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Indian NGOs receiving foreign funds campaigning against government policy is causing clamour in India right now. Prime Minister Manmohan Singh, usually a taciturn man, lashed out at foreign agencies dabbling in Indian policy. This is not a first. In 1976 at the height of the emergency government of India, read Mrs. Indira Gandhi, brought in the Foreign Contribution (Regulation) Act, 1976 that severely restricted NGOs from accessing foreign funds. She was sure that some of her opponents were funded by external agencies. A variant of that Act controls foreign funds to NGOs even today.

The outburst from the PM has upset a section of population which does not see any harm in that and has criticised the PM. In a democratic set up there is definitely a case for civil society getting involved in formulation of government policy.  They definitely have a mandate to do so and it is the responsibility of the government to ensure that the space for civil society dissent / contribution remains unrestricted.  To the best of my knowledge, there is space in India for dissent and in fact one of the critical role of media and civil society is to ensure that it remains that way.

However, I too am not a fan of NGOs raising money abroad for advocacy work in India.

  1. India is a sovereign country and, as far as possible, policy formulation should be the exclusive prerogative of her government and civil society.
  2. I am not sure that foreign analysts, governments and donors will support policies that are good for India. I am also not sure that Indian NGOs always understand this though any student of international aid will know that aid always comes with strings attached.

Then why do NGOs in India secure foreign funding for advocating policies?

One reason is that fund raising in India for softer interventions like advocacy can be a nightmare. I remember a discussion on a blog about high fund raising costs of Oxfam India. The blog provoked a response from the Oxfam India CEO in which she mentioned a disturbing statistic – For a single, average  donation of Rs. 2850, a typical fundraiser has to meet about 100 people. This for an NGO that has excellent credibility round the world and especially in India where it has supported a large number of very important social development initiatives. I find both facts intolerable – the small average donation size and the success rate. It is appalling how little and how seldom the rich donate. Of course sudden impact humanitarian crises like earthquakes, floods and Tsunami do tend to attract a generous response. However, ‘regular giving’ even for emergencies like drought has few takers. Fund raising is easier for ‘hardware’; schools, parks, crèches, dispensaries, ambulances etc and much more difficult for softer initiatives; raising awareness, building leadership, campaign etc. Is it so because hardware has a visibility? This, as Oxfam India has found out and reported, increases the transaction costs of raising money in India.

A second reason is that local NGOs rarely reach out to local people for funds or other resources. I have never really understood the reason for that. Is it because

    • One had to answer more questions to get the money? Show results? Become more accountable?  Talk to lots of people to get relatively little?
    • Or because it is easier & preferable to write a proposal and get relatively large quantum of funds from a foreign donor to whom accountability meant a periodic report, a rare visit and a project evaluation?

Third, corporate India which spends millions on lobbying for policies that favour them, rarely show social responsibility in supporting NGOs that lobby for socially relevant policies. Most corporate entities prefer to support initiatives in their ‘catchment’ area; close to the factory, reaching out to workers and their families. A lot of these funds go to education and health services for the blue-collars workers and their families. No harm in this one supposes since it does help build equity. However, this support is normally at the bottom of the priority list and any shock is enough to turn off the tap.

The unhappiness about foreigners trying to influence policy is understandable. The reaction to that is NOT to escalate the stakes and talk of shrinking civil society space. It is for NGOs in India to raise funds in India to influence policy. Then no one can complain. Surely India has a large number of wealthy people who can afford to fork out? Will they?