Importance and Social responsibility of NGO’s

A non-governmental organization (NGO) is an organization that is neither a part of a government nor a conventional for-profit business. Usually set up by ordinary citizens, NGOs may be funded by governments, foundations, businesses, or private persons. The existence of NGOs is proving to be a necessity rather than a luxury in societies throughout the modern world. the inability of the government alone to create just and sustainable societies is persuasively demonstrated throughout history. Prompted by the inadequacies of the state, citizens across the globe have developed organizations of civil society NGOs to help address a wide variety of social needs.

NGOs have three primary roles in advancing modern societies. First, NGOs can facilitate communication upward from people to the government and downward from the government to the people. Communication upward involves informing government about what local people are thinking, doing and feeling while communication downward involves informing local people about what the government is planning and doing. Secondly, NGOs provide opportunity for the self-organization of society. NGOs enable citizens to work together voluntarily to promote social values and civic goals, which are important to them. They promote local initiative and problem solving. Through their work in a broad array of fields environment, health, poverty alleviation, culture & the arts, education, etc. NGOs reflect the diversity of society itself. They also help the society by empowering citizens and promoting change at the “grass roots”. Thirdly, in some cases, NGOs become spokespersons for the poor and attempt to influence government policies and programs on their behalf. This may be done through a variety of means ranging from campaigning and pilot projects to participation in public forums and the formulation of government policy and plans. Thus, NGOs play roles from advocates for the poor to implementers of government programs; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators.

NGOs have a clearer link to a guiding purpose, the greater good. They actually take up the responsibility of fulfilling moral and social needs that ought to be taken by the government. After all, there’s more happiness in giving than receiving; NGOS truly embody this thought.

Along with social enterprises, microfinance institutions and donors, corporations play a large role in raising money and resources for NGOs. Many international corporations can today rival entire nations when it comes to raising resources and influence in both India and international territories.

 In the last four years, Corporate Social Responsibility (CSR) in India has acquired new impetus with the Companies Act 2013. The Act defines that companies with a net worth of Rupees 500 crores or more, or a turnover of Rupees 1,000 crores or more, or earning a net profit of Rupees 5 crores or more must spend a minimum amount on corporate social responsibility.

CSR: support charities to fulfil legal obligation while generating goodwill

For many of India’s most loved brands, ‘giving back’ is not about fulfilling this legal obligation of having to donate to charity, but generating goodwill in their respective communities. These are times when CSR and NGOs go hand-in-hand. Companies, therefore, must spend in areas like literacy, women empowerment, environment, water, sanitation, child rights etc. Most companies around the world allocate 100% of their resources before they consider the need of CSR. The same holds true for India, and even after allocating CSR funding, and engaging employees with a mission of social good, companies struggle with their project’s sustainability.

NGO intervention in corporate social responsibility

Many companies simply do not have the bandwidth (employees, consultants and supervision) to undertake consistent CSR implementation. These companies not only need to spend on CSR, but also on CSR training for their employees, or adding manpower dedicated to CSR capability. NGO’s in India pitch a streamlined, customised solution to these corporations. For NGOs, corporates are not only a source of consistent funding but also access to strategic resources. An IT giant, for example, can provide technology, processes, and support for educational initiatives.

A look at India’s NGO sector

India possibly is home to the world’s largest number of active not-for-profit NGOs. At last count, India had 31 lakh NGO – one NGO for about 400 Indians. With the boom in CSR funding, this number can cross 40 lakh – considering that there are thousands of public and private sector companies worth Rs.15,000 to 18,000 crores annually. This number doesn’t even include India’s actual number of NGOs, as many aren’t formally registered under the Societies Registration Act 1860, or any other Acts pertaining to non-profit organisations.

 How does a company identify the right NGO for CSR intervention?

With this veritable ocean of NGOs, it isn’t easy to pick the right one for a company to engage in CSR intervention. Companies not only must allocate funds, but also work with the NGO on CSR interventions. This requires the need for effective monitoring and evaluation mechanisms in place. Many large corporates, like Godrej, Reliance, Wipro, Infosys, Tata, and the Birlas have their established their own Foundations and Trusts to achieve this.

 It is critical for a company to rate an NGO on parameters while shortlisting one for CSR implementation.

• Years in operation

It is important for a corporate to work with an NGO that has demonstrated years of experience and reliability. During this time, it must have mobilised resources, infrastructure and people for a social cause.

• Geography

Companies should preferably look for an NGO near the project area. This not only ensures easier logistics, but also an intimate understanding of the local needs, geography, language, culture etc. The NGO preferably must situate offices or centres with connectivity and other resources in these locations, to efficiently execute projects.

•  Reputation

Transparency, accountability and measurable change in a social welfare context are how an NGO’s reputation can be measured. This gives an NGO credibility, making it trustworthy of using corporate assets and funding for CSR goals.

• Certification (e.g. filing for donation tax return)

Certification allows corporates to assess if an NGO complies with legal norms, as legal issues can compromise CSR implementation. Certification includes Income Tax exemption, FCRA, service tax, and also proper internal documentation in case an audit is requested.

• Relevant experience

An NGO must have shown work in projects relevant to the corporate’s CSR goals. Coca-Cola India, for example, devotes a substantial amount of CSR efforts to water sustainability, conservation, and sanitation. These projects must be corroborated with completion certificates from clients.

• Leadership

The NGO’s leadership must be well-known promoters, with no legal proceedings or controversies to their name.

•  Credentials

An NGOs credentials can also be ascertained via certificates, awards, news coverage, and membership of NGO and corporate bodies like CII, Chamber of Commerce etc.