NGOs (UPSC Notes)

According to the UN, NGOs are organizations that are not part of the government & are not conventional profit businesses. In case NGOs are funded totally or partially by governments, NGOs maintain their non-governmental status by excluding government representatives from membership in the organization. 

Other Names

1. Third Sector Organizations (TSO) 
2. Non Profit Organizations (NPO) 
3. Voluntary Organizations (VO) 
4. Civil Society Organizations (CSO) 
5. Self-Help Organization (SHO)
6. Non-State Actors 

NGOs can be classified in two ways

1. By level of orientation 
2. By level of operation 

By Level of Orientation

By Level of Operation

 Not a single model 

• Some are highly professionalized & rely mainly on paid staff.
• Others are based on voluntary labour and are less formalized. 
• Many NGOs are associated with the use of international staff working in developing countries, but many NGOs in both the North and South rely on local employees. 

Two explanations of why NGOs emerged

1. Market Failure Theory

• NGOs emerged to provide services that the public sector can’t or will not provide services for which businesses can’t get a sufficient return on their investments. 

2. Contract Failure Theory

• NGOs are created to provide services where the parties who want them offered are not in a position to provide these services. These parties are donors or well-wishers of clients receiving services.

Note: The Right to Association is Fundamental Right guaranteed under our constitution. Forming NGOs is part of it.

State policies have significantly influenced the formation of NGOs, e.g. government-sponsored and aided programs & provided financial assistance to NGOs. In addition, several government committees have acknowledged the need to involve NGOs in social development processes.

Initial years

• After independence, some attention was given to the NGO sector by the central government mainly because NGOs were Gandhian in nature, and Balwant Rai Mehta Committee was constituted to look into the work of the Community Development Program. The committee recommended that more emphasis should be laid on NGOs. But after that, the next initiatives came in the 1980s.

From the 6th Five-Year Plan

• The government increasingly recognized the NGO sector’s vital role & provided increasing levels of funding. In the past two decades, the government has increased engagement with NGOs at all levels. 

GO- NGO Interface

• It was launched in March 2000.
• The Planning Commission was made the nodal agency.
• The message was clear; the government would work with NGOs for the development of India.
• The main reason for this was State Minimalism after LPG reforms. NGOs became mediators and managers of development processes. 

• Although social development has emerged as a significant sector in the 21st century & NGOs are a vital part of it, there is no institutionalized mechanism of collaboration between the Government & NGOs. Evolving long-term & sustainable collaboration between Government & NGOs is the need of the hour.
• Andhra Pradesh Model: The Government of Andhra Pradesh has formed a State Level Coordination Committee consisting of NGOs & Governmental officials headed by the CM to promote coordination between the Government and NGOs. All states must learn from this.  
• CAPART (Council for Advancement of Peoples Action & Rural Technology) & various Ministries have evolved their schemes to be implemented by funding NGOs. For example
  1. Swachh Bharat Abhiyan: In Swachh Bharat Abhiyan, the government has partnered with NGOs like Sulabh International, Gram Vikas, and WaterAid to promote awareness, build toilets, and implement sustainable sanitation practices nationwide.
  2. National AIDS Control Program (NACP): The program works closely with NGOs like HIV/AIDS Alliance and Naz Foundation to provide HIV testing, counselling, treatment, and support services. 
  3. National Health Mission (NHM): NGOs like CARE India, Child in Need Institute (CINI), and Jan Swasthya Sahyog (JSS) collaborate with the government in implementing NHM interventions. 
  4. National Skill Development Mission (NSDM): NGOs like Pratham Education Foundation, Gram Tarang Employability Training Services, and Srijan Foundation collaborate with the government to implement skill development projects.
• NITI Ayog also wants to involve leading Civil Society Organizations & NGOs in taking forward social sector initiatives of the government.

Strengths

• Strong Grassroots Links: NGOs work closely with local communities, understand their needs, and develop context-specific solutions. 
• Ability to Mobilize Resources:  The NGO sector in India has successfully mobilized funding from domestic and international sources, including governments, corporations, foundations, and individual donors. 
• Ability to Innovate and Adapt: The NGO sector in India exhibits a culture of innovation and has pioneered new approaches, models, and technologies to address social challenges effectively. 
• Collaboration and Networking: NGOs in India actively collaborate, forming networks and alliances to maximize their collective impact
• Cost-effectiveness: NGOs operate with limited resources and are adept at optimizing their expenditure.
• Long-term commitment to the cause

Weaknesses

• Limited finances: NGOs are known as an independent voice, but in recent years NGOs have increased in number & range of activities, but the number of donors hasn’t increased with that pace. Hence, there is large competition for funding. It adds the risk of donors adding conditions which can threaten the independence of NGOs. Additionally, Over-dependence of NGOs on official aid has the potential to dilute their stand to speak on public issues critically.
• Fragmentation and Duplication of efforts: Numerous NGOs working on similar issues within the same geographical areas
• Low levels of self-sustainability: Ensuring the long-term sustainability of programs is a significant challenge due to factors such as over-reliance on donor funding, difficulty in generating sustainable income streams, and limited integration of projects with government policies.  
• Political interference: NGOs in India sometimes face political interference, mainly when they work on sensitive issues or criticize government policies. 
• Capable of small-scale interventions only

• India has 2 Million registered NGOs, but there is an accountability & transparency problem. Their credibility is questioned because there is a lack of transparency about their finances.
• Main Problems include
  • NGOs are registered under multiple acts in India like Societies Registration Act,1860; Indian Trust Act,1882; Bombay Public Charitable Trust Act,1950 & Companies Act. Accountability requirements of all acts differ, with some not requiring any form of annual filing. 
  • NGOs are required to register annual returns with the Income Tax department, but annual returns filed by NGOs are not subject to public disclosure. 
  • While receiving Foreign funding, NGOs only need to inform Government of India and file annual reports to Home Ministry under FCRA and no public disclosure is required.

Hence, the statutory framework doesn’t require NGOs to be accountable directly to the Public. 

• NGOs should build and regain lost public trust through better transparency in functioning. They can adopt the following.
  • External auditing  
  • Increased Information disclosure

NGOs running PIL Industry 

• NGOs are tutoring victims to seek larger compensation when some development project runs on their land. They file bogus affidavits & PILs. 

Harming Internal Security 

• They have a soft glove and apologist attitude towards Naxalites, Insurgents & Terrorists.
• They force the government to repeal some acts like AFSPA, which can prove dangerous in some situations. 

Try to put Animal Rights above Human Rights 

• Resulting in Street dog/monkey menace
• Animal Right Activists NGOs vs Inconvenience to Public Issue 

They Cherry Pick Causes on Donor Priorities 

• Initially, Chipko Movement was a success, but NGOs failed during Bhopal Gas Tragedy because foreign donors didn’t want to raise their voices against those companies. 
• There is a particular scene that emerges when we see funding patterns from a particular nation and issues raised by NGOs who receive this fund. French Funded NGOs are soft on Maoists, German-funded are Anti-GM Crops, and US-funded are Anti-Coal. 

Intelligence Bureau Report (2014) also brought to the forefront the obstructionist role played by Foreign Funded NGOs and the loss of GDP to the tune of 2% happening due to their protests.

• Foreign Contribution (Regulation) Act,2010 replaced FCRA,1976 
• The Act seeks to regulate the flow of foreign funds to voluntary organizations to prevent their diversion towards activities detrimental to the national interest. 
• NGOs have to register under FCRA to accept foreign contributions & central government can deny certification under certain conditions. 
• Organizations must renew FCRA certification every 5 years. Dormant accounts can be weeded out using this provision.
• NGOs can receive these foreign contributions only through designated banks ( New Delhi Branch of SBI).
• Further, the NGO has to report to the central government any foreign contribution within 30 days of its receipt, in addition to filing annual reports.
• If any organization receive a foreign contribution of over ₹10 lakh in an instance, the bank concerned would immediately inform the government so that the source of such fund can be tracked. 
• NGOs cant spend beyond 20% of their foreign funding on Administrative expenses.