More than charity
Rabobank Foundation turns 40
Amid all the debates on development aid, Rabobank Foundation has for forty years been holding steadfast to its mission: to offer disadvantaged people the prospect of an independent existence.
When is development aid genuinely effective? Which preconditions must it meet? These questions fuel extensive debate. A number of critical books on this theme have been published in recent years. One example is William Easterly’s controversial book entitled The White Man’s Burden published in 2006. Why has development aid done more evil than good? In his book, the development economist criticises the colonial attitude that appears to lurk behind a great deal of development aid. Zambian economist Dambisa Moyo took the world by surprise with her book entitled Dead Aid published in 2009. Her hypothesis: mass financial aid to Africa leads to (greater) corruption, apathy and dependence. Dutch Minster for Foreign Trade and Development Cooperation Lilianne Ploumen aims to combine aid and trade in such a way that it benefits both the aid recipients and the Netherlands’ economic interests. Her policy receives both support and strong criticism.
No unconditional aid
The Rabobank Foundation was founded in 1973 and offers disadvantaged groups the prospect of a better life by providing donations, loans, knowledge and expertise. Rabobank Foundation supports small farmers’ cooperatives and savings and loan cooperatives in 24 countries in Asia, Africa and South America. What is Rabobank Foundation’s vision on development aid? ‘We prefer not to use the term aid,’ says Rabobank Foundation Director Pierre van Hedel. ‘It sends out the wrong message. You create a relationship of dependency when there is aid without preconditions. We conversely focus on self-sufficiency.’ Africa and Latin America Regional manager Albert Boogaard adds: ‘We support people in the process of improving their socio-economic position. But we do this on the condition that they demonstrate own initiative and make an own contribution in the form of money or labour. We provide loans under business and banking terms and conditions. There is the greatest chance that people will over time be able to fend for themselves when you appeal to their own capabilities from day one.’ Van Hedel refers to the history of Rabobank. ‘The first cooperative bank was established in the late nineteenth century based on the idea that self-sufficiency and not charity leads to sustainable improvement. This is also our starting point. We actually practice development aid “new style”, but we have already been doing it for forty years as part of a cooperative bank with a history dating back more than a century.’
Rabobank Foundation has been involved in more than two hundred international projects. One example of such a project is in the Indian state of Andhra Pradesh where Rabobank Foundation supports a cooperative of around a thousand female dairy farmers who earn their livelihoods through the production and sale of milk. ‘The farmers used to be dependent upon local traders and moneylenders. Setting up a cooperative has enabled them to increase their production and the members receive a better price for their milk,’ explains Van Hedel. In order to add extra impetus to this growth, Rabobank Foundation provided a loan that the cooperative can use to make microcredit available to the farmers. This enables them to buy extra cows. ‘By providing this kind of support, we help these women farmers strengthen their cooperative and improve their income position. This is the way to set an upward course into motion. It is successful because the women accept responsibility themselves.’
While Rabobank Foundation’s vision of development aid has remained unaltered for forty years, the emphasis of the approach has changed. ‘We used to donate money more often. We now provide primarily loans,’ explains Van Hedel. ‘A donated truck is broken down after three years. A truck financed with a loan will last for twenty years,’ says Boogaard. ‘We have also become much more selective in the choice of our projects,’ Van Hedel says. ‘Even though healthcare and accommodation are important themes for example, they fall outside our focus area. We know about farmers, cooperatives and money. We put this expertise to work in our international policy. And that is what we will continue to do for the next forty years.’
Rabobank Foundation supports national projects in the Netherlands that are aimed at helping disadvantaged people get ahead socio-economically. ‘Our related focus is on labour participation, (financial) education and social participation,’ explains Roelie van Stempvoort, Programme Manager Netherlands. ‘Our target group is comprised of people who have a physical, intellectual or psychological disability and children and young people who have a problematic background or are growing up in poverty.’ Rabobank Foundation reaches this target group through nationally-orientated social welfare organisations. They can count on both financial support and access to the Rabobank network. ‘We have, for example, been affiliated with the Emma at Work Foundation for a number of years,’ says Van Stempvoort. ‘It is a non-profit temporary employment agency that helps young people with a physical disability to find a job. Together with Nibud (National Institute for Family Finance Information) and Humanitas, we are training volunteers to help people who have financial difficulties to put their finances in order. We also support the Special Olympics Netherlands organisation that makes it possible for people with an intellectual disability to play sports at a high level.’ These are just a few examples. Van Stempvoort: ‘The underlying idea is that everyone must be able to participate fully in society. Social and economic self-sufficiency are the related focus.’