Editor's note: Transparency International Georgia submitted this contribution to the debate originally sparked by Till Bruckner's post The accidental NGO and USAID transparency test. We at TI Georgia have closely followed this debate about whether and to what extent USAID and its NGO contractors should make their budgets public. Till Bruckner began his quest for answers while he was working with us in 2008-09, although his pursuit of the NGO budgets via FOIA requests to USAID was not conducted under the auspices of TI Georgia.

Mercy Corps’ response to the debate begins by stating, “it is unfortunate that the discussion has devolved into insinuations about NGO motives rather than an open discussion of what constitutes meaningful accountability in aid work.” Yet nowhere in this debate has TI Georgia witnessed an attack against the motives of aid workers. Transparency can open up a discussion on the global aid system and how to better address problems that lack of openness can lead to in ANY organisation: waste, inefficiencies, redundancies and, sometimes, fraud and corruption. As Scott Gilmore points out in his post, the impact is what matters.

The discussion on the blog has been engaging, open, honest and productive. But we do not agree with attacks against individuals who speak up against problems that they see. To call someone a “self-appointed watchdog” misses the point. Others would call Till a whistleblower – exactly the practice we should encourage and protect if we are serious about delivering on our development promises, protecting aid funds and transforming the aid system.

Mercy Corps proceeds to make an ad hominem attack against Bruckner by drawing attention to problems in an assignment he did on behalf of TI Georgia in 2009. Mercy Corps’ criticisms of the unpublished report are fair. That is why TI Georgia chose not to publish the report. But we fail to see how problems in drafting that report are relevant to the question of whether NGOs should publish their budgets or not.

Further, claims that raw budget data are not useful to measure NGO effectiveness are misguided. The question of aid effectiveness is tied up inherently with having access to ALL the information behind aid programs, allowing for comparison and analysis. While releasing project budget documents may not be a catch-all indicator for transparency of an NGO or donor, it is certainly a meaningful one.

Even if conditions are precarious, such as in humanitarian assistance work, there should be a clear NGO or donor policy on transparency, and organisations need to be open about which information cannot enter the public domain – and why. TI, in its handbook, recommends that financial information should only remain secret if its publication endangers staff or beneficiaries.

Mercy Corps argues:

NGOs have different cost structures and different methodologies, and budget documents reveal little about which are most effective. Certain types of projects – such as technical assistance or gender-based violence prevention – tend by their nature to be heavy on labor costs and light on capital items, while food distribution or micro-lending tend to be lighter on labor costs and heavier on capital requirements.

There are two separate arguments above. The second is about differences between types of assistance projects. No one advocating for aid transparency has implied that one kind of cost structure is inappropriate. Let us see the numbers, assess them and discuss our concerns with you.

The first is an argument we hear from NGOs over and over again: that publishing their budgets will erode their competitiveness. This argument has not gotten the attention it deserves in this exchange. The most sensitive information in those budgets, even before salaries, is the Negotiated Indirect Cost Rate Agreements (NICRAs) that every NGO competing for USAID funds has, as Counterpart’s post highlights. NICRAs arrive in sealed envelopes and are carefully guarded secrets within the industry, differing widely in structure from one organization to another. Perhaps someone can explain why USAID contracting uses this system – presumably if all NICRAs were the same (or if they were all public), NGOs would be slightly more willing to disclose their budgets

In its current state, USAID’s system rewards secrecy and discourages public accountability. We applaud Bruckner for his efforts to raise these serious questions and we look forward to the viewpoints of more NGOs, USAID, and others on the topic.

The accidental NGO and USAID transparency test Till Bruckner Responds to Critics on Meaningful Transparency NGO Response: CNFA Reaffirms Commitment to Transparency World Vision responds on transparency USAID and NGO transparency: When in doubt, hide the data Response from Mercy Corps on Transparency NGO Transparency: Counterpart International to release budget

From Aid to Equality

Transparency International clarifies the debate, deplores attacks on Till Bruckner