2009/3/26 <[email protected]> > > > --- On Thu, 26/3/09, ashok _ <[email protected]> wrote: > > > From: ashok _ <[email protected]> > > Subject: Re: [silk] the business of charity!?! > > To: [email protected] > > Date: Thursday, 26 March, 2009, 1:29 PM > > On Tue, Mar 24, 2009 at 8:42 AM, > > Bonobashi <[email protected]> > > wrote: > > >There is also an unfortunate tendency to assume > > >that work here should be paid differently, on the > > >basis of voluntarism, thus scaring away young > > >people, most of whom are under enormous pressure > > >from their parents and family to show reasonable > > >social return on investment. It tends to become > > > > Its a bit difficult to justify equating salaries in NGOs > > with private > > sector jobs. > > Most NGOs i have seen carry huge administrative costs, so > > much so that > > the proportion of funds spent on administrative costs / vs > > / project > > implementation spending is sometimes ludicrous.... > > > > Secondly, if you have a private sector company -- if it > > isnt doing > > well it either goes bankrupt / closes down -- this is > > because there is > > a very clear definition in terms of what is the starting > > point (to > > manufacture / service a need etc..) and what is the ending > > point (not > > competitive, service not required anymore etc...). With > > NGOs, while > > there seems to be a clear starting point -- it is never > > clear when the > > ending point has been reached. > > > > Most NGOs start with a kind of charter - a statement > > describing why > > the organization has been started. What is perhaps needed > > is a clear > > identification of time-frames and goals -- and if those > > arent reached > > the organization is disbanded at that point because it > > clearly did not > > serve the purpose it was built for. > > From what I know of the social sector after a brief brush with it over a > period of slightly less than a year, what I have stated as a cause is what > you have re-stated as a result. > > Please consider: in a private sector organisation, there is a constant > paranoia about head-count; there is no encouragement to add numbers unless > the individuals concerned are able to add value to the efforts of the team > as a whole within a very short time of their joining the team. My experience > of NGOs has been that there are large numbers of incompetent and untrained > people milling around and getting in each other's way in the absence of > structures, processes and systems, and their salaries, pitiful though they > are, add to the disproportionate administrative costs that occur in this > sector. > > What I am advocating is a reduction in numbers of staff engaged, and an > increase in their competence and capability. > > In an ideal world, this increase in competence and capability would be > achieved by excellent training mechanisms and by the addition of hitherto > untrained or less-trained individuals to the work force. Instead large sums > of money are spent, and produce no result because they are going as salaries > of people who simply can't do what they are supposed to do. > > In a less than ideal world, therefore, the social sector is compelled > either to host these masses of non-performing people or to compete with the > private sector at salary levels which are frankly unaffordable, considering > that the social sector expressly does not set out to make money or to be > self-sufficient. > > This is still not the worst-case scenario. The social sector could be > drawing its personnel from the public sector. > > Therefore in this less than ideal world there is no short-term alternative > for hiring in competition with the private sector, at the salary levels > which will encourage talent to work in the social sector. In other words, at > salary levels which may not match, but which come close enough to give pause > to youngsters and make some of them take the pllnge; >
A few clarifications: *1. Charity regulation and oversight* All registered charities, both public trusts and Section 25 not-for-profit companies) are subject to greater oversight and regulation than their corporate counterparts, These mechanisms include reporting to the regional Charities Commissioners and the Home Ministry under the Foreign Contributions Regulation Act (FCRA). All tax exemptions, on the charities own revenues as well as those extended to donors, are subject to review and oversight by the Finance Ministry. These are in addition to the reporting and compliance requirements of any commercial entity by way of Income Tax, Sales Tax, Octroi, Customs, ESIC, Provident Fund, Shops and Establishment and other authorities. Those charities that raise resources outside India must, in addition, comply with local regulatory requirements in each country they operate in. In addition, all charities are, of course, accountable to donors who typically each have audit, reporting and compliance requirements. And those who raise their resources from the public must satisfy their donors that funds are being used both honestly and effectively if they are to enjoy continued support. There are sector initiatives towards greater accountability including the Credibility Alliance in India and the International Advocacy NGO Accountability Charter. A non-profit section to the Global Reporting Initiative is also currently under development. The regulatory framework also imposes serious constraints on building financial capacity within the sector by constraining the building of reserves and investment options as well as penalties against charities developing sustainable revenue streams through business-like activities. Finally, the current legal framework prevents mergers and acquistions and even makes winding up a defunct charity impossibly complex. * 2. Impact metrics* The programme:overheads cost ratio is IMO at best misleading and at worst irrelevant. It purports to measure efficiency but does not tackle effectiveness at all. It is eminently possible for a charity to manage to the desirable ratio in the way a teacher can teach to the test by: - only working in domains that are easily measurable e.g. providing health/education services or building infrastructure e.g. schools, hospitals. - configuring a donor portfolio skewed towards large institutional donors that reduces fundraising costs per rupee. - underinvesting in building organisational sustainability wrt financial and human resource sustainability, training, technology, research etc. - staffing biased toward volunteers, part-time employees and/or lower than desirable competencies. There are, regrettably, too few donors willing to support the very real costs of organisational investments and development of organisational capacity in the arena of accountability. Further, more sustainable change is achieved IMO by advocacy geared towards building communities' own awareness of their rights and facilitating grassroots organising to achieve those rights than by private substitution of inadequate public services. The impact of activities like these are, unfortunately, less easy to quantifiably measure. While the benefits of the Right to Information legislation are regularly lauded, for instance, funding for the movement that advocated for it was hardly easy to come by. A 2007 study of the Mid-day Meal Programme found that the best predictor of succesful outcomes in terms of birth-weight, maternal mortality, malnutrition, immunisation, school enrolment/dropout rates and corruption was community awareness of their entitlements under the scheme. Most donors, in my experience, would rather fund a private feeding/immunisation/non-formal education programmes than support the building of such awareness and/or community monitoring of the ICDS anganwadis paid for by their tax rupees. How would one have measured the impact of support to the anti-apartheid movement for example? Yet its key protagonists agree that their movement could not have achieved success in the time-frame it did were it not for a few enlightened donors who were willing to set aside considerations of measurability and efficiency. In times of disasters, natural or human-made, it has been clear to me that communities that have strong 'civil society' networks whether these take the form of self-help groups, mahila mandals, workers' collectives or social/religious associations are better able to cope with the immediate impact, better able to ensure efficient delivery of relief, and better able to bounce back than those who do not. Impact of this kind is seldom measured or accounted for. Efficiency is, in any case, a highly over-rated factor in assessing the health of a programme. Efficiency criteria in AIDS control programmes in India's North-East, for instance, dictated that commercial sex-workers and intravenous drug users would be entitled to free HIV/AIDS treatment due to their higher risks of transmission, whereas children and others were not. *3. Civil Society Goals* When civil society functions optimally it: - generates the basis for democracy - promotes political and corporate accountability - strengthens trust, reciprocity and social cohesion - develops and tests innovations abd alternate models for development - defends the rights of citizens and promotes citizenship Service delivery of the charitable kind is only one aspect of civil society. One that compensates for the failures of those paragons of efficiency and accountability - markets and states. - Ingrid
