Out of tune with Malawi: Madonna’s wasted millions

Madonna's publicity: more to learn than she meant?

This Saturday, the front page of The Times read “Madonna digs £2.4m hole in the African ground”. The story described in painful detail how all this money had been wasted on a school project in Malawi. Not exactly value for money. The Guardian ran the same story:

“The managers of Madonna’s charity in Malawi have been ousted after they squandered $3.8m on a school that will never be built.

The charity’s executive director, Philippe van den Bossche, the partner of Madonna’s former personal trainer, left in October after criticism of his management style and spending.

“These included what auditors described as outlandish expenditures on salaries, cars, office space and golf course membership, free housing and a car and driver for the school’s director.”

It’s a far cry from the plans trumpeted in 2009 and the charity’s grandiose mission. The charity in question is Raising Malawi. With toe-curling self-importance, the website pronounces:

“In 2006 Madonna and Michael Berg founded Raising Malawi to bring an end to the extreme poverty and hardship endured by Malawi’s 2,000,000 orphans and vulnerable children once and for all. … We choose Malawi because we refuse to turn our backs on those in dire need.”

Madonna’s controversial adoption of two Malawian children, David in 2006 and Mercy in 2009, must also have been a reason for ‘choosing Malawi’. In October 2009 Madonna went there again for a ground-breaking ceremony:

“The Raising Malawi Academy for Girls, is on the outskirts of the country’s capital, Lilongwe and will admit 500 girls from the small southern African country’s 28 districts. Madonna said: “If this school is successful it will be used as a model to replicate it in other countries.”

Other reports describe the project: “Billed as a “gift” to the African country from which she has adopted two children, the $15m (£9.37m) institution was to take in 500 girls and prepare them to be “future women leaders”.”

Saturday’s Times reports what some villagers in Malawi think about it.

“In Chikhota village an area over 120 acres in size had been cleared for the school campus. “I used to have a maize garden here but I was told to make way for the school,” Grevaniso Makina said. “We agreed to give up the land because we hoped we will get some employment. But we have been duped.”

The project’s cancellation is a particular embarrassement for the village leader, Chief Chinkhota. “I don’t know what to tell my people for it was me who convinced them to give up their land. Now they think I fooled them.”

More about the charity

Raising Malawi’s website is strikingly uninformative, omitting any mention of: staff or board names, contact details, an annual report or any financial summary – all items you’d normally expect to see on an NGO’s website.

Luckily their 2009 tax return, Form 990, is more revealing. (Available from Guidestar – thanks for the great work!) In 2009, the charity made $3.6m of grants out of total expenditure of $4.4m. The Executive Director received a salary of $142k from Raising Malawi and related organisations. The charity had assets of $5.4m and liabilities of $4.9m including $3.7m owed to a ‘related party’.

So, the $15m school project must have been the biggest project they worked on. The loss of $3.8m is equivalent to a whole year’s grant making. Ouch. That’s big.

The form echoes the website’s self-confidence (or is that self-promotion?): “By working at a truly grass-roots level, real and lasting change is happening for hundreds of thousands of impoverished children.” Though not, as it turns out, at the flagship Academy.

It also lists impressive sounding policies, including:

“Before money is sent overseas, the following requirements must be met:

The recipent … organization is required to submit a detailed budget … with sufficient detail for the board to determine the economic efficiency of the project being funded.

A list of specific charitable goals the recipient organization wants to accomplish with the funds and a statement of the standards by which progress toward the goals can be measured must be submitted by the recipient organization.

The recipient organization and its responsible person(s) are required to commit fully, faithfully and timely comply [sic] with Raising Malawi Inc’s reporting and monitoring requirements …

[Raising Malawi] is in the process of developing written whistleblower and document retention and destruction policies which will be consistent with governance best practices …”

Again, the policies don’t seem to have applied in this case. Which is the biggest project the charity was running, attracting international attention and plenty of favourable publicity for Madonna.

It’s not all bad

The press reports say Madonna brought in specialists from the Global Philanthropy Group to investigate what happened. Raising Malawi also funds a range of other projects. The board of directors has been removed and replaced by a caretaker board that includes Madonna herself and her manager.

When the project had gone well and truly upside down, and vast amounts had been lost, Madonna and her fellow board members did finally take action. What a pity it was so late in the day.

What are the lessons?

Like other organisations, NGOs get into trouble from time to time. These problems aren’t all unique to this project, though they are extreme. Here are eight reflections which build from wider experience summed up on www.ngoperformance.org

1. Thanks for nothing. This $3.8m should have been used to help people living tough lives in poor conditions. It’s an outrage if it has been wasted on an extravagant lifestyle by an incompetent manager: a tragedy for people who needed help and were denied it. It’s also a blow to the reputation of all other aid agencies.

Madonna’s done more harm than good by failing to match her good intentions with a responsible understanding of what she was getting in to. Development projects involve other people’s lives: they shouldn’t be used as designer accessories or sweeteners for dodgy adoptions.

2. The problem stems from Los Angeles not Lilongwe. The  root problems seem to have been (i) appointing incompetent managers, (ii) bad oversight and (iii) bad strategy. All three were the responsibility of Madonna and her fellow directors in the US. This is not primarily a story about ‘African corruption’. It’s about people in the West with more money than sense: deciding how to use huge sums without the necessary skills and judgement. Wealth is no guarantee of wisdom.

3. The mission statement sets up the wrong approach. Raising Malawi cannot and will not end extreme poverty among Malawi’s children ‘once and for all’. It’s arrogant, absurd and patronising to suggest it will. It’s not up to Madonna to ‘raise Malawi’. Malawians’ will do that themselves.

The best that outsiders can do, if they work carefully and sensitively, is help people help themselves. The patronising mission gets the whole enterprise off on the wrong foot, based on the idea that ‘we’ have all the power and ability and ‘they’ should be grateful for whatever we give them. In this case, the idea was proved to be completely wrong.

4. Plans aren’t the same as results. After years in aid, I’ve lost count of how often I’ve read that projects ‘will’ achieve certain results. And how often I’ve heard that an NGO is already thinking about replicating those results, before they’ve happened.

Drawing up plans is more fun than the hard work of implementing projects. It has the advantage of not being constrained by practical reality. Decision makers need to be on the constant look out for which aspirations are realistic and which are unlikely. Celebrity fundraising can directly push against this.

5. Policies aren’t the same as practices. I’ve also seen dozens of policies like Raising Malawi’s, about checks and balances to make sure that funds are spent effectively. They seem reassuring. But boards depend on managers to put the policies into practice. They also mostly rely on the same managers to report how well policies are implemented. And they have very few sanctions if policies are not followed. There can be huge conflicts of interest for managers.

In NGOs, boards face the real risk that developing policies turns into a bureaucratic quagmire that takes up time but adds no real value to either managers or board members. They also need creative ways of overseeing management – beyond just asking the chief executive if everything is going to be OK.

6. Celebrities and staff can benefit more than poor people. Who’s benefitted from this sorry story? Not poor Malawians. In fact, they appear to have lost out, losing fields where they used to grow food. Contractors who might build the school haven’t gained, because nothing’s been built. Madonna benefitted from the early publicity. But the major beneficiaries, the really aid-dependent people, are the incompetent managers like Philippe van den Bossche, the former executive director.

7. Development projects need professional, committed management. Running development projects is complicated, requiring sophisticated skills and a strong commitment to helping people help themselves. It’s not easy.

Being a great private sector manager may get you a lot of the way there. But managers also need to be truly committed to helping people help themselves, with the wisdom and modesty that entails. The work is about helping people build up the confidence, skills and resources to tackle their own problems in their own ways.

8. All NGOs should meet basic standards of accountability and transparency. NGOs are involved in important, collective work to tackle social problems and create public goods. They should appoint proper, experienced boards that can make sure strategies are sensible and hold managers to account. They should also publish basic details about their boards, staff and operations. Transparency is a crucial step towards improving performance across the sector.

What do you think, Madonna?

Those are my reflections. I’d love to know what Madonna’s are. What lessons has she taken from wasting $3.8m along with many people’s time, energy and fields? How will she do things differently and better in the future? What would you suggest?

4 Responses

  1. Great analysis, you have rightly summed it. I couldn’t have said more or less.

  2. Update. Perhaps in response to this story, Raising Malawi’s website has taken another step backwards.

    Until a few days ago, the site accepted comments on their blogs. I left one with a link to my blog, above. Curiously, when I checked today, all the comments have been deleted from Raising Malawi’s blog – and there’s no facility to leave them any more. Which is a pity. It looks like less interaction and less learning, more defensiveness and more short term thinking.

    Though on the positive side, I did find a ‘contact us’ form which you can fill in to leave them a message. But still no phone number or contact name.

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