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UN's Legal problems of receiving funds from NGOs

Nongovernmental Organizations and the Global Compact (Part #2)

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The strange legal context of "multinational corporations" also raises the irony of the contribution by Ted Turner at the crucial point in the 27 December 2000 debate on US contributions to the UN. As Cliff Kincaid commented in Foundation Watch on Turner's earlier creation of his public charity to channel these funds, donated in the form of stock in a multinational corporation (Time-Warner) in ten annual installments (Ted Turner's United Nations Foundation: Making the UN a Pawn for Tax-Exempt Special Interests) :

"Almost 18 months after Time-Warner vice-chairman Ted Turner announced he would give $1 billion to the United Nations, serious questions remain about the nature and influence of his "gift." One concern is technical and legal: Turner's money is being channeled to the UN through a private foundation and a 501(c)(3) nonprofit. But the UN is strictly prohibited by its own charter from accepting contributions not from member nations. Questions raised about this practice have not been fully answered by the UN." (

Curiously a related Global Reporting Initiative (described earlier), with UNEP involvement, describes itself as benefitting from "the United Nations Foundation's generous funding". The Foundation awarded a $3 million partnership grant to CERES and UNEP to support GRI activities from 2000 - 2002. GRI is significantly supported by major American foundations (

The Secretary-General then created a United Nations Fund for International Partnerships (UNFIP) in March 1998 to coordinate, channel and monitor contributions from the United Nations Foundation and a special agreement has been signed for this purpose (with an "NGO"?). The Foundation itself has links with a number of UN-related programmes. According to the UN:

"The UNFIP/UNF partnership brings together UN organizations through joint programming to encourage complementarity of action and cohesion of response. UNFIP works to build additional partnerships between the UN and a variety of sources, including the business community, private philanthropists, foundations and international and bilateral donors." (

According to Kincaid:

"... the agreement offers no clues about the UN's justification for accepting private foundation funds, which is a violation of the UN Charter. Article 17, Section 2 of the charter states that UN expenses "shall be borne by the Members as apportioned by the General Assembly." This requirement is supposed to prevent private interests like the UN Foundation from exercising undue influence over the world body. This author has repeatedly asked UN officials and members of Congress to provide a legal justification for the UN's acceptance of UN Foundation grants. Concerns about the foundation's activities were first expressed in an October 1997 letter to Joe Sills, then director of the UN Information Office in Washington, DC: "The UN Charter says the expenses of the organization shall be borne by the member-states. How, then, can the UN accept any money from a source outside of the member-states, such as a foundation, business or individual?" (

As of March 1999, Kincaid had received no answer from the UN's Office of Legal Affairs. It would be intriguing to know how the crucial donation from Ted Turner was handled in December 2000 in the light of the legal position on Global Compact partners. Is the UN now being funded by ghosts? Time-Warner is not even listed as a multinational adhering to the Global Compact.

In this context it is also worth noting that according to UNDP figures, the donations received by UNESCO from foundations during 1993 (DP/1994/40/Add.1, 28 September 1994), for example, amounted to $3.20 million dollars, namely a total of $5.87 million for the 1992-93 biennium. But "foundations" are not included within the UNESCO definition of "NGOs". Responsibility for both NGOs and foundations is however held by the same department within UNESCO. It would appear that, in terms of funds alone, NGOs (if foundations are to be considered NGOs in the light of the UNDP perspective) are far from being a cost to UNESCO, as Member States have long endeavoured to argue. Rather UNESCO effectively redistributes to "NGOs" about half of what it actually receives from "NGOs". In this sense NGOs may be said to be a net financial contributor to UNESCO, even though it is not clear that foundations have any legal existence for the UN system. More funding by ghosts!

Of course these legal and semantic confusions, and the associated fast footwork, do raise the issue of the significance to be attributed to any other partnership arrangement touted by the UN system with other bodies. But it would be a grave mistake to believe that any rapid rectification about "misunderstandings" (notably on easily modifiable web pages) would be more than skin deep. The UN is in a new chameleon mode and has to fight for its survival with its newfound friends. But, if the Global Compact initiative turns sour, will it be possible for all involved to dismiss it as a short-term public relations ploy?

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