NGOs Wasting Money...

This post is going to be a rant similar to this one, which I wrote a couple months ago.

To generalize, NGOs waste money. They literally throw it away. I really do not understand how they justify this, who makes these decisions and why, and how/whether it shows up in their financial reports.

As a side note, most of the NGO projects I’ve been exposed to in Rwanda have been funded, in some way or another, by USAID. Maybe these issues are specific to USAID-funded projects. I have no idea.

The first way NGOs waste money – staff trainings. Staff trainings are vital to the success of any project, and are an especially good practice when they transfer skills and knowledge to locals. I fully support trainings and workshops, particularly for host country staff. But, is there any reason staff trainings should not be cost efficient? It really seems like some NGOs are trying to waste money.

First, if a significant proportion of the attendants do not learn anything from the training because they do not speak the language in which it is conducted, bringing those participants to the workshop is a waste of money. Second, if the venue chosen for the training is fancier than necessary and more expensive than other options, it is a waste of money. Third, the NGO hosting the training should provide accommodation. But, if they choose to house everybody at the fanciest hotel in town, and to give each person their own room when rooms are designed for 2-4 people, it is a waste of money. Fourth, the NGO should also provide food during the training. But, when participants are fed every three hours, it is a waste of money. Fifth, for meals not provided, the NGO should give participants a per diem. But, when one can easily dine in a decent restaurant for 2,500F (about $4.17), but the NGO gives each participant 5,000F-7,000F per meal (about $8.33-$11.67), it is a waste of money. Sixth, and the last note on meals, when the NGO provides participants with a meal and also gives them a stipend to cover that meal, it is a waste of money. Finally, the NGO should reimburse participants for transportation. But, when the NGO staff know that it costs 5,000F (about $8.33) to travel round-trip from Nyagatare to Kigali, but give participants making that trip 15,000F (about $25) to cover transportation, it is a waste of money. Even worse, when the NGO staff provides transportation stipends to participants who did not even have to travel to the training, it is a waste of money. Not only is this money not providing aid, it’s not even being spent on/given to people who need it – it’s going to Westerners and middle/upper-class locals.

Sadly, such wasteful expenditures are not limited to staff trainings.

The second way NGOs waste money – meetings/trainings in the field. It is crucial for NGO staff to meet with beneficiaries, and, for some projects, it is a good practice to provide trainings for them. I fully support this. But, again, some NGOs are really making a solid effort to waste money.

First, if the beneficiaries incur a cost traveling to a meeting, the NGO should reimburse them. But, in many cases, a meeting is held for residents of a particular village/cell/town, so everybody walks both ways because it’s so close and, in rural areas, there’s no public transportation there anyway. If the NGO gives each participant 2,500F (about $4.17) for transportation anyway, it is a waste of money. Second, a leader of some kind is often present at a meeting. For example, if the meeting is at a church, the pastor of that church might be there; if the meeting is at a health center, the director of that health center might be there. In those cases, attending said meeting is probably part of that person’s job requirements. And, they were obviously already there, working at their church/health center/etc., anyway. If the NGO gives those leaders 5,000F (about $8.33) for transportation, it is a waste of money. When said leaders accept this money, it is really despicable. It seems both parties are aware of this, as this money is sometimes (though not always) literally given under the table.

The third way NGOs waste money – staff per diems in the field. These expenditures apply not only to formal meetings, but also to aid workers/volunteers going about their daily work in the field. First and second, apply all the same expenditures regarding transportation and food. Third, if an NGO employee/volunteer has these expenses covered (and covered in excess), but the employee/volunteer is not actually contributing anything, it is an even bigger waste of money.

I’ve already received 70,000F (about $116.67) in excess reimbursements/per diems.

I’m one person, working at one site, being paid by one NGO, and I’ve only been here for three months. Assuming my case is not unique, and I’m fairly confident it isn’t, let’s estimate how much money is wasted by NGOs worldwide.

I’m making the rest of these numbers up, but let’s assume:

$116.67/person x 4 quarters/year x 10 volunteers/organization x 40 organizations/country x 150 countries receiving aid = $28,000,800 being wasted every year.

$28,000,800 of “aid” money going into the pockets of Westerners – and that doesn’t even include all the other ways NGOs waste money. That’s only looking at reimbursements/per diems for international volunteers, which is one very tiny factor in the operations of any NGO. Imagine what could be done with the total amount of money that is wasted by NGOs every year… The end of poverty? Kidding. But, still.

Okay, I’m done for now. More ranting to come, I’m sure.