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.
© The UN and the Private Sector, 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: The institutional design of funding rules at international organizations: Explaining the transformation in financing the United Nations, European Journal of International Relations 2017, Vol. 23(2) 365–390
The third link leads to an interesting article about how unfavorable views toward a particular state will result in skepticism about the legitimacy of IGOs in which that state possesses influence. This certainly shows the legitimacy problems that IOs face and, just like the second link, it further discusses the problematics of bad relations between states and how this takes shape in the work of IOs. Scepticism and negativity towards the United States, the biggest contributor to the UN, could easily result in scepticism towards the United Nations.
In other words, considering the research presented behind the second and third links, negative attitudes towards IGOs could be said to increase the chance for more flexible funding schemes, and an even more active private sector role in the intergovernmental system.
© Johnson Tana: Guilt by association: The link between states’ influence and the legitimacy of intergovernmental organizations, Springer Science+Business Media, LLC 2010
The Technical Cooperation Programme is the International Atomic Energy Agency’s main tool to transfer nuclear technology to its member countries. The areas of action of the Technical Cooperation Programme encompass health and nutrition, food and agriculture, water and the environment, industrial applications, and nuclear knowledge development and management.
© IAEA Technical Cooperation Programme
It is primarily funded by the Technical Cooperation Fund which is in turn mostly funded by member states’ contributions. However, financial support from private actors is actively sought by the Agency, as shown in the example of the fight against Covid-19 and the donation of 500 million yen (around €4.35 million) by the Japanese multinational pharmaceutical company Takeda in support of the IAEA’s Covid-19 Assistance Programme. Aimed at helping countries combatting Covid-19 with a nuclear-based diagnostic technique, this programme is the Agency’s largest technical cooperation initiative.
Member States as well as the private sector have shown strong support for this initiative, with several announcing major funding contributions to IAEA efforts in helping to tackle the pandemic.
© IAEA’s Funding the Technical Cooperation Programme, Takeda’s Donation & IAEA’s Covid-19 Assistance Programme.
The WHO relies on contributions from member states (both assessed and voluntary) and private donors for funding. According to the WHO webpage 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 and Funding Webpage
However, the creation of the WHO Foundation in 2020 demonstrates the shift in financing strategy by the WHO. Established under Swiss law and legally separate from WHO, the WHO Foundation’s mission is to support the WHO’s work by widening and facilitating donors-based financial contributions.
© WHO Foundation Webpage
An important part of WHO's future success is broadening its donor base and increasing both the quantity and quality of funds at its disposal. […] The creation of the WHO Foundation, as part of WHO's transformation, is an important step towards this goal, and towards achieving our mission to promote health, keep the world safe and serve the vulnerable.
Dr Tedros Adhanom Ghebreyesus, WHO Director-General.
© WHO Foundation Established to Support Critical Global Health Needs
The creation of this separate entity has raised criticisms particularly around possible conflicts of interests and the WHO’s increasing reliance on private funding which is feared could influence its public policies in the future.
© Nason Maani and others, The new WHO Foundation — global health deserves better, BMJ Global Health, January 2021
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
Unlike other IOs, for which most of their revenue derives from member states contributions, 95 percent of the income of the World Intellectual Property Organization comes from the fees charged for the different global intellectual property services it provides.
Therefore, the WIPO is mainly self-financed by private actors using the international systems of protection of intellectual property the WIPO offers, especially the PCT International Patent system and the Madrid System for international trademark.
In 2020, the WIPO's revenue amounted to 468.3 million Swiss Francs.
© WIPO Results, Budget and Performance
The International Telecommunication Union is one of the oldest IOs still operating today. It is composed of three sectors: Radiocommunication (ITU-R), Telecommunication Standardization (ITU-T) and Development (ITU-D). The ITU is funded mainly by its membership fees, but it also receives income from its activities and from voluntary contributions earmarked to specific projects, which amounted to over 10 million CHF in 2016
© Voluntary Contributions to ITU-T & How is the ITU Funded?
The ITU also earns revenue from its Sector Membership for private industry actors.
Membership with ITU allows businesses to network with ICT regulators and policy-makers, contribute to global standards and best practices,and advise governments on ICT strategies and technologies.
© How is the ITU Funded?
The ITU provides lists of its industry members who financially contribute to two or three of its sectors.
© Platinum Sector Members & Gold Sector Members
Most of the International Organization for Migration’s funding comes from governments’ contributions but the IOM also receives donations from private sector actors. In the past years, the IOM has increased its collaboration with a variety of private actors in order to fund and implement parts of its activities.
The Donor Relations Division (DRD), through its resource mobilization and related activities, is the focal point within IOM for donor liaison, appeals submission and reporting. The Division aims to strengthen and diversify IOM's collaboration with donors and partners on IOM programmes and new strategic initiatives, matching donor priorities with ongoing and prospective IOM programmes.
© IOM Webpage Donor Relations and Resource Mobilisation
Recognizing the private sector as a key actor in development and humanitarian processes, the IOM private sector partnership strategy 2016–2020 outlines the objectives and outcomes of the collaboration with private sector partners including Resource mobilization partnerships.
© IOM Private Sector Partnership Strategy 2016–2020
The 28th Session of the Standing Committee on Programmes and Finance’s presentation on the IOM partnerships with the Private Sector provides interesting facts and figures concerning private sector funding.
© IOM Partnerships with Private Sector
Like most IOs, the majority of the United Nations Educational, Scientific and Cultural Organization’s funding comes from governments’ contributions but like most IOs, UNESCO has worked to diversify its sources of funding and has seen an increase of contributions from multilateral institutions and the private sector. New collaborations are made especially through public/ private partnerships.
© Opendata UNESCO Financial Flows & UNESCO Mobilizes Higher Voluntary Funding
For 2020-2021, Private Sector funding represented 4,88% of UNESCO’s total revenue, with contributions from private foundations but also from private multinational groups such as the French conglomerate LVMH or the mining company Vale S.A.
© Opendata UNESCO Donors by Category
Partners can support UNESCO by providing financial resources to its programmes. Such funding is often accompanied by knowledge, shared value and networking opportunities because cooperation is focused on areas that are shared strategic priorities for UNESCO and its partners.
© UNESCO Partnerships
GloBallast, GloMEEP and GloFouling are three examples of public-private sector partnership projects coordinated and executed by the International Maritime Organization. Global Industry Alliances are, thus, designed to engage private industry actors in committing to funding public-led projects concerning the protection of the maritime environment.
It is abundantly clear that global environmental problems like marine bioinvasions will be solved only if the private sector also weighs in with its vast technical, managerial and financial resources and expertise.
© The GIA- GloBallast Webpage
In the GloMEEP project, private actors partner with the IMO to promote low carbon shipping.
© GloMEEP GIA Concept Paper
Leading shipowners and operators, classification societies, engine and technology builders and suppliers, big data providers, oil companies and ports have joined hands under the GIA to collectively identify and develop innovative solutions to address common barriers to the uptake and implementation of energy efficiency technologies and operational measures.
© GIA- GloMeep Webpage
We can also find on the same page the list of the members of the GIA for the GloMEEP project.
In the GloFouling project, the Global Industry Alliance for Marine Biosafety seek to develop the management of biofouling. Maritime industry members include several companies specialized in in-water cleaning, anti-fouling systems or shipping companies.
© GloFouling GIA Concept Paper & GIA- GloFouling Webpage
The International Labour Organization is mainly founded by contributions from its member states, but it also increasingly resorts to alternative fundraising approaches, such as public-private partnerships.
Public-private Partnerships (PPPs) play an increasingly important role in promoting decent work around the world, mobilizing resources, knowledge and expertise through partnerships with enterprises and other non-state actors. The ILO promotes PPPs as an effective and collaborative way of leveraging its values, principles and standards.
© ILO Public-Private Partnerships and ILO Funding
On the ILO's Development Cooperation Dashboard, we learn that, for the period 2020-2021, the private sector has contributed $31,56 million and public-private partnerships have provided $2,44 million of the ILO's total budget of $975.36 million.
© Development Cooperation Dashboard: Private Funding
Using the ILO’s Project Finder, we can see that for 2020-2021, 50 projects are being funded by the private sector or by public-private partnerships.
© Development Cooperation Dashboard: Projects Funded by the Private Sector or PPPs
Besides statutory contributions from member States, which represent most of its funding, Interpol also receives voluntary financial contributions from other IOs, NGOs, foundations and private actors. The detail of these contributions are published each year and are available on Interpol’s website in an effort to ensure transparency and accountability.
Working with the private sector helps us bridge gaps and provide vital services or expertise that would not otherwise be available to our member countries.
This cooperation may take the form of funding but often involves the secondment of staff, licensing of software, use of equipment and buildings, and other in-kind donations. In both cases, the selection process is rigorous.
© Interpol website- Private Sector partners
For instance in 2019, there are a few examples of private sector companies which have partnered with Interpol, and have also pledged to financially contribute to Interpol's activities.
© New Contributions Agreements 2019
The Mountain Partnership is an alliance of different stakeholders hosted by the Food and Agriculture Organization. Its goal is to improve the living conditions of people living in mountainous areas and protect the mountain environment. Membership is open to countries, NGOs, IOs, research institutes and also to businesses meeting membership requirements.
The Mountain Partnership aims to function as a broker for joint activities, facilitating contacts between countries and institutions and creating conditions for technical cooperation and resource mobilization at the national, regional and global levels.
Members are charged with mobilising funding for the different projects undertaken within the framework of the Mountain Partnership. These funds and financial contributions may come from philanthropic institutions, foundations and public or private funds.
© Mountain Partnership Webpage
The Mountain Partnership members share a vision: a world in which sustainable mountain development receives greater public and private sector attention, commitment, engagement and investment.
© Mountain Partnership Resource Mobilization
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.
© New York Times Web page (nytimes.com) February 16 2008; Los Angeles Times Web page (latimes.com) December 16 2007
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.
© Deutsche Welle (dw.com) July 19 2021
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!
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
This is a perfect example of IOs being founded completely on the basis of private sector money. Check out the article discussing the so called phenomenon of "philanthro-policymaking" for further aspects about philantrocapitalism. Are restrictions on private giving for social good ever appropriate?
© Rogers Robin: Why Philanthro-Policymaking Matters, Springer Link, july 28th 2011
A very small part of the Council of Europe’s total revenue comes from private and non-state actors contributions. For instance, in 2019 the total of other voluntary contributions (including some non-member states participation) represented 1 432 140.19 euros on a grand total of 77 777 312.32 euros.
© Council of Europe Highlights 2019
The CoE is also implementing a variety of projects to which private donors can financially contribute. In the project data donors’ categories, by choosing non-state actors, we can see the list of donors and affiliated projects.
© Council of Europe Project Data
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.
© CIP Web page.
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 Webpage
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.
© Erin R. Graham: Follow the Money: How Trends in Financing Are Changing Governance at International Organizations, Wiley Online Library, 24 August 2017
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.
©OECD web page (March 2021)