Tuesday, 6 September 2016

Funding for Corpus, Core staff and Overheads is Essential for Organizational Sustainability!

Donors look for Scale in projects and programs while project implementing agencies (NGOs) mostly worry in terms of the organization’s own Sustainability. Donors like to see long term Impact but NGOs are often so cash strapped that they habitually react on short term Impulse! Both, donors and implementers have a common purpose (to bring about positive social change) but the paths they consider treading are often different.

The dictionary meaning of ‘to sustain’ means to last in strength. For donors this means that the objective for which funds were given to an NGO has been fulfilled and the impact will endure. For an NGO it means this, plus that the NGO lasts. However, NGOs are kept waiting anxiously for months before corporates decide to fund projects. Funds may even be refused. So, how shall NGOs sustain themselves?

Despite the mandatory requirement that companies spend 2% of their profit on social causes, it is not easy for NGOs to get funds. NGOs need well-trained people to implement projects. Corporates prefer to fund capital but not operational costs. Some have started forming their own foundations and giving directly to beneficiaries. There is a trust deficit.

In a room, across a big table sit corporate donors on one side and NGOs on the other -- not communicating. Can the two come together in real time sustainability? Yes, if donors ‘adopt’ NGOs, ie. keep their employees on their payroll, pay their administrative costs at source, so NGOs can focus on long term programs. Donor funds will be properly utilized and accounted for while the NGO works like another “department” of the company with targets, deadlines, evaluations, and yet independent. An example of this type of sustainable partnership is that of Thermax with its partner NGOs.

Dr. Viney Kirpal
Executive President, GREAT foundation, Pune.
GREAT Foundation, Pune provides equal opportunity to economic equality through quality education for less privileged children. It has/is working in 78 schools for over 37,500 students in three States.
Grant making bodies are driven to optimally utilize their resources to maximize their returns. It is the same rigour they bring to the development space - to ensure that every rupee spent is making a difference and maximizing impact. While analysing projects and the costs associated with it, grant makers pay close attention to how effectively the NGO is run. They check that overheads, core staff salaries and other expenses  are within acceptable limits and try to put standardized systems and processes in place. 
But grant makers also need to be attuned to specific needs and complexities of the work done by the organisations they fund. NGO's often work across a number of sectors each operating in a unique manner and demanding a variety of human resources which cannot always be standardised. At their end, they can at times be too close to the problem, focussed on just the issue they are tackling or bound by the location they operate in. The organisations  may need to broaden their vision, trust the grant makers intent and take advantage of feedback to improve their systems and processes to ensure that the beneficiaries receive the maximum benefit.
Ultimately, it is critical for grant makers and NGO’s to function as partners. Sustainability and growth both cannot be achieved unless these two bodies work together harmoniously. Scalability cannot be accomplished unless there is Sustainability. The two are interdependent on each other and hence the focus should be on strengthening the resources of the organisation for long term growth. This should be arrived at in a transparent manner and as a two way dialogue between the partners.
Amrita Nerkar
Corporate Social Responsibility, Cipla Foundation
Cipla Foundation was registered in 2011 to take Cipla’s socially focussed business legacy forward. It mirrors Cipla’s relentless commitment to improve lives and fights inequities on key fronts. To build accessibility and affordability, initiatives in India focus on Health, Skilling, Education and Disaster Response.

Any significant dialogue on sustainability needs to address itself to two key aspects , which are as follows :
  • Sustainability for whom
  • What does this sustainability actually mean
In the development sector and space, sustainability is often defined as sustainability of processes, results and outcomes, mostly in favour of communities, where the development work takes place

Donors demand sustainability of processes and their outcomes, but not necessarily of the Institutions that facilitate these results and outcomes. And here is where the debate starts to heat up- Development organisations need to sustain themselves within finite time frames to allow them to do the work they are committed to . Often this dichotomy of perceptions and focus lead to issues where sustainability remains a pipe dream for all.

Perhaps defining finite time frames where NGOs, CSOs wean themselves off donor funds, whilst at the same time ensuring sustainability of processes, outcomes, benefits- in terms of community led sustainable outcomes would be one way to solve the impasse and ensure that true sustainability is attained within realistic and measurable time frames.

Sustainability of community led development processes would then best be achieved through their own capacity building and ownership, with support from NGOs, CSOs. During this time donors have to be convinced that such processes are vital to ensure sustainable outcomes at the community level.

Alka Pathak
Trustee, The Resource Alliance
The Resource Alliance inspires sharing and collaboration to create powerful change in the social impact sector.

People in general really appreciate the work NGOs and people dedicated to causes do, but when it comes to parting with funds there’s a general mistrust in the air. We’ve all heard proclamations like “I’d rather give 2 sacks of rice than give money” or “I don’t know how much of my money will actually reach the beneficiary.” However, these arguments are misplaced.

For instance, let’s take the “sack of rice” argument, which is analogous to “program cost”. One might believe that such a donation has a high chance of complete disbursement to the beneficiary, that there will be no “loss in translation”. But that misses the big picture – “how will the sack of rice effectively reach the beneficiary in the right form?”

The answer to this question is “overheads”.
There are several other costs in the equation – cooking costs, including cook, gas, oil, spices, etc.; infrastructure costs including kitchen, cooking equipment, etc.; distribution costs; and delivery costs such as cutlery among others. 

Therefore, while “program costs” are core, one cannot undermine the importance of “overheads” without which effective delivery would be impossible. So let’s give it the respect it deserves!

Shreeja Kanoria
Director Communications, Ballygunj Society for Children in Pain (CHIP)
CHIP is an NGO working in the field of children education and health.

We would love to hear your experiences and views on this debate. Write to us at connect@capindia.in

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