Robbing the vulnerable: How NGOs eat your donations through allowancing each other here!

In a stark revelation, the NGO Regulatory Authority (NGORA) has exposed the alarming truth behind the operations of many Non-Governmental Organizations (NGOs) in Malawi—funds meant for community development are being siphoned off through excessive allowances, fuel expenses, and travel costs.

Edward Chileka Banda, CEO of NGORA, didn’t mince his words when speaking about the ongoing exploitation during the launch of the localisation debate in Lilongwe yesterday. According to Banda, NGOs in Malawi are spending a disproportionate amount of the funds they mobilize on non-essential costs, leaving only a fraction for the very communities they claim to serve.

“There is a culture where NGOs spend more money on allowances, travel, and fuel than on actual projects that benefit the poor. In some cases, 90% of the mobilized funds are spent on these overhead costs, and a paltry 10% is what trickles down to the community,” Banda said. “For example, people are traveling to Mulanje spending K10 million on allowances while only K500,000 goes to support the community. This doesn’t make sense. This is the kind of resource capture that must stop.”

The impact of these mismanaged funds is clear—poverty is still rampant in the communities that NGOs claim to support. Despite billions of kwacha being poured into development programs, Malawi’s most vulnerable populations are seeing little to no improvement in their living conditions. Banda argues that this is a direct result of a system that prioritizes lavish allowances and travel expenses for NGO staff over tangible aid for the poor.

The funds that could transform the lives of many are being diverted into extravagant travel allowances, daily subsistence allowances (DSAs), and fuel reimbursements for NGO staff. Banda emphasized the absurdity of this financial mismanagement: “We cannot talk about development if this culture of allowances continues. We must change the way NGOs operate to ensure that more money reaches the people who need it.”

The need for reform is urgent. With the localisation agenda now being heavily discussed, Banda stressed that this is the perfect opportunity to reassess and realign the way NGOs operate in Malawi. Localisation, which emphasizes empowering local communities and institutions, is being heralded as the way forward. Banda noted that a systemic overhaul is necessary to ensure that foreign aid and NGO resources are used effectively and responsibly.

As part of this reform, NGORA is working on new policy guidelines and partnerships regulations that will require international NGOs to collaborate more closely with local institutions, such as local NGOs and government agencies. The aim is to ensure that funds are spent directly on community projects, rather than being wasted on bureaucratic expenses.

During the launch, Bernadetta Mkonyola, representing the UN’s Resident Coordinator in Malawi, highlighted the importance of localization. She emphasized that empowering local communities, particularly women, youth, and the elderly, is the key to driving true development.

“Localization is not just about trickling down money; it’s about giving power to communities to sit at the table with decision-makers,” Mkonyola said. “Only through consultation with those on the ground can we ensure that development agendas are relevant and sustainable.”

As the NGO sector in Malawi grapples with its role in development, the need for greater accountability has never been more urgent. Local communities should not be left to bear the brunt of a system that prioritizes the comfort of NGO staff over their own welfare. If Malawi is to truly develop and break free from the cycle of poverty, the misallocation of resources within the NGO sector must end.

It is time for the government, regulatory bodies, and NGOs themselves to address the elephant in the room: The allowance culture is robbing the people of Malawi. Without immediate reforms, the promises of community development and poverty alleviation will remain hollow, as the poor continue to be left behind while NGO staff profit from their plight.

The localisation debate is the first step toward change, but the real test will be whether the sector can break free from the grip of wasteful spending and begin putting the needs of the people first.

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