International organizations (IOs) are very often funded by private companies or private foundations. Does this lead to a perilous partnership that endangers the idealistic goals of IOs or does it mainly help IOs in securing their global progress?
IOs Being Funded by the Private Sector
The United Nations and business need each other. We need your innovation, your initiative, your technological prowess. But business also needs the United Nations. In a very real sense, the work of the United Nations can be viewed as seeking to create the ideal enabling environment within which business can thrive.
– United Nations Secretary-General Ban Ki-moon
The UN is a huge Intergovernmental organization with many specialized agencies and organs. The first link with information deals with the UN and the private sector in general.
Published by the Global Compact Office, United Nations, September 2008
The second link leads to an article about how different attitudes towards the UN and its agencies effect the views on how the IO should be financed. The article argues that rules that offered greater donor control and increased flexibility in commitments were pursued by states with a pro-UN orientation that wanted to expand UN-activity, whilst countries that wanted to restrict UN-activities did not pursue such rules. The article further discussed the difference between mandatory and voluntary funding rules in the UN system.
Erin R. Graham, European Journal of International Relations 2017, Vol. 23(2) 365–390
The WHO relies on contributions from member states (both assessed and voluntary) and private donors for funding.
According to the WHO web page the biggest part of the funding directed to the WHO comes from member states (34.53 %) while philantropic foundations and partnerships together make up the second biggest source (17.06 %).
© WHO web page
IOM’s vision and commitment to working with businesses, foundations and private individuals goes well beyond traditional fundraising and recognizes that the active participation of the private sector is crucial to advance humanitarian and development objectives. IOM sees the private sector both as a partner and an important stakeholder in tackling today’s pressing migration challenges, most notably the Sustainable Development Goals and commitments made at other summits including the recent World Humanitarian Summit.
© 2016 International Organization for Migration (IOM)
The Vaccine Alliance GAVI is a very fine example of an IO who has been working tightly with the private sector. GAVI has been praised for being effective, and less bureaucratic than multilateral government institutions like the WHO. On the other hand critical voices have raised concerns that donors increasingly perceive that they can more easily exert influence through public-private GHIs than through what they often refer to as the ‘unwieldy’ traditional intergovernmental system of governance. GAVI receivs big amounts of funding from especially the Bill and Melinda Gates Foundation, who is one of the founding partners of the Vaccine Alliance.
© Katerini T. Storeng, Global Public Health, 26 Aug 2014 & Gavi Web Page.
The Bill and Melinda Gates Foundation is the second largest charitable organization in the world. The Foundation thus wields a great amount of power as it grants a lot of funding to various recipients. The Bill and Melinda Gates Foundation plays an important role in enhancing healthcare and fighting poverty and its contributions has certainly achieved some of its goals.
The Foundation has nonetheless faced criticism for its dominance and the related risk of stifling diversities of views among scientists and wiping out common policy-making functions. The Foundation has also been criticised for putting too much focus on certain issues, while other important ones have been overshadowed by the issue that the Bill and Melinda Gates Foundation has decided to focus on.
One of the Foundation's current projects is the Alliance for a Green Revolution in Africa (AGRA), which aims to improve food security in Africa and reduce poverty among small farmers. Critics allege that the AGRA-mission is locking African farmers into a system that is not designed for their benefit, but for Northern multinational corporations.
In the Setup-page article "Private Sector Influence in the Multilateral System: A Changing Structure of World Governance" a fear of a privatization of the multilateral system is discussed. The examples above certainly shed some more light on this fear. Check out the links for further information!
© New York Times Web page (nytimes.com) February 16 2008.
Los Angeles Times Web page (latimes.com) December 16 2007.
Deutsche Welle (dw.com) July 19 2021.
The United Nations Foundation (UNF) and the United Nations Fund for International Partnerships (UNFIP) were both founded as a result of the huge 1 billion dollar donation by the businessman and philanthropist Ted Turner in 1998. The UNF and UNFIP both work tightly with the entire UN family, the biggest intergovernmental actor in the world.
© UNF Web Page & United Nations Office for Partnerships Web Page
According to the web page of the IRRI the mission of this IO is the following:
IRRI is dedicated to abolishing poverty and hunger among people and populations that depend on rice-based agri-food systems. Through our work and partnerships, we aim to improve the health and welfare of rice farmers and consumers; promote environmental sustainability in a world challenged by climate change; and support the empowerment of women and the youth in the rice industry.
Our research for development is characterized by its collaborative nature: from alliances with advanced research institutes; through strong collaborations and capacity development with governments and national agricultural research and extension systems; to partnerships with the development sector and our ability to broker novel delivery channels through the private sector. IRRI’s work is supported by a diverse network of investors aligned to common goals.
The IRRI was founded with support of the Ford Foundation and the Rockefeller Foundation. Today the IRRI receivs a lot of funding from the Bill & Melinda Gates Foundation. Check out the links to the left for more information!
© Robert s. Anders, Jstor, Minerva, Vol. 29, No. 1 (March 1991), pp. 61-89 & IRRI Web Page
The International Potato Center (CIP) seeks to reduce poverty and achieve food security on a sustained basis in developing countries through scientific research and related activities on different kinds of potato and root and tuber crops. The CIP receivs funding from a lot of funders and also works tightly with a big amount of corporations.
It is not unusual for IOs to adopt some sort of guidelines on the acceptance of funds to ensure funds are only accepted from appropriate sources, and will advance work that is consistent with the objectives of the IO. This adoption will at the very least paint a picture of an IO acting in the ethically correct manner. The International Whaling Commission (IWC) works for the noble cause of proper conservation of whale stocks and the orderly development of the whaling industry. The IWC has adopted guidelines on the acceptance of funds. The IWC has also adopted a code of ethical fundraising. The link to the lift will take you to their web page and provide further information.
The importance of this kind of ethical guides has increased after the tremendous failure in the UN Oil-for-Food programme, caused by the lack of accountability and guidelines. This failure is discussed under the third research cathegory on this web page.
© IWC Web Page
The financial flows to IOs have in recent decades generally been increasing. Between 2007 and 2012 the financial flows to IOs for instance grew by 31 % in real terms. These surging transfers are to a large extent due to the increased earmarked funding for specific themes. Earmarked resources have been described as a powerful means to mobilise resources, engage in partnerships and fill co-operation gaps. Earmarked money can for example be an effective way to respond fastly to a crisis. But if the substantive and geographic priorities of individual donors in the aggregate are different from those set by governing bodies, the practice of earmarking has the potential to alter IGO priorities and resource distribution. By 2012 earmarked resources accounted for 70 percent of the contributions to UN agencies. It is quite clear that this may endanger the work of some IOs as the donations may get a great deal of significance in the desicion-making as well. In order to prevent this, the OECD report to the left for instance advocates that donors should base their use of earmarked funding on evidence and strategic considerations. In others words openness and thruthfulness is important.
The sources to the left will provide further information on these issues.