Methodology

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Strategic Criteria

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Financial Transparency

As it is linked to the interference of governments, the proportion of public and private resources in the budget of an NGO is another important criterion, if we are to consider the impedimenta of a contracted assistance and the conditions of the programs financed by various states. It must be said that these ratios are given by NGOs themselves: Aid Watch does not have the means to go through accounts and is not entitled to do so. Another important point to make is that the proportion of public funds does not always involve a political dependency towards the institutional backers. Considering the great variety of humanitarian “dispensers”, an NGO can very well diversify its public funds, while an intergovernmental organization can also call on people’s generosity, or foundations’ or companies’: about one third of the resources of UNICEF (United Nations Children’s Fund) comes from private donations, and the UNHCR (United Nations High Commission for Refugees) has created associations for that purpose in France and Great Britain.
 

After a quick description of the budget, the analysis is developped with a transparency index. Some so-called humanitarian associations do not publish any annual report on their programs and accounts. To “publish” means to make these reports available to other people than the sole private donors, institutional backers or members of the NGO. This can be done reliably by putting them online on Internet (mail or telephone requests to the head office are much more unpredictable).

A six-point gradation sets up a hierarchy in this regard:

Level 0: no annual or financial report available on Internet;
 

Level 1: no financial report available on Internet. The website gives access to a mission statement but there are no exhaustive lists of interventions per country and no information on actual expenditures;
 

Level 2: the website gives access to only one financial report, dated from the previous year or older. There are no data about actual expenditures per country or per programme. At best, the annual report looks like an advertisement pamphlet and provides no exhaustive list of interventions;
 

Level 3: the NGO's website fulfils one of the two following expectations. Either it gives access to several financial reports dated from the previous year or older. Or it gives access to only one financial report but completes the picture with an exhaustive list of interventions and/or data on actual expenditures in the field;
 

Level 4: the NGO's website gives access to one or several financial reports, the latest being two years old maximum. There are also exhaustive lists of interventions and more detailed data on actual expenditures, especially regarding earmarking and the origin of financial resources per country or programme;
 

Level 5: confirming its accountability on a regular basis, the NGO's website gives access to one or several financial reports, the latest being two years old maximum. There are also exhaustive lists of interventions and detailed data on actual expenditures, especially the source, the names and the origin of funding per country or programme. The percentage of earmarking helps to clarify the situation in this regard. Even better, annual reports really try to assess difficulties from a self-critical perspective.

 

These indicators were developed by Aid Watch in 2007 in order to analyse the accountability of international NGOs’ and their political dependency towards institutional backers. Earmarking is a strategic issue and financial reports seldom provide data that could show for instance how some NGOs in Iraq today are funded by parties to the conflict, i.e. the United States and the United Kingdom. The One World Trust’s Global Accountability Report also developed interesting indicators about access to online information. To give as fair a picture as possible, it photographed the organisations’ websites in 2002. It checks if a public information disclosure policy exists, applies to both archives and current data, lists the available documents and explains adequately the criteria for non-disclosure in order to avoid withholding information on an ad-hoc basis. Moreover, the Global Accountability Report assess if the main website can be converted into a different language, if it identifies the organisation’s members, if it explains the powers and responsibilities of the executive, if it gives information about their activities, their governing articles and their board. Eventually, the One World Trust checks if an annual report is available online, if it describes an organisation’s activities, if it contains financial statements and if it provides an audit report.
 

At this stage, it must be said that, unlike the One World Trust’s Global Accountability Report, Aid Watch focuses on access to information and activities only. It does not address the member control of NGOs’ governance structures because this good practice is more difficult and subjective to assess. The One World Trust’s Global Accountability Report is concerned about the access to decision making online, i.e. the agenda of governing and executive bodies within a year, as well as draft papers, minutes and key decisions of governing and executive bodies’ meetings. For instance, it looks at voting procedures, the rule of the majority, the fair and equitable representation of all members, their power to amend constitutions, to add items to the agenda of governing body meetings, to nominate, elect or dismiss individuals on the executive, etc. Yet the definition of “member” is limited to the national sections or affiliates or groups of an international NGO. It does not include individual members and does not check the governance within affiliates at the national level. From a formal point of view, it means that an international NGO can be considered as democratic even if its affiliates are not.