Introduction to NGO (Compiled by Kishor Mistry, MD, PhD) What is NGO? Non-Government Organization (NGO) is also called as Non-for Profit Organization (NPO), Non- Profit Institutes (NPI), Voluntary Organization (VO) and Civil Society Organization (CSO). These terms describe characteristics of NGO such as: it is non-government, not for profit and formed voluntarily by civilians. NGO is run by both volunteers and paid employees; however, it is not for profit purpose. Thus, NGOs are voluntary non-government and non-profit making civic organizations founded for the betterment of society. The NGO is one of the four social institution, other three social institutions are government, business and media. The encouraging news is that the global Edelman Trust Barometer 2014 survey results showed that out of these four institutions, the NGO enjoys highest trust level. NGOs can be considered as institutes linking common people s need to the government, corporate and media. Majority of NGOs provide services to the needy population. The secular NGOs can be also considered as civic organizations addressing the issues which are not properly taken care either by religion or government. History of NGOs Historically NGOs have existed since ancient time in the form of various religious organizations, to which the followers would donate voluntarily and part of it would be used to help the poor. The help provided would be in the form of food, clothes, shelter, etc. Inspirations for such donation are common in all sacred books. Thus, it started as sympathy for the needy poor people in the name of God. During 20 th century, many NGOs evolved to become secular and expanded their help for the causes of health and education, disaster management, human rights, child labour, consumer rights, gender issues, refugees, weapons of mass destruction, microfinance, vocational training, environment, etc. Since the end of 20 th century few national and international NGOs are also focusing on advocacy for the constructive policies. Thus, the trend is moving from a charity type welfare work to the advocacy for self-sufficient, just and sustainable society. Current status of NGOs in India A 2010 survey by Government of India showed that there are 33 lac (3.3 million) NGOs registered in India, of them about 58% are rural and 42% urban. The top five categories in which these NGOs works are: social services (41%), education & research (19%), culture & recreation (12%), trade unions (7%) and development & housing (5%). Only 0.2% NGOs reported working in advocacy field. Until 1970, only 1.44 lac NGOs were registered; the greatest increase in registration occurred after 1990, between 1991-2008 total about 22.57 lac NGOs were registered. This number looks very impressive, since it comes out to be one NGO for each 400 people. Also, the registered NGOs are greater than total companies (14 lac) and schools (13 lac) registered in India. However, a survey carried out by the Central Statistics Office of the ministry of statistics and
programme could locate only 31% of these registered NGO. Thus, the real number of active NGOs is unknown. According to 2012 report by the central government of India, the NGOs in India raised funding of about Rs 72,792 crore (Rs 727.92 million) annually, of this about 54% came from grant (from government, national or international sources), 16% from donation and 16% from income. Major heads of fund utilization by NGOs were education (49%), social services (20%) and health related activities (11%). In India most commonly people become volunteer and donate for the causes related to their religion or caste. Most NGOs are small, employing about 3-4 persons. However, the average number of volunteers reported per NGO was 22 and the reported average number of persons in governing bodies was 10. Therefore, 85% of workforce in NGOs was of volunteers and only 15% was employed. Types of NGOs Legal classification of the NGOs 1. Trust: Usually formed under Bombay Public Trusts Act 1950, requires minimal 2 members. For details, please refer to a chapter on Founding new Trust or Society in this handbook. 2. Society: Formed under the Social Registration Act 1860, requires minimal 7 members. For details, please refer to a chapter on Founding new Trust or Society in this handbook. 3. Company: Formed under the section 25 of the Companies Act 1956, applicable uniformly throughout India. It can be private company (with minimal 2 members) or can be public company (with minimal of 7 members). Since, it is non-profit company, there is no dividend paid to its members. For details, please refer to a chapter on Founding new Trust or Society in this handbook. 4. Trade union: Formed under Trade Union Act 1919. For details, please refer to a chapter on Founding new Trust or Society in this handbook. Functional classification of the NGOs NGOs can be also classified according to field they mainly focus; however, most NGOs are mixture of some of the following: 1. Service provider: In the fields like education, health, disaster management, animal welfare, vocational training, rehab to orphan/elderly/battered women, housing, legal aid, sanitation, irrigation, animal welfare, etc. They may serve to general public or to particular caste/race /age group/gender/city/village., 2. Empowering specific group: For example - women, youth, Schedule Castes, Scheduled Tribes, a minority, those needing vocational training or counselling, etc. 3. Networking: This is a newer trend, in which NGOs form a network with other similar NGOs. That way they share experiences and may use collective efforts in implementing project or even doing advocacy. 4. Research & Advocacy: Examples of such NGOs are those involved in research, creating awareness, policy modulation, gender issue resolution, environment protection, becoming a part of government advisory, consumer rights, communal harmony, human rights/right to education or food, networking, urban/rural development, etc.
5. Religious/spiritual: Usually they serve to one religious community, they may also extend service to others e.g. Christian schools are open to all, hospital founded by particular sect (the word cult is generally used in negative sense) is open to all, etc. 6. Professional associations: Such associations can be for doctors, Chartered Accountants, a particular business owners (e.g.hotel, transport), etc. 7. Philanthropist: They finance other NGOs, many of them also carry out some social work. 8. Others: For example cultural, consultant, sports, etc. Even though trade unions are non-profit organizations, usually are not included as NGO. Laws governing NGOs Bombay Public Trusts Act 1950: Regulates the Trusts registered in India, for details please refer to the law listed under Government Laws. Social Registration Act 1860: Regulates the Societies registered in India, for details please refer to the law listed under Government Laws. Section 25 of the Companies Act 1956: Regulates the Companies registered in India, for details please refer to the law listed under Government Laws. Trade union law: Regulates the Trade Unions registered in India, for details please refer to the law listed under Government Laws. Foreign Contribution Regulation Act (FCRA): Regulates the receipt and utilization of foreign funding, for details please refer to the law listed under Government Laws and a Chapter on FCRA in this handbook. Corporate Social responsibility (CSR): Regulates Corporate Social Responsibility activities, for details please refer to the law listed under Government Laws and a Chapter on CSR in this handbook. Links to other related laws can be found in Government Laws section on this website. Issues related to NGO function Lack of transparency and accountability: More than 2/3 of the registered NGOs are nonfunctional. Few NGOs are criticized for misusing the fund. Many NGOs (such as trust running schools, colleges, hospitals, etc) are registered for the name sake non-profit; however, they are thought to be profit generating. In 1996 the Council for Advancement of People s Action and Rural Technology (CAPART) audited 2,000 of the 7,500 NGOs and found a fraud of Rs 50 crore, 300 were non-existent or phantom NGOs and 26 other NGOs were engaging in criminal conspiracy to defraud. There are no mandatory laws to publish the annual report of activities and the audited account information. Majority of NGOs are service providers: Majority of NGOs are providing subsidized services to the poor in the form of health, education, legal aid, food, shelter, etc. Providing services is definitely helpful to the needy; however, there are two fundamental limitations for this approach: (a) It is too far from meeting a huge demand by the needy, constantly increasing due to widening economic disparity (b) It does not address the underlying system defect that is causing a huge demand for the subsidized services.
Constant struggle for sustainable funding and dedicated workers: Most NGOs are facing scarcity of regular flow of funding. NGOs raise only about 16% of revenue from the service they provide and remaining revenue needs to be raised as outside funding. Some NGOs modify the field of work depending upon the availability of funding, e.g. number of Indian NGOs working in the field of HIV/AIDS is greater than those working for TB/Malaria, even though the need is reverse. Also, it is hard to employ and retain the dedicated worker due to relatively lower salaries and uncertainty of funding. Very limited success of Public Private Partnerships (PPP) model: Working in collaboration with government sounds very attractive; however, practically many genuine NGOs have bitter experiences from bureaucracy and fear of compromising ethical values. Belt tightening by Government: Government has become strict in permitting foreign funding to the NGOs due to concern for its political misuse, money laundering, terrorism or religious proliferations. It takes more than a year to get permission from government to accept the foreign funding because that process involves inspections from Police Commissioner, Mamalatdar office and Central Home Ministry. Working like separate islands: Most NGOs work without collaboration with other NGOs for many reasons like difference in philosophy, approach, geographical distance, ego factor, etc. Such an isolated approach makes it hard to resolve many of the complex social issues which need collective thinking and action. Working in isolation also prevents them to learn positive and negative experiences from each other. Lack of volunteerism spirit in India: In India, usually after retirement around age 60, most people relax and spend time in religious activities, TV watching or socialization. It is uncommon to get involved in volunteering for the social cause. Now many college students have become interested in doing internship at NGOs. Future of NGOs Move from service provider to advocacy/proactive in policy influence: NGOs will evolve from service provider for the needy to proactive institutions for the just and sustainable society. Thus, the need for charity work will be minimal. For this NGOs have to learn to work collaboratively with other NGOs, other professionals/specialist, corporate, media and government. Ideally, the NGOs can be small labs for the future society and not trying to take greater responsibility to help needy population. The successful examples of constructive advocacy are enacting the laws of RTI (Right to Information) and Lokpal bills. Increase efforts in research and documentation: Many NGOs have rich experiences; however, it is neither shared nor properly documented. Hence the efforts are duplicated and lessons learnt are wasted. Use digital media: NGOs are learning and employing digital media for knowledge sharing, fund raising, attracting volunteers, etc. The digital media has made it easier to connect with other NGOs of India and abroad without physical travelling. This way they not only can share the experiences (both successes and failures), but also help each other with specific issue, do collective thinking and networking. Having dedicated website is one way to share information
about activities, publications, annual report, etc. The other ways of digital media are Face book, Twitter, etc. Address the neglected issues: Few examples of such neglected issues by common NGOs include widening economic disparity creating a world of have and have not, plutocracy, rampant corruption, lack of public discipline in India (e.g. in driving, noise pollution, etc), exhaustive delays in judiciary process, improving the quality of public funded education, health and transport, sustainable development, corporal punishment to the children at school and home, blind faiths, etc. Develop better models for PPP: The approach for PPP (Public Private Partnerships) can be very effective. This way funding can be easier and NGOs can be more influential in constructive policy modulation due to increased interaction with government. On the other side, increased dependency on government funding can reduce autonomy of NGOs and make it difficult to point out wrong policies of the government in power. Increase collaboration with corporate sector: With implementation of CSR, this will be a good source of funding and collaboration for sustainable future society. Develop and implement transparency and accountability for NGOs: This can be done through consensus to formalize the guidelines for a) publishing the activities and related accounts, b) following the basic guidelines for internal governance. In this direction planning commission tried to introduce National Accreditation Council (NAC) based on CAPART recommendations. Also, National Credibility Alliance is founded to evaluate and certify the credibility of NGOs. Lack of implementation of such credibility guidelines by NGOs will lead to an increase in bureaucratic laws from the government. References 1. Status of the Voluntary Sector in India, VANI Report Oct 2014 2. First official estimate: An NGO for every 400 people in India, Indian Express, Archna Shukla Posted online: Jul 07 2010 3. Giving as good as you get, Pushpa Sundar, Mar 25 2011 4. Edelman Trust Barometer 2014 Annual Global Study (www.edelman.com/trust2014) 5. NGOs in India, Patrick Kilby, Routledge, 2011 6. Final Report on Non Profit Institutions in India: A Profile and Satellite Accounts in the framework of System of National Accounts, 2012, by Ministry of Statistics and Programme Implementation GOVERNMENT OF INDIA, www.mospi.gov.in (Last updated: November 2015)