Why should large aid organizations spin off more start-ups? What kind?

April 14, 2016

     By Duncan Green     

Here’s vlog number 3 – they’re turning into kind of lazy exec sums for blog posts. And a chance to study my kitchen….

I’ve been thinking about the idea of Oxfam and other large aid players deliberately ‘spinning off’ start-ups as independent organizations. The idea came up when I was writing ‘Fit for the Future’ last year, on the way INGOs need to adapt to work in complex, fast-changing systems, and has been niggling away at me ever since.

The argument for spin-offs is twofold: firstly, it frees a small, energetic start-up from the workings of a large Fairtrade Foundationbureaucracy, with its rules, sign off procedures and regular shifts in focus and priorities. It means you can just get on with things, try stuff out, adapt and evolve. In the UK, New Internationalist and Fairtrade Foundation started life in this way, and lots of successful organizations in developing countries can be seen in this light – starting with a good idea and an aid grant or two, and then building into mighty organizations like SEWA in India. More recently, we have got better at setting up independent ‘multi-stakeholder initiatives’ like the Ethical Trading Initiative.

The second argument is more subtle, and comes from Mike Edwards. Development in complex  societies, polities and economies is best served by a rich, diverse ecosystem with lots of diversity, innovation, creative destruction etc. But in many ways, business as usual in the aid business encourages monoculture – small numbers of INGOs, funding grassroots organizations that ‘look like us’ in terms of politics and narrative. Seeding the ecosystem with start ups is a way of spreading diversity in the system with long term benefits for the system as a whole (i.e. development).

What might be the best candidates for spin offs? Here’s a few ideas, but I’d love to hear yours:

New InternationalistParticular projects with a viable commercial business model, whether as producers of products or services. These can be global or national.

Watchdog bodies to follow up major campaigns: the excellent Bretton Woods Project was set up to keep a body of expertise on the World Bank and IMF alive even when wider attention to structural adjustment etc fell away. Control Arms is doing a fine job on keeping up the pressure on the Arms Trade Treaty. But as far as I know, there is no global campaigning body on the WTO or regional trade agreements like EPAs or the TPP (although there are thinktanks), which couple prove a real missed opportunity, should the need to revive trade campaigning return. Any new major campaigns should think about spinning off small specialist bodies as part of their exit strategy – what would a BWP equivalent on inequality look like?

Sectoral Specialists: Fashions and priorities come and go, but people will still need schools, hospitals, rights and roads whatever the latest development fad. It would be interesting to map out the institutional ecosystem and identify where some sectors are neglected, then encourage start-ups to populate the gaps. This could be the answer to my regular rants about why the aid business pays so little attention to ‘cinderella issues’ like obesity, tobacco and alcohol.

Against this suggestion is a clear institutional obstacle – why would Oxfam ‘give up’ its most interesting/innovative

Breaking Good?

Breaking Good?

programmes, leaving a rather tame rump of traditional activities that critics could slag off as same old same old? Giving Oxfam a chunk of shares in the spin-off, as in private sector spin-offs, doesn’t really work, but is there some other way to align incentives, eg by giving the parent organization some kind of reputational stake in the subsequent glory of successful spin-offs?

One answer might be to take a two tier approach – some degree of autonomy within the Oxfam brand for spin offs where there is a case for retaining an institutional link (this could include my long-standing suggestion for semi autonomous advocacy groups of ‘grey panthers’, and I guess this blog is one example!) And a second tier of fully independent spin offs.

Any other suggestions?

 

April 14, 2016
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Duncan Green
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