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[Editor's Note: This article was originally published in OneWorld.net's online, "living magazine," Perspectives, as part of its edition on foreign assistance. Click here for the entire issue.]

Pakistani educators outside the offices of USAID in Washington, DC. © climbnh2003 (flickr)

WASHINGTON, Feb 10 (OneWorld.net) - Providing resources to help improve the lives of people in faraway countries -- where customs, beliefs, and political systems may be vastly different -- can be a complicated process.

Donor governments, nongovernmental organizations, individual philanthropists, and corporate foundations all play different, yet interconnected roles in delivering foreign assistance, but the goals of each contributor are ultimately the same: to help raise the standard of living for the people on the receiving end.

Governments as Donors

Governments are one of the primary sources of foreign assistance. Developed countries such as the United States, Japan, the United Kingdom, and members of the European Union employ thousands of people in their efforts to plan, coordinate, and sometimes even deliver assistance to communities where it is needed. The United States is the largest provider of aid, spreading some $22 billion around the world in 2007, according to the Organization for Economic Co-operation and Development.

But when measured as a percentage of a country's total income, or GNI, every other developed country except Greece provides more foreign assistance than the United States. Norway, Sweden, Luxembourg, the Netherlands, and Denmark all commit close to 1 percent of their GNI to foreign assistance. The United States only committed 0.18 percent of its national income in 2007, according to Oxfam, a privately funded, international relief and development organization.

Foreign assistance provided by governments begins with the taxpayer. The citizens of a donor country pay their taxes to fund the national budget. Through negotiations between the executive branch and the legislature, the allotment for foreign aid is determined.

Foreign aid has never been a top priority for U.S. budget negotiators, when compared with funding for domestic programs. The foreign assistance budget was approximately $35 billion in 2007, or a little more than 1 percent of the total federal budget, according to the U.S. State Department, which administers foreign aid programs through the U.S. Agency for International Development (USAID). In comparison, the United States military budget for 2008 was more than $700 billion, according to nonprofit advocacy group Center for Arms Control and Non-Proliferation.

In the United States, the Congress often weighs in as to how much assistance will be provided to each country, and for what purposes the resources will be used (water systems, educational programs, police training, etc.).

USAID then works with the State Department to determine if the aid is efficient, effective, and a strategic use of taxpayer money.

Traditionally, U.S. foreign assistance is aimed at supporting national security and promoting economic growth, poverty reduction, and humanitarian relief abroad. Foreign assistance is generally considered an aspect of U.S. foreign policy, so resources often target those nations where policymakers believe the resources will be used to strengthen U.S. security. This may not always include the world's neediest nations. (See "Foreign Assistance: Why Countries Help Others" for more on the motivations behind assistance programs.)

Private Donors Dwarf Government Aid Programs

In the United States, private philanthropists provide a significant amount of foreign assistance as well. In fact, nearly 80 percent of U.S. foreign assistance in 2005 came from private sources, according to the State Department. These donations come from from private foundations, corporations, voluntary organizations, universities, religious organizations, and individuals.

A family that received a Heifer goat passes on the gift to a neighboring family. © Heifer International / Dan GudahlOprah Winfrey, the well-known TV talk show host, made headlines in 2007 with the opening of her school for girls in South Africa, and investment guru Warren Buffet's multi-year donation of $31 billion to the Bill and Melinda Gates Foundation nearly matched the entire U.S. foreign affairs budget in 2007. The Gates Foundation itself has donated a total of $287 million toward the development of a malaria vaccination and $1.5 billion to the GAVI Alliance to reduce child mortality in the world's poorest countries.  But plenty of not-so-rich-and-famous people make an impact as well.

Non-governmental organizations (NGOs) often carry out smaller aid projects that directly reach those in need. These groups play an important role in the foreign assistance process. Many of the larger NGOs, like Mercy Corps, Save the Children, and CARE International, work worldwide. These international NGOs generally do their own fundraising among the general public and may also receive grants or donations from governments, religious organizations, private foundations, or philanthropists.

An example of an international NGO providing direct aid to communities around the world is Heifer International, a U.S.-based organization that gives anybody the opportunity to donate an animal to a family in a developing country. A check sent to Heifer International headquarters in Little Rock, Arkansas, buys a cow, chicken, goat, or llama for a family in the recipient country. The new owners make a commitment to extend the donation even further by giving the animal's first offspring to another family in the community.

Save the Children provides relief items to families in disaster areas and helps rebuild schools and social systems to protect young people. The international NGO has health programs in 40 countries, working with USAID funding in some cases to achieve sustainable improvements in maternal and newborn health and survival and contribute to child nutrition and immunization, among other things.

All Assistance Is Local

Local NGOs and governments in recipient countries also play a vital role in helping foreign assistance reach their own people. Although local NGOs frequently lack the funds to promote themselves worldwide, their presence in the aid equation gives local people a voice in how development unfolds in their country.

The participation of local people is necessary for the success of aid projects, says Nikhil Aziz, the executive director of Grassroots International, a Boston-based group that partners with NGOs around the world to help direct aid where it is needed to improve lives. "International aid or projects can be successful only when people organize in their own communities to confront the root causes of their problems. That means those most affected by problems are the ones who can generate the most effective solutions," Aziz says.

Molly Melching (center) and her nonprofit organization Tostan, work with local communities in Senegal to help them achieve their development priorities. © TostanOxfam America, one of the largest international NGOs in the world, also recognizes the importance of forging local partnerships, noting on its Web site that local community leaders often have a clearer idea of what can help them overcome their problems, but they lack the resources to make those changes happen. As an international organization, Oxfam can help local groups tap into global resources to facilitate the economic growth those communities need.

"Our job at Oxfam is to help people take charge of their own development by transferring the information, capacity, and ultimately control that they need to manage their own pathways from poverty," says Paul O'Brien, Oxfam America's director for aid effectiveness.

Private foundations, like the MacArthur, Rockefeller, and Gates foundations, also play a significant role providing funding for local NGOs. Foundations generally set their own funding priorities, which means deciding what types of programs they will provide grants for. It is then up to potential recipients to demonstrate that the program they aim to run will accomplish the goals the foundation wants to achieve.

Grant applications typically require concise descriptions of projects as well as explanations -- in English -- of how the proposed project would meet the foundation's funding priorities. And the process is a competitive one. The Ford Foundation, for example, receives some 44,000 applications per year, but makes only about 2,000 grants, according to its Web site. Once a grant is made, most foundations require recipient organizations make regular reports on the project's progress.

The arduous processes may help foundations account on paper for money provided to organizations around the world, but they can also add significant costs to grassroots organizations that often don't have experience with the bureaucratic procedures required. In some cases, organizations running effective programs may simply be unable to qualify for funds from international foundations.

Corporations like Microsoft also set up their own foundations to make development grants. The "Giving in Numbers" report, published annually by the Committee Encouraging Corporate Philanthropy, estimates that in 2006 nearly 13 percent of all corporate giving -- or about $5 billion -- had international destinations. 

Effectiveness Varies

For various reasons, foreign aid originating from governments and private sources is not uniformly efficient.

"U.S. foreign aid has contributed to such successes as the eradication of polio and increases in literacy worldwide," says Oxfam. "Another success story is the National Solidarity Program in Afghanistan. In 2003, this program gave rural villages ownership over their own development," the group adds.

In the West African nation of Ghana, funds from U.S. sources have been successfully used to support maternity centers, according to the Sustainability Institute, a Vermont-based research center. These maternity centers educate women on important and sometimes life-saving topics from vaccinations and family planning to safe birthing and using contraceptives to prevent diseases like HIV/AIDS. 

A local council, or shura, helps set community priorities in Kunduz, Afghanistan. © munir (flickr)On the other hand, some foreign aid funds fail to reach the people who need them most. This is often a result of stifling government bureaucracy or corruption. Other factors, like massive debt and persistent climate-induced emergencies, can keep aid from being used for long-term development needs in many countries.

In sub-Saharan Africa, for example, less than 44 cents of every dollar provided for economic development reaches the people in the villages, according to Justin Muzinich and Eric Werker of Stanford University's Hoover Institution on War, Revolution and Peace. The rest of the money goes to debt service, consultants, and humanitarian emergencies, and some is lost to mismanagement and corruption.

But those in the field generally agree on one key aspect of foreign assistance: an increasing focus on providing assistance directly to locally driven projects means more success.

Through its support of social movements related to the right to food, land, water, and other natural resources, Grassroots International is doing just that. "We support leadership development, particularly among women, youth, and indigenous communities," says Aziz, the group's executive director. "We help our partners train and organize their communities, build alliances, and advocate for fair policies. They are the ones closest to the situations that need changing. Our role, as an international funder, is to support them and link grassroots leaders across borders and issues to build a more powerful, responsive movement."

"In the end, the fight against global poverty isn't going to be won or lost by donors or NGOs," adds Oxfam's O'Brien, "but by those who face the causes and consequences of poverty every day."

* Feri G. Koszorus and Katie Rice are international journalism students at American University's School for International Service.

This article is part of OneWorld.net's coverage of foreign assistance for its online, "living magazine," Perspectives. The series also examines why countries help others, how effective the system is, how it could be improved, and what is expected to change in the coming months and years. Get all this, plus the latest news from OneWorld.net and links to ways you can get involved at Perspectives: Foreign Assistance.