Skip to navigation – Site map

Patterns of International Non Governmental Organisation’s Growth

Jon Huggett

Abstract

This essay looks at the growth of INGOs, the patterns of that growth, and what has driven this growth.  It asks whether this growth has been healthy, and how these new global institutions are held accountable.

Top of page

Full text

1. International Non Governmental Organisations now

1International Non Governmental Organisations (INGOs) are growing.  With 40,000 employees, WorldVision has revenue approaching USD 3 Billion.  The revenues of Habitat for Humanity, Save the Children and Médecins Sans Frontières have each passed USD 1 Billion.  Oxfam and Opportunity International claim to have tripled revenues over the past ten years.  

Table 1: Four largest INGOs today.

INGO

Annual revenue

Past five years average growth

Countries

Founded in

WorldVision
International

USD 2.6 B

11%

97

1977 USA

Habitat
for Humanity

USD 1.4 B

9%

85

1976 USA

Save
the Children

USD 1.3 B

11%

120

1919 UK

Medécins Sans
Frontières (MSF)

USD 1.2 B

13%

70

1971 France

Source: Annual Reports

2The larger INGOs now reach to all corners of the earth.  Save the Children operates in 120 countries.  As well as INGOs with “northern” roots, there are now INGOs with roots firmly in the “global south”, such as Bangladesh Rehabilitation Assistance Committee (BRAC) and African Medical and Research Foundation (AMREF, Kenya), and ActionAid (now South Africa, formerly the UK).

3While each INGO is unique and dynamic, four patterns of growth are emerging.  The choice of model reflects the INGO’s strategic imperatives – how to have more impact – rather than operational necessities or pressure from donor governments.  There are some illuminating parallels between the globalisation of NGOs and of businesses.  

2. Patterns of INGOs growth

4“Replicators” are loose associations with a shared mission, but without a strong central headquarters.  Most “replicators” are confederations of local independent entities.  Save the Children and Oxfam started out as “replicators”.  Grameen today follows this model outside of Bangladesh.  Notable examples beyond development are the Young Men's Christian Association (YMCA) and the Scouting movement.  The YMCA is the oldest INGO: founded in London in 1844, it opened in Boston and Montreal in 1851, and is now in 124 countries.  The Scout movement, founded in 1907, now claims 41 million members in 216 countries.  In business, many early “multinationals”, such as Unilever, developed decentralized organisations like that of “replicators”.  For NGOs, the key strength of the “replicator” model is local ownership and adaptability.  It works well for NGOs with a strategy to raise and deploy resources locally.  Its main drawback is the difficulty of transferring resources between countries.  The largest development INGOs, trying to move resources efficiently to the developing world, are now “integrators”, the newest pattern, described below.

5 “Branders” are INGOs built around a strong global brand, surrounded by a loose association.  They raise and distribute resources globally among heterogeneous affiliates.  For example, the Marine Stewardship Council brings together fishers, environmentalists, food manufacturers and retailers from around the world.  It offers its seal of approval to retailers and manufacturers that sell fish harvested sustainably.  With money raised, and the assurance of strong sales, it helps fishers harvest sustainably in both developed and developing worlds.  The strategic advantage of this model is the clear focus around a specific issue, such as marine conservation and overfishing.  The strategic disadvantage is the effort required to maintain the brand.  The most famous example is the Olympic movement, which defends its brand against competitors (e.g. Goodwill games), corruption scandals (e.g. Salt Lake City games), and other organisations wanting to use the name (e.g. “Police Olympics”, “Rat Olympics”, or “Gay Olympics”).  A business parallel is Coca-Cola, which has always kept strong central control over the formulation and branding, while independent “bottlers” distribute locally.  Another parallel might be the Red Cross Red Crescent, an international network larger than any INGO, which relies on the Geneva Convention and other statutory protection to maintain its brand.

6“Radiators” are INGOs with a strong center that makes global decisions and moves resources between countries.  Examples are Americares, Feed the World, Mercy Corps or Kiva.  The key strength of the “radiator” model is its ability to respond coherently and efficiently to global challenges.  “Radiator” INGOs outside development include Human Rights Watch and Mozilla, with 50,000 active volunteers around the world that write the popular internet browser Firefox and other programs.   Worldwide businesses with a centralized organisation akin to that of “radiators” include banks such as Goldman Sachs.  For INGOs, the model’s main drawback is securing resources in the developed world outside the home country.  The old adage “charity begins at home” still has currency – people prefer to give to local rather than “foreign” charities.  Governments often insist that charities be controlled locally to receive tax advantages.  As a result, the largest “radiators” have the largest home market – the USA.

7“Integrators” are INGOs that are developing global coherence out of loose associations.  Save the Children (founded in 1919) or Oxfam (founded 1946) started as “replicators”.  Twenty years ago they could have been described as “movements” not organisations.  They are investing to become coherent networks.  The spur to integrate often came from failures, such as uncoordinated responses to humanitarian disasters, conflicting policy advocacy from different members, or grants lost due to confusion among funders.  Once integrated, many have found benefits from coherent programs, shared costs, and speaking with one voice.  The emergence of “integrators” parallels the emergence of “globalised” businesses (Huggett 2010).  Traditionally the choice of organisation design was seen as a tradeoff between centralization and decentralization.  Global NGOs were described along this simple spectrum (Lindenberg and Bryant 2001).  However, a number of authors (e.g. Bartlett and Ghoshal 1990, 2002) described the emergence of the “international” business which had both global coherence and local optimization, albeit at a high cost of coordination.  The extra overhead was worth the investment for firms such as P&G that could gain a strategic advantage, e.g. in product innovation.  Both “international enterprises” and “integrator INGOs” harness the “complementarity” (Milgrom and Roberts 1995) of the different capabilities of various parts of their networks.  Legally, “integrator” INGOs are networks of independent members held together by “trust and relationships, not rules” (Webster and Walker 2009).  As in any alliance, members empower others to be “forces for good” (Crutchfield and Grant 2007).  Many “integrators” are development NGOs that started in Europe, as this model allows robust raising of resources in many rich countries simultaneously.  The top four development INGOs follows the “integrator” model.

3. Drivers of NGOs globalisation and choice of pattern

8“Strategic imperatives” dominates the story of each INGO that has struggled for global coherence.  The main motives to change have been strategic: more impact in the field, advocating with a clearer voice, and finding resources.  The beginning of each journey is usually the need to avoid a problem.  The journey then continues with opportunities to increase impact.  For example, Oxfam and other NGOs have talked of how each national member used to respond to a humanitarian disaster separately, resulting in disappointments.  Better coordination among Oxfam organisations helped the network respond more quickly, more effectively, and more efficiently.  Oxfam then discovered that by speaking with one voice, it could have global influence on debt relief for poor countries.  The strategic drive to have more impact, a clearer voice, and raise more money to support the cause is the overwhelming theme in most INGO stories.  The collapsing cost of communications has not only made it possible for some INGOs to become globally coherent, it’s changed the game.  Not only is it possible to be coherent, it is now much more costly to be incoherent.  The largest INGOs have become “integrators” for impact.

9“Operational necessities” as a theme emerges later in the stories of globalizing NGOs.  While strategic imperatives have driven INGOs to become more responsive and effective, the drivers to become more efficient have been weaker.  National governments require complex legal structures for NGOs that inhibit lean operations.  Most INGOs are compelled, legally, to be federations or confederations of “independent” national organisations.  This complexity, driven by national regulation, requires more governance, slows decision-making, and often necessitates duplicate costs and sub-scale facilities.  Consequently, INGOs have been slower than businesses to reap the benefits of computers in automating back office functions, for example spending only 0.3-2.5% of revenue on IT, less than 3.9% for typical businesses of the same size (Bulloch 2009).  The collapsing cost of communications has cut the cost of coordinating global networks from prohibitive to merely expensive – an investment that can deliver a strategic return. INGOs are reaping economies of scale, exploiting network effects, and building critical masses of expertise.  However, I’ve not encountered an INGO where the drive to globalise came more from “operational necessities” than “strategic imperatives”.  It can be argued that the most “efficient” global development organisations are not INGOs, but for-profits, such as DAI and Chemonics.

10“Pressure from governments” sometimes emerges as a driver for globalisation in INGO stories, but is just as often an inhibitor.  Donor governments sometimes favor NGOs of global repute, but can sometimes prefer the small and local.  A donor may demand consistent global service from an NGO, but its requirements may differ from other donors’. USAID and the European Union (UE), for example, have different approaches to earmarks, costing, procurement, and reporting.  Consequently, some of the largest development organisations, such as DAI, have developed systems to serve one but not another.  Businesses sometimes face resistance from national governments as they try to globalise.  Donor demands for “innovative” approaches require customization, not standardization, which could deliver more impact by pooling resources across donors.  “Pressure to collaborate” can require NGOs to tailor complicated alliances for each project, without the management bandwidth to navigate the complexity, or the clarity of focusing on impact.

4. Two questions: is this growth healthy, and how are INGOs accountable?

11Is the growth in scale and scope of INGOs healthy? INGOs can look like multinational businesses that pay no tax.  INGOs merit the same scrutiny of businesses. The journey of the INGOs suggests that they have grown with good intent.  They have globalised to have more impact – because of “strategic imperatives” rather than “operational necessities” or “pressure from governments”. INGOs shift from “north” to “south” significant resources: volunteers, expertise and donations.  They tell the rich of the plight of the poor. MSF, for example, first bore witness to the scale of the humanitarian disaster unfolding in Ethiopia in 1984, and then showed that the disaster was not just an accident of nature, but a brutal ethnic cleansing by an unelected government (Borlotti 2006).  The profusion of development NGOs in both north and south shows how the topic is no longer obscure but for discussion in Starbucks over a cup of “fair trade” coffee. “Global civil society” empowers citizens north and south.  De Toqueville (1840) observed that a vibrant civil society is a critical ingredient in a healthy democracy.  A globalizing world can welcome globalizing civil society ... as long as the institutions can account for their impact.

12Who holds INGOs accountable?  Like global businesses, INGOs can seem unaccountable.  They operate inside the territory of the nation state with a “foreign” agenda, often in conflict with national policy.   To the individual citizen, the INGOs can be more opaque than multinational businesses of the same size: accounts are more complicated or even unaudited; results are not enumerated beyond words about “measurement & evaluation”.  A focus on simplistic measures, such as “overhead ratio”, can lead to an investment “starvation cycle” (Howard and Goggins-Gregory 2009).  Severino and Ray (2010), sharing a background at the Agence française de développement (AFD), articulate frustration with the “fragmentation” of development actors, describing coordination and harmonization as “the Sisyphus task of donor agencies”, calling for “hyper-collective action”.

5. A passion for impact is preferable to a passion for order

13A passion for order is laudable, but a passion for impact is better.  It is fair to criticize the development world as untidy, but more serious criticism in recent years has been that it is ineffective.  “Hyper-collective” action infers a new hierarchy to “shape complexity”, instead of a better market for empowered citizens, donors, clients, and, lastly institutions.  Transparency might improve that market more than any hierarchy, new or old, and empower the growing range of stakeholders to probe and pick.  Flourishing civil society is chaotic – expect bigger INGOs, more social entrepreneurs, and fewer “collective” views.  “Radical transparency” lets citizens “crowdsource” oversight of a global civil society that will become more disorderly as it flourishes.

14Transparency can be hard for INGO leaders.  Multiple stakeholders ask a myriad of questions.  Services intent on comparing NGO effectiveness, such as Charity Navigator or GEXSI, have struggled.

15But radical transparency can deliver impact (Ridley 2010).  Consider the “open-source” web-based INGOs.  The achievements of Wikimedia, Mozilla, Kiva, and Creative Commons have not been modest. Wikipedia is the fifth most visited site on the web.  Mozilla has created Firefox, which competes successfully with Microsoft, a firm that crushed many well-backed for-profit competitors.  

16Since the 1970s businesses have become more transparent, both by desire (e.g. on world wide web) and force (e.g. international accountancy rules).  This transparency has unleashed a turbulent wave of innovation - mostly welcomed.

17The next chapter of the INGOs story may tell of more growth than the last.

Top of page

Bibliography

Bartlett, C and S. Ghoshal.  1990. Matrix Mangement: Not a Structure, a Frame of Mind, Harvard Business Review.

Bartlett, C and S. Ghoshal.  2002.  Managing Across Borders: The Transnational Solution, Harvard Business Press.

Borlotti, D.  2006.  Hope in Hell: Inside the world of Doctors Without Borders, Firefly.

Bulloch, G.  2009.  Development Collaboration: None of Our Business? Accenture.

Crutchfield, H. and H. Grant.  2007.  Forces for Good, Wiley.

de Toqueville, A.  1840.  Democracy in America, Vol II, multiple publishers.

Howard, D. and A. Goggins-Gregory. 2009.  The Nonprofit Starvation Cycle, Stanford Social Innovation Review.

Huggett, J.  2010.  Moving from Loose Global Associations to Linked Global Networks.  In Scaling Social Impact, ed. P. Bloom, Palgrave Macmillan.

Huggett, J., K. Smith-Milway, and K. Kramer.   2010.  Moving from Loose Global Associations to Linked Global Networks.  In Scaling Social Impact,ed. P. Bloom, Palgrave Macmillan.

Lindenberg, M and C. Bryant.  2001.  Going global: Transforming relief and development NGOs, Kumarian Press.

Milgrom, P. and J. Roberts. 1995.  Complementarities and fit, Journal of Accounting and Economics.

Ridley, R.  2010.  Radical Transparency Will Change The World, Stanford Social Innovaiton Review..

Severino, J-M. and O. Ray.  2010.  The End of ODA (II): The Birth of Hypercollective Action, Center for Global Development.

Webster, M. and P. Walker. 2009.  One For All and All For One, Feinstein International Center, Tufts University.

Top of page

References

Electronic reference

Jon Huggett, « Patterns of International Non Governmental Organisation’s Growth », International Development Policy | Revue internationale de politique de développement [Online], Policy Briefs | Working Papers, Online since 10 May 2012, connection on 18 August 2017. URL : http://poldev.revues.org/1175 ; DOI : 10.4000/poldev.1175

Top of page

About the author

Jon Huggett

Jon Huggett advises a range of INGOs, including Wikimedia Foundation, which supports Wikipedia across the developing world.  He is also a Visiting Fellow at the Saïd Business School at Oxford University, and serves on the boards of the Organisation for Refuge Asylum and Migration, Inspire Foundation, and Khulisa UK.  He was formerly a partner at both The Bridgespan Group and Bain & Company.  He has published on INGOs in Monday Developments and in Scaling Social Impact: New Thinking. Jon has an MBA from Stanford University and an MA from Oxford University.

Top of page

Copyright

Creative Commons License
International Development Policy is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Top of page