SPRAWLING INDIAN NGOs & FOREIGN FUNDING
An unedited /unfinished piece by P.N.BENJAMIN
27 June 2012
Foreign funding for the sprawling Indian NGOs has been growing at a compounded annual rate of 14 per cent every year .It received over Rs 49,968 crore as contributions from abroad during the last five years. In 2009-10, 21,508 organizations received Rs.10,337 crore for various activities. Besides rural development, child welfare, humanrights advocacy,education and protection, environmental programmes and AIDS awareness, foreign funds are also being used for setting up religious schools, education of priests/preachers, religious functions and publication and distribution of religious literature, among other activities. This mirrors the overall sharp increase in spending on 'community' services in the country .
Transparency, or rather the lack of it, has long been a problem with the NGO sector. One telling example of this is how few NGOs bother to make their annual accounts available for public scrutiny. It is compounded by the highly unorganized nature of these organizations that are often required to register under multiple laws without any uniform accounting policy or reporting framework.
One of the key complaints against Indian NGOs is their overspending on overheads. There are several alleged instances of unscrupulousness in the ever expanding NGOs sector. According to NGO watchdogs, almost half of the money received from abroad is misused, mostly to support high establishment expenses incurred: buying land, buildings, jeeps, setting up fancy offices, mobiles, laptops, expensive cameras, salaries, consultancy fees, honorarium, and importantly, foreign travel etc, which make up 35-70% of the expenses. This goes against the grain of service motto where the ultimate recipient is supposed to get the maximum.
There are other uncomfortable questions that undermine the credibility of a large number of Indian NGOs. Chief among them is the businesses using these organisations for money laundering. Ravi Nair, Director of South Asia Human Rights Documentation Centre and India's best known human rights defender has been found guilty of fraud and embazzlement of funds by the European Union's anti-fraud busting agency European Anti-Fraud Offce (OLAF). The European Union has asked the government of India to take action against the NGO which received funds through banks accounts in Switzerland and the Netherlands.
Money has been flowing into the NGO sector, but very few of the “charitable” outfits allow public scrutiny of their accounts. There is very little financial regulation of NGOs as matters stand. The Foreign Contributions Regulation Act (FCRA), under which organisations that receive foreign funds have to report annually to the Home Ministry the sources and use of the money. It focuses only on ensuring internal security. It is not concerned with wastage or misuse of funds, but only with use of these funds for political, communal or other such activities.
In 2008 alone, out of the 34,803 registered associations receiving foreign funds , only 18,796 filed their reports. NGOs that do not file returns to the Home Ministry will lose the right to receive foreign funds for three years, which will, in many cases, effectively suspend their operations.
India's latest five-year plan also advocates a single comprehensive law with a single set of accountability procedures to encourage accountability and transparency within the NGO sector. NGOs are in the "credibility market" and they cannot afford to be above accountability”, a prominent NGO leader has said.
Despite their saintly image in the media, some NGOs have connections to dubious groups in India. More insidious are groups with deceptively appealing siren songs. Most of these organizations have become personal fiefdoms for self-glorification, or else unwitting tools in the hands of anti-nationals.
Similarly, annual submissions to the registrar of societies or to charity commissioners are for all practical purposes mere formalities, with little scrutiny if public money is being prudently spent by charities. This is in stark contrast to what exists in the government where the Comptroller and Auditor General's office investigates whether the physical achievements match the funds spent. The Kelkar Committee had recommended the creation of a National Charities Board to assist the government in regulating charities as is the case with the National Charities Commission in the UK.
It would be appropriate that all NGOs insist that they be covered under the Right to Information Act, even though as of now it is not applicable to those who do not receive funds from the government. This insistence will go a long way in establishing their credentials as real believers in transparency and right to information.
An unedited /unfinished piece by P.N.BENJAMIN
27 June 2012
Foreign funding for the sprawling Indian NGOs has been growing at a compounded annual rate of 14 per cent every year .It received over Rs 49,968 crore as contributions from abroad during the last five years. In 2009-10, 21,508 organizations received Rs.10,337 crore for various activities. Besides rural development, child welfare, humanrights advocacy,education and protection, environmental programmes and AIDS awareness, foreign funds are also being used for setting up religious schools, education of priests/preachers, religious functions and publication and distribution of religious literature, among other activities. This mirrors the overall sharp increase in spending on 'community' services in the country .
Transparency, or rather the lack of it, has long been a problem with the NGO sector. One telling example of this is how few NGOs bother to make their annual accounts available for public scrutiny. It is compounded by the highly unorganized nature of these organizations that are often required to register under multiple laws without any uniform accounting policy or reporting framework.
One of the key complaints against Indian NGOs is their overspending on overheads. There are several alleged instances of unscrupulousness in the ever expanding NGOs sector. According to NGO watchdogs, almost half of the money received from abroad is misused, mostly to support high establishment expenses incurred: buying land, buildings, jeeps, setting up fancy offices, mobiles, laptops, expensive cameras, salaries, consultancy fees, honorarium, and importantly, foreign travel etc, which make up 35-70% of the expenses. This goes against the grain of service motto where the ultimate recipient is supposed to get the maximum.
There are other uncomfortable questions that undermine the credibility of a large number of Indian NGOs. Chief among them is the businesses using these organisations for money laundering. Ravi Nair, Director of South Asia Human Rights Documentation Centre and India's best known human rights defender has been found guilty of fraud and embazzlement of funds by the European Union's anti-fraud busting agency European Anti-Fraud Offce (OLAF). The European Union has asked the government of India to take action against the NGO which received funds through banks accounts in Switzerland and the Netherlands.
Money has been flowing into the NGO sector, but very few of the “charitable” outfits allow public scrutiny of their accounts. There is very little financial regulation of NGOs as matters stand. The Foreign Contributions Regulation Act (FCRA), under which organisations that receive foreign funds have to report annually to the Home Ministry the sources and use of the money. It focuses only on ensuring internal security. It is not concerned with wastage or misuse of funds, but only with use of these funds for political, communal or other such activities.
In 2008 alone, out of the 34,803 registered associations receiving foreign funds , only 18,796 filed their reports. NGOs that do not file returns to the Home Ministry will lose the right to receive foreign funds for three years, which will, in many cases, effectively suspend their operations.
India's latest five-year plan also advocates a single comprehensive law with a single set of accountability procedures to encourage accountability and transparency within the NGO sector. NGOs are in the "credibility market" and they cannot afford to be above accountability”, a prominent NGO leader has said.
Despite their saintly image in the media, some NGOs have connections to dubious groups in India. More insidious are groups with deceptively appealing siren songs. Most of these organizations have become personal fiefdoms for self-glorification, or else unwitting tools in the hands of anti-nationals.
Similarly, annual submissions to the registrar of societies or to charity commissioners are for all practical purposes mere formalities, with little scrutiny if public money is being prudently spent by charities. This is in stark contrast to what exists in the government where the Comptroller and Auditor General's office investigates whether the physical achievements match the funds spent. The Kelkar Committee had recommended the creation of a National Charities Board to assist the government in regulating charities as is the case with the National Charities Commission in the UK.
It would be appropriate that all NGOs insist that they be covered under the Right to Information Act, even though as of now it is not applicable to those who do not receive funds from the government. This insistence will go a long way in establishing their credentials as real believers in transparency and right to information.
