Sunday, August 27, 2006

NGOs, funding and funders

An eye opening piece from The Hindu Businessline by the prof from IIMB, R Vaidyanathan. The same NGOs which ostensibly operate in the favour of civil society, demanding transparency from the government etc., are notoriously evasive when it comes to disclosing their cash flows. NGOs are a big business, IMHO and if you spout the right rhetoric, you can get money by the tons.

Anyway, to cut a long story short, the amount of money received in 2005-06 was INR 6257 crores (Thats 1.39 billion USD). To put that amount in comparison it is about 1/10th of Indian ITs estimated revenue for FY2006 - 13.2 billion USD.

Some pertinent points he raises are:

Maharashtra, Tamil Nadu, West Bengal, Gujarat and Andhra Pradesh are some of the States with large number of NGOs. It is curious to note that the poorest States such as Bihar, Uttar Pradesh, and so on, do not have as many numbers. Why, I wonder, when they are supposed to be working on poverty alleviation.

The NGOs are active in pointing out the deficiencies in the functioning of the Government, be they on human rights or wild life preservation or child labour. It is also important that the activities of the NGOs are transparent, particularly from the point of view of their sources and uses of funds.

...One can argue that they are accountable to their donors but it is not like a corporate situation where the company is accountable to its shareholders.

Going by his experience, that is tough. For instance, this writer has tried unsuccessfully for nearly three years to get the annual report, including annual accounts of three leading NGOs of this country, which are often featured in newspapers and TV channels.

but surely, as he says, they can make their own operations transparent, To start with, they can publish their annual reports, including accounts, in their Web sites on a regular basis.

The leading donor agencies are Ford Foundation US (Rs 121 crore), World Vision International (Rs 90 crore) and Foundation Vincent E Ferrer Spain (Rs 79 crore). The largest recipients are World Vision of India, Tamil Nadu (Rs 98 crore) followed by the Rural Development Trust, Andhra Pradesh (Rs 85 crore).

He ends it with...

It would not be appropriate to suggest that everything is fine with every NGO in the country. Numbers are growing, causes are getting enlarged and funding particularly from abroad is increasing.

Hence, perhaps, the time has come for them to be more transparent and enhance disclosure practices to be like Caesar's wife. And transparency and regulation and full disclosure are the things, which they demand from corporates, and the Government. Hence, is it too much to expect the same from them?


Steve Zavestoski said...

Transparency among NGOs is certainly a reasonable expectation. But from what I have learned through my research focusing on environmental organizations in India, the government and other opponents (e.g., business and economic interests) have occasionally used the tactic of attacking an NGO's credibility by questioning its source of funding. For example, going back to the mid-1980s, activists in Bhopal refused to accept contributions from foreign sources for fear that the government would claim they were against the development of the Indian economy. The government's logic was that Bhopal activists who took funds from foreign sources wanted to go after Union Carbide, and int he process would create an atmosphere in which foreign investors would be scared away from investing in India in the future.

This is just one example. But many NGOs in India are working on issues that are sensitive to the government and business interests. Because of the tactics employed in the past, these NGOs often keep their cards close to the chest, so to speak. Thanks for bringing this article to my attention.

Neelakantan said...

If the motives of the funders are clear, there is no reason for anybody to doubt the funders. I can understand secrecy for national interests, army etc., but NGOs?

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