Fund­ing cuts take a toll on front­line NGOS

Reg­u­la­tory changes and the launch of PM Cares have all but dried up funds for or­gan­i­sa­tions en­gaged in Covid re­lief ef­forts, writes NAM­RATA ACHARYA

Business Standard - - FRONT PAGE - NAM­RATA ACHARYA

Reg­u­la­tory changes and the launch of PM CARES have all but dried up funds for or­gan­i­sa­tions en­gaged in Covid re­lief ef­forts at the last mile, writes

Last week, Goonj, an NGO work­ing in ru­ral ar­eas, re­ceived an un­usual re­quest. It was from a mid­dle-aged IT pro­fes­sional in Kolkata, Rajib Ray (name changed), who wanted help to buy medicines for his sick par­ents.

On March 18, as cor­po­rate In­dia slipped into the com­fort of work from home due to Covid-19, Ray, 48, re­ceived a ter­mi­na­tion let­ter from his em­ployer.

“I was first asked to re­sign in Jan­uary. But I re­fused and sought writ­ten grounds of my forced res­ig­na­tion. When I pleaded, the com­pany said they can of­fer help only if I re­sign on my own. On March 18, I got the ter­mi­na­tion let­ter,” says Ray.

Over the past few weeks, Goonj has re­ceived more such re­quests from salaried in­di­vid­u­als, who sud­denly find them­selves trapped in acute poverty.

“We need to en­sure that se­crecy is main­tained in ex­tend­ing help to this class, as they were never de­pen­dent on NGOS for re­lief. Peo­ple fear so­cial em­bar­rass­ment about it. What­ever sav­ings peo­ple had, are now de­pleted af­ter a month of lock­down,” says If­tiqar, an em­ployee of Goonj.

The ex­pe­ri­ence of other NGOS is no dif­fer­ent. “With the sud­den loss of jobs, some peo­ple who were earn­ing aboveav­er­age salaries have ap­proached us ask­ing them to help with house rent and gro­cery,” says a spokesper­son of Givein­dia, one of the big­gest NGOS in In­dia.

In the fight against Covid-19, the out­reach of NGOS in the nooks and cor­ners of In­dia is now much sought af­ter. While donors, in­clud­ing gov­ern­ments, are seek­ing their help to reach out to peo­ple, in­di­vid­u­als in need find them eas­ily ac­ces­si­ble.

Ear­lier this month, Niti Aayog CEO Amitabh Kant had writ­ten to over 92,000 NGOS ap­peal­ing them to as­sist the gov­ern­ment in iden­ti­fy­ing Covid-19 hotspots and de­liv­er­ing ser­vices to vul­ner­a­ble groups.

Iron­i­cally, since the present gov­ern­ment came into power, NGOS have come un­der tight gov­ern­ment scru­tiny. Be­tween 2014 and 2019, For­eign Con­tri­bu­tion Reg­u­la­tion Act, or FCRA, reg­is­tra­tions of more than 16,000 as­so­ci­a­tions were can­celled, data from the Min­istry of Cor­po­rate Af­fairs shows. As many as 14,500 NGOS were banned in the last five years from re­ceiv­ing funds from abroad for vi­o­la­tion of the Act, the gov­ern­ment re­cently said in the Ra­jya Sabha.

NGOS in the past have helped weather sev­eral cri­sis sit­u­a­tions, in­clud­ing se­vere floods and earthquake­s. How­ever, in the face of the present pan­demic, they are fac­ing is­sues like never be­fore, start­ing from fund­ing crunch, lo­gis­tics and in­creased gov­ern­ment scru­tiny.

On March 28, the gov­ern­ment set up its own fund, PM Cares, to raise money for Covid-19, pro­vid­ing 100 per cent tax ex­emp­tion, and at­tract­ing big cor­po­rate dona­tions. Dona­tions to NGOS en­tail only 50 per cent tax ex­emp­tion.

The shrink­ing cof­fers of NGOS

While for­eign fund­ing for NGOS has shrunk, cor­po­rate fund­ing avail­able from cor­po­rate so­cial re­spon­si­bil­ity (CSR) kitty has found mul­ti­ple claimants, in­clud­ing the gov­ern­ment.

In 2014, the gov­ern­ment made it manda­tory for big com­pa­nies within cer­tain fi­nan­cial pa­ram­e­ters to spend 2 per cent of their av­er­age profit of the pre­vi­ous three years on CSR ac­tiv­i­ties ev­ery year.

Con­tri­bu­tions to mass gov­ern­ment wel­fare schemes like the Clean Ganga project and Swachh Bharat qual­ify as CSR fund­ing. Cor­po­rate en­ti­ties can now also adopt a her­itage site as part of their manda­tory CSR.

While pub­lic sec­tor un­der­tak­ings pre­fer spend­ing money on gov­ern­ment projects, big cor­po­rate en­ti­ties like to spend CSR money through their own trusts. In 201718, In­dia’s top CSR con­trib­u­tors were Re­liance In­dus­tries, Oil and Nat­u­ral Gas Cor­po­ra­tion (ONGC) and Tata Con­sul­tancy.

In 2017-18, Re­liance In­dus­tries’ to­tal CSR spend was ~745 crore. Of this, ~304 crore was spent on Re­liance Univer­sity.

For ONGC, its sec­ond high­est CSR spend was on Swachh Bharat Ab­hiyan at ~75 crore. Preser­va­tion of her­itage and re­li­gious sites also fig­ured in its CSR list. This in­cluded preser­va­tion of four kunds at Varanasi, pro­mo­tion of San­skrit lan­guage, clean­li­ness drive at Tiru­mala Tiru­pati Dev­asthanams and restora­tion of Kedar­nath tem­ple, among oth­ers.

In 2018, de­mon­eti­sa­tion came as a ma­jor con­straint for CSR fund­ing. Be­tween 2015-16 and 2017-18, the over­all CSR spend of com­pa­nies dropped by nearly ~893 crore. In the same time, CSR spends on her­itage, art and cul­ture in­creased from about ~119 crore to

~212 crore, while the spends un­der the cat­e­gory of health, erad­i­cat­ing hunger, poverty and mal­nu­tri­tion, safe drink­ing wa­ter, san­i­ta­tion de­creased from ~4,608 crore to ~1,774 crore, gov­ern­ment data shows.

“In ear­lier dis­as­ters we saw much more fund flow than what we see now. Also, over the years’ a sub­stan­tial part of CSR fund is also go­ing to gov­ern­ment schemes. There is more money af­ter CSR Act, but it is go­ing in few pre-de­fined causes in a few states where com­pa­nies are lo­cated. In vil­lages very lit­tle money is flow­ing. Also, CSR was never meant to fill­ing up govt money,” says An­shu Gupta,founder of Goonj.

“Af­ter PM an­nounced ~ 500 per month will be de­posited in Jan Dhan ac­counts, in­di­vid­u­als as well as com­pa­nies started ques­tion­ing the need for fur­ther funds. When PM Cares was an­nounced, the fund con­straints wors­ened as close to ~7,000 crore went into that fund. Some cor­po­rate en­ti­ties are still sup­port­ing us. How­ever, some are adding riders like Aad­haar de­tails of all the in­di­vid­ual ben­e­fi­cia­ries, a demand which we turned down,” says Arun Ku­mar, CEO of Ap­nalaya, which is work­ing in Mum­bai’s slums.

Ku­mar says, his NGO has ra­tion to sup­port close to 6,000 more fam­i­lies over the next eight to 10 days.

In ad­di­tion, the re­port­ing pres­sure on NGOS has in­creased as they are now re­quired to fur­nish monthly de­tails of for­eign fund­ing to the gov­ern­ment.

For smaller NGOS, the prob­lem is more acute. “The ques­tion is with so many fund­ing con­straints how do we sur­vive?” asks El­samarie Dsilva, founder and CEO of Red Dot Foun­da­tion, an NGO work­ing for women safety.

“If the gov­ern­ment can al­lo­cate some money from PM Cares for NGOS, that would be a good ini­tia­tive,” said In­grid Sri­nath, di­rec­tor of the Centre for So­cial Im­pact and Phi­lan­thropy at Ashoka Univer­sity.

NGOS in last-mile bat­tle

About a week ago, in a re­mote vil­lage called Mawlai in Megha­laya, eight fam­i­lies ran out of money to buy ra­tion. Cashre­lief, an NGO, acted swiftly to mo­bilise its field team to send ~1,000 to each of the fam­i­lies. Al­most a month be­fore peo­ple in slums in Mum­bai started get­ting ra­tion from gov­ern­ment, Ap­nalaya had be­gun dis­tribut­ing food. Coro In­dia, an NGO, while dis­tribut­ing aid in ru­ral ar­eas is print­ing a helpline num­ber for women and chil­dren on the pack­ets to help vic­tims of domestic vi­o­lence. These are only a few in­stance of how NGOS are lead­ing from the front to fight Covid-19. In­ter­est­ingly, most of the funds of NGOS are be­ing raised from in­di­vid­u­als rather cor­po­rate en­ti­ties.

Apart from fund­ing crunch, NGOS face op­er­a­tional chal­lenges in buy­ing food grains and trans­porta­tion.

“Why should NGOS need to buy food grains from the Food Cor­po­ra­tion of In­dia (FCI)? Ideally, the FCI or gov­ern­ment should give it. It’s a com­pli­cated task to raise money from peo­ple to fill up these gaps. As we are more needed in the field. NGOS must get more re­spect and co­op­er­a­tion. We are the best pos­si­ble last­mile con­nects. And this na­tion­wide dis­as­ter has proved the im­por­tance and sig­nif­i­cance of the sec­tor, ” says Gupta.

“Pro­cure­ment of re­lief ma­te­rial in bulk, es­pe­cially when there is a paucity of goods avail­able in the mar­ket, is a con­stant hur­dle for the NGOS. Also, the cost of trans­porta­tion is high and the do­na­tion is gen­er­ally for the re­lief ma­te­ri­als and sel­dom cover the trans­porta­tion costs. One of the most chal­leng­ing parts of dis­tribut­ing re­lief ma­te­rial and reach­ing out to peo­ple in dis­tress is to en­sure the NGO vol­un­teers are keep­ing them­selves safe. They are at the front­line and could be­come in­fected them­selves,” says the spokesper­son of Givein­dia.

If the Covid-19 lock­down con­tin­ues for long, NGOS might also run out of re­sources , and along with that will dis­ap­pear the much-needed last mile con­nec­tiv­ity .

Per­haps, a more dra­co­nian act for NGOS is still in the mak­ing. Re­cently, the gov­ern­ment pub­lished the Draft Com­pa­nies (Cor­po­rate So­cial Re­spon­si­bil­ity Pol­icy) Amend­ment Rules, 2020. Un­der this, money spent on trusts and so­ci­eties would not qual­ify as CSR . More than 90 per cent of NGOS work as trusts or so­ci­eties. They would not get any CSR fund un­der the pro­posed law.

“If the NGOS start shut­ting, not only will many peo­ple be un­em­ployed, we will also risk de­stroy­ing the ground level ca­pac­ity, some­thing which will be dif­fi­cult to build again,” says Sri­nath.

Be­tween 2015-16 and 2017-18, CSR spends on her­itage, art and cul­ture in­creased from about ~119 crore to

~212 crore, while the spends on health, erad­i­cat­ing hunger de­creased from ~4,608 crore to ~1,774 crore

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