This article is part of our special issue on New Trends in Philanthropy and Civil Society in China (Summer, 2011). While many of the other articles in this issue examine the rise of Chinese foundations and their possible impact on the NGO sector, this article examines the role and impact of international funders which have traditionally been the most important supporters of grassroots NGOs in China
It interviews the author of a survey that asked Chinese NGOs to evaluate their international donors. The survey finds that, while NGOs are getting a growing share of their funding from Chinese foundations, funding from international donors is still very important to NGOs. The survey also identifies a number of areas for improvement in the NGO-donor relationship. It calls for donors to establish a more equitable relationship with NGOs, and to view funding as an opportunity to help NGOs develop and strengthen their capacity, rather than to impose additional burdens on NGOs. Some of those burdens include onerous application and reporting requirements, and excessive emphasis on project funding without providing funding for staff and administrative costs that are needed to manage the project. The lessons culled from this survey are important for international donors who want to improve their performance and effectiveness, but they may be even more critical for Chinese foundations which are only starting to learn how to work with grassroots NGOs.
In June 2010, local NGOs participated in the first ever large-scale evaluation of international donor organizations in the inaugural “Survey on International Donors by Chinese NGOs” (支持中国草根民间组织国际资助方评估). The survey included feedback from 110 Chinese organizations evaluating 122 different international funders. China Development Brief (CDB, 中国发展简报) had the opportunity to speak with Bo Meng, international consultant and program officer for the Capacity Building & Assessment Center (CBAC, 倍能组织能力建设与评估中心), the primary organizer of the survey.
The growth of local NGOs has always been closely tied to the aid provided by international donors. Although the dollar amount of financing has steadily declined in the wake of China’s economic growth, international aid still plays a decisive role in the funding and capacity building of Chinese NGOs. Not surprisingly, many challenges still exist in the relationships between international donors and local NGOs, and these challenges, in turn, could help determine the future growth and development of Chinese civil society.
According to CBAC’s report, “The relationship between donors and NGOs still follows a traditional top-down model, wherein the donor provides funding and the NGO must accept the conditions and terms set by the donor. The two sides have yet to establish a more equitable partnership, something also evidenced in the culture of “upward accountability.” In the current state of affairs, funding recipients are responsible for detailing how grants were spent and the results they achieved, whereas donors themselves have little or no accountability. Seldom do they ask, “What problems and difficulties, does this funding relationship produce and how can we improve it?” The current top-down form of evaluation has resulted in lost opportunities to improve the funding system itself, discouraged recipients from innovating, and implicitly punished recipients who have encountered difficulties in their operations not taken into account by donors.
A closer look at donor organizations indicates that the donor-recipient relationship varies significantly according to the donor’s overall funding strategy. “A strong partnership generally indicates a good funding relationship; on the other hand, a good funding relationship does not necessarily indicate a strong partnership.” Bo Meng points out that foundations that focus on providing comprehensive support for Chinese organizations often enjoy good relationships with their partners. In contrast, organizations that both run their own programs and provide funding to Chinese groups often treat Chinese NGOs as mere functionaries, a working relationship with definite room for improvement.
According to Bo Meng, a significant proportion of donors are still accustomed to unilaterally setting the parameters of the funding relationship. They still view the relationship as a top-down, patron-recipient model, and not as an equitable partnership. Thus, Chinese NGOs and international donors still have a significant ways to go in establishing genuine partnerships.
Bo Meng acknowledges that blame for the current system does not lie wholly with donors. In fact, NGOs have their own reasons for preserving the status quo. After all, within the wider context of international aid, Chinese grassroots NGOs and their funders are stakeholders in the same system—they simply represent different links in the chain.
According to the report, a majority of Chinese NGOs reported spending an inordinate amount of time and resources navigating the bureaucracy of donor organizations, indicating a funding process that benefits neither side of the relationship.
Furthermore, the majority of Chinese NGOs reported primarily receiving funding for projects, saying many donors decline to cover basic operational and administrative costs. Bo Meng believes that international donors would be well-advised to diversify their funding strategies. He further acknowledges that this sort of transition toward more comprehensive funding may require donors first to educate their own financial backers about peculiarities in the structure and regulations of China’s civil society and the special needs that Chinese NGOs have as a result.
One interesting finding of the survey was how the donor organizations’ individual program representatives affected the overall relationship between donor organizations and NGOs. Bo Meng explained, “Sometimes an NGO’s satisfactory rating of a donor had nothing to do with the organization itself, but rather reflected a positive relationship with the particular program officer dealing with the NGO.”
In addition, the report indicated that large, well-established donors with resources and personnel in China did not necessarily enjoy a better relationship with Chinese NGOs than donors without these advantages. In fact, the latter often showed more willingness to cooperate with Chinese NGOs. The question of how to more effectively marshal the domestic resources of well-established donor organizations clearly deserves further consideration.
Individual personalities also remain an influential variable in the relationship between donors and NGOs. In the survey, Bo Meng discovered that “there are a number NGOs who work closely with a given foundation, but constantly worry that, if the foundation’s contact person changes, then the entire relationship will be threatened.
“Foundations, in addition to evaluating funding recipients, also need to look inward and evaluate their own performance at fixed intervals. This sort of practice remains exceedingly rare.” Bo Meng adds.
Another incipient problem lies in Chinese NGOs’ unwillingness to express dissatisfaction with a donor, even at the end of the relationship, for fear of jeopardizing future funding opportunities. Donors, meanwhile, fear that any sort of conflict, if publicized, could influence their ability to fundraise, and thus tend to resolve disputes as quietly as possible.
“If you don’t approach the partnership as equals, it is difficult to achieve the optimum result. A cooperative partnership must be built on a foundation of mutual respect.” Bo Meng says.
“Chinese NGOs are often the targets of appraisal, whereas donors are seldom subject to evaluation.” In the process of collaboration, “domestic non-profits are unlikely to communicate very candidly with donors,” even when the donor might try to elicit feedback. According to Bo Meng, the survey was undertaken in response to this situation.
Bo Meng believes that addressing the way Chinese NGOs interact with international donors is an important aspect of capacity building. Thus, this survey conforms with CBAC’s core mission.
Before joining CBAC, Bo Meng worked for the German MISEREOR Foundation, allocating grants to grassroots organizations in China. This experience on the other side of the funding divide has given Bo Meng exceptional insight into the dilemmas faced by donors and NGOs alike. In his role at CBAC, Bo Meng is very sensitive to the respective roles played by donors and NGOs.
Bo Meng says the purpose of the survey was not to publish a formal evaluation of international donors, but rather to give feedback to these organizations and let them know how they are perceived by local NGOs. He hopes it can be a starting point for improved relationships between the two.
In the course of our conversation, Bo Meng also pointed out that the operating environment for Chinese NGOs is in the midst of change. As foreign aid continues to shrink, competition for funding will grow increasingly fierce. Chinese NGOs have already encountered difficulties in the wake of the 2008 financial crisis when international funding dried up and many organizations that had grown to rely on international donors were suddenly on their own. This experience and the ensuing controversy over the roles of foreign vs. domestic funding also may have helped to heighten incipient tensions in the relationships between Chinese NGOs and foreign donors.
The rise of Chinese foundations raises the possibility of a new source of funding for NGOs, a conclusion supported by the report’s finding that Chinese NGOs are relying less and less on foreign donors, and instead are cultivating new sources of funding. According to the report, “if foreign donors were to cut off funding within the next two years, of the 100 or so NGOs in the survey, only about 16% would be forced to cease operating.” Bo Meng admits that “although this is a significant percentage, it’s far less than we had expected.” Furthermore, he believes that this report will be an excellent resource for the growing number of private foundations in China as they establish their own working relationships with Chinese NGOs. [Editor’s Note: A number of the articles in this special issue address the rise of private foundations and their evolving relationship with Chinese NGOs.]
The “Survey on International Donors by Chinese NGOs” was a joint project of CBAC and the Institute for Civil Society (ICS, 公民与社会发展研究中心) of Sun Yat-sen University, with the support of the Social Resources Institute (SRI, 社会资源研究所), NGOCN.net (NGO发展交流网), and others. As of this article’s original publication, Bo Meng was preparing the final draft of the report for dispersal to international foundations operating in China, as well as publication on NGOCN.net and the websites of CBAC and SRI. Bo Meng further hopes to hold a workshop for the organizations that were the subject of this report to gauge their reactions to the results. Together with ICS he is considering repeating the survey every two years, in addition to conducting case studies and training for donor organizations, with the ultimate goal of creating a platform for dialog between donors and NGOs and improving this vital relationship.
(The complete results of the “Survey on International Donors by Chinese NGOs” can be found online at http://www.sojump.com/jq/91269.aspx; interested parties may contact Bo Meng directly at firstname.lastname@example.org)