NGOs : Crisis of credibility

CAPART has not funded new projects for NGOs for over a year now. It will not do so till new norms for the voluntary sector are finalised

Amitabh Shukla / New Delhi

February 1, 2011

The institutions of democracy are facing a serious crisis of credibility and confidence. 2G scam, disruption of an entire session of Parliament, role of media in lobbying, insinuation against judges, appointment of the Chief Vigilance Commissioner and the Radia tapes dominated the headlines in the recent weeks leaving none of the pillars of democracy sacrosanct.

Is the voluntary sector far off from the crisis? Isn’t the sector too facing serious crisis of credibility and challenge? Have the NGOs come out clean in the entire episode.

This does not seem to be so. A Chennai based NGO had to face the ignominy of CBI raids as its name cropped up in the 2G scam and was said to be the beneficiary of funds from the state government and lobbied for interest groups. The NGO is not alone. The nodal agency of the government, responsible for giving grants to the NGOs, CAPART blacklists hundreds of NGOs every year for fund embezzlement and irregularities.

The acts of transgression of the Chennai based NGO is quite common and is replicated elsewhere in the country as the malaise has been found to be deep and widespread. With a whopping 3.3 million registered NGOs, India's nonprofit sector raises up to $16 billion in funding every year. Foreign funding to Indian NGOs has only increased over the years. According to the figures of the Home Ministry, in 2008, the total official foreign aid to India was $2.15 billion.

It is actually the fight for these funds. Whoever presents a better picture, does a good social marketing and brings a sob value to their projects, gets a lion’s share, particularly from the international donors. Those for transparency say that a large amount of that money is misused, mostly to support high administrative costs of running organizations rather than on actual projects which are intended for the target beneficiaries. Transparency is an exception rather than a norm in a large number of NGOs and very few submit themselves for account audits and come clean on where and how the funds they receive as donations are spent.

While groups like Credibility Alliance, are working toward increasing NGO accountability through accreditation, field visit to scrutinize the records and membership, they have been able to rope in only a handful of NGOs so far. In the year 2009-10, 147 VOs applied for accreditation with Credibility Alliance. Out of these, 23 VOs were accredited under desirable norms and 10 were accredited under minimum norms. The total number of VOs accredited till October 2010 was a mere 115, suggesting that a large number of organisations do not want any scrutiny and would prefer to operate in an opaque, arbitrary manner as per the whims and fancy of the person who founded it and got it registered.

Not surprising as many as 833 NGOs were blacklisted by CAPART at the end of 2009 after they were found indulging in misappropriation of funds. Andhra Pradesh had the highest number of such blacklisted organisations followed by Bihar and Tamil Nadu. Of the 833 NGOs and voluntary organisations which were blacklisted, 192 were from Andhra Pradesh, 125 from Bihar, 83 from Tamil Nadu, 75 from Karnataka, 72 from Uttar Pradesh, 42 from Rajasthan and 35 from Kerala. In 2008, out of the 34,803 registered associations, only 18,796 filed their reports.

The malaise has reached such proportions that for many NGOs symbolize a ‘dirty word’ which is best avoided. They are seen as a tool of laundering money, embezzling donations and presenting a lofty-ideal picture to the outside world. No wonder the private trusts, corporate foundations, corporate social responsibility projects etc prefer to have their own set-up, own staff, their own model of projects, development and disburse funds through them rather than through the NGOs. For instance the Azim Premji Foundation, which got a whooping over Rs 8000 crore from its founder, has its own organization to conceive and execute the educational programmes.

“We are facing a severe crisis. Some NGOs have brought in a bad name for the voluntary sector. The image of those doing genuinely good work is also tarnished in the process,” said Abhay Pandey who runs Nav Srijan Sansthan in Bihar’s West Champaran district, a project to teach 20 children every year which he is doing in his individual capacity with the help of some well-wishers.

Wasn’t it time that all VOs and NGOs, which are registered under the Societies Registration Act undergo mandatory scrutiny of funds and subject themselves to something like the Right to Information. Making transparency mandatory is the need of the hour rather than hiding behind a cloud of secrecy.

A change in the institutional structure is taking place in the country, particularly in the developmental field where the move is to decentralize down to the lowest levels of panchayat. The panchayats at the village level are gradually becoming more important in all decision and policy making and development at the grassroots. They are deciding the developmental agenda and governments at the Centre and the states are also giving them control over financial resources to meet the objectives.

It is here that the NGOs have the big task of facilitation and also build capacities. The involvement of VOs in implementing development programs in partnership with the government has become key to this agenda. The involvement of local community, local activists, those who are well entrenched in the society is a must for any positive outcome. If funds for these grassroots organisations, those who understand the nerves of the local community dry up, hundreds of thousands of people living below poverty line will lose all hope.

Undoubtedly, there are hundreds of VOs, NGOs and individuals who have and continue to contribute effectively in the development process. They work with commitment, transparency, vision and a set goal. Why should they suffer from the deeds of the black sheep who are mushrooming all over. Wasn’t it time to separate the rice from the husk. Wasn’t it time to get our act together and bring in a system wherein regulation and control is transparent and effective.

The country may not need 3.3 million registered organisations. Even a few thousand would do. They needed to be weeded out on the basis of parameters set up in consultation with the voluntary sector itself, policy makers and government agencies. The stench has to be removed to make VOs and NGOs more vibrant and effective and restore the confidence of the common people and the donor agencies in them. (February 2011)