Analysis: BRAC – the biggest charity you haven’t heard of

No1 NGO worldwide for the last four years, Bangladeshi charity BRAC is now encountering a problem that few charities face – what happens when you achieve your goals? This is the story of how a Bangladeshi charity made Bangladesh richer, and what they will do next.

Brac was founded in 1972 by a former oil executive Sir Fazle Hasan Abed, initially to act as a small scale relief effort to aid returning war refugees from the Bangladesh Liberation War of 1971. Although BRAC initially stood for the ‘Bangladesh Rehabilitation Assistance Committee, it now no longer stands for anything. Since its birth, the charity has expanded massively, today employing roughly 100,000 people, 70% of whom are women, and operating in 13 countries outside Bangladesh across Asia, Africa and the Americas. Despite their now international presence, BRAC’s greatest impact and success has been in Bangladesh.

During their early days, following the war, BRAC mainly focused on community development through the aiding and introducing cooperatives, family planning, agriculture, fisheries and health clinics. This expanded into creating village organisations to assist small farmers, the landless, vulnerable women and local artisans. 

One of the most successful early projects was a programme to combat diarrhoea, a leading cause of child mortality in Bangladesh at the time. BRAC introduced a training programme teaching mothers how to prepare and use an Oral Rehydration Solution (ORS) to treat diarrhoea in their children. This was reinforced through a programme of posters and radio adverts. Throughout the 10 year programme, the ORS training was given to more than 12 million households, and more than 15 years on was still found to be used to treat 80% of severe diarrhoea. 

BRAC’s most famous and innovative programme however is their microfinancing and ‘integrated development programme’. This started with giving a small cash stipend, some lentils and an asset, such as a cow, to largely poor, landless, rural women, enabling them to generate income and improve standards of living. In the first 40 years of the programme more than $1.9 billion was given in loans, with the repayment rate at 96% (BRAC figures).  This anti-poverty regime pioneered by BRAC has been trialled and proven successful in a number of other countries including Ethiopia, Honduras and India. 

The success of the regime has to do not just with the simplicity, but the personal and integrated approach BRAC has adopted, not only helping individuals, but creating programmes that will benefit a community through education, simple healthcare and training to provide ‘employable skills for decent work’. This broad approach means that BRAC now includes a university, driving school, seed company, financial advice, and much more. In Bangladesh, there are BRAC notices plastering every inch of the country, from cities to remote rural villages.  

Although this all encompassing approach has led to criticism over the years that it is acting as a ‘second government’, it also explains why BRAC is largely credited for the improved state of contemporary Bangladesh. For each of the last 15 years, the annual GDP growth in Bangladesh has been above 5%. Now a lower middle income country, Bangladesh will soon be too rich to qualify for the World Bank’s international development assistance loans. Almost no one in Bangladesh now struggles to afford food. Bangladesh has never been the recipient of large amounts of foreign aid, due largely to the fact that it is not strategically vital and relatively populous (aid per head is usually higher in foreign countries). The largest source of international aid, a ‘strategic partnership’ with Britain and Australia is due to end in 2021. From the 1980s to 2016, international aid fell from 5% of Gross National Income to 1.1%. Due to government incompetence and lack of foreign aid, it is therefore fair to largely credit BRAC with Bangladesh’s rise. However, things are changing, and Bangladesh’s newfound (relative) prosperity may leave BRAC redundant.

Firstly, the lack of a need for food amongst the most indigent has meant that changes have to be made to the core programmes – people no longer require lentils and cash stipends. Secondly, Bangladesh’s government has improved, with plans for digital education and conditional cash transfers amongst other programmes. This is a far cry from the governmental incompetence that caused the charity to be set up in the first place. Furthermore, the charity has been suffering from a lack of funds. Now that Bangladesh has become, as a country, richer, the changes that would help are becoming more expensive, expenses which BRAC cannot afford. 

So, what has BRAC done to adapt itself? Within Bangladesh, the main change it has made is to shift from philanthropy to commerce, and quickly. For many years, BRAC has used income generating activities to fund its projects, an example of which is its ‘Aarong’ (Bengali for ‘village market’), a cooperative that sells crafts made by indigent women, and now more than ever it is mining the commercial vein of its activities. Some examples of this are that a small charge has been introduced for medical clinics, and there is now a paid service to check paperwork for Bangladeshis travelling abroad, largely to the Gulf. 

One big change BRAC is making  is turning some of its schools into fee-paying ones. BRAC’s education programme has had one of the largest impacts in Bangladesh, at the end of 2012 it had 22.700 schools, and had educated of 670,000 children. By 2018 that figure had risen to 1 million. However, since 2016, BRAC has converted over 8,7000 primary schools into fee-paying ones. Although this has generated income, and in some cases, improved attendance as parents are now more likely to force their children to school having paid for it, it is a double edged sword. Parents now have higher expectations, such that tables, chairs and more resources should be present in every school, as well as qualified teachers, rather than the trained local women BRAC usually employs. Although higher expectations are no bad thing, the fee-paying schools currently only cover a quarter of their costs, meaning that BRAC still needs to be largely self funding them. 

BRAC has also adapted its core programme. Rather than giving cash stipends, BRAC has moved to a programme based on loans, with the recipients split into two categories, either paying back 20% of their loan or 30-70%, dependent on their situation. Although this helps fund the programmes, where nowadays most donations are given to humanitarian relief, not what BRAC specialises in, it has raised concern that the neediest will now go without help. This is because of the fear of not being able to pay back a loan. In fact, when the loan based component of the programme was introduced in 2017, the refusal rate for participating rocketed from 2% to 17%. 

Although at home in Bangladesh BRAC is still a force to be reckoned with – its leading response to the influx of Rohingya muslims from Myanmar was cited as one of the reasons it topped the NGO adviser’s list of the best 500 NGOs worldwide for the fourth year running last year, perhaps BRAC must expand its horizons if it is to continue to be at the forefront of international charities. Although on the international stage BRAC is a tiny fish compared to the big hitters such as UNICEF, it has the benefit of experience completely transforming a country. A recent evaluation by the World Bank of BRAC’s ultra poor programme in Afghanistan found a large boost to income, and in Uganda, the introduction of BRAC after school clubs seems to have cut teenage pregnancy rates and encouraged girls to start work. BRAC has a unique skill for identifying the poorest people in a village or society, not an easy task. This was demonstrated when the Kenyan government recently hired BRAC to assess whether they are targeting the right people with a newly introduced governmental ‘social safety net’. 

This is a good example of where BRAC will flourish in the future – applying the skills and programmes they have acquired in Bangladesh, to an advisory role on the international stage. In order to survive, BRAC may have to move from providing the services the government was failing to do, to teaching governments how to do it themselves. 

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