Americas

The Power of N.G.O.'s: They're Big, But How Big?

Risto Karajkov
Florence, Italy
July 16, 2007

Sudanese displaced families receive food aid from the World Food Program distributed by World Vision. (Photo: Jose Cendon / AFP-Getty Images)

Lester Salamon suggested long ago in his by now classic "The Rise of the Nonprofit Sector" that the rise of private associations could be for our times what the rise of nation states was for the late 19th century.

In the very simplest of terms that forecast is already a matter of reality, as some aspects of N.G.O. power today easily exceed that of states.

After exponential growth during the past two decades, N.G.O.'s have come to be accepted as actors to be reckoned with in international affairs. Joseph Nye has pointed out that the use of the term "N.G.O." in mainstream media increased 17-fold from 1992 to 2004, and that even strong states such as the United States can be affected by their influence, let alone smaller ones.

They are big all right. But how big? And who is big exactly?

In terms of size and financial strength, some of the biggest N.G.O.'s are to be found in the realm of humanitarian work. A random glance reveals the strength of the groups in disaster relief work. Some of the biggest N.G.O. brand names are here: Oxfam, CARE, World Vision, Save the Children. These are mammoth organizations with financial power often several times that of small states.

The biggest of them, World Vision had an annual budget for 2006 of about $2.1 billion. This is roughly 30 times the annual G.D.P. of some of the smallest countries in the world, such as Nauru for example, which has an estimated population of 13,000. World Vision is quite bigger than Nauru also in terms of staff. It had 23,000 employees in 2006.

Nauru may be poor, but World Vision financial power easily matches the G.D.P.'s of some small rich countries in Europe, such as Andorra ($1.8 billion), Liechtenstein ($1.7 billion), or San Marino ($1 billion).

The same goes for its immediate associates. The Save the Children Federation reported $863 million in 2006; Catholic Relief Services, $694 million (2005); CARE, $624 million (2005); Doctors Without Borders, $568 million (2004); Oxfam, $528 million (2004-05 fiscal year).

Their "smaller" colleagues include the International Rescue Committee, $203 million in 2005, or Mercy Corps, with "only" $185 million in revenue for that same year.

Analysts of the relief "business" have noted the fact that the biggest humanitarian N.G.O.'s account for the lion's share of the market, and have called the N.G.O.'s mentioned above the "Big Eight." Over 70 percent of the relief funding goes to these eight biggest N.G.O.'s, they say.

The line between an "N.G.O." a "nonprofit" and "civil society" is often blurred in debates, that much is known. The big nonprofit universities, museums, and hospitals are not N.G.O.'s, and neither are the small producers of social capital, such as choral societies. The multiplying references to "civil society" in international treaties, as an increasingly mandatory actor in global affairs, essentially mean N.G.O.'s.

Going beyond the cluster of "pure" disaster relief groups, there are private organizations that are even bigger.

On top of the list of the 100 biggest American nonprofits by "The NonProfit Times," for 2005, is the Y.M.C.A. with annual income of $5.3 billion; the American Red Cross, which also engages in large-scale relief efforts internationally, had $3.8 billion (ranked 3rd on the list); Goodwill Industries International, which provides job opportunities and training for the disadvantaged, $3 billion (ranked 5th).

It is not all about financial power. The financial base of human rights and advocacy groups is much smaller compared to the relief giants. Nevertheless, these groups can levy significant political power. Freedom House had a budget of $26 million in 2006; Human Rights Watch, $39 million (data for 2005); Amnesty International, 32 million pounds (about $65 million).

They may be "small" compared to their relief-focused kin, but they can bite. They do not shrink from bashing even the strongest of governments, such as the United States over the Iraq war, or Russia over quite a few matters—let alone corporations.

Amnesty International just recently told off the Vatican. The Catholic Church said it would not give any more money to Amnesty because it was pro-choice. Amnesty said it wouldn't take the money anyway. They do not take money from governments, or money that comes with strings attached.

Modern N.G.O.'s derive their financial strength from a few different sources, notably big membership (Y.M.C.A.), fees for services (American Red Cross, or Goodwill Industries International), big government grants, and individual donations (the big relief groups).

But before the N.G.O.'s, there were the foundations.

Before N.G.O.'s managed to concentrate such private power by trying to act as the "conscience of humanity," it was the weight of private capital endowed for social causes that gave a boost to private care of the public good.

The top 50 American foundations had combined assets in 2005 of around $151 billion. Even with the current euro to dollar exchange rate, this was more than the budget of the European Union in the same year (about 106 billion euros, or $148 billion). The total spending of these 50 was around $9 billion in 2005.

The European foundations are not far behind. The top 50 European foundations (in just eight European countries), according to data which is a bit older, had in the early 2000's combined assets of around $98 billion, with annual spending in that same period of about $6.7 billion.

Both the American and European foundations are led by giants that dwarf all the rest. In the United States, the leader is the Bill and Melinda Gates Foundation, with assets in 2005 of $29 billion (spending $1.3 billion). The second ranked (by assets) is the Ford Foundation, with "only" $11.6 billion.

In Europe, the leader is the Wellcome Trust (U.K.) with assets (data for 2002) of $24.5 billion. Second ranked, with assets of $7.8 billion (2001), is the Fondazione Cassa di Risparmio delle Province Lombarde (Savings Bank Foundation of Lombardy).

So big is the financial clout of these groups that they easily outweigh the capacity of governments. The American government recently cut medical spending with the justification that there was a lot of private money (such as from the Gates Foundation) to replace government funding.

Montenegro, one of the latest countries to gain independence, in 2006, had a G.D.P. of $2.2 billion. It is considered one of the fastest growing economies in the world, by states' standards. N.G.O.'s, however, grow faster.




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