Wakeup call for NGOs

The recent amendment to the Foreign Contribution Regulation Act has evoked several responses from people within and outside the sector. While there are differing lenses through which these amendments can be looked at, it is no secret that it will impact the NGO sector.

Though organised and unorganised voluntary action in India has been recorded from the time of the first war of independence in 1857, it was the erstwhile Planning Commission’s Eighth Plan document that formally recognised it. It was Indira Gandhi who first expressed suspicion about the sector and wanted to regulate it. Successive governments were equally wary and the momentum to control the sector gathered impetus when P Chidambaram was the Union Home Minister. While several NGOs are known for their constructive activities, it is no secret that a few black sheep have violated several laws of the land and have behaved with ulterior motives. A few others have had their agenda dictated by powerful global forces and have brought discredit to the entire sector, forcing the government to respond with kneejerk changes in the law.

The primary responsibility of a government in any country is to ensure that its citizens are taken care of and provided with the basic goods and services. When nation-states failed in this minimal obligation, organised voluntary efforts emerged to provide services, mostly in the health and education sectors. With several countries moving away from their social agendas, it fell on these organisations to move into other areas like poverty alleviation, livelihood creation, protection of human rights and preservation of democratic ideals. They were called NGOs to distinguish their activities from that of government agencies. This itself is a misnomer as it tends to describe civil society action in a negative construct as ‘not being the government’. They are, in fact voluntary organisations and should be seen as another critical sector contributing towards societal progress.

The strength of such socially relevant NGOs is four-fold. Operating mostly at the grassroots, they can understand the needs expressed by communities the best. They can then fashion appropriate responses to these needs and think through solution frameworks. NGOs can then combine their talent, passion and community mobilisation strengths to translate intent into implementable interventions. And finally, they mobilise resources, including finances, to ensure that these interventions are actually implemented on the ground.

Credible NGOs that understand and appreciate this will not make a mountain of a molehill of the current changes in the regulations. One also needs to be pragmatic and cognisant of the reality that prevails today. Out of the 3.2 million NGOs that are currently listed, only 10% of them are known to be filing their returns and submitting audited copies of their balance sheet. Less than a few hundred are accredited with Credibility Alliance, a consortium of Voluntary Organisations committed towards enhancing accountability and transparency.

One must bear in mind that the number of NGOs in India is twice the number of schools that exist and the FCRA amendment will only impact around 19,000 NGOs registered under this act. And for most of them, the only change that will sound incomprehensible will be the need to open a bank account in a notified SBI branch in New Delhi. In a world of digital and core banking, this will not pose any operational challenges, but the government needs to clarify its intent in this regard. While NGOs themselves have long demanded that the transaction costs of government be brought down, the argument that 20% of the expenses being permitted for administration is restrictive, may not be morally tenable. One also needs to wait and see how the rules framed regarding the definitions will affect a few organisations whose activities could be primarily research or advocacy, where much of the expenses will be on salaries and classified as administrative expenses.

While regulations and control will choke the financial pipeline of NGOs primarily depending on foreign contributions, one must also bear in mind that tens of thousands of small and medium-sized NGOS are promoted and supported by philanthropy from within the country. It is also pertinent to note that the trend of ‘giving’, especially from amongst the millennial generation is steadily increasing and this will enable greater voluntary action. It is also a fact that NGOs represent on several government committees both at the state and national level, including the NITI Aayog, where the sectoral and community interests can be articulated and protected.

Honest introspection will reveal that the NGO sector has failed in self-regulating itself. This is the opportune time for NGO leaders to come out with codes of conduct with respect to funding, accountability, impact measurement and governance standards. Society can ill-afford a situation of NGOs vs government; what is needed is a healthy respect for each other’s strengths while constantly working to mitigate their structural weaknesses. Development cannot and should not be the monopoly of any single sector, be it the government, the private sector or NGOs. It should emerge from a synergistic partnership amongst all the stakeholders.

(The writer is the founder and president of Swami Vivekananda Youth Movement)