NGOs: Note-Growing Organisations?

About 85 per cent of the NGOs functioning in India lack vision and mandate. Although a few NGOs have made an outstanding contribution to community welfare, many have only pulled wool over the eyes of funding agencies to get sanction for finances, writes Aditi Tandon.

SOCIAL service has become quite a fad. Since the Fifth Five Year Plan recog-nised non-government organisations (NGOs) as alternative tools of development, a number of them have been mushrooming in the name of charity. The definition of charity, however, remains blurred, with a majority of NGOs ending up serving only themselves by seeking money from people and taking concessions from the government. What makes things worse is that this Rs13,000-crore NGO sector is often charged with misappropriation of funds.

There may be evidence to show that NGOs have been involved in gross mismanagement of funds, but punitive measures in this regard are almost unheard of. Out of the 100 such cases only about one reaches a logical conclusion. The reasons are simple: most funding agencies take monitoring casually, there is no way to check the flow of foreign funds or determine their beneficiaries; the Registrar of Cooperative Societies hardly scrutinises registered NGOs to check whether they are properly using funds, maintaining credible audit accounts and holding regular elections to the governing council.

Many NGOs in the region have governing councils only on paper. In reality, they are being run by individuals who control the funds. About 30 per cent of the NGOs, registered under the Societies Registration Act, 1860, are no more in action. They have shut shop but the Registrar, Cooperative Societies, has no information because his office has not been monitoring such societies. A Manimajra-based NGO, working for AIDS awareness, closed operations long back, but it continues to be registered. Nothing can stop such bodies from seeking exemption under the Income Tax Act that liberally promotes "charity".

No wonder then that the number of NGOs has been growing every year. The Ministry of Social Justice and Empowerment alone supports over 644 institutions. Besides, 90 per cent of the Ministries, including that of Education, Science and Technology, Family Planning and Health, Environment and Forests, Rural Development and Culture, have earmarked budgets for voluntary agencies so that they can reach target groups. Over Rs 13,000 crore is being annually pumped into the NGO sector

Surveys show that 85 per cent of the NGOs functioning in India lack vision. Although a few NGOs have made outstanding contributions to community welfare, many have only pulled wool over the eyes of funding agencies to get sanction for finances. A Chandigarh-based activist clarifies, "They are more inventive at writing project proposals and furnishing audits than at caring for society. Most NGOs work for projects, not for a cause. If they learn the Ministry of HRD is giving money for women’s empowerment, they will immediately abandon the health agenda and deviate. One NGO handling a health project in Sector 16 recently started working for women’s empowerment. It has no expertise or manpower for this area. Likewise, thousands of NGOs were born overnight to get huge funds that flowed during the tercentenary celebrations of the Khalsa. Where are they now?"

With people floating NGOs to gain social or political mileage, credibility invariably suffers. That’s why social activists are pressing for a model code of ethics that will make NGOs accountable to the community. Although there are many agencies working for the grassroots, there are others that bring a bad name to their sector. The credibility of NGOs in our region was shattered recently when the Council for Advancement of People’s Action and Rural Technology (CAPART), one of the largest NGO-funding agencies in India, unearthed a scam flourishing under the garb of service.

NGO scams

Cracking down on a Haryana-based NGO activist who ran 20 NGOs, the Vigilance Cell of CAPART discovered that he had siphoned off over a crore of rupees by seeking grant for similar projects from several funding agencies simultaneously. He was receiving money for similar projects from CAPART as well as the Khadi and Village Industries Commission (KVIC). Vigilance officers found that not even 50 per cent of the grant given had been spent on welfare activities. The activist was running 20 NGOs in Karnal, Kaithal, Panipat and Kurukshetra.

Following the expose, the Director-General of CAPART registered an FIR against the activist and sealed the funding to NGOs operating in the districts in question. The respective Deputy Commissers were also directed to conduct inquiries into the functioning of NGOs and submit reports at the earliest. This is not an isolated case where an NGO activist has been caught swindling funds. In December last year, a Kulu-based NGO was charged with misutilising Rs 2 lakh granted by the KVIC. Not only had the fund been grossly underutilised, the organiser had also tried to get inflated bills to overstate the expenditure in the balance sheet.

Due to frequent cases of misappropriation of funds by NGOs, some funding agencies have intensified their monitoring operations. Not only have they blocked financial assistance to NGOs by bringing them under the FAS (further assistance stopped) category for unsatisfactory working but they have also blacklisted thousands of NGOs for non-performance. Recently, CAPART placed 100 NGOs in the FAS category. Out of these, 70 are in Haryana alone. There are about 10 in Punjab, seven in Himachal, six in Jammu and Kashmir and seven in Delhi. CAPART has also stopped funds to the Indian Red Cross Society, New Delhi.

Last year, the Central Social Welfare Board (CSWB), funded by the Department of Women Child Development, Government of India, blacklisted 3000 NGOs for dissatisfactory progress. In October 2002, the Ministry of Social Justice and Empowerment formed a team to monitor the functioning of NGOs accused of mismanagement of funds. In January this year, the Ministry blacklisted 67 NGOs and, in May, it dealt a blow to NGOs by revising norms for granting financial assistance. The revised norms have drastically reduced the quantum of financial assistance for NGOs.

Only a few funding agencies are stringent about scrutinising projects allotted to NGOs. That’s why many NGOs in Chandigarh, Punjab and Haryana are dabbling in various kinds of social welfare projects like child-related programmes, women-welfare schemes, etc.

Chandigarh has some NGOs which handle as many as 20 projects simultaneously. In all, there are over 200 NGOs and hundreds of trusts working in the city and the 21 villages and resettlement colonies around it. Hundreds of charitable trusts registered under Section 12-A of the Income Tax Act are tax exempt under Section 80-G. The law requires such trusts to spend 85 per cent of their income on charity. Sources, however, admit that it is tough to monitor the funds of such units. Although the law provides for cancellation of exemption in case the money raised from trusts is spent for purposes other than those mentioned in the Article of Association, there have been negligible cases of cancellation.

NGOs are also being used to gain entry into the political arena or as a means of acquiring social status. Many trusts have sprung up in Chandigarh in the name of community welfare. There are bhavans of all kinds. Though most of them have sought tax exemption on grounds of being run by charitable organisations, they are being used for commercial activity.

Many NGOs have political leanings, with their heads owing allegiance to political parties. One organisation in Sector 22 belongs to the daughter of a former Punjab CM. Another famous NGO, with its office in Sector 9, belongs to a sitting MLA from Punjab. Several other NGOs across Punjab, Haryana and Himachal enjoy political patronage. Recently, CAPART blocked funds to two Solan-based NGOs, which had political links.

Although there are discrepancies galore in this voluntary work, it still enjoys people’s confidence. A World Economic Forum survey recently showed that NGOs were placed second in the list highlighting the bodies and groups that enjoyed people’s confidence. Government was placed 16^th in the list. NGOs, however, are losing popularity due to lack of flexibility and innovation in their working. They are closed entities that like to hide their funding procedures. In many cases funding agencies discourage transparency. For instance, the Chandigarh State AIDS Control Society reportedly receives crores of rupees as annual grants but refuses to talk about it.

In the absence of checks, many NGOs continue to misappropriate funds. Some voluntary workers have illegal liaisons with people living abroad. Says a Punjab-based social worker, "Since these people cannot transfer funds to India legally, they issue cheques in the name of NGOs. NGO workers come back to India, and hand over the money to the respective NRI family. They get huge commissions in these rackets." Harjinder Singh, a human rights activist maintains, "NGOs are operating like MNCs. The upper middle class has a special interest in this sector. Working in an NGO adds to one’s mobility internationally. That’s why this rat race."

In most cases, NGOs manage to get projects even if they have no intentions of taking them up. An official of the Chandigarh Social Welfare Department, which has a budget of Rs 11 lakh for NGOs, says, "One NGO was giving the grant of Rs 20,000 to children as scholarships. Another one, working for the disabled, spent Rs 20,000 on brochure printing. We blocked their funds. But there are many NGOs doing good work. The funding pattern should be revised for them."

Though it is a rare occurrence but some committed NGOs even surrender projects due to discrepancies in the funding pattern. Pooja Passi, who runs a trust in the memory of her sister, recently surrendered two projects: an AIDS project of Rs 8 lakh, being funded by the Haryana Government; and another one backed by the Chandigarh Social Welfare Advisory Board. She explains, "Both projects had faulty funding patterns. Haryana was offering too much for a project that could be completed in half the funds being offered. UT was offering too less. In either case, one would have had to be dishonest to show utilisation of grant."

While some NGOs are self-sustainable, there are others that enjoy a five-star status and receive huge funds from government as well as foreign agencies. Sources inform that a reputed Chandigarh-based NGO recently applied to the Centre for complete exemption of tax on income. Under Section 80 (G) of the IT Act, only a certain percentage of the income is exempted from tax.

Chandigarh also abounds in redundant NGOs. Some have been occupying the Karuna Sadan building in Sector 11. Some of these rooms have not been opened in ages. Many NGOs have not paid rent for years. The UT Red Cross Society, which owns the building, has called for a profile of these NGOs. The society secretary, Madhavi Kataria, says: "We will ascertain the credentials of the NGOs and then initiate recovery proceedings."

Significantly, earlier as the UT Director, Social Welfare, Kataria had proposed a study of the NGO sector in Chandigarh. The idea was to identify areas that needed intervention. The study was never conducted. Even today some areas like women’s empowerment are saturated, while others like disability are untapped. Moreover, NGOs often underutilise funds and overstate bills. Duplication of projects is commonplace. Remarks an official, "NGOs are either creating awareness or running stitching centres for women. They have no other ideas."

For the Union Territory of Chandigarh, an outlay of Rs 235 lakh has been proposed in the 10th Five Year Plan and Rs 45 lakh in the annual plan.

CAPART’S FACTFILE CAPART, an autonomous body under the Ministry of Rural Development, has sanctioned 2,000 development projects with the involvement of 12,000 NGOs. Out of 2000 projects, 120 were not implemented due to NGO non-performance. Has disbursed about Rs 700 crore as grant to NGOs, with 20 per cent being forwarded to the community for asset creation. Out of Rs 700 crore, it has mobilised Rs 150 crore as contribution from the community. Has an annual budget of Rs 70 to 80 crore. Has stopped assistance to and blacklisted about 600 voluntary organisations all over India. CAPART funds 11 NGOs in Chandigarh. Projects of two NGOs (in Sectors 15 and 26) have been terminated, for they flouted the rules. Another NGO in Sector 15 has been placed in the FAS category. CAPART: TOUGH ON DEFAULTERS CAPART has a very efficient monitoring system. Constituted in 1986 as a nodal agency for NGOs, CAPART has evolved a transparent funding procedure. Unlike other funding agencies where projects have to be recommended by state-level boards, CAPART directly sanctions funds to NGOs. All panchayats function through NGOs that are supposed to incorporate aspirations of the community in the proposed project plan objectives. MAIN FUNDING AGENCIES IN UT The UT Social Welfare Department: It sanctions Rs 20,000 per project. Runs cr`E8ches, vocational centres, and institutions for the disabled. It has, however, not yet been able to provide a fully equipped resource centre where the disabled can get information and equipment. The one in Government Medical College and Hospital, Sector 32, is not fully equipped. The UT State AIDS Control Society: It disburses over a crore of rupees annually. Runs under the World Bank-funded National AIDS Control Organisation (NACO). It is currently executing 15 projects through NGOs. Till today, it has debarred only one NGO for non-performance. The Chandigarh Social Welfare Advisory Board: This local branch of the CSWB has an annual budget of about Rs 60 lakh to Rs 70 lakh for NGOs. It is financing 31 NGOs currently; and is compiling a directory of NGOs in the region. In its golden jubilee year, The CSWB will release directories of NGOs operating in all the 25 states and five UTs where it has branches. The Society for Service to Voluntary Agencies (SOSVA): A mother NGO, SOSVA, in its 19 years of existence has channelled over Rs 3 crore to 100 NGO projects benefiting 1.2 million people; has trained 6,000 personnel from 4,500 NGOs in over 200 workshops; has brought out a donors’ guide, listing selected NGOs which it supports. GOOD WORK BEING DONE A Dehradun-based NGO is credited with upgradation of gharats (traditional water mills) and improving the Himalayan resources. Himachal has a number of NGOs working for environment conservation. In Rajasthan, Dr Bankim Roy has redefined the areas of social service. Based in Tillonia, he works extensively for rural welfare. Many NGOs in Chandigarh are active in the area of health, especially care of the aged. One agency is running an "adopt a granny scheme", where each beneficiary gets Rs 450 a month. One NGO active in the PGI offers attendants to those who are alone. Another NGO ir running a home for abandoned women in Sector 43. The home also offers vocational training to such women. Panchkula has NGOs working in Rajiv Colony, where street kids are being educated free of cost. An NGO in Rajpura is running a comprehensive rehabilitation programme for the disabled.