Whenever people see systematic work in cooperation and service being carried out, they often ask without hesitation, “Do you run an NGO?” For most of them, the underlying implication is—“Ah, so you are making money!”
In recent years, corporate professionals, politicians, and journalists have also begun considering ‘opening an NGO.’ Whether they understand the core principles of the institutional world or not, they perceive a ‘business’ here—one that builds both public image and wealth.
However, this is only half true and, in a way, reflects a deep-seated prejudice against the institutional sector. This NGO sector, often referred to as the ‘development sector,’ has become so deeply dependent on external ‘funds’ that it has been forced to expend more energy on its own survival than on addressing society’s actual suffering. Even when these organizations did generate ‘earnings’ or build ‘capital,’ they did so covertly, just to avoid being branded as ‘commercial’ entities. On the other hand, governments treated NGOs as ‘cheap workers,’ forcing them to execute tasks at minimal costs—or often entirely voluntarily—that the government could not have achieved on its own.
Dialogue and Partnership
By labeling them ‘Non-Governmental’ Organizations (NGOs) and ‘Non-Profit’ Institutions, we have already relegated them to a separate status where they are expected never to think of profit. Whether genuine organizations that work day and night to eradicate society’s foundational problems should be identified by a vocabulary of ‘scarcity’ or by their ‘impact’ is a matter that warrants discussion. We possess both viable alternatives and a rich heritage of social service.
However, the issue is not merely about changing names; the real crisis lies hidden within the ‘economic structure’ of these organizations. Donors will have to rethink this from a fresh perspective, and the organizations themselves must devote all their efforts to remaining relevant and effective.
Whenever the government attempts to streamline and regulate the ‘social sector’—which has been entangled in a battle for its own existence for years—organizations instantly perceive it as an assault on ‘civil society.’ In reality, there are two distinct factions trapped in an ideological conflict. One faction is already deeply connected with global frameworks and actively works to influence policies. The second faction is desperately struggling to reach giant donors, even though it currently lacks both the necessary preparation and the required network.
Instead of fading away over time, these ideological rifts have only deepened in recent years. Although everyone hesitates to speak openly and, superficially, prefers to appear supportive of the current government, the question remains: Amid this conflict, how should the institutional world’s contribution be viewed and measured? Have their scattered, fragmented efforts across various regions truly changed anything in society and the country that can be reflected in statistics?
The biggest reason for this is that the very cooperation and transparency these organizations preach in every meeting are completely missing from their own style of functioning. Even if a donor selects different institutions for the same type of work, these organizations show no interest in communicating or working in partnership, except when attending meetings called by the donor itself. Another reason is that they simply lack the resources or time required for such partnerships.
Operating in Isolated Shells
According to data from NITI Aayog’s ‘NGO Darpan’ and the Ministry of Home Affairs, there are approximately 5.25 lakh registered organizations in India. Out of these, 50 percent are Trusts, 42 percent are Societies, and 8 percent are Section 8 companies. This translates to one organization for every 400 Indians. Yet on the ground, the number of active organizations shrinks to a mere 2 lakh. Should we consider this another testament to our mastery over paperwork, or something else?
The matter does not end here. The primary reason behind this massive statistical disparity is financial uncertainty and ambiguity. Over the past few years, due to stringent FCRA (Foreign Contribution Regulation Act) regulations, the foreign funding of many organizations has been canceled. Furthermore, Corporate Social Responsibility (CSR) funds remain confined to specific types of projects and a few select NGOs. Consequently, these organizations that take up the mantle of changing society end up living in severe scarcity themselves. The arbitrary caps placed on administrative and ‘overhead’ budgets stand as a major hurdle.
The Financial Labyrinth
Rajat Ray, a well-known social innovation expert and former United Nations advisor, summarized his global experiences in an article. Published in the prestigious global magazine NextBillion at the University of Michigan, his article argues that the compulsion to rely on continuously provided short-term ‘grants’ has weakened the backbone of the entire ‘social sector.’ Because of this, organizations have lost their way, and the solid ground-level work that should have been visible through them has failed to materialize. Instead of executing work that is genuinely needed, they are left with no choice but to adopt projects that lure donors and evaluate their success entirely within the vocabulary favored by those funders.
Every point in that article is profound. It is a reality that conforming to donor preferences has made the capability of ‘grant writing’ (project proposals) highly sought after, overshadowing actual grassroots work. The institutional world itself has failed to properly utilize social workers with genuine grassroots understanding and field assessment experience. Donors are still not entirely open-minded about allowing the flexibility and innovation needed to align with ground realities.
It is also worth pondering whether long-term, permanent solutions to complex problems like malnutrition, water and energy crises, or gender and educational inequality can ever be achieved with funds granted for just a year or two. Driven by the need to slap their own and their donors’ brand names on projects, institutions end up establishing parallel ‘branded systems’ (such as temporary schools, new clinics, counseling centers), which collapse entirely the moment the funding dries up. This ad-hoc, temporary arrangement—akin to digging a new well every time you feel thirsty—leaves absolutely no room for large-scale, impactful, and lasting work.
Old and New Paths to Change
If we look at Rajasthan, the largest state in the country, this crisis becomes even more glaringly visible. Rajasthan boasts a rich history of grassroots movements and social organizations. Several organizations and groups working here have shown the way to the entire nation—whether by conserving water in the Thar Desert, igniting the flame of education in state-run public schools, or working in marginalized communities, the agricultural sector, and tribal belts.
The challenges here are equally massive. Populations scattered across remote hamlets (dhanis), a severe water crisis in western districts, social, educational, and caste struggles across other regions, safety of women and young girls, gaps in the delivery and reach of government schemes, complex health issues, and superficial pageantry of work—all exist simultaneously here.
Amidst all this, the region’s mutual harmony, culture of service, and traditional wisdom have acted as a great shield. The organic fabric of society has always deeply valued selfless service. Even today, across various pockets of the state, you will find individuals who have taken up the mantle of cleaning lakes, arranging affordable medical treatment, or setting up water booths (pyaau) to quench the thirst of travelers. Others are dedicated to the selfless care of abandoned cows and animals, or helping poor patients arriving at hospitals. Some service-minded farmers are constructing water troughs (kund) for birds and wildlife, while others rely on community support to feed the hungry and look after orphaned children.
All of this is happening quietly, without any ostentation, without glossy reports, away from the eyes of those who boastfully exaggerate their achievements on public stages. If the formal institutional world has added anything to this organic ecosystem, it is a bit of greed, avarice, and financial uncertainty.
On the positive side, it has nurtured a spirit of new experimentation, a tendency to measure oneself against global standards, and the courage to innovate. However, the race for massive platforms and high visibility has often resulted in the exploitation of the unique qualities of local communities rather than making them self-reliant. Today, an organization that once took Marwar’s folk art and culture to global stages under the pretext of uplifting local artists is mired in bitter internal conflicts over the wealth and assets it accumulated. The exact same fate has befallen other large organizations, where immense capital was amassed in the name of service, while actual ground-level work remained purely nominal.
Had these service initiatives initially been conducted with pure professional ethics, transparency, and honesty, no one would have pointed fingers at them, nor would the institutional world have lost its credibility. There is a pressing need to think deeply about how to forge a healthy, professional relationship between the government and social organizations. The existing government system is plagued by so much laxity and so many flaws that everyone prefers to stay comfortable inside their own isolated shells. Everyone desires the luxury of working with complete independence. Partnering with the government always brings the looming anxiety of getting trapped in bureaucratic red tape and extortion games.
The intense scramble over CSR funds is a completely different story if one digs beneath the surface. Between the moment capital leaves a corporate house and the moment it lands in an NGO’s wallet, how many intermediate pockets get filled remains entirely invisible, even to the eagle eyes of auditors. Today, everyone—from the government and UN agencies to academic institutions and the NGO sector—has their eyes trained squarely on CSR capital. Consequently, in their rush to keep everyone pleased and appear socially responsible on their official records, many corporates have themselves mutated into new hubs of corruption.
The argument that CSR funds must also be invested heavily in deep research and innovation has been strongly raised by scientists leading the newly formed ‘Anusandhan National Research Foundation’ (ANRF). Very few people have heard of this government agency yet. Alongside sending recommendations to NITI Aayog, this foundation represents New India’s preparation to integrate the nation’s intellectual talent into the larger picture of the future.
New Frameworks and Partnerships
Rajat Ray, who previously led the world’s largest social project—the ‘Rashtriya Kishor Swasthya Karyakram’—focuses his evaluation on transforming donors’ behavioral patterns rather than merely blaming institutions. Recognizing all systemic barriers, he firmly believes that a partnership among institutions is the only real vehicle for moving toward true solutions. Therefore, his emphasis is on making social organizations self-reliant and investing heavily in building the capacity of their human resources.
Donors must not absolve themselves of responsibility by simply distributing capital. If organizations are trained to operate like ‘social enterprises’—mastering financial management and supply chain logistics—they will be able to execute both social reform and wealth creation on a tangible, massive scale.
Rajat Ray proposes a funding structure in which the amount granted in the first year should decrease by 20 percent each subsequent year. This model forces an organization from day one to maintain a mindset geared toward finding paths to self-reliance. Equal weight must be given to state partnerships and the NGO’s internal capability to generate revenue. Long before a grant concludes, organizations should allocate a portion of their efforts to revenue-generating models—such as the direct sale of local handicrafts, art, or organic farm produce.
The government already organizes various spice, handicraft, and art fairs at its own level. Self-Help Groups (SHGs), cooperative societies, and formal institutions regularly participate in these. If communication expands to implement more such initiatives aligned with government welfare schemes, the work will survive, revenue will flow, and public trust will be restored.
The size of an organization’s fancy office or the massive scale of its ‘grants’ are absolutely no metrics for deep, impactful, and transformative work. True meaningfulness is achieved only when an intervention dissolves so seamlessly into society and the public administrative machinery that the work continues to thrive long after the NGO has stepped away.
If initiatives are taken to build frameworks and networks that force organizations to step out of their narrow, protective identities and move toward genuine partnerships, it will naturally exert pressure on donors as well. The only condition is that the groups leading such initiatives must be guided by proven experts. Doors must be kept open for them. Rajat Ray’s writings have undeniably caused a stir among institutional donors. There is immense room for healthy debate on this topic, and it would be highly beneficial if new blueprints for institutional governance emerge from it.
Dr. Shipra Mathur
Dr. Mathur is a veteran journalist based in Jaipur, India. The views expressed here are solely those of the author.
- Dr. Shipra Mathur#molongui-disabled-link
- Dr. Shipra Mathur#molongui-disabled-link
- Dr. Shipra Mathur#molongui-disabled-link
- Dr. Shipra Mathur#molongui-disabled-link
