NGOs Closing – For Good?
At a meeting today and it mentioned how all the NGOs (Non-Government Organizations, also called foreigner-run charities) are on tough times. Not only are the glory days of the 1990’s, when channeling a business through an NGO was a permit to print pesos, long gone but now the players in the NGO market have grown from a handful to over a hundred.
With the increase of crime fewer foreigners come to visit which means fewer donations. More competition for those donations means fewer pesos per charity. Some NGOs are in the unenviable position of tapping into capital to meet operating expenses instead of living off the interest generated. Suffice to say, when anyone relies on capital versus interest it is the start of a spiral going down few ever rise back up from.
I wrote a year ago how I thought many foreigner run charities would fold in the foreseeable future which, on the surface, sounds bad, but in reality isn’t. So many charities met their mission statements a long time ago but stay in business for the money the businesses generate. In a positive light, closing an NGO is a very affirming statement that the goal was met and things are better now.
But all that is very easy for me to say as I’m not a gringo pocketing the funds!
When I came to town eight years ago I got certified to teach English. I quickly found myself a volunteer teacher here with a great group, several of which I’m still going to fiestas with.
Equally quickly I was asked to be President and upon accepting realized my mistake. The school was riddled with financial improprieties. Being new to town, I didn’t realize then that was pretty much the norm with foreigner run charities and still is. There’s a reason Mexicans have long stated the phrase “Foreigners come to town to form charities to line their own pockets.”
Some ex-pats simply still refuse to accept this fact. Here’s the easiest test to find out if you are volunteering to make another foreigner wealthy, ask for an audited financial statement showing exactly how much of every 100 pesos donated goes directly to the stated cause. You won’t get one and will be met with much shock that one would question the board’s integrity. If you didn’t before, you certainly should question their integrity now as how much goes to a cause should be source of pride, not secrets.
Every institution (including charities) has a life span. If the mission statement has been met, or no longer relevant, there’s no reason to stay in business. And make no mistake, every foreigner run charity in town is first, and foremost, a business (or businesses) with the goal of making a profit. Then, perhaps, occasionally, sporadically, that profit could, in theory, be put towards the mission statement.
It’s very different than up North where the only business a charity is in is fundraising for their cause. You don’t see the United Way, or American Cancer Society, running restaurants, newspapers, tours or whatever, they’re too busy getting donations to their cause. It’s a vastly different approach on being charitable.
Grant donors have learned to require local charities applying for grants to show the money won’t go to overhead and that the grant donor is not paying for proposal responses. I’ve employed many proposal writers and even a decade ago the good ones, with a proven track record, earned $100 to $150 an hour. You won’t find that level of experience, or pay rate, here in San Miguel.
My advice to folks running foreigner-run charities is use their current profit (if any) to hire winning proposal writers whose grant money then goes directly to their mission statement. Next, get out of the businesses (services already provided by Mexicans who would appreciate the decrease in competition) and focus on providing the services they claim to provide.
Otherwise, more and more charities are forced to close their doors and that may very well be okay. The purpose to the library, for example, is to teach youth art and literacy. Those goals are met in school now and often not even addressed at the library, so closing will do real harm to their mission.
Another example is an ex-pat on tour from Laos that started a charity to fund children from a certain village transportation to school. She achieved 97 cents of every US dollar donated to transportation. A 3% overhead rate is unheard of here where they often run over 100%.
After seven years, all the village kids had access to education and she closed up shop. I was stunned and asked why. She was exasperated claiming I was just like every reporter that gave her more press for closing a charity upon meeting her goal, than advertising her original goal when looking for donations.
I’m not advocating a mass closing of charities. I am encouraging everyone to look where their donations and volunteer time are going, in reality, and if the mission statement hasn’t already been met. Closing a charity because success has been achieved is not a bad thing.