Hot money or cold money?

Once, when I was struggling with a “local partner” when living in Zimbabwe, I wandered into the office of a more senior colleague at our international NGO, hoping to get some advice and guidance. I told her what was going on and I expressed that I felt that I was being treated more like a money spigot than whatever title I had at the time.

“That’s because it’s cold money,” she responded matter-of-factly.Frozen-Money-e1334611205983

“What?” I asked, confused.

“Cold money. It doesn’t matter.”

She proceeded to share with me a conversation she had once had with an village elder in Liberia years before, not in reference to global capital flows, but to community capital flows.

“The problem with all these outsiders,” he had told her, “is that you come in with your money and you don’t warm it up.”

My colleague probed to learn more from him. If something came to the community and was not “warmed up,” no one would care about it, or be invested in it. When the money was “hot,” there were many eyes on it–eyes of people who cared about what it was intended for and who would be held responsible for it. Money from international assistance was considered “cold” because it was often not made a part of already existing mechanisms for mutual accountability.

The elder went on to explain that if money was cold, it came and it went. There would always be more.

Think of a “housewarming” or rituals where babies are passed over fire or water. All are customs that indicate a collective welcoming or acceptance has occurred.

Think about the projects on which you work or fund. Is the money hot, or cold?

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  1. Pingback: Going local: Could national NGOs prevent more fraud than international agencies? | Second Marshmallow

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