civilsociety grants are also found in other categories, such as human rights and international development.

Based on sample of grants of $10,000 or more from 1,020 foundations for 1994 and 1,009 foundations for 1998.

Source:Renz, Samson-Atienza, and Lawrence (2000).

1998

Science 2%

Religion 2%

Human rights8%

Arts9%

Environment8%


17%

Health14%

Social sciences10%

Inter-nationalaffairs13%

Education11%

Public/societybenefit 5%

Total amount = $1,066,414,588

Percentage composition

CarribeanLatinAmerica

Sub-SaharanAfrica

WesternEurope

North Africa&

Middle East

CanadaEastern Europe,Russia &

independent states

Asia &the Pacific

90

100

80

70

60

50

40

30

20

10

0

1994

1998

M

illionsofdollars

Figure 8.2: US Foundations: cross-border giving 1994 and 1998

Based on sample of grants of $10,000 or more from 1,020 foundations for 1994 and 1,009 foundations for 1998. Grants tooverseas recipients, for example in Europe, may be for programmes conducted in other countries or regions.


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estimated two-thirds of the total international givingby all foundations. Changes in programmatic focusfor the US foundations over the decade were asfollows:

1. The main areas of substantial growth in givingwere in international development, health,international affairs, and education. These werefollowed by human rights, public/social benefit,arts and culture, and religion.

2. Continued growth was reported in micro-enterprise development, human services,reproductive health care, pre-collegiate andadult education, refugee issues, civil rights, civilparticipation, and the non-profit sector andphilanthropy.

3. New areas of growth include programmes onAids, child health, disaster relief andhumanitarian aid, climate change and pollutioncontrol, forest protection, and the impact ofglobalisation

The comparative growth and decline of individualareas of interest can be seen in Figure 8.1.

The changing international funding environmentis also shown in Figure 8.2. Foundations felt thatpartnerships between grantmakers and otherinternational funding organisations would increase,as would funding directly overseas. The increase ininterest in giving abroad appears to be a result ofglobalisation, the decline in US government funding,and the rapid growth of foundation endowments.

The variations in growth patterns need to be furtherexamined. However, the significant increase in fundsdirected to Western Europe may be explained by agreater willingness of US foundations to use WestEuropean NGOs as intermediaries, while the drop ininterest in central and eastern Europe, Russia, and theIndependent States reflects a correction after the firstinflux of funds following the fall of communism.

There does appear to be a convergence around ahandful of key issues which some have interpretedcynically as the Washington consensus. Certainly, FU

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Box 8.1: The Soros Foundations Network

The profile of the Soros Foundations Network is anunusual one, but as a major player in theinternational arena it warrants special attention.Established in the 1980s by one individual, thebillionaire financier George Soros, it is fundedprimarily out of his current income and a numberof charitable entities established by the Sorosfamily. Some of the programmes receive additionalfunds from the US governmentparticularlyscholarshipsand from other donors. Partner-shipping with multilateral and bilateral agencies as

well as NGOs on a programmatic level is en-couraged throughout the network which is madeup of nationally governed and staffed foundationsnow in 31 countries, primarily in central andeastern Europe, the former Soviet Union, andAfrica, as well as Haiti and Guatemala. In addition,the flagship foundations of the OSI of New Yorkand the OSI of Budapest offer a selection ofnetwork programmes that draw on a central poolexpertise and are coordinated through a numberof advisory boards. National foundations areencouraged to draw on these centralised internal

resources.

While the distinctive mission of George Soros hasbeen to create open societies out of formerlyauthoritarian ones, the need to leverage and scale-up innovative models has necessitated workingincreasingly in partnerships with other donors thathave a greater developmental focus, not onlybecause of cost but also as a way of encouragingchanges to take root by spreading the commitment

across a broader base.

Health6%

Education,research

27%

Culture,recreation

24%

Other16%

Social services8%

Civic &advocacy

13%

Development& housing

6%

Total amount = $560,000,000

Source:Open Society Institute (1999).

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improved communications and increased attendanceat international conferences have enabled foun-dations to watch more closely one anothers interests.The large amount of American money pouring intothis arena is setting the standards and procedures

followed by these and other donors. The degree ofoverlap of funded areas is demonstrated in Figure 8.3.

The core issues addressed by these bodies includehuman rights, the environment, biotechnology,humanitarian interventions, anti-capitalism/global-FU

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Poland

20,000

16,000

12,000

8,000

4,000

0 Hungary Czech Republic Slovakia

140

120

100

80

60

0

40

20

Aid (Left Axis)

Foundation Giving(Right Axis)

Figure 8.5: Aid resource flows US$m19901996 and foundation support to central and eastern Europe US$m 19891997

Source:Pinter (2001).

Science2%

Other2%

Humanrights10%

Arts7%

Environment9%


18%

Health15%

Socialsciences

11%

Internationalaffairs13%

Education9%

Public/societybenefit

4%

Figure 8.3: International programmatictrends of top twelve US foundations

providing international grants, 1998


Other 3%

Health53%

Culture, recreation 7%

Philanthrophy 1%Social services 0.3%

Education,research

42%

Figure 8.4: Gates Foundation: distribution ofgrants, 1999

Source:Gates Foundation (URL).

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isation, democracy building, civil society building,arts and culture, the media, and health. Not reflected

in these Foundation Center headings or in the mainICNPO listing is the importance of programmes andcampaigns associated with gender issues, which infact cut across many of the main sectors.

Corporate foundation giving in America grewfaster than any other foundation sector in the late1990s. The interests of corporate foundations in theglobalisation process would suggest that a furthercoupling of the public and private can be expectedin the early twenty-first century.

Many multinationals have identified areas inwhich acting in the public interest can be beneficialfor themselves as well. Pharmaceutical companies, for

example, spawned foundations that list in theirannual report in-kind drug donations from theirparent companies. Cynics argue that this is actually

just a marketing exercise with tax and goodwillbenefits attached. While the intentions of someindividuals involved may be sincere, it is obvious that,by giving away, for example, the hardware andsoftware products of their parent companies,corporate foundations can help seed under-developedmarkets. The American Express Foundation explicitlystates in its 1999 Annual Report many of ourmajor philanthropic efforts are tied directly to the

companys long-term business objectives (AmericanExpress 2000: 3).

Attention is focused presently on the activities ofthe William and Melinda Gates Foundation (URL) thattopped up its endowment funds to over $22 billionin 2000. Although programme development is still atan early stage, indications of priorities are clear. Thedistribution of funds in 1999 is shown in Figure 8.4.However, this does not reflect the growing concernBill Gates has expressed over health provisions for thepoorest people in Africa, which will be evident inlater reports.

Foundation support internationally, whetherprivate or corporate, often follows the same path asmultilateral and bilateral aid. This occurred in centralEurope in the 1990s as is illustrated in Figure 8.5.

Religious organisations

In recent years religious bodies have shifted theiremphasis to include poverty reduction, agriculturaldevelopment, provision of finance through smallloan schemes, birth controlfor and againstand,significantly, human rights and emergency relief

programmes. Like many other funding bodies,religious organisations both disburse their own funds

raised through donations and act as implementingagents for other funders.In addition to the large numbers of locally

sponsored and cross-border projects, a number ofbodies bring state-based churches together withininternational networks. For example, the WorldCouncil of Churches represents more than 330churches, denominations, and fellowships in 100countries representing 400 million Christians. Actionsby Churches Together is an alliance of churches andrelief agencies that deal with emergencies in morethan 50 countries. The World Alliance of ReformedChurches links more than 75 million Christians in

over 100 countries. The Lutheran World Federationhas 128 member churches in 70 countriesrepresenting 58 million Lutherans. Many nationallybased religions have strong congregations around theworld, such as the Russian Orthodox Church andthe Armenian Church, all of which redistributeresources. Federations of Islamic religious groupsplay an active role in social and educational welfare.These umbrella groups facilitate the movement offunds across borders for the various causes endorsedand supported by religious bodies.

While the amount of funding for cross-border

activities by religious bodies is difficult to ascertain,the Johns Hopkins study provides indicators ofreligious giving and volunteering as a percentage oftotal giving and volunteering. Table 8.7 demonstratesthat religious giving and volunteering constitutes asizeable proportion in each of the three countriessurveyed. Whereas much of this is for local causes, asubstantial portion is devoted to disaster relief aroundthe world.

Trade unions

By 1999, the International Confederation of FreeTrade Unions (ICFTU), much the largest trade unionfederation, had 213 member organisations in 143countries, with a combined membership of 124million employees. Although individual unions can

join, most affiliates are national union centres. Themain bulk of funding comes from affiliation feesfrom member organisations, based on the number ofaffiliated members. Some income also comes frompublications sales, though this has been in declinesince the 1980s, perhaps partly due to use of theInternet (Gordon and Turner 2000: 834). FU

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Income for ICFTUs International Solidarity Fundcomes from special appeals, both general and forear-marked projects. The ICFTU has also becomeincreasingly reliant on grants from various publicagencies (Gordon and Turner 2000: 912).

International cooperation also takes place on theindustry or sector levels through International TradeSecretariats. As with the general federations, fundscome from affiliation fees from member unions.However, they also receive grants from publicagencies and private foundations

Who is funded?

The kinds of groups, organisations, and entitiesfalling within the global civil society arena andfunded by the sources discussed above may be

large, well-established multinational NGOs or theymay be small NGOs housed in one-room offices. Theyare sometimes more and sometimes less than inter-national non-governmental organisations (INGOs),

a category that the Union of International Associ-ations (URL) prefers to call transnational associationnetworks. NGOs may be societally sponsored orestablished by governments, in which case they maybe referred to as government organised NGOs(GONGOs); as multinational NGOs (MANGOs), referredto by some as manipulated NGOs; or as governmentregulated and initiated NGOs (GRINGOs). NGOs mayalso be sponsored by Inter-Governmental Organi-sations (IGOs). The official purpose of an NGO isoutlined in its constitution, but its ultimate course isinfluenced by its members and backers. While allclaim to be independent, many serve only theinterests of their sponsors.

Other funded bodies including social movements,a looser form of organisation, also come in a varietyof shapes and sizes. Grass-roots organisations, whiletending to be local, sometimes employ a network ofinternational alliances to further their causes. Grass-roots organisations are most likely to receive localfunding from individuals, businesses, and munici-FU

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Table 8.7: Religious giving and volunteering indicators, selected countries, 1991 and 1992

Dimension

Sum of religiousgiving as % of totalsum of giving

Religious giving as %of annual income ofgivers

Average total sum ofreligious donations forgivers previous 12

months

Median total sum ofreligious donations forgivers previous 12months

Sum of religiousvolunteering as % oftotal sum of volunteerhours

Average total sum ofreligious volunteerhours for volunteersprevious 12 months

United States

60.4

0.95

$800

$300

27.5

363

With church tax

80.21

0.800.92

-

-

23.1

223

Without church tax

33.1

0.33

$119

$40

-

-

France

22.1

0.08

$107

$40

5.8

106

Source:The Johns Hopkins Comparative Nonprofit Sector Project (Salamon et al. 1996: 56).

Germany

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palities. Their resources are almost always stretchedand, like social movements, they live a hand-to-mouth existence, receiving much in-kind supportsuch as use of computers and telecommunicationsfacilities. NGOs vary in size, of course, but usuallyhave easier access to funding from more establishedbodies than do social movements. Social movementsare considered by some funders to be too radical andtoo chaotically run. Grass-roots bodies tend to bemore firmly rooted than social movements andtherefore able to find more stable sources of funding.NGOs tend to be better equipped to attract fundingfrom foundations of all kinds as well as the state,often through competitive processes requiring thesubmission of formal written applications. Increas-ingly the larger NGOs are relying on professionalfundraising staff.

Bilateral aid programmes work alongside themultilateral agencies, as both engage with NGOs.How civil society organisations might operate withinthis context is described by Muduuli (2000) asfollowswhich applies equally to global CSOs:

1. influencing policy formulation throughadvocacy dialogue, research, and analysis;

2. participating in formulation of sector plans asresearchers, stakeholders; and beneficiaries;

3. providing delivery of socio-economic servicesand implementing public programmes;

4. influencing public expenditure prioritisation,resource mobilisation, allocation and utilisation;and

5. monitoring and evaluating public expenditureand programmes.

Some of the funding of the above may be built intoproject costs, but funds are scarce for all but itemthree of the list. CSO project managers often findthemselves turning to private foundations to coverthe salary costs involved in influencing policyformulation, participating in planning, influencingprioritization, and monitoring.

These organisations core activities includeadvocacy, activism, conflict resolution, humanitarianrelief, educational/capacity building/training, and FU

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In the aftermathor even duringhumanitarianinterventions, such as in Kosovo or Sierra Leone,a plethora of agencies provide humanitarianaid on the ground. There is a rather contortedcriss-crossing of funds between establishedinternational organisations such as the UN andits agencies, regional bodies such as the EuropeanUnion, and NGOs both national and international.Such criss-crossing is apparent, for example, inthe funding structure of the UNHCR (URL) whichreceives only a small annual contribution from

the UN regular budgetjust under $20 million in1999. It is heavily dependent on voluntarycontributions from governments, intergovern-mental organisations, NGOs, corporations,foundations, and individuals. Fourteen govern-ments and the European Union provided 94 percent of the near $1 billion expenditure in 1999,undoubtedly impacting on UNHCRs politicalagenda. Special funds earmarked for specificemergencies amounted to over half of its $911million income.

In 1999 UNHCR entered into 544 agreementswith NGOs, 395 of which were national and 149international. $295 million of the operationalexpenditures flowed through these NGOs. Muchin-kind assistance came from other sources. Thishas been crucial in helping UNHCR on the groundduring crisis periods. With the increased use oftechnology in the management of refugee crisesthe large hardware and software companies arebecoming increasingly important donors. In 1999the main contributors were Microsoft and Sun

Microsystems. The political nature of humani-tarian assistance funding has caused considerableconcern. (Edwards 1999). Activists worldwidehave had to face the dilemmas produced bymilitary interventions undertaken ostensibly withgoals they may endorse but with methods theyabhor. The NGOs involved in the aftermath ofKosovo, Somalia, and Timor have produced anelite of relief workers that through their networksinfluence, to some degree, the reconstructionprocess.

Box 8.2: An example of multi-sourced funding: the aftermath of humanitarian intervention

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facilitating the use of digital communications. Themake-up of different types of funding depends not

only on the issue area addressed but also on the kindof activity pursued. Not-for-profit income-generatingactivity in the educational field provides a higherproportion of revenue than, say, selling T-shirts tosupport an advocacy endeavour on banninglandmines.

While much global civil society activism isresourced through voluntary contributions of time,there are recurring costs that are fairly typical ofmost organisations. These include salaries forpaid staff, premisesusually rented rather thanpurchasedoffice overheads, computers, telecom-munications, information contentthat is, books,

reports, subscriptions, and Internet accesstravel,training and capacity building, and public relationscampaigns. The cost of many of these activities hasdropped in recent years. Air travel in real terms hasdecreased by about 70 per cent (Economist2001: 5)and ICT has enabled cash-poor organisations tolaunch campaigns on the web for a fraction of thecost of a paper campaign.

Whatever combination of funding sources ispursued, all civil society actors face the three mainissues of independence, sustainability, and account-ability.

Independence

From an anthropological point of view no organ-isation can ever truly retain its independence. Aresource dependency perspective developed byPfeffer and Salancik is summarised by David Lewis(2001: 87) as follows:

The theory is based on the idea that instead ofseeing organisations as relatively autonomous,the environment is a strong constraininginfluence which limits room for manoeuvre. Allorganisations depend on the environment forthe resources they need and to do this theymust continuously negotiate and exchange,and in this sense are to a large degreeexternally controlled. Organisations try toreduce this dependency by controlling the flowof information about themselves to outsidersand by diversifying their sources of resources.

The above is as true for NGOs as it is for corporations.While there has been an increase in income-

generating activities across the whole spectrum ofNGOs, advocacy groups rely mainly on spreading

their dependency across a wide enough range ofdonors to ensure their independence.Amnesty International (AI), for example, was

launched in 1961 with 1,000 offers of support. Todayit has over a million members, subscribers, and regulardonors in more than 160 countries and territories.There are more than 5,300 local youth, student,and professional AI groups registered with theInternational Secretariat. Nationally based sectionsexist in 56 countries. Amnesty International does notaccept funding from governments for its workinvestigating and campaigning against human rightsviolations. The International Secretariats budget is in

the region of $25 million, though this is only part ofits worldwide funding (Amnesty International URL).This money is raised through membership fees anddonations from trusts, foundations and companies.Human Rights Watch, with a core budget of $12.5million also does not accept government funding.However, it relies more heavily on foundation grantsrather than membership fees or individual donations(Human Rights Watch URL). Such broadly based bodiesdevote substantial resources to soliciting and thenservicing their membership.

Campaigning globally on environmental issues,

Greenpeace relies on a broad funding base for itslegitimacy as much as for its financing. In 1999, 2.5million donations were received, amounting to 126million Euros. It does not accept contributions fromgovernments or corporations. Money flows from theperiphery to the centre as grants from the 25 nationaloffices received by Greenpeace Internationals headoffice amounted to just over 25 million euros, whilegrants to the national branches from head officeamounted to 4.5 million euros. Income from mer-chandising and licensing is in the region of 2 millioneuros and is a potentially growing source of revenue(Greenpeace URL). Friends of the Earth, founded in1971, has also grown dramatically; it now has over5,000 local activist groups and a combined budget of$200 million (Friends of the Earth URL). Even with 700full-time staff members, much of its campaign workis carried out by volunteers.

The degree to which an organisation is inde-pendent of its financial backers depends, in part, onthe amount of support it receives from volunteers andin-kind contributions. In many ways the moreestablished and dependent an NGO is on outsidefinance, the more vulnerable it can become toFU

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changes in funding fashions. Relative dependencyon financial resources varies according to the task at

hand and the nature of the organisation to be funded.However, funding is only one, albeit important,component of the resourcing of any kind of activity.The appropriateness or viability of non-financialresources as substitutes or complements to financialresources depends on the structure of theorganisation, what it intends to achieve and how,and the overall cultural climate surrounding theparticular issue area. For example, in general thegreater the local support for the effort, the lessfunding is required for advocacy campaigns. Otherpatterns of funding are necessary if highly paidexperts need to be brought and bought in. The more

global the coverage the more money needs to bespent on communications, both virtual and physical.

The question from whom organisations areindependent varies from region to region. Forexample, in the transition countries of central andeastern Europe the rapid retreat of the state createda dramatic shortfall of funding in many areas.Substitution came primarily from foreign donors whothen created a different kind of dependencyrelationship. After a few years of gratitude resent-ment set in. The same ingenuity that commandeeredresources from the state was and is being employed

in attempts to maintain the flow of foreign funds,even as the former Soviet bloc has fallen out offashion with some donors.

Historically, northern NGOs (NNGOs) were theimplementing agencies of choice for multilateraldonors. These NNGOs would often subcontractcomponents of projects to southern NGOs (SNGOs).Recently there has been a shift towards contractingdirectly with SNGOs. The rationale behind this is thatthe process itself assists in the building of local civilsociety; and, of course, it costs far less. Some arguethat this can lead to an unhealthy dependency whenNGOs act on behalf of funders with whose ideologythey disagree. In trying to attract the business, NGOsrisk losing their focus as independent commentatorsand promoters of alternative perspectives (Hulmeand Edwards 1997). Conversely, as the donors becomemore dependent on NGOs for delivery, donor policiesmay to some extent be influenced by the NGOsthemselves.

Sustainability

Sustainability as a concept may be applied to aproject or programme that is sustained by itsbeneficiaries. In commerce the cost of creating anddelivering products to the market is sustained by thecustomers willingness and ability pay for them. Butwho are the beneficiaries of the actions of globalcivil society? NGOs can mistakenly be thought of asthe beneficiaries of the funds they receive, and hereinlies the crux of the problem in defining what is andis not sustainable. The causes represented by NGOs arenot the same as the organisations themselves. Thereis always a danger that organisations perpetuatethemselves out of self-interest rather than for the

sake of their original mission. The most successfulorganisation can fail to make itself redundant onceits goals are achieved. The natural lifespan of a CSOdepends on different factors from those thatdetermine the lifespans of governments or businesses.

Social movements also face transformationquestions. They may redefine themselves, as has beenthe case with many anti-apartheid groups. In centraland eastern Europe many of the undergroundmovements of the 1980s found it very difficult toadjust to the less idealistic and more materialistic1990s. In the early 2000s many are still mourning the

fragmentation of their old groups. However, othershave grown up in their wake and a new generationof tougher, more pragmatic, and more highlystructured NGOs has emerged.

Actors within the civil society sector are lookingfor ways of becoming self-sustainable, and to this endNGOs have adopted many of the business modelsstemming from the commercial world. Funds areincreasingly raised through the provision of goods andservices. Generating revenue from market activitiesrather than relying solely on membership contri-butions or donations from foundations, the state, ormultilateral organisations may, to some extent,increase sustainability and independence. While themission itself dictates to some degree the mode ofoperation, the will to survive causes CSOs totransform themselves from advocacy groups intoconsultants and subcontracted project managers.

The matching of funder and funded is as complexas any mating game. One cynical report argues thatsome NGOs will simply define their mission to agreewith whatever a funder wants (Economist 2000). Ona practical level CSOs do have to conform to certainrequirements. Funders tend to operate with strict FU

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funding cycles. Applications need to be submittedby certain dates. Immediate needs often cannot be

met because of waiting times for decisions to bemade. The identity of the funder(s) also makes adifference. The source of support can determine theCSOs legitimacy and thus its effectiveness ininfluencing policy and accomplishing its objectives.

Accountability

The definition of accountability has broadenedconsiderably since it applied solely to financialaccounting practices, and now reflects the spread ofthe democratic process at all levels of society. Citizensworldwide are increasingly demanding that their

elected leaders and the bureaucracies that serve themshow a greater degree of accountability for theiractions. In turn, questions have emerged about theaccountability of civil society, in particular withregard to its mandate and to whom it is responsible.

Within the jurisdiction of the state, laws regulate theactions of civil society, but the power and influence ofglobal civil society actors seem to be beyond the controlof any individual state. Mechanisms for incorporatingdemocratic values and involving all stakeholders indecision-making are as yet relatively undeveloped. Theideal may be unattainable because of purely logistical

constraints, but greater transparency and clearerrepresentations are being promoted more widely thanever. There is always the danger that NGOs administeringfunds are more accountable to their donors than totheir beneficiaries (Edwards 2000: 209). However, withfull disclosures, public debate, and more democraticgovernance it may be possible to generate more trust.Accountability will continue to be an issue at all levels,among the funders and the funded.

Legislative and TaxEnvironments: The State

Friend or Foe?

The legislative and tax environments affect allfund flows, whether emanating from develop-ment agencies, foundations, or individual

contributors. This is particularly true for cross-borderflows that not only are subject to a variety of legalregulations but also may experience practicaldifficulties, as with electronic transfers to countrieswith underdeveloped banking systems. In someinstances the banks simply do not function at all, asin Kosovo just after the war of 1999. In rare instances

a well-known global CSO can maintain its existencewithout locating itself physically in any state. When

the Campaign to Ban Landmines received a NobelPeace prize it transpired that it did not have a bankaccount (Florini 2000: 143). It was simply a coalitionof over a thousand CSOs worldwide working towardsthe same goal and brought together by the drive ofa few individuals.

Both private and corporate foundations areincreasingly taking advantage of differing tax andlegal environments around the world in order tostretch their philanthropic funds. Increasingly popularare offshore sites from which funds may be easilydisbursed; many choose to register in Liechtenstein andSwitzerland with their favourable tax environments. At

the same time some organisations such as AmnestyInternational have chosen to forgo the legal and taxbenefits of charitable status for fear that such statusmight compromise their political independence.

Taxation and legislative policies do affect theability of foundations to give to causes outside theirhome country. In many countries, the taxation ofcharities and donations encourages domesticprogrammes only; giving to foreign- registered NGOsis almost never tax-deductible. Only occasionally dobilateral treaties covering double taxation reducethese losses. Foundations may risk their tax status

unless they ensure the charitable nature of therecipients of their grants; and this is more difficult tocontrol when giving abroad.

Many governments are suspicious of CSOs andvoluntary organisations. They suspect that NGOgrowth, particularly in the service provision sector,may erode their tax base. This is despite theadvantages of encouraging voluntary organisationsto take over some of the burdens of the state, oftenresulting in net cost savings. Non-profit legislation isless advanced in developing countries; and restrictionson incoming money flows often hinder rather thanencourage increased flows from abroad. Manyorganisations establish legal entities within a numberof the wealthier countries so as to offer the best taxadvantage to potential givers from these countries,even though the ultimate recipient may be outsidethe country.

A healthy balance in NGO legislation is describedbelow by John Clark (1997: 54). Not many countrieshave achieved this lofty state:

Government-imposed NGO regulations andreporting requirements must strike a balanceFU

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between nurturing NGO growth, and guardingagainst corruption, management ill-discipline

and other malpractice. Restrictive laws andprocedures designed for the political control ofNGOs clearly hamper legitimate NGOs. Fiscalpolicies should be transparent and even-handed, providing incentives for legitimateNGO activities (conforming with Statedevelopment priorities). Tax concessions may beused to encourage indigenous philanthropy andincome generating activities of NGOs. Andlegitimate NGOs should be able to receiveforeign funds and donated goods withoutonerous bureaucratic delays. There should beno arbitrariness, bias or rent seeking in the

awarding of these privileges.

Some developed countries are only just beginningto establish NGO-friendly laws. Until Japan passed itsLaw to Promote Specified Nonprofit Activities in1998, 90 per cent of Japanese NGOs remainedunincorporated, resulting in all financial transactionsbeing carried out in the names of individuals ratherthan organisations (Florini 2000:169).

The extent to which the state can set theregulatory framework for the cross-border flow ofgoods, services, and capital is contested, though the

discussion is about degrees rather than absolutes(Higgott, Underhill, and Bieler 2000). NGOs servingglobal causes certainly benefit from more liberalregimes.

Conclusion

The earlier sections of this chapter focused onfunding. But money alone does not create civilsociety. Human, social, organisational, infor-

mational, and financial resources provide a finelybalanced mix that fuels global CSOs. Depending onwhether it is lubricating the parts or firing the engine,different types of oil are required. The permutationsare infinite, but the components are still of the same rawingredients. New forms of renewable energy, in attemptsto achieve sustainability, have become part of the globalcivil society resource kit and the advantages ofrecyclable resources are becoming increasingly apparent.

The dangers of focusing too heavily on financialresources were brought forcibly home in a paperpresented by the former Chief Economist of theWorld Bank, Joseph Stiglitz, at the Banks AnnualConference on Development Economics in 1999,

which focused on the failure to build social andorganisation capital in the former communist bloc

countries:

Arrow, Hirshman, Putnam, Fukuyama, andothers have argued that the success of amarket economy cannot be understood interms of narrow economic incentives: norms,social institutions, social capital, and trust playcritical roles. It is this implicit social contract,necessary to a market society, that cannot besimply legislated, decreed, or installed by areform government. Some such social glue isnecessary in any society. One of the mostdifficult parts of a transformation, such as the

transition from socialism to a market economy,is the transformation of the old implicit socialcontract to a new one. (Stiglitz 1997: 8)

What Stiglitz is saying is that strategic funding alonecannot accomplish change. Whether at the abstractlevel of a general social contract or in the detail ofhow individuals behave in the associations theycreate, the social glue of norms and trust must bein place if there is to be any life in the organisationor institution. This became a powerful, though notalways heeded, lesson for both governments and

foundations alike as they watched billions of dollarsoriginally intended to assist the transition in thepost-communist bloc disappear into Swiss bankaccounts. It was an expensive demonstration of whathappens in societies where there is no social glue tohold them together.

In a world of increasingly dense networks thatengage more and more in communicating with oneanother, there appears to be a growing convergencearound a handful of core issues among the majordonors. The causes around which advocacy andactivist groups have emerged, such as human rights,environmental issues, poverty alleviation, betteraccess to health and education, and gender rightshave given hope to some that a cultural cosmopolitanconsensus (Held et al.1999) is emerging. Others seea bleaker world in the making that is totallysubservient to the dictates of global capitalism.

At this stage it may be said that even if theperimeters of this new global civil society were clearer,it would still be impossible to quantify accuratelyhow much money is flowing into this arena and whateffect it is having. While the general shape of thefunding community can be sketched, the actual total FU

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amounts flowing into the civil society space throughglobal and regional CSOs are difficult to determine.

It has been noted that over $7 billion of developmentfunds flow through NGOsbut not all for civil societyprojects; that over $2 billion of US foundation givingis internationalnot all for and through CSOs; andthat nearly $700 million of USAID was devoted todemocracy building in 1999 alone. However, this isonly a part of what is being spent worldwide on across-border basis that funds global civil societyactivities. The funding level we see is in the billionsof dollars rather than millions or hundreds of millions.More studies need to be carried out at all levels, tocreate workable typologies and to demarcate clearlywhat is global from what is local. Comparative work

to establish how funding patterns vary from regionto region is also needed.

This chapter has tried to introduce the main issuesaround identifying and measuring the funding oforganisations and movements that qualify as actorsin the global civil society space. There is clearly aneed to engage in further research, of both anempirical and a theoretical nature, related to thequestions surrounding all aspects of resourcing, andnot just funding. More fundamental questions onthe nature of the economies in which global civilsociety is embedded need to be raised. Do healthy

local civil societies attract more or less outsidefunding than less healthy ones? More in-depthcomparative case studies need to look at how foreignfunds influence local civil society and vice versa. It isto be hoped that the concept will in time be broughtinto sharper focus. The data, however, will in alllikelihood still be problematic as the primary units ofanalysis remain nation-state based. More imaginativeresearch approaches will be required to overcomethis difficulty.

I would like to thank Jerzy Celichowski andAndy Roberts for their assistance in assemblingthe data for this chapter.

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