Month: May 2020

Social Cognitive Theory (SCT) started as the Social Learning Theory (SLT) in the 1960s by Albert Bandura. It developed into the SCT in 1986 and posits that learning occurs in a social context with a dynamic and reciprocal interaction of the person, environment, and behavior. The unique feature of SCT is the emphasis on social influence and its emphasis on external and internal social reinforcement. SCT considers the unique way in which individuals acquire and maintain behavior, while also considering the social environment in which individuals perform the behavior. The theory takes into account a person’s past experiences, which factor into whether behavioral action will occur. These past experiences influences reinforcements, expectations, and expectancies, all of which shape whether a person will engage in a specific behavior and the reasons why a person engages in that behavior.

Many theories of behavior used in health promotion do not consider maintenance of behavior, but rather focus on initiating behavior. This is unfortunate as maintenance of behavior, and not just initiation of behavior, is the true goal in public health. The goal of SCT is to explain how people regulate their behavior through control and reinforcement to achieve goal-directed behavior that can be maintained over time. The first five constructs were developed as part of the SLT; the construct of self-efficacy was added when the theory evolved into SCT.

1. Reciprocal Determinism

This is the central concept of SCT. This refers to the dynamic and reciprocal interaction of person (individual with a set of learned experiences), environment (external social context), and behavior (responses to stimuli to achieve goals).

2. Behavioral Capability

This refers to a person’s actual ability to perform a behavior through essential knowledge and skills. In order to successfully perform a behavior, a person must know what to do and how to do it. People learn from the consequences of their behavior, which also affects the environment in which they live.

3. Observational Learning

This asserts that people can witness and observe a behavior conducted by others, and then reproduce those actions. This is often exhibited through “modeling” of behaviors. If individuals see successful demonstration of a behavior, they can also complete the behavior successfully.

4. Reinforcements

This refers to the internal or external responses to a person’s behavior that affect the likelihood of continuing or discontinuing the behavior. Reinforcements can be self-initiated or in the environment, and reinforcements can be positive or negative. This is the construct of SCT that most closely ties to the reciprocal relationship between behavior and environment.

5. Expectations

This refers to the anticipated consequences of a person’s behavior. Outcome expectations can be health-related or not health-related. People anticipate the consequences of their actions before engaging in the behavior, and these anticipated consequences can influence successful completion of the behavior. Expectations derive largely from previous experience. While expectancies also derive from previous experience, expectancies focus on the value that is placed on the outcome and are subjective to the individual.

6. Self-efficacy

This refers to the level of a person’s confidence in his or her ability to successfully perform a behavior. Self-efficacy is unique to SCT although other theories have added this construct at later dates, such as the Theory of Planned Behavior. Self-efficacy is influenced by a person’s specific capabilities and other individual factors, as well as by environmental factors (barriers and facilitators).

Limitation of Social Cognitive Theory

There are several limitations of SCT, which should be considered when using this theory in public health. Limitations of the model include the following:

• The theory assumes that changes in the environment will automatically lead to changes in the person, when this may not always be true.
• The theory is loosely organized, based solely on the dynamic interplay between person, behavior, and environment. It is unclear the extent to which each of these factors into actual behavior and if one is more influential than another.
• The theory heavily focuses on processes of learning and in doing so disregards biological and hormonal predispositions that may influence behaviors, regardless of past experience and expectations.
• The theory does not focus on emotion or motivation, other than through reference to past experience. There is minimal attention on these factors.
• The theory can be broad-reaching, so can be difficult to operationalize in entirety.

Social Cognitive Theory considers many levels of the social ecological model in addressing behavior change of individuals. SCT has been widely used in health promotion given the emphasis on the individual and the environment, the latter of which has become a major point of focus in recent years for health promotion activities. As with other theories, applicability of all the constructs of SCT to one public health problem may be difficult especially in developing focused public health programs.

Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals and institutions and how those decisions vary from those implied by classical economic theory.

Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. The study of behavioral economics includes how market decisions are made and the mechanisms that drive public choice. The three prevalent themes in behavioral economics are:

• Heuristics: Humans make 95% of their decisions using mental shortcuts or rules of thumb.
• Framing: The collection of anecdotes and stereotypes that make up the mental filters individuals rely on to understand and respond to events.
• Market inefficiencies: These include mis-pricing and non-rational decision making.

In 2002, psychologist Daniel Kahneman was awarded the Nobel Memorial Prize in Economic Sciences “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.” In 2013, economist Robert J. Shiller received the Nobel Memorial Prize in Economic Sciences “for his empirical analysis of asset prices” (within the field of behavioral finance). In 2017, economist Richard Thaler was awarded the Nobel Memorial Prize in Economic Sciences for “his contributions to behavioral economics and his pioneering work in establishing that people are predictably irrational in ways that defy economic theory.”

The field of behavioral economics blends ideas from psychology and economics, and it can provide valuable insight that individuals are not behaving in their own best interests.

Behavioral economics provides a framework to understand when and how people make errors. Systematic errors or biases recur predictably in particular circumstances. Lessons from behavioral economics can be used to create environments that nudge people toward wiser decisions and healthier lives.

Behavioral economics emerged against the backdrop of the traditional economic approach known as rational choice model. The rational person is assumed to correctly weigh costs and benefits and calculate the best choices for himself. The rational person is expected to know his preferences (both present and future), and never flip-flop between two contradictory desires. He has perfect self-control and can restrain impulses that may prevent him from achieving his long-term goals.

Traditional economics uses these assumptions to predict real human behavior. The standard policy advice that stems from this way of thinking is to give people as many choices as possible, and let them choose the one they like best (with minimum government intervention). Because they know their preferences better than government officials do. Individuals are in the best position to know what is best for them.

In contrast, behavioral economics shows that actual human beings do not act that way. People have limited cognitive abilities and a great deal of trouble exercising self-control. People often make choices that bear a mixed relationship to their own preference (happiness). They tend to choose the option that has the greatest immediate appeal at the cost of long-term happiness, such as taking drugs or overeating.

They are profoundly influenced by context, and often have little idea of what they will prefer next year or even tomorrow. As Daniel Kahneman (2011, p5) put this, “It seems that traditional economics and behavioral economics are describing two different species.” The latter shows that we are exceptionally inconsistent and fallible human beings. We choose a goal and then frequently act against it because self-control prevents us from implementing our goals.

Behavioral economics traces these decision errors to the design of the human mind. Neuroscientists argue that the mind consists of many different parts (mental processes), each operating by its own logic (Kurzban, 2011). Brocas and Carrillo (2013) note that the brain is best represented by an organization of systems that interact with each other. A key insight is that the brain is a democracy (Tononi, 2012). That is, there is no dominant decision-maker. Although the behavioral goal of an individual can be stated as maximizing happiness, reaching that goal requires contributions from several brain regions.

Behavioral economics attempts to integrate psychologists’ understanding of human behavior into economic analysis. In this respect, behavioral economics parallels cognitive psychology, which attempts to guide individuals toward more healthy behaviors by correcting cognitive and emotional barriers to the pursuit of genuine self-interest (Lowenstein, and Haisley, 2008).

Finally, behavioral economics suggests ways how policymakers might restructure environments to facilitate better choices (Sunstein, 2014). The focus on errors suggests ways that policymakers might restructure environments to facilitate better choices. For example, simply rearranging items that are currently offered within the school encourages children to buy more nutritious items (e.g., placing the fruit at eye level, making choices less convenient by moving soda machines into distant areas, or requiring students to pay cash for desserts and soft drinks).

In sum, the basic message of behavioral economics is that humans are hard-wired to make judgment errors and they need a nudge to make decisions that are in their own best interest. The understanding of where people go wrong can help people go right. This approach complements and enhances the rational choice model.

Nudge is a concept in behavioral economics, political theory, and behavioral sciences which proposes positive reinforcement and indirect suggestions as ways to influence the behavior and decision making of groups or individuals. Nudging contrasts with other ways to achieve compliance, such as education, legislation or enforcement.

The nudge concept was popularized in the 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness, by two American scholars at the University of Chicago: behavioral economist Richard Thaler and legal scholar Cass Sunstein. It has influenced British and American politicians. Several nudge units exist around the world at the national level (UK, Germany, Japan and others) as well as at the international level (e.g. World Bank, UN, and the European Commission). It is disputed whether “nudge theory” is a recent novel development in behavioral economics or merely a new term for one of many methods for influencing behavior, investigated in the sciences of behavior analysis.

The first formulation of the term and associated principles was developed in cybernetics by James Wilk before 1995 and described by Brunel University academic D. J. Stewart as “the art of the nudge” (sometimes referred to as micronudges). It also drew on methodological influences from clinical psychotherapy tracing back to Gregory Bateson, including contributions from Milton Erickson, Watzlawick, Weakland and Fisch, and Bill O’Hanlon. In this variant, the nudge is a microtargetted design geared towards a specific group of people, irrespective of the scale of intended intervention.

In 2008, Richard Thaler and Cass Sunstein’s book Nudge: Improving Decisions About Health, Wealth, and Happiness brought nudge theory to prominence. It also gained a following among US and UK politicians, in the private sector and in public health. The authors refer to influencing behaviour without coercion as libertarian paternalism and the influencers as choice architects. Thaler and Sunstein defined their concept as:

A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.

In this form, drawing on behavioral economics, the nudge is more generally applied to influence behaviour.

One of the most frequently cited examples of a nudge is the etching of the image of a housefly into the men’s room urinals at Amsterdam’s Schiphol Airport, which is intended to “improve the aim”.

Types of Nudges

Nudges are small changes in environment that are easy and inexpensive to implement. Several different techniques exist for nudging, including defaults, social proof heuristics, and increasing the salience of the desired option.

A default option is the option an individual automatically receives if he or she does nothing. People are more likely to choose a particular option if it is the default option. For example, Pichert & Katsikopoulos found that a greater number of consumers chose the renewable energy option for electricity when it was offered as the default option.

A social proof heuristic refers to the tendency for individuals to look at the behavior of other people to help guide their own behavior. Studies have found some success in using social proof heuristics to nudge individuals to make healthier food choices.

When an individual’s attention is drawn towards a particular option, that option will become more salient to the individual, and he or she will be more likely to choose to that option. As an example, in snack shops at train stations in the Netherlands, consumers purchased more fruit and healthy snack options when they were relocated next to the cash register. Since then, other similar studies have been made regarding the placement of healthier food options close to the checkout counter and the effect on the consuming behavior of the customers and this is now considered an effective and well-accepted nudge.

Application of Theory

Behavioral insights and nudges are currently used in many countries around the world.

1. Government

In 2008, the United States appointed Sunstein, who helped develop the theory, as administrator of the Office of Information and Regulatory Affairs

Notable applications of nudge theory include the formation of the British Behavioural Insights Team in 2010. It is often called the “Nudge Unit”, at the British Cabinet Office, headed by David Halpern.

Both Prime Minister David Cameron and President Barack Obama sought to employ nudge theory to advance domestic policy goals during their terms.

In Australia, the government of New South Wales established a Behavioural Insights community of practice.

In 2020, the UK government of Boris Johnson decided to rely on nudge theory to fight the coronavirus pandemic. Patrick Vallance, the UK’s chief scientific adviser, seeks to encourage “herd immunity” with this strategy.

2. Business

Nudge theory has also been applied to business management and corporate culture, such as in relation to health, safety and environment (HSE) and human resources. Regarding its application to HSE, one of the primary goals of nudge is to achieve a “zero accident culture”.

Leading Silicon Valley companies are forerunners in applying nudge theory in corporate setting. These companies are using nudges in various forms to increase productivity and happiness of employees. Recently, further companies are gaining interest in using what is called “nudge management” to improve the productivity of their white-collar workers.

3. Healthcare

Lately, the nudge theory has also been used in different ways to make health care professionals make more deliberate decisions in numerous areas. For example, nudging has been used as a way to improve hand hygiene among health care workers to decrease the number of healthcare associated infections. It has also been used as a way to make fluid administration a more thought-out decision in intensive care units, with the intention of reducing well known complications of fluid overload.

Each day, humans and animals rely on habits to complete routine tasks such as eating and sleeping. As new habits are formed, this enables us to do things automatically without thinking. As the brain starts to develop a new habit, in as little as a half a second, one region of the brain, the dorsolateral striatum, experiences a short burst in activity. This activity burst increases as the habit becomes stronger. A Dartmouth study demonstrates how habits can be controlled depending on how active the dorsolateral striatum is. The results are published in the Journal of Neuroscience.

In prior research at MIT, the senior author found that this burst in brain activity in the dorsolateral striatum correlated with how habitual a running maze task was for rats. The activity was found to be accentuated at the beginning and end of the maze run.

For this study, the researchers sought to manipulate this burst in brain activity in rats using a method called optogenetics. With this method, the neurons (brain cells) in the dorsolateral striatum, which have been found to be associated with forming habits, can be excited or inhibited using light. Optogenetics enables the brain cells to express a receptor that is sensitive to light, and is painless. A flashing blue light excites the brain cells while a flashing yellow light inhibits the cells and shuts them down.

Using maze running tasks, rats were trained to run in a cross-shaped maze. (There was only one rat in a maze at a time). The rats began in one of two starting arms and ran from one end of the cross and ran to the center decision point. They were trained to turn either left of right and run to the end, where a sugar pellet reward was waiting; only one arm of the cross was baited with the reward. As soon as the animals started the maze run and turned in the correct direction of where the reward was located, they received a sugar pellet reward.

After the rats had learned the maze training runs, the optogenetics component of using the flashing color lights to manipulate the dorsolateral striatum activity, was incorporated. When the cells in the dorsolateral striatum were excited for just a half a second as the rats initiated their runs, the rats would run more vigorously and habitually on the entire maze. The habit had been formed, once the rats ran to the center of the cross-shaped maze and turned immediately towards the direction of where the reward was located. The animals would no longer stop at the center to look around, once they knew where to go.

In contrast, when the cells where inhibited, the rats were slow and appeared to lose their habit altogether. Once they reached the center of the cross-shaped maze, they paused and would turn around a lot as though deliberating, before ultimately making their choice. Even more striking, the researchers also tested how habitual the animals were by changing the tasty reward to something not tasty. In this case, the excitation made the rats continue running by habit for the now unpleasant outcome, while the inhibition made the rats essentially refuse to run when there was no reward to gain from it.

When the researchers applied the light manipulations during the middle of the runs on another day, there was little effect. Once the rats had already set in motion the full sequence of behavior — run, turn and stop sequence -this habit appeared to dictate their actions, as if they were on auto-pilot.

“Our findings illustrate how habits can be controlled in a tiny time window when they are first set in motion. The strength of the brain activity in this window determines whether the full behavior becomes a habit or not,” explained senior author, Kyle S. Smith, an associate professor and director of graduate studies in the department of psychological and brain sciences at Dartmouth, whose lab focuses on the neuroscience of reward and action. “The results demonstrate how activity in the dorsolateral striatum when habits are formed really does control how habitual animals are, providing evidence of a causal relationship,” he added.

Gaining a better understanding of the specific role that the dorsolateral striatum plays in habit memory and other behaviors is critical. Damage to this brain area has been found to be associated with Parkinson’s disease, a neurodegenerative disorder that often affects body movement. In the study, the researchers explain how targeting the time window as to when habits are formed could be leveraged in “designing intervention strategies for humans with otherwise treatment-resistant compulsive behaviors.”

Organizations which are independent of government involvement are known as non-governmental organizations or NGOs. or non-government organizations. NGOs are a subgroup of organizations founded by citizens, which include clubs and associations which provide services to its members and others. They are usually nonprofit organizations. Many NGOs are active in humanitarianism or the social sciences. Surveys indicate that NGOs have a high degree of public trust, which can make them a useful proxy for the concerns of society and stakeholders. However, NGOs can also be lobby groups for corporations, such as the World Economic Forum.  According to NGO.org (the non-governmental organizations associated with the United Nations), “[an NGO is] any non-profit, voluntary citizens’ group which is organized on a local, national or international level … Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information.”

Russia had about 277,000 NGOs in 2008. India is estimated to have had about two million NGOs in 2009 (approximately one per 600 Indians), many more than the number of the country’s primary schools and health centers. The term “NGO” is used inconsistently; it is sometimes a synonym for a civil society organization, any association founded by citizens. NGOs are known in some countries as nonprofit organizations, and political parties and trade unions are sometimes considered NGOs. NGOs are classified by orientation and level of operation; orientation refers to the type of activities an NGO undertakes. Activities may include human rights, environmentalism, health, or development. An NGO’s level of operation indicates the scale at which an organization works: local, regional, national, or international.

NGO may be defined as an association having a definite cultural, educational, religious or social program registered with the Central Government. The full form of NGO is Non Governmental Organization, NGO’s are also referred to as Non Profit Organisations (NPO’s) sometimes.

NGO in India

NGO’s are nor “owned” by anyone and cannot distribute profits through the form of dividends as such. Whatever profits they may earn from economic activities are reinvested or spent on appropriate non-profit activities.

The typical sources of revenue for non-governmental organizations are donations, funding grants from unilateral and multi-lateral agencies, membership fees, miscellaneous sources and interest and dividends on investments.

The Following Forms of Associations May Act as NGO

(i) A trust of two or more persons as Trustees therein. The Trust may be registered under the Indian Trusts Act, 1982.

(ii) A company registered u/s . 25 of Companies Act, 1956. Usually clubs, associations of professionals get registered under this provision of the Companies Act, 1956.

(iii) A society of persons registered under the provisions of the Societies Registration Act, 1860 with the Registrar of the Societies, with aims and objects and a structure as laid down in the said Act.

(iv) A statutory body consisting membership of persons constituted by or under a stature, having a structure as laid down in the statute by which it is constituted.

(v) A charitable trust constituted under the Charitable Endowments Act, 1920.

(vi) Any other organization akin to a society.

Thus an NGO in India can either be registered as a trust,society or as a company under sec 25.

Types of NGO

NGOs may be classified by their orientation and level of operation.

1. Orientation

• Charities: Often a top-down effort, with little participation or input from beneficiaries, they include NGOs directed at meeting the needs of disadvantaged people and groups.
• Service: Includes NGOs which provide healthcare (including family planning) and education.
• Participation: Self-help projects with local involvement in the form of money, tools, land, materials, or labor
• Empowerment: Aim to help poor people understand the social, political and economic factors affecting their lives, and to increase awareness of their power to control their lives. With maximum involvement by the beneficiaries, the NGOs are facilitators.

2. Level of operation

• Community-based organizations (CBOs) are popular initiatives which can raise the consciousness of the urban poor, helping them understand their right to services, and providing such services.
• City-wide organizations include chambers of commerce and industry, coalitions of business, ethnic or educational groups, and community organizations.
• State NGOs include state-level organizations, associations, and groups. Some state NGOs are guided by national and international NGOs.
• National NGOs include national organizations such as YMCAs and YWCAs, professional associations, and similar groups. Some have state or city branches, and assist local NGOs.
• International NGOs range from secular agencies, such as Save the Children, to religious groups. They may fund local NGOs, institutions and projects, and implement projects.

Activities of NGO

The World Bank classifies NGO activity as operational and advocacy. NGOs act as implementers, catalysts, and partners. They mobilize resources to provide goods and services to people who have been affected by a natural disaster; they drive change, and partner with other organizations to tackle problems and address human needs.

NGOs vary by method; some are primarily advocacy groups, and others conduct programs and activities. Oxfam, concerned with poverty alleviation, may provide needy people with the equipment and skills to obtain food and drinking water; the Forum for Fact-finding Documentation and Advocacy (FFDA) helps provide legal assistance to victims of human-rights abuses. The Afghanistan Information Management Services provide specialized technical products and services to support development activities implemented on the ground by other organizations. Management techniques are crucial to project success.

1. Operational

Operational NGOs seek to “achieve small-scale change directly through projects”, mobilizing financial resources, materials, and volunteers to create local programs. They hold large-scale fundraising events and may apply to governments and organizations for grants or contracts to raise money for projects. Operational NGOs often have a hierarchical structure; their headquarters are staffed by professionals who plan projects, create budgets, keep accounts, and report to and communicate with operational fieldworkers on projects. They are most often associated with the delivery of services or environmental issues, emergency relief, and public welfare. Operational NGOs may be subdivided into relief or development organizations, service-delivery or participatory, religious or secular, and public or private. Although operational NGOs may be community-based, many are national or international. The defining activity of an operational NGO is the implementation of projects.

2. Campaigning

Campaigning NGOs seek to “achieve large-scale change promoted indirectly through the influence of the political system.” They require an active, efficient group of professional members who can keep supporters informed and motivated. Campaigning NGOs must plan and host demonstrations and events which will attract media, their defining activity. Campaigning NGOs often deal with issues related to human rights, women’s rights, and children’s rights, and their primary purpose is to defend (or promote) a specific cause.

3. Combined

NGOs may conduct both activities. Operational NGOs will use campaigning techniques if they face issues in the field which could be remedied by policy change, and campaigning NGOs (such as human-rights organizations) often have programs which assist individual victims for whom they are trying to advocacate.

4. Public relations

Non-governmental organizations need healthy public relations to meet their goals, and use sophisticated public-relations campaigns to raise funds and deal with governments. Interest groups may be politically important, influencing social and political outcomes. A code of ethics was established in 2002 by the World Association of Non-Governmental Organizations.

Structure of NGO

1. Staffing

Some NGOs rely on paid staff; others are based on volunteers. Although many NGOs use international staff in developing countries, others rely on local employees or volunteers. Foreign staff may satisfy a donor who wants to see the supported project managed by a person from an industrialized country. The expertise of these employees (or volunteers) may be counterbalanced by several factors: the cost of foreigners is typically higher, they have no grassroots connections in the country, and local expertise may be undervalued. By the end of 1995, Concern Worldwide (an international anti-poverty NGO) employed 174 foreigners and just over 5,000 local staff in Haiti and ten developing countries in Africa and Asia.

2. Funding

NGOs are usually funded by donations, but some avoid formal funding and are run by volunteers. NGOs may have charitable status, or may be tax-exempt in recognition of their social purposes. Others may be fronts for political, religious, or other interests. Since the end of World War II, NGOs have had an increased role in international development, particularly in the fields of humanitarian assistance and poverty alleviation.

Funding sources include membership dues, the sale of goods and services, grants from international institutions or national governments, and private donations. Although the term “non-governmental organization” implies independence from governments, many NGOs depend on government funding; one-fourth of Oxfam’s US$162 million 1998 income was donated by the British government and the EU, and World Vision United States collected $55 million worth of goods in 1998 from the American government. Several EU grants provide funds accessible to NGOs.

Government funding of NGOs is controversial, since “the whole point of humanitarian intervention was precise that NGOs and civil society had both a right and an obligation to respond with acts of aid and solidarity to people in need or being subjected to repression or want by the forces that controlled them, whatever the governments concerned might think about the matter.” Some NGOs, such as Greenpeace, do not accept funding from governments or intergovernmental organizations. The 1999 budget of the American Association of Retired Persons (AARP) was over $540 million.

3. Overhead

Overhead is the amount of money spent on running an NGO, rather than on projects. It includes office expenses, salaries, and banking and bookkeeping costs. An NGO’s percentage of its overall budget spent on overhead is often used to judge it; less than four percent is considered good. According to the World Association of Non-Governmental Organizations, more than 86 percent should be spent on programs (less than 20 percent on overhead). The Global Fund to Fight AIDS, Tuberculosis and Malaria has guidelines of five to seven percent overhead to receive funding; the World Bank typically allows 37 percent. A high percentage of overhead relative to total expenditures can make it more difficult to generate funds. High overhead costs may generate public criticism.

A sole focus on overhead, however, can be counterproductive. Research published by the Urban Institute and Stanford University’s Center for Social Innovation have shown that rating agencies create incentives for NGOs to lower (and hide) overhead costs, which may reduce organizational effectiveness by starving organizations of infrastructure to deliver services. An alternative rating system would provide, in addition to financial data, a qualitative evaluation of an organization’s transparency and governance:

• An assessment of program effectiveness
• Evaluation of feedback mechanisms for donors and beneficiaries
• Allowing a rated organization to respond to an evaluation by a rating agency

4. Monitoring and control

In a March 2000 report on United Nations reform priorities, former UN Secretary-General Kofi Annan favored international humanitarian intervention as the “right to protect” citizens from ethnic cleansing, genocide, and crimes against humanity. After that report, the Canadian government launched its Responsibility to Protect (R2P) project outlining the issue of humanitarian intervention. The R2P project has wide applications, and among its more controversial has been the Canadian government’s use of R2P to justify its intervention in the coup in Haiti.

Large corporations have increased their corporate social responsibility departments to preempt NGO campaigns against corporate practices. Collaboration between corporations and NGOs risks co-option of the weaker partner, typically the NGO.

In December 2007, Assistant Secretary of Defense for Health Affairs S. Ward Casscells established an International Health Division of Force Health Protection & Readiness. Part of International Health’s mission is to communicate with NGOs about areas of mutual interest. Department of Defense Directive 3000.05, in 2005, required the US Defense Department to regard stability-enhancing activities as equally important as combat. In compliance with international law, the department has developed a capacity to improve essential services in areas of conflict (such as Iraq) where customary lead agencies like the State Department and USAID have difficulty operating. International Health cultivates collaborative, arm’s-length relationships with NGOs, recognizing their independence, expertise, and honest-broker status.

Voluntary organization is a generic term used to refer to a specific type of organization, sometimes also referred to as nonprofit organizations, NGOs (non-government organizations), third sector organizations, and civil society organizations. Each of these terms reflects a slightly different emphasis. For example, the common definition of a nonprofit is ”an organization whose goal is something other than earning a profit for its owners. Usually its goal is to provide services” (Anthony & Young 1990). The definition emphasizes the nonprofit aspect of voluntary organizations but does not distinguish between other organizations that might not be profit seeking, such as state run or government organizations. Similarly, NGOs can technically refer to private for profit organizations as well as voluntary organizations, although the term is usually reserved for large international nonprofit organizations (which nonetheless may earn a profit from some aspects of their operations, such as, for example, the Bangladesh NGO BRAC).

The term voluntary, as the name implies, emphasizes the fact that citizens freely form these organizations, and thus they are autonomous, independent of both government and the market. The term is often taken to refer to the presence of volunteers within nonprofit organizations, although many voluntary organizations are more dominated by professional staff than volunteers. Finally, these organizations are often identified as being independent of both the state and the market, belonging to a third sector or to civil society. As some scholars have argued, the formation of voluntary organizations may occur as a response to the failure either of the market (in providing a low cost service) or of the state (in providing a service for minority needs) (Hansmann 1987). Indeed, service oriented nonprofits can be found in fields as diverse as health, education, sport and recreation, social services, and religion.

More recent scholarship has focused on the positive attributes of nonprofits, for example that voluntary organizations provide a ”school for democracy,” or a form of community mutual support as an expression of social capital (Putnam 2000). Many, though by no means all, voluntary organizations are embedded in social movements that generate new collective social responses to social, economic, or environmental issues (Melucci 1988). International scholar ship has also emphasized the variable and complex nature of voluntary organizations, which makes it difficult to identify a set of characteristics that serve as essential criteria for all such organizations.

Voluntary organizations vary greatly in size. The great majority in all countries are small, relying entirely on the voluntary labor of their members. These are grassroots organizations, often with strong traditional roots, but without any formal legal structure, particularly in traditional village societies. Other voluntary organizations are very large indeed, with a national or international reach, with thousands of volunteers and several hundred paid employees (Salamon et al. 1999).

Voluntary Organizations: Important Objectives and Functions

In a democratic, socialistic and welfare society, voluntary organizations are indispensable and they perform a number of functions for the welfare of its members, the development of the country and integration and solidarity of the society and nation.

(i) Man is by nature gregarious. The urge to act in groups is fundamental in him. People therefore form groups and associations voluntary for their benefit as also of others with a view to lead a full and richer life as is reflected in voluntary associations formed for promotion of recreational and cultural activities, social services, professional interests etc.

(ii) A pluralistic society with a democratic system requires multitude of independent, voluntary non-government associations as buffer between the individual and the state preventing the government from developing monopoly in various fields. Voluntary organizations involve citizens in noble affairs and avoid concentration of powers in the hands of government and thus serve as power breakers. Sharing of power by voluntary group restrain government from developing monopolistic approach to organisation of services.

(iii) They enable the individuals to learn the fundamentals of groups and political action through participation in the governing of their private organizations.

(iv) Organized voluntary action helps groups and individuals with diverse political and other interests, contributes to strengthening of feeling of national solidarity and promotes participative character of democracy.

(v) The state does not have the requisite financial resources and manpower to meet all the needs of its citizens. It can therefore have the responsibility of providing them minimum needs. The voluntary organizations by raising additional resources locally can meet uncovered needs and enrich local life.

(vi) Voluntary organizations also help the state in the area which are its exclusive responsibility but for which it has limited sources and perform such functions in much better way as compared to the state organizations.

Education for example is the responsibility of the state but the educational institutions being run and managed by voluntary organizations far outnumber the government institutions and excel the latter in quality of service also in view of the flexibility, ability at experimentation, pioneering spirit and other virtues.

Same is the case in respect of the provision of health services which is again the responsibility of the state. But the hospitals sponsored by philanthropic and charitable institutions are well known for better care and concern comparison to government owned hospitals.

(vii) Voluntary organizations thus have not only a role to play ii the field of accepted state responsibilities but they can also venture into new needs, work in new areas, unveil social evils and give attention to hitherto unattended and unmet needs. They can act as sappers and miners of unfolding development revolution.

They can function as reconnaissance squads. They can be fore-runners of change and anticipate and take action to make it less painful. They can work for progress development and consequently in course of time they can help the state in extending its activities over wider areas, thus raising the national minimum.

(viii) They provide avenues for activities to those persons why do not relish participation in the activities of the state through politics and government, but organize into voluntary groups thus making their talent, experience and spirit of service available to society in bringing about changes in it with a view to meeting the needs and aspirations of the people concerned and enriching the lives.

(ix) They act as a stabilizing force by welding together people with such groups as are not politically motivated and are no concerned about the fortunes of one or the other political party i capturing government power but are above party politics and are interested in other areas of nation building and thus contribute t national integration and concentration on non- political issues.

(x) They also perform the functions of educating the members and the public at large about the policies and programmes of the government about their welfare, their right and obligations and also are in a position to offer constructive criticism in respect of wrong policies and activities of governor without any fear and with courage of conviction obliging the government to make necessary adjustments to accommodate the viewpoints of the public likely to be affected by such policies and actions as has been the experience in the case of programme concerning scheduled tribes and environment conservation and preservation.

(xi) The endeavour to meet the special requirements of specialized interests and special groups such as the aged, the handicapped, women, children, etc. which cannot be adequately met by the state for reasons of financial scarcity. Age-India and Help age are voluntary organizations engaged in the welfare programmes of the aged.

Indian Council of Child Welfare is engaged in the promotion of child welfare. The Indian Curricle for Women Welfare is working in the field of women welfare. All India Ex-servicemen Welfare Association is concerned with the welfare of the ex-servicemen. Similarly thousands of voluntary associations exist to look after the interests of the groups they represent.

(xii) They are in a better position to function to their own satisfaction as also at that of their clientele for the reason that they can identify the needs of individuals, groups and community being close to them and formulate appropriate programmes to meet them, make necessary changes and modification in the light of the experiences gained in their implementation processes, involve people’s participation, raise necessary funds and win public confidence and cooperation by human touch, human warmth and sympathy which the bureaucrats in governmental organization are not capable of.

In sum, voluntary organizations main functions comprise giving concrete expression to the fundamental right of freedom of association, identifying the needs of individuals, groups and communities and initiating projects and programmes to meet them on their own or with the grant-in-aid of the government, sharing the responsibility of the state in providing minimum needs of the citizens, covering the areas of uncovered and unmet needs, preventing the monopolistic tendencies of the government, providing opportunities to people imbued with the spirit of service and dedication to organise themselves to promote public welfare, educating citizens about their rights and obligations and informing them about the policies and programmes of the government contemplated and initiated for their welfare, mobilising public support through publicity campaigns, raising functional resources through contributions and donations and finally organising activities of non-partisan and non-political nature for wellbeing of the society, enriching the lives of citizens and progress of the nation.

Types of Voluntary Organization

If you want to take on the role of owning, running and managing a local playing field, recreation ground, sports club or similar facility, it is important that you consider all the organizational options available, consider the different opportunities, risks and liabilities, and where appropriate take independent advice.

When setting up a community organization there are several possible legal structures. Deciding which type of organization is most appropriate is essential as each structure has its own advantages and disadvantages and will influence how far the asset can be used, developed and protected in the future.

The different types of organizations that can be used are grouped as follows: an Unincorporated Association, a Trust, a Limited Company, a Community Interest Company (a company for social enterprise) and an Industrial and Provident Society (a co-operative for social enterprise)

1. An Unincorporated Association

This approach may have been the initial structure for campaigning to protect a facility or a space in the first instance. It tends to involve a small group of members with short-term goals and is appropriate where there is no intention to employ staff or acquire property. An Unincorporated Association is relatively quick and cheap to set up. Unless an organization is applying for charitable status or registration as a Community Amateur Sports Club (CASC), no other agency need be involved. There are no fees to pay unless legal advice is sought on drawing up a constitution.

However, an unincorporated association has no separate legal existence and remains for most purposes a collection of individuals. Any property or contracts would have to be held by individuals on behalf of the group, and any legal proceedings taken against the group would, in reality, be against the individuals themselves, making them personally liable. The issues surrounding liability can be quite complex and you will need to be very clear about the risks involved.

2. A Trust

A Trust can be set up to manage land and property and to receive money for a particular purpose for the benefit of a wider community. They establish a formal relationship between the donors of money or property, the Trustees (normally three) who become the nominal owners of the trust property and the beneficiaries – the people who will benefit from the trust. Trusts can be set up quickly and cheaply. Trusts are non-democratic organisations as they do not tend to have a membership structure although trustees can agree to report regularly and consult with a wider group of people. Trustees can be personally liable for contracts entered into on behalf of the trust and are not protected from personal liability. You can, however, take out insurance to provide some financial protection.

3. A Limited Company

A company structure is an increasingly popular choice for voluntary and community organizations.

It is very appropriate if you intend to be managing staff, land, contracts and/or significant amounts of funding. A company limited by guarantee is an incorporated organization. This means that it has a separate legal identity distinct from that of its members. This legal structure limits the liability faced by Directors in the case of insolvency, except in cases of negligence or recklessness. This is the most flexible legal arrangement but the main constraint is that shares cannot be issued.

You will need to register the company with Companies House and company law must be abided by.

4. Community Interest Company (CIC)

A Community Interest Company is limited by guarantee or share issue with several added features such as a community interest test, an asset lock and a cap on dividends. The legal form gives greater flexibility than charitable status but emphasises public benefit over private profit.

Each CIC must specify the community that is intended to benefit from any profits made by the company (this could be as wide as all the residents of a defined geographical area) and the CIC regulator must approve this. The asset lock enables capital gains to be directed to the specified community and the dividends cap limits the amount of profit private investors can take out of the business.

5. Industrial and Provident Society (IPS)

An IPS is a trading organization that operates as a co-operative either for the benefit of its members or the wider community. An IPS is usually funded by share capital, but this takes a different form to limited companies. The value of the shares is fixed and does not go up and down with the value of the organization.  An IPS is the only vehicle that can issue shares on a low-cost basis. Buying a share confirms membership and decisions are taken on a one-member-one-vote basis (regardless of number of shares owned) and there is an upper limit on the cash value of shares that can be held by one individual. IPSs are regulated by the Financial Services Authority (FSA).

Third sector organizations’ is a term used to describe the range of organizations that are neither public sector nor private sector. It includes voluntary and community organizations (both registered charities and other organizations such as associations, self-help groups and community groups), social enterprises, mutuals and co-operatives.

Third sector organizations (TSOs) generally:

• Are independent of government. This is also an important part of the history and culture of the sector;
• Are ‘value-driven’. This means they are motivated by the desire to achieve social goals (for example, improving public welfare, the environment or economic well-being) rather than the desire to distribute profit; and
• Reinvest any surpluses generated in the pursuit of their goals. For this reason TSOs are sometimes called ‘not-for-profit organizations’. A better term is ‘not-for-personal-profit’. In many cases, TSOs need to make surpluses (or ‘profits’) to be financially sustainable.

TSOs can take a number of legal forms. Many are simple associations of people with shared values and objectives. Many have company status but with a not-for-personal-profit approach. Very many have charitable status or are community interest companies, industrial and provident societies or co-operatives.

In October 2010, the Government published its strategy to support charities, voluntary groups and social enterprise. It is committed to ensuring that charities, social enterprises and cooperatives have a much greater role in the runninng of public services.

Benefits that third sector organizations can give commissioners

Public services can gain a lot from working with third sector organizations. The benefits vary across policy and geographical areas. But some of the common themes are TSOs’:

• Understanding of the needs of service users and communities that the public sector needs to address;
• Closeness to the people that the public sector wants to reach;
• Ability to deliver outcomes that the public sector finds it hard to deliver on its own;
• Innovation in developing solutions; and
• Performance in delivering services.

TSOs also speak out for people and their needs to the public sector and to wider society. Such activity may be based on a local, drop-in advice service for people with unmanageable debt, right through to a charity’s national communications campaign (on child cruelty, for example).  Such work dovetails with TSOs’ services to the public.

India is the first country in the world to make corporate social responsibility (CSR) mandatory, following an amendment to The Company Act, 2013 in April 2014. Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger. Company having:

• Minimum net worth of rupees 500 Crore.
• Turnover up to “1000 Crore”
• Having a net profit of at least ‘5crore’

During any financial year, are covered by this provision.

The Company should constitute a Corporate Social Responsibility Committee as follows:

• The Committee shall consist of minimum 3 including 1 Independent Director, however in case of Private Company or the Company, which is not required to appoint Independent Director on board, or Foreign Company committee can be formulated with 2 directors.
• The CSR Policy shall be formulated in accordance with Schedule VII and the CSR Committee will be responsible for framing the policy, finalizing the amount to be spent on CSR, monitoring & implementation of the Scheme.
• If Company ceases to fulfill the eligibility criteria for three consecutive years, then the company is not required to comply until the company will meet the eligibility criteria once again.

Current CSR Practices of the Firms in India

Brief on CSR Activities as prescribed under Schedule VII of Companies Act, 2013

• Objective to efface the daily life segments including poverty, malnutrition and hunger while enhancing the standard of living and promoting the facets of better health care and sanitation.
• Introducing varied projects for Rural Development.
• Initiative to promote the different segments of education including special education and programs to enhance the vocation skills for all ages like children, women, elderly and conducting other livelihood enhancement projects.
• Aim to bring the uniformity in respect of different sections of the society to promote gender equality and other facilities for senior citizens and developing hostels for women and orphans and taking initiative for empowering women and lowering inequalities faced by socially and economically backward groups.
• Elevate the segment of flora and fauna to bring the ecological balance and environmental sustainability in respect of animal welfare, conservation of natural resources and ago forestry while maintaining the quality of air, water and soil.
• Enhancement of Craftsmanship while protecting art and culture and measures to restore sites of historical importance and national heritage and promoting the works of art and setting up of public libraries.
• Steps to bring worthy to the part of war windows, armed force veterans and their departments.
• Sports programs and training sessions to enhance the level of rural sports, nationally recognized sports, Paralympic sports and Olympics sports.
• Favoring to Prime Minister’s National Relief Fund and contribution to other fund set up by the central government to promote socio-economic development and welfare of the schedule castes and Schedule Tribes and for supporting backward classes, minorities and women.
• To uplift the technology of incubator that’s comes under academic institutions and which are approved by the Central Government.

Example

1. Tata Group

The Tata Group conglomerate in India carries out various CSR projects, most of which are community improvement and poverty alleviation programs. Through self-help groups, it is engaged in women empowerment activities, income generation, rural community development, and other social welfare programs. In the field of education, the Tata Group provides scholarships and endowments for numerous institutions.

2. Ultratech Cement

Ultratech Cement, India’s biggest cement company is involved in social work across 407 villages in the country aiming to create sustainability and self-reliance. Its CSR activities focus on healthcare and family welfare programs, education, infrastructure, environment, social welfare, and sustainable livelihood. The company has organized medical camps, immunization programs, sanitization programs, school enrollment, plantation drives, water conservation programs, industrial training, and organic farming programs.

3. Mahindra & Mahindra

Indian automobile manufacturer Mahindra & Mahindra (M&M) established the K. C. Mahindra Education Trust in 1954, followed by Mahindra Foundation in 1969 with the purpose of promoting education. The company primarily focuses on education programs to assist economically and socially disadvantaged communities. CSR programs invest in scholarships and grants, livelihood training, healthcare for remote areas, water conservation, and disaster relief programs. M&M runs programs such as Nanhi Kali focusing on girl education, Mahindra Pride Schools for industrial training, and Lifeline Express for healthcare services in remote areas.