The Business Ethics Blog

The world of institutions is normally thought of as being broken up into roughly 3 types: public sector institutions (government), private sector institutions (corporations and other firms) and the voluntary sector (charities & other non-governmental organizations). The categories are not exactly water-tight compartments. Many corporations have associated charitable foundations (e.g., the Eli Lilly and Company Foundation, Inc.) , and there are lots of government agencies that provide services in a way that closely approximates private commerce (e.g., Canada Post).

But in the developing world, the boundaries between categories can be even more porous. Case in point: those of you who haven’t already heard about it may be surprised to learn about a giant NGO called “BRAC” (the Bangladesh Rural Advancement Committee).

Here are 2 stories about BRAC, one quite recent from The Guardian:
Growing discontent

In the chaotic heart of downtown Dhaka, the 19-story Brac building – home to one of the world’s largest NGOs, the Bangladesh Rehabilitation Assistance Committee, an organisation so powerful that it is commonly termed Bangladesh’s second government – casts a shadow over one of the city’s largest slums. From the top floor, the slum looks like a ramshackle maze of corrugated iron and tarpaulin. But a short boat ride across the river reveals a neighbourhood of neat interlocking streets dotted with open shopfronts, selling everything from firewood to hot cakes, and with centres providing health and education programmes to its 300,000 inhabitants.
Most of the small enterprises here have been funded by Brac micro-finance loans. The slum’s school is run by Brac-trained teachers using Brac textbooks. More than 200 Brac-trained health volunteers dispense medical services. Down the road is the Brac University, and a Brac bank sign is just visible across the street.

With an expenditure of £160m, a staff of 108,000 and services that reach more than 110 million people across the country, Brac has grown from a small relief operation into an organisation globally unsurpassed in the scale of the programmes it provides to some of the world’s poorest people.

In its 35-year history, it has organised nearly 7 million landless poor into 239,000 village organisations and distributed more than £2bn in micro-finance loans.

…and another, slightly older, story from the NY Times:

Helping Hand for Bangladesh’s Poor

…BRAC today resembles a corporation as much as a development organization. It claims to be 80 percent self-supporting, with a budget this year of $174 million. It has 28,000 permanent employees — plus its 34,000 schoolteachers — and a 21-story headquarters in Dhaka, the capital. It may be the world’s largest national nongovernmental organization.

BRAC and other groups have become national institutions, but along the way they have also become lightning rods. Businesspeople have accused BRAC of elbowing in on their fields, especially banking. ….

What’s interesting to me, here, is the issue of how ethical standards shift as the activities of an NGO like BRAC bleed across borders into the realms of government and private commerce. On the one hand (as pointed out in the story in the Guardian) organizations playing government-like roles need to be accountable in ways that NGOs normally don’t need to be. Most NGOs need only be accountable to donors; an organization like BRAC arguably needs to be accountable to the entire population it serves. And, presumably, to the extent that it engages in commerce, BRAC becomes subject to the principles and norms that ought to govern commercial organizations, in addition to the principles and norms that govern NGOs.

Here’s the BRAC website.

(p.s. I have a research interest in the idea of NGOs taking on quasi-governmental duties, and in particular in how business firms should relate to NGOs in such situations. If you know things I should read, email me.)
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Thanks to Melissa for sending me the Guardian story.