The column below appeared in OPinionatED - Herald, Goa on 8th August 2008 --------------
NGOs: Where do you get your money from? By Sujay Gupta The fallout of the Ahmedabad and Bangalore blasts and the upping the ante on strengthening our defences against terrorism and terrorists, has had another very positive fallout. The Union Finance Ministry, has finally upped the ante in pushing for a legislation which will make it mandatory to scrutinize the sources of funds of each and every NGO operating in the country. While this has been a pressing need in its own right without any external factors, it must be borne in mind that the need for this legislation was sparked off after a report from the offices of the National Security Advisor, that some funds channelized to NGO's from abroad, were routed to terrorist organisations and even moré alarming, were being traded in the stock exchange. While these are serious charges, the demand for independent scrutiny of funding patterns for eight lakh NGO's in the country, obviously including our own Goan NGO's, couldn't have come a day earlier. Even if we push the terrorism angle on the backburner-purely for arguments sake- since the larger issue of transparency is equally important here, the veil of almost complete secrecy of the manner of funding and running these NGo's has to be lifted. No longer can NGO's get away, by saying that they are accountable only to their donors or funders. They are not. They are responsible to the civil society they work for or claim to work for. If NGO's demand accountability from government and corporates, if they lead agitations-rightly or wrongly, call for strikes and closure of factories, if they make lofty judgments-for instance, demand that all mines in Goa should shut down, or demand to know if requisite pollution control and forest permissions have been obtained, then they should subject themselves to similar scrutiny. All NGO's aren't illegal or fraudulent. But two important criteria that should govern them are that they are supposed to be independent from government and they are organisations not meant for making profit. They are also expected to be "value-based" But how do we check that? And who checks that? Since the Companies Act does not cover them, it is not required of them to file annual reports with the Registrar of Companies. They are not part of the Government and, hence, the Comptroller and Auditor General of India does not audit their accounts. The irony is that for long, people with impeccable credentials whose knowledge, expertise and depth on serious issues concerning our societies, have raised the need for a serious investigation into the sources of funds for NGO's. Surprisingly these voices have seldom been heeded by rabble rousing activists, quick to pressurize and blackmail corporates, but very slow in showing how their money came from. There years ago R. Vaidyanathan, then professor of Finance and Control of IIM Bangalore, one of the most respected educationists wrote an article in The Hindu entitled 'NGO's should practice what they preach'. I quote just one telling paragraph from that piece, "We would rather have NGOs create a self-regulatory body, which is a creature of their own and to which they are accountable. They can co-opt eminent citizens in this body. This becomes important since it is perceived that some of the NGOs ….are using the NGO banner for blackmailing well-functioning corporate and government entities" View this quote in the existing Goa situation, and you'll realise how true this is. Professor Vaidyanathan is no corporate czar or a mine owner, so there should be no harm for NGO's to take his views seriously, isn't it? Meanwhile, there is a need to gently nudge those who feel that NGO's are patron saints of society and deserve a hallowed position. Here are some facts. According to an audit report of the Union Finance Ministry, 80% of India's NGO's "operate from the homes of those who run it", close to the same percentage receive direct funding from abroad and a mere 8% are completely credible and fulfill all norms. This is a shocking indictment of the sector. Even if these figures are challenged and the percentages-for arguments sake- are reduced by half, the situation is still very alarming. While funds is an important issue, their functioning needs to be scrutinized as well. One standard tactic used by a leading Goan NGO, is to have influential people including well known architects on board or as close associates. The formula then is simple. Projects handled by these people are unchallenged, even though they may flout laws, violate CRZ rules and panchayat provisions while the same NGO openly campaigns against the same violations in other projects where their interested parties do not have an involvement. This is called selective targeting. For example a leading architect, who is member of this NGO, has built the sprawling bungalow of a well known heart surgeon of Delhi in Candolim. The house a 14 feet wall and its plinth goes up to the level of the first floor of the adjoining house. The property also clearly violates CRZ rules. The NGO has obviously turned a blind eye to these among others. The same NGO, it is learnt has now received Rs 3.5 crores for the restoration of an important heritage site close to Panjim, but there is no clarity on why this NGO was used to chanellize the funds. It's important to know the funding source and manner of distribution, since this restoration is a public activity. Most of the time, NGO's get away by being outside the ambit of the Right to Information Act. They themselves use the act to threaten, blackmail and pressurize, but refuse to subject themselves to the act The second administrative reforms commission tried to address this issue and it made the following recommendations regarding NGO's, "In the wake of outsourcing of functions which traditionally were performed by government agencies, it is desirable that institutions that enjoy a natural monopoly, or whose functions impinge on citizens' lives substantially, must come under the provisions of the RTI Act" This must be done without delay. Another strong argument in favour of NGO's being subjected to CAG scrutiny is that is many ways their functioning and their ills are similar to government departments. Establishment expenses tops the list of most expenses of NGOs, followed by rural development and construction and maintenance of schools and colleges. The number of persons employed in NGOs is not separately available though one estimate by PRIA (Society for Participatory Research in Asia) Research, published by Indianngos.com, indicates the figure at 19.4 million. These imply that the total number of government employees at nearly 20 million (Central, State and local bodies) and the number employed by NGOs are comparable. In other words, the NGOs are perhaps like top-heavy Government Departments whose developmental expenses are spent on salaries, telephone and travel — both domestic and international. Goan NGO's are no different if one investigates the number of foreign trips made by leading lights of these NGO's. Let us ask a clear question to leading Goan NGO's. Are you ready for this transparency and enhance disclosure practices, to be like Caesar's wife. After all regulation and full disclosure are the things, which you demand from corporates, and the Government. Hence, is it too much to expect the same from you? ------------------------------------ Sujay Gupta can be contacted at: <[EMAIL PROTECTED]> or check his website http://www.goaunltd.com/ =========
