Non-Governmental Organisations (NGOs) in India - “May their tribe increase”: Some reflections

 A. Srinivas Rao

A few days back an old student called up to inform me that he was starting an NGO and I wasn’t sure whether to commend him or dissuade him. NGOs are complex and fragile ecosystems, with a fascinating and combustible mix of ideas, ideals, and great people and sometimes a hubris born of virtue & self sacrifice. I have often found among their ranks a strange mix of people who are inspiring and humbling as well as those profoundly sensitive and profoundly delusional. It is this often contradictory and protean image that makes them so difficult an organisational species to understand and grasp with any certainty.

India had 3.3 million NGOs in 2009 reported the Indian Express July 7^th 2010 quoting a Government commissioned study, that gives us a questionable distinction of having the largest number of NGOs in the world. In other words, India had according to this study one NGO for every 400 people in the country; a fertile breeding ground in more ways than one. That is more than what we can count for in access to schools and health centres. The figures provoke wonder and to some derision, like the recent census data that India has more mobiles than toilets (and according to World Bank poor sanitation costing the exchequer 54 billion USD or 6% of its GDP mainly through pre-mature death Hindustan Times Dec 21^st 2010). However India hasn’t followed Bangladesh where the NGOs have taken up most economic activity unlike a healthy private sector and created huge NGO corporations like the BRAC, Grameen etc; which contests the very idea of an NGO as a space within civil society that stands independent of government and the market as the third sector. The large numbers ironically are testimony to a democratic political functioning of the society, despite their many failings and that the number is driven by the size and ethnic, cultural and religious diversity of the country.

A broad definition of NGOs in the study above, in its 3.3 million includes all hues of organisations charitable organisations and religious endowments and temples several of which maybe even defunct. In terms of geographical distribution the largest number of NGOs are registered in Maharashtra (4.8 lakh), followed by Andhra Pradesh (4.6 lakh), UP (4.3 lakh), Kerala (3.3 lakh), Karnataka (1.9 lakh), Gujarat (1.7 lakh), West Bengal (1.7 lakh), Tamil Nadu (1.4 lakh), Orissa (1.3 lakh) and Rajasthan (1 lakh). In other words Maharashtra, Andhra, UP and Kerala account for 50% of these NGOs. In terms of growth in numbers there were only 1.42 lakh NGOs in 1970 and grew to 11 lakh by the year 2000. In other words almost 2 million NGOs were added in just the last decade; probably underlining, a strong co-relation between economic growth and philanthropy. 

What is intriguing according to the study is that funding in this sector is between 40 to 80,000 crores. This would seem strange and rather understated. However if it were true it would imply an average funding per entity of less than Rs 2.4 lakh. If these figures are correct it would imply that most NGOs are tiny and significantly under-capitalised with barely enough to feed themselves. Even if one were to drop the defunct ones and account for a polarisation of size to just very large NGOs and very small ones it reveals the fundamental fragility of these organisations.

In the past year India witnessed a surge of media attention to what was called as civil society in their crusade against corruption. While the term ‘civil society’ includes of NGOs of all hues it must be used with caution. In the political space that excludes the government and the market, civil society takes forms more than just NGOs such as movements and causes and voluntary associations. While in authoritarian regimes civil society is taken to be the opposition, in democratic societies it has been viewed by some in the Left as being integrated with the state in maintaining the bourgeois hegemony in capitalist societies and not always protecting the people from the state. However what was most interesting was the surprising claim by the NGOs to represent the “voice of the people” and having greater legitimacy than an elected government.

Most NGOs are born in the crucible of a youthful idealism, of immense faith and goodwill and espouse an altruism that is edifying. Scepticism to the dominant paradigm in any social field by an NGO means attempting an alternative practice, that hopefully scales and challenges the established order. NGOs often lack the size or voice to tip the balance in favour of their “alternatives”. They are over time, inevitably bureaucratised by the lost idealism of their middling years and remain trapped anachronistically in the political idioms of their founding; with their rhetoric incongruous to its current realities; evolving structures similar to those that they set about to challenge. Their avowed independence is tenuous at best; being curtailed in ways that funder’s caprice or politics or expedience demands.

Many NGOs are high on legitimacy and low on viability. If one was to single out the most vexed problem in managing an NGO, it is the failure to scale which is a failure of sustainability. Many NGOs commence with little more than a dream in the heart and are willing to support any program remotely linked to their avowed mission; without asking the question whether the organisation’s goals are consistent with their financial resources. Many of these NGOs are small and unsustainable by their operations. Being cash strapped they discover that accessible funding is restricted to programs that they undertake. The activities are better aligned to the donor’s strategy than the NGO. The funding barely covers in many cases the direct costs of the activity and not the overheads of the NGO, forcing it again to seek funding which being further encumbered further de-centers it. This makes the NGO bigger in program portfolio, less focused and more cash starved. This often causes the NGO to be stretched both by the demands of beneficiaries and those of funders, thereby undermining its effectiveness. This causes it to be very busy on a day to day basis executing programs and working to raise funds and yet not achieve its espoused objectives.

From a managerial view the problem can be reformulated as a mismatch between marrying variable income to fixed expenses which is a definition of un-sustainability. The problem is exacerbated when the NGO has no internal sources of revenue generated from it’s ‘clients’ or beneficiaries. Often it is because the NGO has not explored the possibilities of cross subsidizing programs where clients have differing abilities to pay. Sustainability begins by matching internal and fixed sources of revenue to non discretionary fixed costs. Where service operations don’t yield revenue from beneficiaries, a corpus or endowment is needed but the problem lies in sizing expenditure in a manner that there is intergenerational equity or that future generations should have the same access to resources as present ones e.g. keeping the current fund balance same as last year after adjusting for inflation on a corpus fund. Finding funding is then often the core work of the senior management of the NGO and not performance on program operations, inverting the founding premise. They are sometimes reduced to marketing the success stories of their beneficiaries (sometimes captive) through anecdotal narratives in the absence of funding; using the beneficiary as tool to self sustainability of the NGO, turning their founding premise on its head. In the absence of a critical mass, impact assessment is then reduced to measuring inputs rather than outputs and embellished with humanizing tales.

This issue of sustainability is so central in the life of an NGO that it then influences the nature of its own governance and organization design. The boards of many NGOs have high powered individuals because they happen to be followers, wealthy, influential or belong to a particular group including professionals. This reduces the board to an extended arm in a search for funds leveraging on the board’s credibility. Alternatively members or beneficiaries of services serving on the board don’t always take precaution of keeping themselves inured and lose objectivity in resource allocation. Parsing the board with functions such as planning, audit, organization and compliance is feasible with only disciplined members. NGOs are organized as hierarchies in many cases though the sparse staffing permits few levels. This can be a virtue as the organization could leverage outside resources controlled by others and not be saddled with the fixed costs of their maintenance e.g. voluntary work. If being entrepreneurial is pursuing opportunity without necessarily controlling resources, NGOs can be very creative. Leadership in NGOs is then so much about being persuasive with funding bodies as much as bringing to bear their personal passions and convictions on the services or operations. Give their small size the leadership has to balance the tensions of the funding, governance, operations and the organisation simultaneously. To expect independence, legitimacy and viability of these organizations is simply being more idealistic than their own founding.

Funding geography is governed by political considerations while social geography is determined by need and the two don’t often converge. This polarisation was neat in the last decades of the last century, captured as “North” and “South”. Often social movements sustained by large NGOs in the “North” were championed by middle class liberals, distant from the third world struggles, and institutional weaknesses and fitting them within a common framework of rights. These movements are sustained by exchanges of material support from the ‘North’ in varied forms of grants, knowledge and advocacy in exchange for legitimacy, solidarity and purpose from actors in the ‘South’.  While this symmetry seems fair, in the division of labour it often obscures a skewed reality as to the real locus of power that cynics say lies in the purse, or worse that the Northern partners behave imperiously and do not understand the needs or priorities of those they claim to represent while occupying the front seats. While international NGOs claim that its ‘southern’ partners are tied to the HQ in a loose federal structure, they overlook the idea that in a true federal structure it is not the centre that empowers the subsidiary but the centre gains power by the consent of the governed, which is an anarchic idea to many of them.

Given that a significant amount of funding is from governments both local and foreign, they are often instruments of policy pursued in the interest of the donor. In the study of Indian NGOs referred to above, of the 40-80,000 crores of funding, the Indian government is the largest donor with Rs 18,000 crores. In other words the neediest of causes or countries are not the ones that attract funds. Government funds of foreign countries often have conditionalities and prefer routing the funds through their own country NGOs who book services and products against a considerable percent of the fund in their own country even when they could have been booked in the recipient’s country at a fraction of the cost.

It is often that one hears among NGO circles a vocabulary that was battered with the “fall of the wall” i.e. steeped in a Left wing ideology. One wonderes about its incongruity, but it seems remarkably resilient, often accusing others not of its own flock as imperialists and treating businesses and their legitimate ideas on organisation and efficiency with scorn if not contempt. They would also probably believe that capitalism is in its death throes and that the phoenix might rise from the “Occupy” or similar movements. The crusade against corrution is also a case in point; that many of them dissipate their solidarity over minor issues make them splinter and maintain rigid ideological positions than accommodate and see the larger picture.

NGOs in the final analysis just like Abou Ben Adham say "I pray thee, then, write me as one that loves his fellow men". We must admit that life would be uninteresting without their idealism and passionate humanism. They harken the original trinity of truth, goodness and beauty. They like the last bird in Pandora’s box still represent to us the birth of hope.