Cablegate: Kenya: Ngo Board Offers Prize to Encourage Best Practices

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DE RUEHNR #4178/01 2961057
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P 231057Z OCT 07
FM AMEMBASSY NAIROBI
TO SECSTATE WASHDC PRIORITY 3063

UNCLAS NAIROBI 004178

SIPDIS

SENSITIVE

DEPT FOR AF/E, AF/RSA, AF/EPS, AND DRL

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E.O. 12958: N/A
TAGS: ECON EAID PHUM PGOV KCRM EFIN KTFN KCOR KE
SUBJECT: Kenya: NGO Board Offers Prize to Encourage Best Practices

SENSITIVE-BUT-UNCLASSIFIED

1. (SBU) Summary: On October 17, Kenya's NGO Coordination Board (NGO
Board) and the NGO Resource Alliance of the UK launched their new
"NGO of the Year" awards to be presented in July 2008 to NGOs that
demonstrate competence and integrity with their service recipients
and their donors. Separately, the USG is providing $335,000 of
computer equipment, software and training to enable the Board to
guard NGOs from being used for terrorist finance, and to reveal
corruption and fraud. Several speakers claimed the awards would
improve the tarnished image of non-profit organizations in Kenya.
The award scheme is part of the Board's campaign to become more
professional and capable of regulating the $1.2 billion/year NGO
sector, as well as building confidence among civil society that the
Board will not abuse its powers as it did under the Moi
administration. End Summary.

A Little History First
----------------------
2. (SBU) Kenya's international NGO sector expanded enormously during
the Moi administration, when donor governments tried to avoid the
GOK's corruption and poor governance by channeling their assistance
through NGOs offering the services the GOK could not or would not.
Flush with resources, international NGOs became preferred employers,
offering big off-road vehicles, well-equipped offices and good
salaries. GOK officials were naturally jealous of the competition,
and used the parastatal NGO Board to harass NGOs. After its victory
in the 2002 election, the NARC rainbow coalition appointed so many
NGO personnel to official positions the NGO sector was seriously
weakened.

Briefcase NGOs Tarnish Local NGO Image
--------------------------------------
3. (SBU) The NGO Board is the Kenyan Government (GOK) institution
responsible for registering and regulating NGOs, which handle Ksh 80
billion ($1.2 billion) annually. While most international NGOs have
a stellar reputation, Kenya has been plagued for years by "briefcase
NGOs." It is widely believed these "BRINGOs" are used by their
corrupt managers for personal enrichment and aggrandizement ahead of
public service, defrauding their donors. Under the Moi
Administration, the NGO Board lacked the institutional capacity to
locate and weed out the bad actors, but its regulatory powers were
used to harass NGOs in political disfavor. An NGO Council was
created in 1993 to provide leadership among NGOs, improve practices,
and represent NGOs' interests to the NGO Board and the Government.

NGO Council Fails to Improve Sector
-----------------------------------
4. (SBU) After the 2002 election, the Board's and the Council's
situations switched. The NGO Council became increasingly
dysfunctional due to the politicization of Council activities by the
Chairperson, divergent interests among Council member NGOs, and poor
management. In 2006, the NGO Council reached a crisis when Council
leaders tried (with the NGO Board's support) but failed to remove
Chairwoman Ms. Orie Rego Manduli for mismanagement and failure to
represent the interests of the membership. The noisy drama, in
which Manduli locked herself in her office and refused to accept her
removal, made the Council and local NGOs look ridiculous and
incapable of self-governance. Manduli has three years left in her
term, and the NGO Council has continued to wither in effectiveness.

NGO Council Capacity Building
-----------------------------
5. (SBU) Under the Kibaki administration, however, the NGO Board has
enjoyed more enlightened leadership, increased its professionalism,
and began taking on the NGO Council's role of mobilizing and
energizing NGOs. However, it lacked the capacity to effectively
review and archive NGO registrations and annual reports for signs of
trouble. After the 1998 Embassy bombings and the 9/11 attack, there
was also concern that some NGOs might be used as channels for
terrorist finance. In 2004, a joint State Department/U.S.
Treasury/UK Charities Commission team recommended a major IT upgrade
and training to give the Board the capacity to carry out its
supervisory duties and enable it to check for signs of misuse of
funds and terrorist financing. The $335,000 IT project should be
completed in 2008, but has been kept low profile to avoid exciting
civil society suspicions that the Board's improved capacity could be
used to harass NGOs that fall into political disfavor.

6. (SBU) The NGO Board has carried out surveys on NGOs in six
provinces to update its information and determine which NGOs are
actually operating, and will enter this census into its new
database. The survey exercise excited suspicions by some NGOs,
which assumed they were a partisan plot to suppress perceived
opposition. However, the Board's leaders appear to have largely
reassured the NGOs of the benefits for the whole sector of effective
and transparent supervision that would weed out corrupt NGOs and
support the good ones.
Bring on the Awards
--------------------
7. (U) As an example of this outreach, on October 17, the NGO Board,
the Resource Alliance and I&M Bank launched their new "NGO of the
Year" awards. NGO Board Executive Director David Isoe noted that
NGOs in Kenya had improved the lives of 10 million Kenyans, but
their work is not well publicized, and their image needs improving.
The purpose of the awards is to encourage best practices to improve
and standardize fund raising and utilization. This would enable
NGOs to source more donations locally and encourage corporate social
responsibility by providing greater accountability and reporting to
donors and NGO clients. Isoe said the Board had worked with
stakeholders to develop the concept and procedures for the awards.

8. (U) A key partner in the process was the UK NGO Resource Alliance
(RA), which specializes in building non-profit organizations' fund
raising capacity through workshops, training and awards. RA will
hold a workshop in Mombasa November 27-30. The SISA Centre
described its performance index for NGOs, and how it could be used
to improve fund raising by measuring and demonstrating the
competence and integrity of NGOs in delivering services and helping
recipients.

A Politician's View
--------------------
9. (U) National Heritage Ministry Shakombo, within whose Ministry
the Board and the Council operate, commended the NGO awards
initiative. He claimed the infighting in the Council had
discredited NGOs and tarnished their image, and called on NGOs to
critically consider how to recapture their rightful role in society.
The awards were part of a wider effort to create a favorable
operating environment for NGOs. He asked, "Where does the Ksh 80
billion NGOs received annually go? Where are the signboards?"

10. (U) Shakombo also noted that NGOs, in this election year, play a
critical role in civic and voter education. He reminded them to
stay neutral, and not abuse their role by criticizing incumbent MPs.
Shakombo claimed Constituency Development Funds (CDF are GOK funds
distributed by local committees appointed by their MP) have spent
only Ksh 2 billion, but have transformed the country and planted
signs everywhere. He urged NGOs to see themselves as in competition
with the (politically managed) CDF program.

Comment
--------
11. (SBU) The Board and NGOs appear sincere in their goal of
improving the performance of the NGO sector, but Minister Shakombo's
comments revealed the typical politician's jealousy and paranoia
that generate NGO suspicions of the government's real agenda. While
most Kenyans are aware that abuses exist within the local NGO
sector, they know they have benefited enormously from international
NGOs, even without signboards. Post will continue to build the NGO
Board's capacity and has confidence in its current leadership. We
will, however, continue to watch closely for signs the Board is
coming under pressure to harass or suppress NGOs who fall into
political disfavor.

RANNEBERGER

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