Trust.org’s Tom Esslemont and the pipe dream of overhead-free humanitarian aid

When Tom Esslemont and the team at Trust.org send out a survey on how charities involved in the Nepal earthquake relief have spent their money, he must have already have his ‘EXCLUSIVE-Global charities accused of "misleading" public on Nepal quake aid’ headline in mind.
Because the responses he received from a range of global humanitarian organizations hardly justify a story with quite a misleading headline. 

In short, charities reported that they have spent around 15% of the donations on ‘overheads’, work through local partners and have not spent all the money three months after the quake. But Tom Esslemont takes the opportunity for some general charity-bashing and mixes in some convenient UN-bashing as well:

Sixteen of the world's largest disaster relief charities have revealed to the Thomson Reuters Foundation that they are spending up to a sixth of funds designated for Nepal on their overheads rather than in disaster-hit areas, when they are using local charities to do much of the work.

Yep, it is September 2015 and we are back at the ‘why do professional organizations with professional local and global staff have OVERHEADS?!’ discussion.
This issue has been debated at length by many knowledgeable people-I first highlighted it on the blog in 2012 when reviewing Saundra Schimmelpfennig's book and the key quote from her book was:

While there is waste and fraud in the nonprofit world, these problems are not uncovered by looking at an organization’s administration ratio. In fact little can be learned by the administration ratio as it’s often more a reflection of the organization’s accounting practices than anything else.

More recently, in the context of humanitarian staff well-being and the aid industry’s work practices, Tayles from the Hood encouraged his readers to ‘Take Care’:

To justify the existence of a project or organization on the basis of low overhead, you have to literally believe that what you actually do and how you actually do it is of little consequence, compared with volume of output. You have to be able to believe that every dollar spent paying the salary of those doing the implementing literally erodes the overall end result. You have to be willing to believe that the level of personal sacrifice of the practitioner has a tangible effect on the end result. And further, that it’s possible to evaluate the outcomes a priori, based on that apparent personal sacrifice. If we could only find someone who would do the work for free, we could save more lives…

I am disappointed that Tom Esslemont does not allow for any of these nuances in his short piece. His premier source is Ben Smilowitz, founder and executive director of the Disaster Accountability Project who focuses on ‘misleading’ regranting practices:

Smilowitz said some international NGOs appear to have operations on the ground when, in fact, they are only donating money to local groups, a process known as regranting.
"When an NGO is regranting ... and they still take standard overhead as if they were delivering the services, then that is waste and abuse. It is misleading," said Smilowitz.

The organizations mentioned in the article all seem to have a pretty solid track record of working in Nepal and I wonder how much of the money is really donated to local groups without further contact with overheads (even if only the finance department is involved which costs money as well, of course).

So in summary:
· Humanitarian organizations have overheads; overheads include any internal processes where staff ‘touch’ donations

· Overhead figures of around 15% are absolutely acceptable for professional organizations; there is no ‘right’ amount and the 20% suggested by USAID is certainly on the higher end of the spectrum

· Global charities do not operate in a vacuum; they cooperate with local partners, the Nepali government or global funds administrated by the UN system, for example; these are complex and complicated relationships and after a large-scale humanitarian disaster it is impossible to find a ‘perfect’ way of distributing resources quickly, fairly and efficiently

· If Trust.org sends out surveys to humanitarian organizations that spend time and effort (overheads!) on responding to their request, journalists have an obligation to engage thoroughly with the information-but also with the debates around complicated issues such as overheads rather than framing a story that somehow justifies the word ‘exclusive’ in capital letters in the headline