NGOs: Pulling Necessary Funding Without Covering the Gap – Evelyn Lumish

The surge in global health organizations has had some interesting effects on the general global health landscape. On one hand, there have been some clear positive changes; because there are many more organizations, a wider swath of healthcare governance issues can be addressed and dealt with. While one organization wouldn’t be able to cover all issues—setting up systems to deal with a variety of communicable and non-communicable diseases, as well as other health issues such as maternal and children’s rights may end up leaving all types of problems being dealt with inadequately—specializing between organizations can lead to greater efficiency.

On the other hand, the huge number of NGOs leads to some major funding issues. Each intergovernmental organization, NGO, and private firm has its own overhead and administrative costs, and the more the organizations are split up, the more inefficient the funding distribution is. That is, because organizations operate under economies of scale, which means that, the larger the organization is, the lower the average cost. With a large number of small organizations, each organization has to cover their own overhead costs before they can begin to do work in the field. Because, for the most part, these organizations are heavily if not entirely reliant on voluntary funding, the funding ends up being split between all of these organizations.

Additionally, at least for organizations such as the World Health Organization, the funding ends up being allocatively inefficient. Devi Sridhar and Lawrence O. Gostin describe how close to 80% of the WHO’s budget depends on voluntary funding, much of which is earmarked towards specific projects. The distribution of this earmarked funding doesn’t match the actual global health problems; only 3.9% of the funding is allocated for non-communicable diseases, which account for 62% of total deaths. These numbers likely illustrate a trend in the greater landscape, indicating that organizations and governments tend to put a priority on problems that may not be what is most important or most pressing globally.

This lack of understanding of the real health issues facing the world currently means that these massive numbers of NGOs may not be contributing as well as they can. Having dozens if not hundreds or organizations focusing on the same issue—for example, malaria—may seem useful on paper, but when each is pulling more funding from larger organizations than it is using in the field, the utility is not necessarily there. Additionally, when the organizations that do exist are focusing all of their efforts on problems that are not the priority, they are also pulling funding from other necessary issues without covering the gap. As such this huge surplus of NGOs, while useful on paper, may actually be pulling away from necessary projects by spreading out funding to cover overhead and setup costs.

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4 thoughts on “NGOs: Pulling Necessary Funding Without Covering the Gap – Evelyn Lumish”

  1. Great post! I definitely agree that theoretically the idea of specialization should create more efficiency but that problem with funding makes it not actually feasible. However, I was wondering what you would think if within a large organization (that would receive all of the funding) there were smaller, specialized projects/teams if that would be more successful? Do you think that could potentially allow for specialization and avoid the issues with funding?

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    1. I do think that having one large operation with specialized teams would solve most of the funding issues. It would eliminate a large amount of the redundant overhead and administrative costs without eliminating the specialization capabilities. It would also clear up some cooperation and redundancy issues in regards to mandate overlap. Unfortunately, it doesn’t solve the issue of reliance on voluntary funding and the corresponding allocative inefficiency due to earmarks.

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  2. I agree with Evelyn that the WHO does not have an efficient structure to solve the issue, especially with the funding. Inefficient funding is a big problem for WHO since medical products cost so much, and they need those in order to solve the problem. Evelyn also points out how efficient the system is by dividing that inefficient funding. I agree with her that specialization may solve the problem and make the organization to be more efficient. However, I also agree that specializations would not solve the problem for funding; in fact, it might even cost more since each organization will ask more money for their specialization.
    With the distribution, she also points out how the organization is not prioritizing what it should with the fund. She said, “The distribution of this earmarked funding doesn’t match the actual global health problems.” While I was reading this part, I thought the organization would not even have a problem with funding if it use the funding efficiently and to place it should be at the first place. With this reason, I thought specialization is important but a better structure building also need to be addressed.

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  3. It’s unfortunate that the functionalist structure can be so innovate and effective in addressing the actual issues of global health yet be so confined by funding. Evelyn, based on what you’ve outlined as the issues in global health governance, do you think it would be possible to have a common “Global Health Fund?” For instance, have a centrally located funding mechanism that would pool volunteer donations and distribute funds more efficiently across the full spectrum of Global Health NGOs, filling the gaps where important issues such as non-communicable issues get overlooked. Although the politics of such a fund may make it completely infeasible, it is nonetheless something to consider as it solves both of the points you make about increased administrative costs and funding inefficiencies. In addition, the increased competition for funds among NGOs could perhaps keep them more accountable and encourage better use of funds?

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