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LATEST NEWS UPDATES | NGOs under pressure to reveal their funding source, show the impact of their work by Naren Karunakaran

NGOs under pressure to reveal their funding source, show the impact of their work by Naren Karunakaran

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published Published on May 31, 2011   modified Modified on May 31, 2011
As NGOs gain traction in public and policy spaces, they face increasing pressure from the political class and citizens to reveal their sources of funding, show impact of their work, and demonstrate who they represent

DHAN Foundation in Madurai has had a remarkable run in the southern heartland for over a decade, focusing on livelihoods, water and food security . Its work, particularly in tank-based watershed development, is an exemplar. Its executive director MP Vasimalai, an alumnus of IIMAhmedabad , however, cringes when DHAN is referred to as a non-governmental organisation (NGO). DHAN is registered as a trust. Therefore, as a legal entity, it is categorised as an NGO, civil society organisation (CSO) or voluntary organisation (VO). But Vasimalai abhors these nomenclatures. He doesn't want to be counted among a lot perceived to be witnessing an erosion in values. "We are a corporatised development institution," explains Vasimalai. And truly, DHAN, driven by a clutch of technocrats and bankers, adopts a professional approach to operations , engaging with various stakeholders, measuring impact, and reporting on them in a timely, transparent manner.

That is perhaps why companies seeking partners in the social sector root for DHAN. The Tatas run a centre of excellence in development management with DHAN. And Hindustan Unilever Limited (HUL) which has embarked on a mouldbreaking programme in sustainability revels in the company of Vasimalai and his ilk. HUL, emboldened by its work on water conservation with its NGO partners, recently launched 'Indian Water Body' , an independent forum to debate water security. "We like our civil society partners to be in line with our governance and efficiency norms," says Meeta Singh, head, corporate responsibility, HUL. The trend underscores three issues. One, a crisis of confidence in the CSO sector as questions on accountability , legitimacy and credibility begin to be asked. Two, the need for and the rise of partnerships of all hues with CSOs.

Three, the increasing role CSOs are beginning to play in public policy formulation and delivery of services, in tandem with government and non-state actors. As CSOs seek, lobby for and gain more space in myriad spheres of activity , they are also beginning to challenge corporations and the government , and influence and participate in processes in a significant way. On May 18, the Supreme Court, for instance, allowed an NGO, the Forum for Judicial Accountability, to assist in the probe on Justice Dinakaran . Consequently, considerable friction and heat is being generated, as questions on who guards the guardians of society are coming to the fore. CSOs are under increasing pressure from the political class and the public to reveal their sources of funding , show impact of their work on the ground, and demonstrate unambiguously why and whom they represent. Many questions are being asked. Who are these NGOs accountable to? Who has elected them? Who has given them the right to question or speak on behalf of the people? If civil society is holding government and corporations to account, it is inevitable that these very questions would eventually be asked of them.

HOW TO MEASURE ACCOUNTABILITY?

The Edelman Trust Barometer of 2011, a global survey on trust in institutions , indicates that NGOs are trusted more than business in developed markets and are on par with business in emerging markets. NGOs do retain goodwill, but they cannot take for granted that people will continue to trust and hold them in high esteem as always. "The legitimacy of institutions must be earned continuously," says Kumi Naidoo, executive director of the Amsterdam-based Greenpeace International , a campaigns organisation . "The age of blind faith in institutions is over. We have entered the age of accountability." Accountability, however, is a complex issue, with no easy answers to the questions bandied about. In the CSO context, accountability can be spoken of as 'upward' accountability to funding agencies, donors, or government.

This is often in terms of the impact of the work done or proof that money received is well-spent . CSO impact itself is subjective. Unlike in the corporate sector, where everything boils down to profits, to rupees, in the social sector , impact can be quite opaque and interpreted in many ways. In Reliance Industries, for instance, so much quantity of crude refined generates so many rupees. "How do I convert one child educated to rupees," asks Venkat Krishnan N, director, Give India , a donation platform with considerable experience on CSO governance issues. "And who is to decide whether spending Rs 500 annually on a child for basic literacy is better than spending . 20,000 on a child to bring him or her on par with learning levels of your child or mine." Answers are elusive. The general consensus is to 'leave it to the donors to decide' whether they are getting the expected results for the money they put into CSO programmes.

Donor-driven accountability is turning into the norm under the present circumstances . "We have designed a tight reporting protocol for the NGOs we fund and work with"right down to details on student learning and social skills, their living environment, etc," says Sheetal Mehta, trustee and executive director, KC Mahindra Education Trust of the Mahindra & Mahindra Group. Mehta has had her fair share of tackling NGO misdemeanours over the years. The trust, with Naandi Foundation, administers Nanhi Kali, an education initiative for 75,000 girls, along with 20 smaller NGO partners. Regulatory accountability to government , which extends tax concessions to CSOs, and also to donors to CSOs, could also be clubbed under 'upward' framework. However, what appears to be lacking traction is 'downward' accountability to the constituency that CSOs work for-community groups and beneficiaries-and also 'inward' accountability to employees and associates . In India, instances of CSOs revealing all to their constituencies are rare. Rajasthan, however, has had a record . Sumita Ghosh of Rangsutra, an artisans' collective, points to the manner in which the Roys of Barefoot College often painstakingly explained the minutiae of its projects and financials to the villagers it worked with; it basically empowered the community with information to enable them to judge for themselves.

SHOULD THEY BE SELF-REGULATED ?

Evidently, there is no hold-all approach to the issue of accountability for CSOs, as they come in all hues and shapes. There are small grassroots outfits. There are regional, national and international campaigns groups, networks and membershipbased organisations. And more. Each has unique issues and challenges . Mathew Cherian, chief executive of Helpage India, presents the case of 'social movements' . Social movements are usually driven by a charismatic individual or a set of individuals. They are broadbased , comprising a bevy of institutions , groups and individuals working on a given agenda, be it education , information, nuclear energy or water. Movements are almost amoeba-like in character, expanding as more and more join up, contracting and occasionally splitting. Movements are a different animal, they are not registered .

How are they to be held accountable or regulated?" asks Mathew . "At best, individual NGOs in the movement may be regulated." Venkat also likes to differentiate campaign NGOs from other sorts, charities or those engaged in developmental work. By their very design or nature, campaign NGOs or advocacy groups-in the mould of a Narmada Bachao Andolan-oppose the establishment and are constantly at the government's throat. "It would be incongruous to allow the government to regulate such organisations ," says Venkat. "Ideally, self-regulation can be the answer." Also the need to disclose their funding sources; there are several instances of fronts for corporate and other interests, especially in water, energy and agriculture. Self-regulation , however, hasn't worked in India. Credibility Alliance was set up in 2004 for accreditation and peer review of NGOs on the basis of a set of norms on governance, transparency and accountability. The number of NGOs in its fold haven't crossed three digits. India has about 3.2 million registered CSOs, of which an estimated 1.5 million are active or functional. Venkat, who has been on the board of the Alliance, insists the effort didn't fly not because Indian NGOs are reluctant to participate, but because the Alliance lacks execution skills. Self-regulation may be in the form of codes of conduct or ethics, selfassessment tools, peer certification or third-party certification, awards, et al.

DO THEY HAVE 'LEGITIMACY' ?

While several accountability mechanisms are being experimented with, if seen closely, the present-day debate is not so much about accountability ; it's the 'legitimacy' of CSOs that is under the scanner, although it's not articulated in that fashion. When critics talk about NGOs being unelected or ask the question, 'from where do you derive your power to speak' , it's all about legitimacy. Kumi Naidoo is certain that criticism about non-accountability is not because of a deep concern over the effectiveness of civil society efforts in sustainable development or poverty alleviation.

It's basically because powerful interests feel threatened by the rise of civil society. Legitimacy of CSOs is therefore what critics allude to. There is a subtle difference between accountability and legitimacy. Mathew of Helpage India speaks on behalf of millions of senior citizens. Is he elected, selected or nominated? "I have arrogated for myself the power of representing them. I didn't go through a process," concedes Mathew . "Civil society legitimacy can indeed be questioned because there is no process of universal suffrage backing us." What Mathew in his humility leaves unsaid is that legitimacy is 'derived' from the years of work that he as an individual in the developmental sector and Helpage India as an organisation have undertaken. Integrity, trust and reputation are integral components to claims on legitimacy .

It's deeply rooted in moral grounds. It also has a legal aspect. It can be said that CSOs operate within the framework of government legislation and that, in a way, contributes to answers on legitimacy. "We comply with all the laws of the land, income tax regulations, demands of the home ministry. Isn't that enough?" asks Vandana Shiva, global civil society campaigner. Much of the legitimacy that CSOs rest on is generated from the people they work with: members, supporters , benefactors. Goodwill is key. Legitimacy therefore, as experts at a meeting of the International Council on Human Rights Policy pointed out several years ago, is often 'derived' and 'generated' . There are tangible and intangible hues to legitimacy of CSOs. Quaintly enough, there is a case for legitimacy without democracy!

DO THEY NEED ONE LEGISLATION?

Does all of this mean there is little scope to regulate CSOs in a more formal, systematic manner, especially when self-regulation attempts seem to be flailing in India; when CSOs are set to play a dominant role in governance; when funds raised are increasing. In 2009, CSOs received Rs 10,803 crore in foreign funding alone. Today, CSOs may be registered under several acts: the Societies Registration Act (1860); the Companies Act (1956); Indian Trusts Act (1862); and those receiving foreign funds come under the Foreign Contribution Regulation Act, 2010 (FCRA). Is India ready for an overarching piece of legislation that covers the entire sector? While CSOs may be registered in many ways, today, it's the Income Tax Act and the IT department that undertake the regulatory function, just as the Internal Revenue Service governs all charities in the US.

In the UK, the Charity Commission of England and Wales govern the 162,000 registered charities in the country. "Sometimes, more and more regulation just doesn't help," says Venkat . Already, the sector is fuming over tightening of the FCRA rules by the ministry of home affairs, ostensibly to address concerns over internal security. A governmental task force nevertheless is tweaking a central law for registering of voluntary organisations , which could also lead to the creation of a voluntary sector commission (See box). Mathew, who has been one of the prime movers of Credibility Alliance, now feels it's about time for a new, specific, sharply-focused law for Indian CSOs. "We do need something tighter," he says.

The Economic Times, 31 May, 2011, http://economictimes.indiatimes.com/news/politics/nation/ngos-under-pressure-to-reveal-their-funding-source-show-the-impact-of-their-work/articleshow/8658574.cms

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