How Less Money Is a Good Sign for Aid Industry

Gates Foundation and Afghanistan are scaling back.

Afghanistan

The aid industry is known for being rife with inefficiencies and bureaucratic holdups, but two developments this week indicate what looks like an encouraging trend—Afghanistan has told more than 100 NGOs to close up shop and the Gates Foundation is scaling down its investments.

What? Less money for needy causes? How can that be a good thing?

In the case of Afghanistan, the government surveyed the country's domestic and foreign NGOs and found that there were dozens that had no reported activity for two years, so they chucked them. And in the case of the Gates Foundation, they found that the rather large investments that characterized the foundation's early beginnings and excitement haven't exactly paid off in terms of impact. So, again, they're saying no to more applicants.

The point is that in both instances a government body and a large non-profit institution are being forced to look at who's doing what, how effective they are, and whether they're really needed or if they're just taking away valuable dollars that could be better spent elsewhere. And that's not such a bad thing, is it?

"We've changed the way we work," said Gates Foundation global health Director, Dr. Tachi Yamada, in a meeting in Seattle last week. "In the very earliest days, honestly I don't know if we knew what we were doing. We were giving away money as fast as we could.... Now we're trying to be more strategic."

I'm excited about the changes—I think it spells good things for the aid industry and my hope is that both Afghanistan and Gates will make even more changes, looking at ways to actually alter how aid gets distributed and implemented on the ground. After all, it's not enough to simply develop vaccines—there is a serious lack of attention on how those vaccines can get to market quickly after development, potentially saving thousands or millions of lives that would have been lost in the usual lag time between development, patent, and implementation.

And as we'll see next week in a series of special reports on international innovators, the traditional funder-funded relationship no longer has to stay that way, and there is now more room for innovation in even the largest organizations and in the most resource-constrained environments. Stay tuned.

Follow me, Jenara Nerenberg, on Twitter.

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