Civil Society Marches Toward Global Governance

Wojtek Sokolowski sokol at jhu.edu
Wed Jan 12 10:31:37 PST 2000


At 02:46 AM 1/12/00 -0500, Michael Pollak wrote:
>Wojtek, have you read Michael Maren's book on NGOs? He said that he found
>documents showing that Care, one of the NGOs he researched in depth,
>received very substantial UN funding, but that he almost had to commit
>crimes to get those figures. He claims that contract funds like these are
>not itemized anywhere in NGO public statements because this allows them to
>improve their overhead ratios considerably. (NGOs seem required to
>disclose remarkably little of their financial details compared with for
>profit companies.) Maren also argued that much of not most of the UN High
>Commision on Refugees' funds were spent via NGO subcontractors during the
>15 years it was in Somalia, and suggests that this is true for most UN
>overseas operations, but that there is no law requiring the UN to disclose
>the details of these contracts either, and it doesn't. Is it possible
>that your figures are skewed by relying on public disclosure statements?
>Or do you think that Maren is unreliable?
>
>

Michael, I have not read Maren's book (I'm putting it on my reading list, though), so I cannot comment on his specific claims, but I would be extermely suspicious of any claim revealing secret evidence of a UN-linked conspiracy. Conspiratorial theories, like sex lives of celebrities, are immensely popular and have sold many cultural products.

Having said that, I am not denying a possibility of UN funding for a single nonprofit organization. In fact, I recall doing a consulting work on UN-sponsored project a few years ago (and earning the whopping $1500), and I am involved in another UN-sponsored project channeled through an nonprofit outfit (but for which I receive no compensation) - so it is quite likely that some UN money ends in nonprofit pockets. The question is, how much.

The total nonprofit revenues in the US are in the vicinity of $600 billion, in Western European countries that figure is anywhere between $5b and $100b - so even if the UN support for nonprofits were measured in millions (which I doubt), that would still be a drop in a bucket.

A more likely, and substantial, source of support are national gov't funding for intrnational projects (e.g. USAID) - usually paid to US nonprofits that run international programs. US gov't rarerly gives money to foreign nonprofits, and if it does, the eligibility criteria are very stiff. It prefers domestic nonprofits that can serve as a venue for program delivery. Information on that subject with the directory of entities receiving gov't support can be found in:

Report of American Voluntary Agencies Engaged in Overseas Relief and Development Registered with the U.S. Agency for International Development Bureau of Humanitarian Response, Office of Private and Voluntary Cooperation, USAID, Washington, DC 20523

http://www.info.usaid.gov

Thus, transnational nonprofits (such as YMCA, the Salvation Army or Planned Parenthood) might be major distributors of foreign aid in developing countries (which is a form of "laundering" of government monies). For example our study of nonprofits in Ghana (Attingdui, Anheier, Sokolowski and Laryea, The nonprofit sector in Ghana in: Salamon and Anheier (eds), _The nonprofit sector in the developing world_ , Manchester: Manchester U Press, 1998) that virtually all major nonprofits in that country reported receiving foreign government and private funds. A similar situation exists in Eastern Europe, where government (PHARE) monies are often distributed by a local nonprofit outfit, thus becoming "private donations." (cf. Wedel, _Collision and Collusion, The Sttange Case of WEstern Aid to Eastern Europe, 1989-1998, New York: St. Martin's Press, 1998).

In sum, foreign aid might indeed by distributed via transnational nonprofits, but the main source of that aid is not the UN but government programs such as USAID or PHARE.

As to the domestic nonprofits, their financial stats are publicly available in two forms, the IRS business master file that lists most tax-exempt entities, and Form 990 filers (entities with revenues over $25 that are required to file their financial report with the IRS). For more info see:

http://www.irs.gov/tax_stats/exempt.html

and

http://www.irs.gov/tax_stats/soi/ex_imf.html

Agreed, it is a well-know fact that 990 reports are full of crap - but it is unlikely that it so to hide secret UN funding. A much more likely data the nonprofits would want to hide is their executive salaries (cf. Gaul and Borowski, _Free Ride: The tax Exempt Economy_, Kansas City: Andrews and McMeel, 1993) or their unrelated business income (UBI) which is taxable. A typical scheme to avoid UBI tax would run like this:

a nonprofit operates a "questionable" business outfit, such as a health club or a gift shop. It would try to convince the IRS that such operation is "mission related" - but if it fails, it would shift most of its overall operatinng ependitures (mostly wages) or running the whole organization into its business outfit (rather than pro-rating it between "related" and "unrelated" activities), thus substantially reducing their taxable "unrelated" income generated by that outfit.

To my knowledge, it is commercialization and tax evasion - not secret UN funding - that are the best kept secret of the nonprofits, at least in the US. To understand that, however, would require some knowledge how the nonprofit ecenomy operates. Accusations of conspiracy, otoh, have a much greater appeal to simple minds, unaccustomed to analytical thought. No wonder that conspiratorial theories have sold many books.

wojtek



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