Foreign Assistance:

Private Voluntary Organizations' Contributions and Limitations

NSIAD-96-34: Published: Dec 15, 1995. Publicly Released: Dec 15, 1995.

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Pursuant to a congressional request, GAO reviewed private voluntary organizations' (PVO) role in delivering federally funded foreign assistance, focusing on the: (1) implications of increasing PVO role in delivering assistance; (2) success of PVO projects in achieving their objectives; and (3) extent to which PVO are dependent on U.S. government funding.

GAO found that: (1) the PVO community encompasses organizations of varying sizes, missions, geographic focuses, and capabilities, and they work to address varied development needs; (2) PVOs serve as a complement to traditional government-to-government assistance and can be a mechanism to strengthen indigenous community-level organizations; (3) while PVOs have demonstrated that they are generally effective in carrying out community-based development projects, most have not had wide experience in working with governments and institutions on sectoral and macroeconomic policy reforms necessary to create an environment favorable to development; (4) twenty of the 26 PVO projects GAO reviewed were making progress toward their objectives, and good project design, competent in-country staff, and local participation were factors common to the most successful projects; (5) PVOs are increasingly using local groups to carry out projects, which should increase the local capacity for development; (6) most projects GAO reviewed included local capacity building, which is critical to long-term development and sustainability; (7) accountability for Agency for International Development (AID) assistance funds has been a continuing concern, and over the last decade, AID has encouraged and assisted PVOs to improve their program and financial management systems; (8) providing increased amounts of foreign aid directly through PVOs or through a foundation, as suggested in some reform proposals, would remove a key accountability mechanism from the U.S. foreign assistance programs; (9) although some individual PVO projects may be funded entirely by AID, PVOs, as a group, have become less dependent on U.S. funding; (10) federal funding as a share of total funding for PVOs receiving federal support dropped from 42 percent to 29 percent between 1982 and 1992; and (11) U.S. funding for PVOs has increased, but private resources have increased faster.

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