The NGO Deluge
Since the 1980s, the number of international NGOs has grown exponentially. One estimate suggests that there may be up to 54,000 NGOs working in the “development” arena, up from perhaps only few hundred in the 1970s. And among these, many thousands are engaged in global health in one way or another. This extraordinary proliferation of NGOs coincides with the neoliberal era in which international debt and austerity policies imposed by international financial institutions (IMF and World Bank) through Structural Adjustment Programs (SAPs) and later Poverty Reduction Strategy Papers (PRSPs) severely restricted public financing of national health services and other public sector programs. A number of the largest donors to global health, including USAID driven by its privatization agenda, openly recruited NGOs to fill the services gaps created by structural adjustment and channeled the great majority of their foreign aid to American NGOs and contractors rather than local institutions. (NGOs come in all shapes and sizes, but here I am focusing not on advocacy NGOs, but those that implement programs and provide services.) Many other donors followed suit leading to startling budgetary imbalances between local health institutions and their NGO partners. In addition to diverting aid funds from public systems, the NGO deluge often fragmented the provision of services, pushed unsustainable pet projects of questionable value, contributed to major brain drain from public services, and created enormous coordination obstacles for local health leaders.
With the arrival of U.S. President's Emergency Plan for AIDS Relief (PEPFAR), the largest foreign aid initiative in global health, the funding imbalance intensified considerably. While it is controversial and hard to measure, up to 95% of the billions that PEPFAR was providing directly to organizations for the scale-up of HIV/AIDS care and treatment in Africa has been given to American NGOs and contractors including FHI360, Abt, Elizabeth Glaser Pediatric AIDS Foundation (EGPAF), Chemonics among many others. In Mozambique, for years PEPFAR annual budgets of close to half a billion USD have exceeded the entire budget for the Ministry of Health and National Health Service where the provision of care and treatment to HIV patients is actually done. While the sheer size of PEPFAR funding has certainly been critical to the scale-up of HIV/AIDS treatment, especially in Africa, diversion of this funding to international NGOs over 20 years rather than investment in local public sector health system building represents a huge lost opportunity, and in some cases may have actually harmed local health services. The PEPFAR consortium of NGOs in Mozambique and other countries has often run roughshod over local decision-makers and institutions, exacerbated the fragmentation of service delivery, multiplied the tasks of severely understaffed public clinics, and created a major brain drain of doctors and nurses from the public system to high paying jobs in NGOs. I witnessed this because I participated in it as Executive Director of an American NGO called Health Alliance International (HAI), affiliated with the University of Washington, which was a major PEPFAR “implementing partner” in Mozambique and Côte d'Ivoire for many years.
Localization in Practice
In response to this imbalance, a chorus of resistance has grown in the Global South calling for “localization” of aid funding, that is the channeling of aid to local organizations and away from large Western NGOs. As far back as 2005 in the Paris Declaration on Aid Effectiveness lip service was paid to the idea, but with growing calls for “decolonization” and intensifying frustration among local health leaders, major donors began to embrace the idea, at least on paper. For example, PEPFAR has stated that up to 70% of funding going forward will eventually be directed to local NGOs and agencies. Samantha Power, the current USAID Administrator, has set a target of 25% for non-PEPFAR funding to be awarded to local organizations by 2025. While this may sound promising, in practice many critics suggest this may be old wine in new bottles and not leading to the kind of shift toward equity envisioned. Large American NGOs began to create local NGOs, sort of local mini versions of themselves, to tap into the new localized funding streams. In many cases, these local aid recipients subcontract some of their funding back to the international NGOs that created them, keeping the big NGOs in the game. Despite the ambitious goal setting by some major donors, progress has been very slow. Estimates for localization funding are difficult to measure, but direct funding to local NGOs from USAID reached only 9.6% by 2023, and some say that is an overestimate.
HAI, the organization I worked with, jumped on the localization bandwagon in the spirit of decolonization just before the Covid pandemic hit, and by 2021 we had handed over all of our grants and contracts in Mozambique, Cote d’Ivoire and Timor-Leste to local NGOs we had established. We closed our doors in Seattle in 2022. We were very proud when we finally succeeded, but throughout the process doubts and fears began to grow about whether this kind of rechanneling of funds was actually empowering local actors. It began to dawn on us that most local NGOs will likely be more beholden to their Global North donors since they have even less bargaining power than we did – less overhead funding, less unrestricted funding from fundraising activities, so less of a fallback position to negotiate grant terms and work plans. This began to seem less and less like anything resembling decolonization or increased equity in global health work. The power of Western donors to call the shots is preserved.
Austerity and Localization
More importantly, it has become clear that in this era of renewed austerity, in which aid must be kept off-budget for governments, localization means feeding the proliferation of even more NGOs, this time local, rather than rechanneling meaningful funding to public institutions including ministries of health, national health systems, public sector health research institutes, or other public agencies. As we are already seeing in Mozambique, the fragmentation, brain drain, and lack of coordination is deepening and widening. Old wine in new bottles indeed. Given the enormous resources that PEPFAR, USAID, and other major Western donors bring to Africa in the name of global health, rechanneling the lion’s share to long term investment in public institutions would not only be transformational, but honor the principles of decolonization through support for local governance of health and the ultimate goal of the SDG’s Universal Health Coverage (UHC). With the growing social movements around the globe calling for debt cancellation and an end to austerity, increasing pressure to meet UHC goals, and the greater favorability that some European donors show for supporting public services in their lending, it may be possible to move the needle. There are plenty of projects for NGOs still to do, but substituting for public health services, setting up parallel systems, plaguing local health sectors with unsustainable pet projects, and poaching health providers should not be among them.
It is important to note that I write this still reeling from the results of the U.S. election just a few days ago. It is hard to predict the direction the new administration will take on U.S. foreign aid for health. PEPFAR somehow survived Donald Trump’s first term. Despite the critique advanced here, I certainly hope that PEPFAR and other US funding for global health will be renewed so there are major resources available for us to debate their best use in achieving health for all.
About the author
James Pfeiffer PhD, MPH is currently Professor in the Department of Global health in the School of Public Health at the University of Washington, Seattle, with a joint appointment in the Department of Anthropology. Dr. Pfeiffer was also Executive Director of Health Alliance International (HAI) for 10 years where he oversaw public sector health system strengthening projects in Mozambique, Côte d’Ivoire, and Timor Leste.
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