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This Is India’s Non-profits' Critical Reform Or Perish Moment

31/07/2017 8:41 AM IST | Updated 31/07/2017 4:41 PM IST
Austin Yoder
NGO executives attending a village meeting.
By Suvojit Chattopadhyay*

India's non-governmental organisations (NGOs) have been facing a crisis for some time now that — going well beyond issues of technical competence or efficiency of delivery — questions their very existence and legitimacy. It is imperative to examine the reasons behind this crisis and set out ways in which NGOs can get back on track.

NGOs trace their raison d'etre to the twin failures of state and markets. In the latter half of the 20th century — the heyday of NGO action in India — vast swathes of India's population did not have access to basic services. This segment of the population mostly lived in areas that were geographically not served by the state, typically in rural areas. The private sector, especially prior to 1991, was largely subject to state controls and had an even more limited reach.

Where basic services did reach, sections of population, usually socially disadvantaged, were left out. NGOs swung into action to fill this gap — funds flowed in and public-spirited people committed themselves to the task, either helping extend government services or providing services of their own. NGOs became a sector.

In the latter half of the 20th century — the heyday of NGO action in India — vast swathes of India's population did not have access to basic services.

Evolving context

Today, in post-liberalisation India, with significantly enhanced penetration of the market and superior tools of governance available to the state, the situation is quite different. India's urban population went from 11% in 1991 to 31% by 2011. Pockets of severe deprivation remain, but the story of the average rural person is significantly different than earlier.

As much as 77% of the bottom quintile of the Indian population now owns mobile phones and 87.3% of all households have reported having access to electricity. At the same time, nearly 7% of the bottom quintile of the population also faces catastrophic health shocks that can wipe out over 20% of their annual household income. The poverty line, in terms of per capita income, remains at ₹32 per day in rural areas and 47 per day in urban areas.

The changing role of the state has been a key factor affecting the role of NGOs in India. On the positive side, health, education, and a host of other government services reach a far greater section of the population than before. Governments have enacted key legislation that created a legal framework for local governments and introduced a wave of rights-based entitlements. Many NGOs played an important role in conceiving and piloting activities that culminated in these laws.

India's urban population went from 11% in 1991 to 31% by 2011. Pockets of severe deprivation remain, but the story of the average rural person is significantly different than earlier.

Shifting landscape

Projects that used to rely on NGOs for last mile delivery have gradually moved towards local governments, or networks of self-help groups established by government programmes. The political impetus for this, in no insignificant measure, came from the proliferation of identity-based politics in the post-Mandal era.

In terms of the negatives, governments have tended to pit empowerment and entitlements against each other, and even as entitlement-based legislation is in place, the current political narrative doesn't appear to be in its favour. The same goes for rights activists, who have suffered from a crackdown on funds and their freedom to dissent.

The basic rights framework built over several decades of struggles (such as education, food, employment, and information) is increasingly being challenged, and key legislative measures to ensure these rights are being diluted through a combination of executive orders, amendments that erode their core characteristics, or by allowing bureaucratic apathy to rule the roost. Also, while local governments now see more funds passing through their bank accounts, there are several reports that their scope for intervention and discretion has been significantly curtailed.

There are numerous examples of NGOs that have grown rapidly to essentially become large-scale contractors of the government, or have adopted a set of targets and management practices that erode the organisation's social core.

Problematic response

As the external environment evolved, NGOs responded, but in ways that in the long term weakened them as institutions, and the whole sector as a voice of the poor and marginalised. NGOs allowed their mandates to be dictated by the nature of funds available. Several other development sector entrepreneurs adopted the social enterprise model, taking to heart, for instance, management guru C.K. Prahlad's bottom of the pyramid thesis.

There are numerous examples of NGOs that have grown rapidly to essentially become large-scale contractors of the government or have adopted a set of targets and management practices that erode the organisation's social core. In doing so, a common casualty is their ability and willingness to engage with the political economy, which is often at the heart of protecting or furthering the interests of the people they work with.

The other direction some NGOs took was to move away from implementation. This was a direct consequence of the state expanding its reach, and arguments being raised in favour of NGOs withdrawing from areas where they had been working for long. Some NGOs took up research and advocacy and settled into a role where they intended to be watchdogs of government programmes, and a few influential NGOs (as research agencies, think tanks and advocacy units) have been successful in this.

NGOs too were guilty of not putting in place sound systems, especially in human resources, and to a lesser extent, for financial management.

However, even the larger (and more influential) NGOs failed to come up with a widely accepted accountability framework. The sector demanded self-regulation (in terms of activities, and results, not funding), but was unable to put forward a coherent framework that could be used to measure them. Attempts to arrive at sector-wide standards were defeated by ego clashes, and some of these attempts were viewed as siding with the government.

NGOs too were guilty of not putting in place sound systems, especially in human resources, and to a lesser extent, for financial management. At times this was driven by donor pressure to cut administrative expenditure.

What next?

First of all, one needs to acknowledge that a simple narrative of state and market failures will no longer work. Gaps exist, but of a different nature. NGOs have to not only frame the new narrative around how these failures manifest themselves in our world today but also demonstrate an ability to design, pilot and implement bespoke responses to these failures. This calls for reforms targeting both, the NGO's mission and its organisation.

NGOs should focus on innovation and learning. They are far more valuable for their ability to experiment with approaches and promote learning from both successes and failures, not just at the organisation level but also at a sectoral level. The accountability framework that is currently missing needs to take shape. By doing this, they can seek to re-occupy the moral high ground without having to hide behind altruism when questioned on impact.

One needs to acknowledge that a simple narrative of state and market failures will no longer work. Gaps exist, but of a different nature.

By cultivating space for experimentation, learning, innovation, NGOs can continue to create models that both, a scale- and optics-hungry state and the efficiency-seeking private sector can adopt in the future. From the early days of micro-watershed development, biogas, community healthcare, micro-enterprises for rural livelihoods and sanitation, there are ample examples of this phenomenon. NGOs have also had significant success piloting and advocating initiatives that resulted in pro-poor legislations — whether in the area of women's rights or rural safety nets — and that reveals ways in which NGOs should seek to achieve long-lasting impact.

Scaling caveat

An important caveat is in order here. NGOs are regularly questioned on their ability to take programmes to scale. This is a red herring and one that NGOs must ignore, or at least, rethink. Scaling up is not the responsibility of any one NGO. They will have to not only implement, but also focus on transferring the design and implementation capability to more local, more cost-effective implementation teams on the ground — whether they belong to local governments or other smaller local community-based organisations. Scaling solutions require robust networks of organisations on the ground.

Refusing to be distracted by political pressure and lucrative funding opportunities, and instead focusing on a well-defined core mission requires strength of character and stamina. This requires a strong coalition of NGOs and donors built on mutual respect and openness. If this implies a deviation from the priorities of government, mainstream philanthropic foundations and donors, there will be fewer, or perhaps a different set of financial resources to work with.

NGOs are regularly questioned on their ability to take programmes to scale. This is a red herring, and one that NGOs must ignore, or at least, rethink.

Moving along this path will also help the sector redefine its human resource models. While high-quality professionals come at a price, knowledge and capabilities will have to be made more open-source if NGOs are to be successful in promoting external networks of learning and implementation agencies. Internally, for professionals working in NGOs, it is important that a clear career path exists right from the beginning, and NGO leaderships should demonstrate that these professionals growing up the ranks can and will occupy the corner rooms in NGOs.

This is part of the way forward. NGOs in India, seeking to adapt to the shifting Indian landscape, need to work with the state and markets, and at the same time, retain their difference. This is a critical reform or perish phase for NGOs as we know them. It will be interesting to watch how many NGOs today are up to this challenge.

Suvojit Chattopadhyay is a development professional currently based in Dhaka, Bangladesh with Adam Smith International. He earned his undergraduate degree in Economics from Shri Ram College of Commerce, Delhi, and masters' degrees from Institute of Rural Management, Anand (IRMA), India, and Institute of Development Studies (IDS), Sussex, UK. He has worked in India, Ghana, Kenya, Somalia, Bangladesh and Myanmar in a career spanning 12 years.

Views are personal.

This article was first published on VillageSquare.in, a public-interest communications platform focused on rural India.

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