Can NGOs and Corporate meet midway?
By Soma Chakraborty
According to an ASSOCHAM report, 67% companies in India have partnered with NGOs to undertake their CSR projects. With an estimated 32 lakh NGOs operating in the country, one can assume that it is a win-win situation for both the corporate and the NGOs to fulfil the CSR obligations as mandated by the Government. However, the reality is in stark contrast. Experts opine that over the years, a huge trust deficit has developed between NGOs and corporate. What went wrong? In pursuit of answers, The Bridge recently organised a panel discussion on ‘Bridging the trust deficit between NGOs and the Corporate’ at the India International Centre, Delhi. Chaired by Amod Kanth, An institutional Development Expert, Member of Working Committee on Institutionalization of Engagement with Civil Society Organisations in Niti Aayog Founder & General Secretary of Prayas JAC Society, the domain experts in a brain storming session discussed the reasons for the deep-seated misunderstandings and mistrust among the two sectors at length.
Despite the presence of huge number of active NGOs in India, many companies claim that they do not find enough eligible civil society partners to work with. This lack of trust, experts opine, stem from communication gap, lack of transparency and understanding between the two sectors and over-confidence of the NGOs.
PERCEIVED LACK OF TRANSPARENCY AND FINANCIAL ACCOUNTABILITY
The greatest barrier to CSR activity, experts say, is a perceived lack of transparency and financial accountability on the part of the NGO recipients.
According to Rakesh Jinsi, founder and President of Khushboo, a care centre for children with mental and multiple disabilities, there seems to be an “inherent lack of trust” between the two sectors in this aspect. “Even if the money which has been spent on CSR by the NGO has been accounted for, still the corporate want to go far more in detail what the NGO has done. The corporate are always concerned about the money going into somebody’s pocket. In contrast, if the same business entity visits a religious place and donates the money there, they never ask what happens to that money. This entire perspective of how corporate look at NGOs should be looked into. At the same time, the NGOs should also look at their work and hold themselves accountable for what they should be doing,” he explains.
For the corporate sector, as per Brig Rajiv Williams, Corporate Head CSR and Sustainability, Jindal Stainless Limited Group, “selection of an NGO is a challenge.” He elaborates, “We have got wrong many a times in selection of NGOs. Some of the challenges that we have faced in selection process are reporting inadequacy and the capacity of the NGO to deliver the Social Return on Investment (SROI). The corporate needs answers to SROI.”
Moderator of the panel discussion, Munish Kaushik, having over two decades of national and international experience in the development sector had a very interesting contrasting view to offer on the credibility aspect of the NGOs. “We talk about challenges regarding finding credible NGOs. Why every time it should be the NGOs? How to find a credible corporate is also an issue. Just like corrupt NGOs, there are corrupt corporate as well. The premise itself is based on lack of trust. The foundation of corporate is for profit sector and the foundation of NGO is non-profit sector. The basic premise of the two is opposite. When the profit sector meets the non-profit sector, it means two foreign bodies are coming together.”
Agreeing with Kaushik, Brig Williams added, “Today the sophistication of deception is increasing faster than the technology of verification. It goes both for the corporate as well as the non-profit organisations. Sometimes, the companies just divert CSR funds in the name of charity. However, there is a shift taking place from charity and philanthropy to corporate social responsibility, sustainable CSR and strategic CSR and the corporate needs to survive this.” The member of the CII CSR Council also emphasised that the funds should directly go to the implementing organisation.
LACK OF UNDERSTANDING AND OVER-CONFIDENCE
Another obstacle to mutual trust, experts says, between NGOs and corporate is the lack of understanding between the two on how the other side functions. Both the sectors have a different motive for its work, which often inhibits complete understanding of the others.
As Social Entrepreneur Rajiv Khurana puts in, “The corporate needs to understand how the NGOs function, what are their limitations and constraints. At the same time, the NGOs must understand how decision making takes place within a corporate set-up, what are the systems and processes, what are the approvals necessary.”
Besides, over-confidence of the NGOs also puts them in a disadvantageous position, opines Jinsi, who is also a retired Secretary General of SOS children’s villages. “NGOs tend to work thinking that they are doing something good. Their mindset is such that they think a work being done by them is much better than any other organisation. Under this intent, they always think that they are doing wonderful. So the first thing that becomes the casualty of this attitude is the quality of work,” he said.
POTENTIAL IN SMALLER NGOs
Apprehending that only bigger voluntary organisations are having a dominant share of CSR funds, the panellists put an emphasis on the need for changing the mindset of the corporate sector and make them understand that there is potential in smaller NGOs as well. They also focussed on the need for capacity building and capability enhancement of smaller NGOs.
Putting his views forward, Brig Williams articulated, “I really see that there is a lot more potential in smaller NGOs.”
Echoing his views, Pande said, “The main problem is that the corporate assume that the NGOs which are doing well are doing good work. There are many lesser known smaller NGOs which are doing well. Their credibility is spread by word-of-mouth. But since they can’t afford a fund raising team, they lack funds. If I go to such an NGO, the company will ask me why I approached it. What is my interest? We need to change this mindset. It is not necessary that the popular and well-known NGOs are the only non-profit entities doing well.”
However, at the same time, there are some genuine issues that concern the companies while investing in smaller NGOs, Pande said. “Suppose I give money to a small NGO to do a CSR activity and it runs away or closes its shop, where do I go? I will get stuck,” he added.
Amod Kanth agreed and said, “While we tend to take account of the NGOs which are registered, we forget those millions of Self Help Groups, cooperatives and other organised and unorganised organisations which are all part of the voluntary sector.”
He also delved on the need for hand holding the smaller NGOs by the big ones. “Some system has to be developed for handholding the smaller NGOs. Not only the corporate sector, the bigger NGOs should also play an important role by grooming and taking them forward,” the former police officer said.
Kanth, who is also the Chairperson of the Domestic Worker Sector Skill Council, says the NGOs also must introspect on its “importance” and the reason for “which it must exist.” “When we talk about social sectors – health, education, poverty alleviation and disability, and targeted groups of population – children, women, disabled, elderly, these entire range of social sector and the classes of people has something to do with the Government programmes also. The entire voluntary sector is best suited to attend to the requirement of social sector. So the role of the sector is much larger than just filling the gaps. But where are we (NGOs)? Where do we figure us? Despite the huge number, the role, location and credibility of the voluntary sector are very much in question,” he emphasised.
Kanth, member of working committee on institutionalization of engagement with civil society organisations further added, “Our (NGOs) existence is the requirement of half the population in India. Poverty and deprivation are rampant in the country. Even if the country has 32 lakh NGOs, I don’t think it is such a big number considering the nation’s size.”
THE WAY FORWARD
The corporate sector has both the resources and the fund to make a positive difference in the lives of the underprivileged, while the NGOs have experience and knowledge of the marginalised and underserved areas of society as well as experience in operational transparency. If a symbiotic relationship can develop between the two sectors, socially responsible programmes can be implemented more efficiently and will have a measurable impact faster than if there is trust deficit and less transparency.
To build a bridge of trust, experts opine that some system has to be built to share the best practices and both the corporate sector and the NGOs should come forward to appreciate each other and their ways of functioning.
Khurana, who is also the co-founder of Lung Care Foundation, said, “To bridge the trust deficit, both the sides have to come with clean hands and focus on raising the work standards.”
Both NGOs and the corporate sector should focus on CSR from different perspective. “The NGOs should focus on building its credibility, success stories and relationship building vis-a-vis corporate, there should be commitment at the top, surety of systems and engagement of right people. The corporate should also focus on results which are concrete and measurable and the NGOs should be answerable to that result. It is unfortunate that most of times; NGOs don’t share credit of an initiative with corporate. There is a lot of snootiness amongst the NGOs when they go to the corporate,” he added as a matter-of-fact.
Khurana also emphasised on generating communication among all the stakeholders. “Information has to be shared. Communication has to happen.”
Many a times, corporate have the mindset that the NGOs lack efficiency to implement a project. Speaking against this backdrop, Jinsi stressed on the need for the NGOs to work towards capacity building and professionalise them more than ever before.
Brig Williams called for use of “technology for finding out what is right and what is perceived to be right.”
Echoing his views, Pande said, “There should be organisations like Moody or Crisil to rate the NGOs on a sustained basis. It will not only give a fillip to the smaller NGOs but also help the corporate to decide on which NGOs to look for their specific CSR needs as there would be credibility check done by the rating agencies.”
Kanth agreed with Pande, however, at the same time, pointed that “rating of the NGOs is not that simple because majority of the voluntary organisations” would not be able to “justify the indicators.”
Khurana also emphasised upon tolerance. “We (the corporate sector) need to tolerate minor goof-ups. There might be a possibility that some of the NGOs may not do their job well but this cannot be the reason for painting the picture completely black. If 20% of the NGOs are bad, put your faith in the rest 80%. Believe in them. Put the money in the right place and I am sure that things will become positive,” he concluded.