Nonprofit Chronicles

Many years ago, as a Peace Corps volunteer in northern Thailand, Paul Strasburg met a young man who said he was a teacher and asked for help building a school in his village. Strasburg somehow found a small nonprofit in New York, led by high school students and teachers, that was willing to help, and made an introduction. What happened next? The Thai villagers “literally built a school from scratch with a couple of thousands dollars from these kids,” he said.

Not long after, Strasburg went to work for the Ford Foundation on agricultural and rural development in Latin America. He couldn’t try small things to see if they worked, he said, because the foundation wouldn’t make grants for less than $25,000. He doubted his own expertise. “I knew damn well that I didn’t know what I was talking about,” he says, with a laugh.

These experiences led Strasburg to start a nonprofit called the International Development Exchange, or IDEX. Then and now, IDEX puts poor people in the global south — not experts in the west — at the forefront of efforts to improve their lives. It identifies effective, locally-based organizations in South Asia, Africa and Latin America, and supports them with unrestricted grants.

“Wouldn’t it be great,”Strasburg says, “if we could just give people a little help and let them decide what they need to do? They know the culture, the power dynamics, the local economic situation. If they tell me that a rice mill is what they really need, and I think that what they need is high yielding variety of rice, I’ve learned to put my money on the rice mill.”

Strasburg started IDEX in 1985. He was way ahead of his time. Two decades later, big international humanitarian programs faced an array of critics. The development economist William Easterly wrote The White Man’s Burden and The Tyranny of Experts, books that assailed the western aid establishment, its paternalism and its condescending belief that people in poor countries can’t be trusted to make their own decisions. “Development is thought of as something that we, the experts, have to do to and for them, as we really don’t believe they can do it themselves,” Easterly has said. Meantime, Internet-based platforms like Global Giving and Kiva sprung up during the 2000s to directly connect donors and lenders in rich countries to nonprofits in the global south. [See my blogpost, Small is beautiful, mostly] Strasburg, who for years communicated with his grantees via airmail letters and long-distance phone, admits to “twinges of jealousy” about all the money the online platforms brought in, but says he’s pleased to see a growing recognition that development works best from the bottom up.

As for IDEX, the San Francisco-based organization remains small and committed to its principles. It made grants that totaled about $1 million last year, to 20 partners, some with as few as five full-time staff and operating budgets of less than $75,000.

“If we’re about making sure the money get to the intended beneficiaries, then small can be very effective.”  says Rajasvini Bhansali, IDEX’s executive director. Most of our partners “don’t have the machinery to write fancy grant proposals,” she says.  “It’s our role to go and find them.”

Once IDEX has identified a partner, they provide no-strings-attached funding for three to 10 years. “You have to relinquish some level of control,” Bhansali told me. “You have to allow grass-roots organizations and their visionary leaders to set the agenda.”

Consider, for example, a Guatemalan organization called the Women’s Association for the Development of Sacatepéquez, which is known as AFEDES. An IDEX grant partner since 2005, AFEDES, which offered micro-loans, discovered to its dismay that the loans weren’t serving their intended purpose. Some borrowers went deeper into debt. “This was a time when microcredit was still seen as a silver bullet solution by many in the development community,” Bhansali says. AFEDES saw that other issues, including domestic violence, were holding women back.

“They were willing to be wrong. They were willing to realign. This process of self-reflection is not easy,” Bhansali said. Other funders, devoted to micro-finance, stopped supporting AFEDES but IDEX stayed the course. Eventually, the organization retooled to educate women about their legal and financial rights, provide training in small-scale agriculture to deal with nutrition problems and advocate for a shelter for abused women. “They’re constantly innovating,” Bhansali says, and the lesson is that local leaders are in the best positions to address the root causes of poverty, injustice, and inequality.

Yet, she writes:

The problem is that this is not the way most international philanthropy is currently practiced. Instead, large-scale development efforts are initiated and led by people and organizations external to the communities directly impacted by poverty and injustice. These efforts fail to take into account the knowledge and experience that already exists in these communities, and don’t have a deep understanding of the efforts that will be most effective in the long run. The results are often limited and short-lived, and groups on the frontlines, like AFEDES, don’t get access to the funding they so desperately need to thrive and grow.

Interestingly, to see if IDEX’s approach has served its partners well, IDEX commissioned an independent evaluation, surveying grantees to get their perspective on IDEX. IDEX got high marks from its partners for being respectful and transparent. “In philanthropy, a field that is often littered with self-important practices, IDEX stands out to its partners as a breath of fresh air,” the report said.

But how effective are the partners at driving change? That’s harder to know. Bhansali said that IDEX does a “very deep due diligence up front,” but doesn’t formally evaluate its partners against time-based goals. That said, some IDEX partners have been globally recognized for their work.

The other challenge facing IDEX is scaling its impact. The organization has eight full-time staff devoted to giving away $1 million. “It is labor intensive,” concedes Bhansali. IDEX hopes to expand its influence through a program called the IDEX Academy, which trains family philanthropists, foundation staff and individual donors to practice IDEX’s grass roots-oriented, reflective and culturally sensitive brand of social justice philanthropy. Most of the teachers are IDEX grant partners from the global south.

I’m attracted to IDEX’s approach. What’s lacking is independent evidence that it works. Of course, when a foundation is making grants in the $5,000 to $50,000 range, it’s hard to justify spending more money to evaluate the effectiveness of its partners which, in any event, would be hard to do, since many engage in advocacy that can take years to show results.

Bhansali has no doubt that IDEX punches above its weight. “What IDEX has learned over the last 30 years is that small can be fierce and deeply-rooted,” she says. “Small can, in fact, be big, and local solutions can have global impact.”