“My CEO will tear off my head, if I suggest to him that we implement IATI.”

This text was crossposted from the Open Knowledge Foundation’s blog Open Aid. The author is Claudia Schwegmann.

These were the precise words of a senior policy person of a big German NGO when I presented IATI some 18 months ago. In the past, reactions of other NGO representatives have been less drastic but still very clearly negative. But times are changing! In the last few months the OpenAid project continued the exchange with NGO representatives. There seems to be a growing willingness to talk about IATI. At the award ceremony of the PricewaterhouseCooper German Transparency Price for non-profits I was able to present IATI in the keynote and discuss with a number of CEOS and the reaction was much more positive than anticipated. Likewise at the workshop on IATI organised by VENRO and OpenAid the response by participants was overwhelmingly positive. The NGO representatives at the workshop acknowledged the value of IATI, but still worried how to make a convincing case for IATI within their organisations. So what is the business case for IATI? Why should NGOs in Germany and in other donor countries publish their data to IATI?

Let me outline three main reasons, why it is in the best own interest of NGOs themselves to implement IATI. The three reasons relate to the internal management of donor organisations, the core values of NGOs and aid effectiveness.

I. INTERNAL MANAGEMENT

Improved information flow: The IATI standard requires donors to publish all their project data in a standardised and machine-readible way. This allows donors to use e.g. open source visualisation tools to have a better overview themselves of all their activities. Experiences in bilateral donor organisations have shown that the implementation of IATI improves the internal information flow and management procedures.

Data quality: Many donors are reluctant to publish all their activity data because they worry about errors in their data. The experience so far has shown, that the publication of data itself leads to an increase in data quality. Through publishing, more people use the data, detect errors and help to correct these errors.

Data-based monitoring: The publication of comprehensive, current and detailed data can enable data-based monitoring, not only internally at headquarters but also for project staff and for beneficiaires. If all donors use the same data standard, the use of open-source monitoring tools is possible.

Reduce corruption: Corruption is a complex issue and there is no silver bullet to prevent it. But transparency of financial flows at project level and information about what is financed by whom and with how much money is certainly one precondition to reduce corruption.

II. STRENGTHENING OF CORE VALUES OF NGOs

Empowerment: Many NGOs want to promote civil society in partner countries to be independent and powerful stakeholders in their societies. They promote local civil society groups to make their voices heard and to demand accountability. Knowledge about resource flows is one important aspect of empowerment. By providing their own financial data in an open, standardised and machine-readable way NGOs empower local partners to demand accountability. The publication of NGO data could be accompanied by training in data analysis and participatory processes and make a significant contribution to NGO capacity in partner countries.

Credibility: Many NGOs in donor countries provide funding for civic engagement, advocacy for good governance and social accountability in partner countries. Donors should lead by example and increase their credibility by demonstrating a maximum level of accountability towards their beneficiaries.

Partnership and Ownership: The Partnership and local ownership of development activities are core values of many NGOs in donor countries. Civil society organisations and governments are strongly demanding more and better information about aid. Both governmental and non-governmental donors should provide open, current, comprehensive and detailed data about their activities to local stakeholders. Without such information the principle of ownership can not be respected.

III. INCREASE AID EFFECTIVENESS OF THE WHOLE AID SYSTEM
IATI was created in the context of the aid effectiveness debate at the High Level Forum on Aid Effectiveness in Accra in 2008. Based on several decades of development cooperation there was a clear demand in Accra to make the aid system as a whole and not just individual organisations more transparent. For aid to be effective it has to be possible to follow the flow of aid funds throughout the system. The transparency of the whole system is essential to improve planning, coordination, cooperation among different stakeholders and knowledge sharing. For example is the publication of open and comprehensive NGO data necessary for partner country governments to make better budget decisions and to take into account NGO activities in different sectors. By implementing the IATI standard NGOs make a significant contribution to more effective aid and more effective reduction of poverty.

Prior to the Accra High Level Forum non-governmental organisations have been lobbied multilateral and bilateral donors to improve aid effectiveness through more transparency. In the Istanbul principles CSOs have confirmed their own responsibility to increase transparency and thus strengthen the effectiveness of aid and development. IATI is beyond doubt the best way to honour this commitment.

All of this sounds good, you may think. But what are the arguments against it? Well, there are two types of arguments. There is a list of popular arguments against any change and innovation. But these arguments are more prejudices and not really relevant. I have written a detailed description of these prejudices here. There are other serious arguments, that merit attention and should be taken into account.

Security concerns: The most frequent argument against IATI is, that particularly NGOs often support civil society organisations involved in promoting democracy, human rights, anti-corruption, etc. and that publication of IATI data about these organisations may put their staff and their activities at risk. Security of partner organisations is a very important concern and IATI is very clear about allowing exceptions to the publication of data to protect partners and to protect personal data.

Costs: The second frequent argument against IATI is costs. Many NGOs worry that the implementation of IATI will create a lot of costs. There are several answers to this concern. First of all the costs necessary to implement IATI can vary a lot depending on the current information management system of an NGO. In some cases implementation may be easy and with limited costs. Particularly for smaller NGOs there are already two online tools, OpenAidRegister and Aidstream, that allow easy and quick implementation of IATI. In other cases the costs may be substantial. For NGOs where costs are considerable national NGO networks should negotiate with their funders, often the development ministry of the government, to provide support for the implementation of IATI. In the case of UK, the British Department for International Development (DFID) has provided funding to the NGO network BOND to help with IATI implementation. In the Netherlands a similar arrangement is currently being discussed. In addition, the discussion of costs should also include benefits. If the publication of IATI data is embedded in the overall management procedures it is possible to reduce administrative costs in reporting and monitoring.

If IATI is implemented on a large scale, then substantial benefits can be expected from better planning, improved coordination, reduced corruption, etc.. Already now, about bilateral and multilateral donors representing 75% of global ODA flows have agreed to implement IATI. So there is a real potential to make the global aid system more transparent and to reap huge benefits both in financial terms and in poverty reduction.