Autumn Issue - 2013

Smile Foundation


Economic patterns close old doors, new ways open for grassroots NGOs

The growth of the non-profit sector in India, in the last two decades, has been phenomenal. But accelerated development soon reaches a stagnant point if it is not sustainable. As the demand for NGOs is rising in the country, owing to the slow pace of poverty reduction and a backlog of social deprivation; it is combated by a plethora of challenges that have reared their head in the past few years.

From relief services to educational initiatives, from healthcare projects to housing organizations, grassroots NGOs work in different spheres that touch the daily lives of marginalized communities across the country. Engaging directly with the people, these NGOs are able to participate in the thought-making process of the communities they work with, and thus have the capacity to bring about positive changes.

Realizing this potential, many genuine grassroots NGOs have been doing commendable work with the underserved communities. However, despite this many stand on the verge of shutting down. Their good intentions and hard work are stymied by tough internal obstacles – from unprepared leadership to organisational anomalies, from inadequate resources to an inability to communicate effectively with their target audience.

Funding being the blood that pumps life into their operations, resource crunch is one of the biggest challenges faced by grassroots organizations. Resources by NGOs are garnered from various sources – international grant, government schemes, corporate support and individual donation. It is believed that the first of these is the major contributor to the resource pool of the development sector, but this might not be today’s reality.

In November 2009, at a forum in New York, Paul Light, a professor of public service at New York University, predicted that “at a minimum” more than 100,000 non-profit organizations would be wiped out in the next couple of years, due to the budget deficits of the American government, what with the nine billion dollar non-profit sector in USA shrinking to a four billion one, in just an year. In 2010, the European Union fell short of its development aid targets by 15 billion Euros, according to a report released by the CONCORD coalition of advocacy organizations.

True, the last decade witnessed the growth of many NGOs with support from international organizations and various governments. This period however is already in the receding stage, with most of these countries like the US and UK busy addressing their own economic woes since the economic downturn of 2008-09.

Due to weaning political influence, in the face of the rise of the Eastern and Southern resource-rich nations, these countries no longer have the same ability or priority to support NGOs by providing core funding to tackle global sustainability issues.

Moreover, owing to the worldwide success of Indian companies and the double digit GDP growth of past years, the global perception about India has changed considerably. India is no longer viewed merely as a developing country, but rather as an emerging market leader. As major donors concentrate more on dealing with countries in states of emergency; India no longer makes it to the priority list.

Around 24 international funding agencies have upgraded India from ‘poor’ or ‘developing’ country to a ‘developed nation’ on the basis of the projections of the Central and State governments. The ground reality however is different. Business growth has been substantial in the country in the recent past being demonstrated by the acquisition of big companies, dependable global footprints in the service sector and empowered human resources. But the wealth being earned has not proportionally contributed to the development ecosystem. The trickling down process is gradual, as has been the case with numerous other countries.

Representatives from grassroots NGOs attend Empowering Grassroots, in New Delhi

Private sector companies, one of the biggest donors in the developed world, are yet to wake up to the phenomenon of charity and philanthropy in India. Indian companies spend less than 1% of their annual profits on such activities against 1.5% to over 2% spent by their UK and the US-based counterparts, says a 2009 study by an international NGO. As such, the grassroots NGOs are left languishing, as resources from both outside and within the country dry up.

The society should understand how much community-based nonprofits can achieve, but also how vulnerable they are to any number of economic and policy-related obstacles occurring from the organizational level all the way up to macro variations in national and international economies.

It is imperative that grassroots NGOs recognize these possibilities and diversify their sources of funding accordingly, to strive for their sustainability. They must begin to develop at least some degree of self sufficiency if they are to have any longterm plans and bring about any lasting change. These NGOs require innovations at the core strategic and organizational levels to sustain their activities. Unexplored avenues need to be discovered with a new mind set and approach.

But unfortunately, most grassroots organizations are unable to adapt themselves to prevailing trends in development and in public spending when planning for the future and have thus developed a dependency syndrome towards external aid. Most NGOs have volunteers with good intentions, but poor management expertise. Size, scale and structure are other areas of concern for them. Also, very little is done to support and encourage genuine grassroots initiatives in our country, especially in making them self-sustainable.

Smile Foundation, believing in the ability of grassroots NGOs to bring real change in the community, works towards empowering and enabling them, through its national level capacity building programme, Empowering Grassroots. Genuine grassroots NGOs are identified from all over the country and trained to bring excellence, good governance, accountability and sustainability at the community level.

Many tailor-made methods on various aspects of capacity building and empowerment such as effective leadership for development & strengthening, 5-C Model of building organizational competencies, involving local support for sustainability, better fund utilization, meeting the expectations of donors, good fundraising practices and effective communication with the stakeholders are deployed as part of the programme. Capacities of 500 grassroots NGOs have been built under Empowering Grassroots in the last two years.

The way ahead is not easy. There is no doubt that the international funding will slow down substantially in the coming days. It is always inversely proportional to the relative growth of a country. Innovative planning and building an understanding with the development stakeholders is the way forward for the non-profit sector. Large-scale organizations have already welcomed the birth of social ventures.

As the new Companies Act, 2013 comes into force; a step forward has been taken towards encouraging the corporate to share a part of their profits for development. An imperative ally in achieving the developmental objectives, NGOs must realize that the need of the hour is not campaigning against but collaborating with companies—and this hybrid approach is likely to intensify. Grassroots NGOs need to form the key bridge between business, government, and society to be able to stand strong and bring real, sustainable change.

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