August 30, 2020
New Delhi: India has an estimated 31 lakh non-government organizations (NGOs). Their primary sources of funding is philanthropy, corporate social responsibility funds, grants from national and international agencies, and cause-related events and programs. Most of them are feeling a funding squeeze. In a survey of 52 NGOs across thematic areas, size, and geography, the Centre for Social Impact and Philanthropy, Ashoka University, found that most expected to see budget cuts.
According to another report in The Economic Times, funding for NGOs in FY21 has so far decreased by 43 percent from FY20, and funding not dedicated to specific initiatives has sunk by 63 percent. CSR grants in particular have come down. More than half of CSR grants have got channeled to PM Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund), which provides 100 percent tax exemption, and other Covid-19 relief efforts.
Out of an annual average CSR budget of Rs 15,000 crore, more than half i.e. Rs 7,863 crore has been allocated towards Covid-19 relief measures, including Rs 5,324 crore for PM-Cares Fund, according to Sattva’s India Data Insights report on CSR’s Covid-19 Response and Outlook for FY 2020-’21.
Adds Pritha Venkatachalam, a partner at The Bridgespan Group, a philanthropy advisory, “The downward pressure on corporate profitability over the coming years is anticipated to significantly reduce Corporate Social Responsibility (CSR) funding that supports India’s Sustainable Development Goals (SDGs) across sectors.”
What does it mean for NGOs? A recent report by FSG, a mission-driven consultancy, on the impact of COVID-19 on CSR funding for Indian NGOs offers guidance. It advocates significant cost reductions for NGOs, but without compromising key capabilities so that they remain future ready when CSR funding returns. Since the focus of CSR funders in the near- and medium-term is likely to be COVID-19, NGOs need to think about exploring ways of leveraging their field presence to address new and emerging needs. NGOs may also have to rethink about the delivery of their programs in the near and medium terms as impact of COVID-19 is likely to continue beyond the current lockdown.
(Sanjana Dargan, a student of Miranda House, University of Delhi, is an intern with OneWorld Foundation India.)