Why Greg Mortenson's Shame is on Us

Now that self-made humanitarian and "stones-into-schools" false prophet Greg Mortenson has been ordered to repay more than $1-million to the charity he founded, exploited and financially mismanaged, it's as good a time as any to assess the disgraced Three Cups of Tea author and his crumbling empire of goodness.

Quick recap of Mortenson's (true) journey:

• In 1993 Mortenson allegedly took a wrong turn (how prescient) while descending from a harrowing and unsuccessful summit attempt of K2 in Pakistan's Karakoram Range, into the village of Korphe where he discovered his inner altruist; 
• In 1996 he founded the non-profit Central Asia Institute (CAI) with seed money from a Swiss millionaire to fund educational development in rural Pakistan and Afghanistan;
• In 2006 he co-authored the best-seller Three Cups of Tea: One Man's Mission to Promote Peace... One School at a Time, and became a huge draw as a motivational speaker while all his expenses were being paid by CAI;
• He collected no fewer than thirty-nine literary and humanitarian awards and honorary degrees between 2004 and 2011;
• In 2010, US President Barack Obama donated $100,000 from the proceeds of his Nobel Prize to CAI;
• In April 2011 the investigative news show 60 Minutes exposed the fact that Mortenson's famous 1993 sojourn to Korphe, as well as other claims made in the book (such as his capture by the Taliban, and, er, building lots of schools) almost certainly never happened;
• A day after the 60 Minutes report, celebrated journalist, mountaineer and CAI donor Jon Krakauer released his own damning investigation of Mortenson, Three Cups of Deceit: How Greg Mortenson, Humanitarian Hero, Lost His Way, detailing Mortenson's rap sheet of hypocrisy and how he (Krakauer) was duped into investing.

Charity fraud doesn't often come with the kind of alarm bells as Three Cups of Tea, a nauseating read whose obnoxious aggrandizement of Mortenson is both its marketing genius (it was published by Viking Press) and its flashing red warning light.

That is not to say that its millions of readers should be (solely) blamed for seeing a halo form above the author's head. Our appetite for such tales is as ravenous as our wallets are fat and our secret shame of wealth is heavy. Greg Mortenson created a religion and made himself its prophet. And like others before him, things didn't quite pan out the way he'd prophesied, if mainly because, as Nicholas Kristof noted, "Greg is more of a founding visionary than a disciplined CEO."

Krakauer and others concede that Mortenson is not pure evil (Bernie Madoff is the cited contrast), just someone in whom we invested an unholy amount of unearned trust.

That is why, we must conclude, bold promises attached to fabricated tales of education-starved children in Asia resulted in tens of millions in book sales and funds raised, a charity-funded book tour, private jets, disgruntled donors, shoddy financial statements, deliberate misinformation, and yes, a few schools.

In other words, Greg Mortenson did what he did because nobody stopped him. Nobody checked the facts, and nobody tempered his idealism (or our own) with a dose of reality. Or if they did, it didn't work.

His real success was not in exploiting his unique encounter with poverty in Pakistan to build schools, but in exploiting our naïveté with respect to encountering poverty. Greg Mortenson's shame is on us.

May we think about that before we write our next cheque to charity.

FINCA: Exploitative Fundraising or Successful Direct Marketing?

Last week I received an envelope in the mail from the Foundation for International Community Assistance, or FINCA, which consisted of this:

Three photographs of women presenting a form of livelihood to the camera, with a letter from FINCA president and CEO Rupert W. Scofield informing me about "micro-entrepreneurship," "village banks," and how my "donation of $50 or more" can empower poor women like "Dominga" and "Robinah" (not pictured), whose brief tales of former woe and current hope are offered up as proof of FINCA's commitment and success.

As an experienced communications manager and advisor in the non-profit/NGO sector, I'm very curious about these kinds of promotions. When I see something like this, there are 5 things that immediately come to mind:

1) Who are the women (and the child) in the photographs?
2) Who is the photographer(s)?
3) Under what circumstances were the photographs taken?
4) Does the letter inform me of how my donation is managed/governed?
5) Am I encouraged to seek out more information before becoming a donor?

So how did FINCA do with respect to these five benchmarks?

1) The photographs are actually cards, and inside each is the full name, home town (or in one case only home country) and brief success story of each woman. The child's name and relationship to the woman in that photograph are not mentioned.

2) The photographers are not named anywhere. I believe the photographer should always be credited (even though this is not standard practice with NGOs) in campaigns such as this, both for credit/copyright of an original creation (based on my experience these photos were probably taken by a frontline fieldworker who has no idea about the copyright he/she holds), and for accountability, such as #3 below.

3) The circumstances are very important: Did the subjects assent to their photograph being taken and their image being used for direct marketing? How did they give their assent and what assurances are there that they understood the concept of what FINCA was doing with their image. There is no mention of this anywhere in FINCA's information. Not that this is surprising or that FINCA is alone in neglecting this.

There is no mention of the child's assent to participate, which is a guideline of the Convention on the Rights of the Child (CRC) and standard Child Rights policies that most international NGOs keep. Not naming the child (a child's right to privacy) is a good practice endorsed by the framework of the CRC, yet this is undermined by using the image of the child without her assent.

It's worth noting that among NGOs the standard practice is to blanket themselves in Child Rights and other policies and therefore not have to invoke them at every turn. My point is that in the case of fundraising and marketing by an NGO, transparency must reach another level, and FINCA fails.

4) There is no mention of FINCA's fiscal accountability in the letter, save for a mention in Mr. Scofield's postscript that "93 cents of every dollar donated to FINCA directly supports client services." This is an impressive but wholly misleading figure. If we are to infer from this marketable statistic that 93% of donations (or 93% of all FINCA's income) are spent servicing the grassroots financial-aid programs for the beneficiaries (the Domingas and Robinahs) and only 7% on administrative and personnel costs of FINCA and its partner NGOs in the field -- well, if true that would be remarkable.

FINCA does, as it should, publish its financial statements for the public to scrutinize. Nowhere within those pages could the average person interpret the "93 cents" remark. FINCA is a $500-million non-profit charitable organization that is also a bank with a corporate business model. In 2010 it collected $7m in grants, $14m in donations, and $163m in gross interest earned. It spent $81m on personnel and $56m on operating expenses (also spending on taxes, interest and foreign exchange), and curiously (for a non-profit) reported a $10-million profit. Which 93 cents of which of those dollars went to which client services?

If 93% of the $14 million in donations alone goes to "client services," my response is: Why not 100%? Donations seem to be such a small part of FINCA's total budget, and in fact come close to matching reported profit. Did FINCA think that 93% was a more believable (e.g. marketable) number than 100%?

Naturally nowhere in his letter (or in FINCA's financial statements) does Robert W. Scofield mention that his annual salary is $317,281, or more than double the median CEO salary in the non-profit industry. The same source -- the Better Business Bureau -- that reported his salary also reported that FINCA's financial statements do not meet the standards of the Generally Accepted Accounting Principles (GAAP); FINCA like many NGOs holds itself to International Financial Reporting Standards (IFRS) instead.

5) This, of course, is a trick question. It's antithetical to a marketing campaign to invite its audience to seek critical counsel before donating. Even if I were FINCA's communications director I'd be hard pressed slip such a gilded layer of transparency past a marketing team besotted with donor-friendly photographs of smiling foreign women. Again, my point is based on holding NGOs, charities and non-profits to a higher standard than for-profit, consumer-based organizations.

This post in no way has been devised to malign FINCA; I am not accusing them of any duplicity or mismanagement, nor am I aware of their reputation amongst their donors, partners and beneficiaries. FINCA sent this unsolicited letter to me. And this is my response. I'm simply posing as a very stubborn consumer. And no, they will not be getting my $50. Not today.

BBC investigates the politics of NGOs in India

What do non-governmental organizations (NGOs) really do to improve the lives of people in developing countries and work for sustainable development of impoverished and oppressed societies?

Plenty, as I learned in India over the course of a year with an exceptionally dedicated and scrupulous NGO called PREM. But the world of NGOs and so-called development, like many a human endeavor, is rife with contradiction, corruption and power politics.

Part 2 of a new three-part radio documentary by Allan Little called "The Truth about NGOs" examines the complex and ever-changing world NGOs inhabit in India. Though the focus is mainly on Mumbai, not on the rural jungles of Odisha, many of the issues are the same: credibility, transparency, efficacy, relevance and corruption (both ethical and fiduciary). Further, it explores in basic detail the complicated relationship between NGOs and government, and the role of the wealthy, powerful and often out-of-touch international NGOs (e.g. Oxfam, Save the Children, others).

Part 1 of Allan Little's NGO reportage examined NGO involvement in influencing government and policy in Malawi, and in foisting Western cultural values onto local society via the power vested in them by the money these NGOs receive from foreign donors. What is a human rights struggle in the West (gay marriage, e.g., or economic equality) becomes a form of neo-colonialism in Africa. And by making local NGOs dependent on this stream of funding, the foreign donors and the agendas they represent and can wield wide-ranging, undemocratic power in the developing world. It's no stretch to imagine that local government and those opposed to NGOs can paint them as agents of a new imperialism.

Part 3, on Haiti, is airing this week.

[Tip of the hat to Dean Bradley for alerting us to these documentaries.]