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NGOs A Perspective

Dr.R. Vaidyanathan
Professor of Finance and
Control
Indian Institute of
Management
Bangalore
Vaidya@iimb.ernet.in
Prof.R.Vaidyanathan, IIMB, 2015

NGOs--Introduction
Traditionally, NGOs are known as
Voluntary Organizations (VOs) & Voluntary Agencies(VAs)
Recently as Voluntary Development Organizations (VDOs) or
Non-Governmental Development Organizations (NGDOs) or
Non- Profit Institutions (NPIs).
There are equivalent names for NGOs available in different
Indian languages; like in Hindi NGOs are called Swayamsevi
Sansthayen or Swayamsevi Sangathan.

Prof.R.Vaidyanathan, IIMB, 2015

Past-

The United Nations Development Programme (UNDP) India and the UN Volunteers
(UNV) programme organized a Forum in January 2006 at the UNDP office in New
Delhi, to discuss the issues relating to implementation of the UN Handbook on
Nonprofit Institutions (NPIs) in the System of National Accounts in India.

Representatives of Planning Commission and the Ministry of Statistics and Programme


Implementation (MoSPI) of Government of India, NGOs, UNV Headquarters, and the
Centre for Civil Society Studies of Johns Hopkins University, which is leading the effort
to implement the UN NPI Handbook in countries throughout the World, attended the
meeting.

In this Forum, the UN Resident Coordinator and UNDP India Resident Representative
stressed the need for implementation of UN Handbook on Nonprofit Institutions in order
to capture the contribution of NPIs to the national economy
Prof.R.Vaidyanathan, IIMB, 2015

Past-2

The National Policy on the Voluntary Sector, adopted in May 2007 [ presumably
under the guidance of the then National Advisory Council] pledges to encourage,
enable and empower an independent, creative and effective voluntary sector, with
diversity in form and function, so that it can contribute to the social, cultural and
economic advancement of the people of India.

It constitutes the beginning of a process to evolve a new working relationship


between the government and the voluntary sector, without affecting the autonomy
and identity of voluntary organizations (GoI/Planning Commission, 2007).

Prof.R.Vaidyanathan, IIMB, 2015

Past--3-Accordingly, it is expected that the enabling environment will be further


enhanced to encourage the development and active engagement of the nonprofit sector, including volunteerism, in the communitys affairs and
developmental efforts.
So we can say by the time of UPA2 the so called voluntary or NGO sector
has fully got ensconced into the decision making and fund collecting
activities.

Prof.R.Vaidyanathan, IIMB, 2015

Criteria / Activities
Two important criteria
they should be independent from government
Organizations not meant for making profit.
Activities involved from aging issues to corruption to human
rights to waste management.
Many are Church-related organization and others involve in human rights
issues as a civil society organization.

Prof.R.Vaidyanathan, IIMB, 2015

How many different ways to be an NGO


Types of Registration The main statutory laws governing the various types of registered nonprofit Organizations are:
A. Non-profit organizations created for the larger public good
1.The Societies Registration Act, 1860
2. The Indian Trusts Act, 1882
3. Public Trust Act, 1950
4. The Indian Companies Act (Section 25), 1956
B. Religious non-profit organizations
1. Religious Endowments Act, 1863
2. The Charitable and Religious Trust Act, 1920
3. Mussalman Wakf Act, 1923
4. Wakf Act, 1954
5. Public Wakfs (Extension of Limitation) Act, 1959

Prof.R.Vaidyanathan, IIMB, 2015

Some Facts

By 2009, a total of 33 lakh societies reported as Societies registered [CSO


Survey]

Of these, the State Directorates of Economics and Statistics [DESs] got information
about 22.58 lakh units

This means India has an NGO for every 535 people but one cop for 940 people,
[TOI Jan 06-2015]

But Central Statistics Office (CSO) could not trace lakhs of them. Of the roughly
22 lakh NGOs it tried to verify, only 6.95 lakh could be traced.

Prof.R.Vaidyanathan, IIMB, 2015

Any which wayNot known

These figures did not include non-profit organizations registered under


The Charitable and Religious Trust Act , 1920 which, if counted, would add a few
thousands to the number. Then there are non-profit companies under the Indian
Companies Act, 1956, and other laws that also help set up trusts.

The numbers also did not include many groups and associations - which in common
parlance are referred to as mass-based groups, usually operating at block and village
levels, at times federating into larger organizations for specific purposes or campaigns.

In some states, a study by PRIA and Johns Hopkins University suggested nearly 50
per cent of the total voluntary organizations in India were not registered under any
law.

Prof.R.Vaidyanathan, IIMB, 2015

Only 10% of 22 lakh NGOs file any returns: CBI

Only about 10 per cent of the over 22 lakh non-governmental organizations


scanned by the Central Bureau of Investigation, on the Supreme Courts directions,
file their annual income and expenditure statements with the authorities they are
registered with.

Only 50 of the 5,684 NGOs, in UTs- filed their balance sheets.

The Tamil Nadu and Telangana governments had not given any information to the
CBI on the NGOs functioning in these States and their financial details.

The court had expanded the scope of the petition and directed the CBI to file the
entire list of NGOs in the country registered under the Societies Registration Act.

Source:http://www.thehindu.com/news/national/only-10-of-22-lakh-ngos-file-returns-cbi/article6757607.ece

Prof.R.Vaidyanathan, IIMB, 2015

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No. of NGOs filing returns


State

No. of NGOs

No. of NGOs filed returns

Uttar Pradesh

548148

119000

Maharashtra

518437

77766

Kerala

360000

Punjab, Rajasthan & West


Bengal

370000

17089

Jammu & Kashmir

147

147

Source:http://www.thehindu.com/news/national/tn-refuses-to-share-data-on-ngos-with-cbi/article6757648.ece

Prof.R.Vaidyanathan, IIMB, 2015

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Maharajas among NGOsFCRA funded


Salient Features 2011-12
A total of 43527 Associations
22702 Associations reported a total receipt of an amount of Rs.11546.29
crore
Highest Receipt State
Delhi (Rs. 2285.75 crore)
Tamil Nadu (Rs. 1704.76 crore)
The highest receipt District
Chennai (Rs. 889.99 crore),
Mumbai (Rs. 825.40 crore)
Prof.R.Vaidyanathan, IIMB, 2015

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Maharajas among NGOsFCRA


funded
Salient Features 2011-12
Highest receipt - Associations
World Vision of India, Chennai, (Rs. 233.38 crore)
Believers Church India Pathanamthitta, Kerala (Rs. 190.05 crore)
Donor Countries
USA (Rs. 3838.23crore)
UK (Rs. 1219.02crore)
Foreign donors
Compassion International, USA (Rs. 183.83 crore)
Church of Jesus Christ of Latter day Saints, USA [Mormons]
(Rs.130.77 crore)
Source - http://www.mha.nic.in/fcra.htm

Prof.R.Vaidyanathan, IIMB, 2015

13

T.N. NGOs received maximum foreign


funds in 2013-14

In 2013-14, till November 14, the government received annual returns from 1,344 Tamil Nadu-based
NGOs disclosing that they had received about Rs.547 crore during the period.

Second in the list were those from Andhra Pradesh (1,022), which received a cumulative total of
Rs.480 crore from foreign sources.

In Kerala, 951 organizations filed returns disclosing receipt of Rs.385 crore, while 734 NGOs in
Maharashtra received Rs.378 crore.

As submitted in the Lok Sabha government statistics revealed that a total of 8,636 NGOs across the
country filed their returns, showing receipt of foreign donations to the tune of Rs.3,784 crore.

The amount is almost half of the foreign funding (Rs.10,963 crore) disclosed by 18,297 voluntary
organisations in 2012-13. Also, the government in 2011-12 received annual returns from 22,719
NGOs showing receipt of Rs.11,554 crore in foreign funding.

The maximum foreign donations of about Rs.1,107 crore in 2013-14 originated from the United
States. Germany stood second with Rs.518 crore and Rs.332 crore was received from the United
Kingdom.

Source:http://www.thehindu.com/news/national/tamil-nadu/tn-ngos-received-maximum-foreign-funds-in201314/article6634154.ece

Prof.R.Vaidyanathan, IIMB, 2015

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Chakravartys among MaharajasNGOs


RBI records say the international NGOs have not been registered with any
Govt agency
Bank Information Centre,
Avaaz, 350.org
Sierra Club
Greenpeace
Home Affairs Ministry - Freeze the flow of foreign funds to these four
non-governmental organizations.

Source:http://www.thehindu.com/news/national/funds-freeze-ngos-yet-to-getintimation/article6761015.ece)
Prof.R.Vaidyanathan, IIMB, 2015

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Type of Activities of NGOs


Age Care

Environment

Agriculture

Health

Animal Welfare

HIV/AIDS

Art & craft

Housing and Slums

Caste

Micro Finance

Children

Population

Cities

Poverty

Community Development

Rural Transformation

Culture and Heritage

Tribals

Disability

Waste Management

Disaster Management

Water

Education

Women
Others

Source: Indianngos.com
Prof.R.Vaidyanathan, IIMB, 2015

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Typical Forms of NGOs


Item

Type of NGOs

Advocacy: These NGOs advocate or campaign on issues or causes. They do not implement programmes/projests. PETA
advocate the cause of ethical treatment of animals

2.

Consultancy/Research organizations: They work on Social and Developmental Research and Consultancy

3.

Training/ Capacity Building organizations: Training is called capacity building by NGOs and some NGOs work on capacity
building of other NGOs

Networking organizations: They provide network for other NGOs in specific fields. AVARD works on networking NGOs in
rural development

5.

Mother NGOs: These are recipients of funds as well as givers. They have a work focus but instead of implementing projects
they identify projects and monitor, evaluate and build capacities of other participating NGOs. CRY is one example.

6.

Grassroots organization: They directly work with the community. In a sense all Mahila Mandals fall in this category.

7.

City Based organizations: They restrict their focus to cities. AGNI in Mumbai could be an example.

8.

National organizations: They have a national presence: CRY, Concern India etc

9.

International organizations: They are part of an international NGO. Like mother NGO they receive and disburse grants. CARE
and Oxfam could be examples.

10.

Self help Groups: They are formed by beneficiary communities. Typically women form these groups of ten plus members. In
rural AP and TN they are increasing in numbers. They are funded even by commercial banks for productive activities. In a sense
they are not typical NGOs.

11.

Religious NGOs: Religion based organizations, many affiliated to international Church groups.

Source: Indianngos.com

Prof.R.Vaidyanathan, IIMB, 2015

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Trend over last 10 years


Number of registered associations under FCRA
has gone up from nearly 20000 to 45000
Only half of them regularly file returns
Totally more than Rs. 100,000 crore have come
into the country

Prof.R.Vaidyanathan, IIMB, 2015

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Top Recipient Associations 2008-09 to 2011-12 (Rs crore)


TOP FIVE RECIPIENT ASSOCIATIONS
Foreign Contribution (Rs. in crore)
Associations

World Vision Of
India, Tamil
Nadu

Believers Church
India, Kerala

Rural
Development
Trust, Andhra
Pradesh

Indian Society
Of Church Of
Jesus Christ Of
Latter Day
Saints, Delhi
PUBLIC HEALTH
FOUNDATION OF
INDIA, Delhi

2011-12

Associations

233.38

World Vision of
India, Tamil Nadu

190.05

Believers Church
India, Kerala

144.39

Rural
Development
Trust, A.P.

130.77

130.31

Caruna Bal Vikas,


Tamil Nadu
Womens
Development
Trust, Andhra
Pradesh

2010-11

Associations

233.74

World Vision
of India, Tamil
Nadu

160.72

135.38

Rural
Development
Trust,
A.P.
Shri
Sevassubrama
nia Nadar
Educational
Charitable
Trust,
Tamil Nadu

96.44

Believers
Church India,
Kerala

72.75

Caruna Bal
Vikas, Tamil
Nadu

Source: Ministry of Home Affairs Foreigners Division, FCRA wing


Prof.R.Vaidyanathan, IIMB, 2015

2009-10

Associations

2008-09

208.94

World Vision
of India, Tamil
Nadu

192.3

151.31

Rural
Development
Trust,
A.P.

154.76

94.28

Mata
Amritanandma
yi Math,
Kerala

116.39

88.45

Jagadguru
Kripalu
Parishat
(Shyama
Shyam Dham),
Delhi

108.72

Believers
Church India

100.27

82.6

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Top Donor Agencies [Rs Crore ]


TOP FIVE DONOR AGENCIES
Foreign contribution (Rs. in crore)

Donors Name &


Country

2011-12

Compassion
International, USA 183.83

Donors Name
& Country

2010-11

Compassion
International,
USA

99.2

Donors Name
& Country
Gospel for Asia,
USA

2009-10

Donors Name &


Country
World Vision
International USA

232.71

2008-09

705.52
Gospel for Asia,
USA

The Church of
Jesus Christ of
Latter day Saints,
USA

130.77

HCL Holdings
Private Ltd.,
Mauritius

69.98

Fundacion
Vicente Ferrer,
Barcelona,
Spain

228.6

595.91
Foundation Vicent
E Ferrer Spain

Kinder Not Hilfe


e. V ( KNH ),
Germany

SOS Kinderdorf
International,
Austria

51.76

Action Aid,
UK

43.25

Population
Service
International ,
USA

62.66

World Vision
Global Centre,
USA

61.34

Compassion
International,
USA

197.62

131.57

458.7

Shyam Shyam
Dham Samiti,
India

358.92

Source: Ministry of Home Affairs Foreigners Division, FCRA wing

Prof.R.Vaidyanathan, IIMB, 2015

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Top Five Purposes


RECEIPT AND UTILIZATION OF FOREIGN CONTRIBUTION
TOWARDS TOP FIVE PURPOSES
Foreign Contribution (Rs. in crore)
PURPOSE

2011-12

Rural
Development
.

945.77

Welfare of
children.
Construction
and
maintenance
of school /
college.

Research.

Establishmen
t of Corpus
Fund.

929.22

824.11

539.14

507.89

PURPOSE
Establishme
nt Expenses
Rural
Developmen
t

Welfare of
Children
Construction
and
maintenance
of
school/colleg
e
Grant of
stipend
/scholarship/
assistance in
cash and
kind to
poor/deservi
ng children

2010-11

PURPOSE

1337.15

Establishmen
t Expenses

Establishment
1482.58 Expenses

1330.35

863.12

Rural
Development

Rural
944.13 Development

1111.23

745.24

Welfare of
Children

Welfare of
742.42 Children

780.58

Construction and
maintenance of
630.78 school / college.

662.86

681.4

458.13

2009-10

Construction
and
maintenance
of school /
college.
Grant of
stipend
/scholarship/
assistance in
cash and
kind to
poor/deservi
ng children

PURPOSE

Relief/Rehabilitatio
n of victims
of natural
454.7 calamities

2008-09

429.08

Source: http://mha.nic.in/fcra.htm; FCRA Annual Report 2008-09 Ministry of Home Affairs; New Delhi

Prof.R.Vaidyanathan, IIMB, 2015

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NGOs as Investment Bankers !!

Organizations gain - Rs. 150 Crore by way of interest each year.

Organizations gain - Rs. 600 Crore by way of Return on Investments each year.
Thus, they are likely to have invested around Rs. 6000 Crore in Fixed Deposits
etc.

Quite a bit of intra-India flows of FCRA-derived funds take place.

A significant chunk of funds to mini-NGOs comes from mega- NGOs (what can
be called-Control-NGOs)and the total magnitude of such intra-India fund flows
is around Rs. 1200 Crore p.a.

Source:http://sighbaboo.blogspot.in/2014/07/intra-india-fund-flows-interest-earned.html

Prof.R.Vaidyanathan, IIMB, 2015

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Purchase of lands

Year after year, around Rs. 50 Crore comes from abroad to purchase land in India

In 2011-12 & 2012-13, the amounts are unusually large, due to increased influx of funds
for this activity for an Organization whose FCRA registration is in the Delhi sequence,
but which is located in Bangalore. It is called "Indian Society Of Church Of Jesus Christ
Of Latter Day Saints", #493, Anjali Plaza, C.M.H. Road, Indiranagar, Bangalore,
Karnataka - 560038. Their activities in India can be learnt from their website
http://lds.org.in/districts-in-india-bangalore-mission . Their FC6 returns for the year
2011 and 2012 are here and here respectively.

An organization located in a given State need not spend the foreign funds it receives in
the same State.

Summary : The meek shall inherit the Earth.

Source:http://sighbaboo.blogspot.in/2014/07/towards-purchase-of-land.html

Prof.R.Vaidyanathan, IIMB, 2015

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"Purchase of Land Calculation

How do we calculate this amount? Well, as usual, by studying the FC6 return filed by the
Indian NGOs every year with the Ministry of Home Affairs. There are approximately
22000 such returns (one per NGO) filed each year which are available at
http://fcraonline.nic.in/fc3_amount.aspx .

Let us learn this process through an example. Consider Jeevan Jyoti Charitable Society
(JJCS), Jeevan Jyoti Ashram, Shivpuri, Madhya Pradesh. Its FC6 return for the year
2012-2013 can be found at: http://fcraonline.nic.in/fc3_verify.aspx?
RCN=063510004R&by=2012-2013.

Just as we have put a red rectangle around "Purchase of Land" in the FC6 return of JJCS,
we shall do likewise in the returns of all the NGOs, wherever this purpose is stated.

Source:http://sighbaboo.blogspot.in/2014/07/towards-purchase-of-land.html

Prof.R.Vaidyanathan, IIMB, 2015

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Religious Denomination - Specified


22044 organizations from 31 States have filed returns so far
for 2011-12. 19809 Organizations from this set are located in
just 20 States which are of interest to us. Among them, 4855
of them have declared their religious denomination of that
4193 are Christian [2011-2012]
Total foreign funds received by such Christian organization
was Rs.3274 crore out of total 10652 crore received in 201112 [based on FC6 returns].

Prof.R.Vaidyanathan, IIMB, 2015

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Donors to FCRA-NGOs Word clouded (State-wise)


We also learnt about subtle, but non-negligible differences in
the sources of funds to different States. For instance, Kerala's
sources have a largely Catholic flavor, Tamil Nadu has a
Western Europe (& Scandinavian) flavor while Andhra
Pradesh (& Telangana) have a more North American one. The
evangelical stamp in all these remittances though, has been
unmistakable.
Source:http://sighbaboo.blogspot.in/2014/11/donors-to-fcra-ngos-wordclouded-state.html

Prof.R.Vaidyanathan, IIMB, 2015

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Word Clouds for Kerala

Word Cloud of Full Names of Foreign Donors


Source: http://sighbaboo.blogspot.in/2014/11/donors-to-fcra-ngos-wordclouded-state.html

Prof.R.Vaidyanathan, IIMB, 2015

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Word Clouds for Kerala

Word Cloud of words in Names of Foreign Donors


Source: http://sighbaboo.blogspot.in/2014/11/donors-to-fcra-ngos-wordclouded-state.html

Prof.R.Vaidyanathan, IIMB, 2015

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Need to have a commission on NGOs &


scrap FCRA Act

Non-reporting
Funds to harvest souls/plant the church
Social conflicts
Experience of Violet/Orange type revolutions helped by
foreign funded NGOsGlobally
How long we will be white mans burden
They are not NG and mainly for politics
Scrap FCRA and save the Republic-

Prof.R.Vaidyanathan, IIMB, 2015

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