Friday, 3 April 2009

NGO Money!!

My experience of working with NGOs was absolutely great but a recent article by IIM Prof R Vaidyanathan in DNA on the funding of NGO is an interesting read. You can find the original link here.

Some of the details from the article

“We also find that in the last three years, the amount received has shown a phenomenal increase and it was 56% more in 2006-2007 than in the previous year.”

Another interesting fact according to the article ‘relatively’ well of states receive more money than relatively poorer states. Is it due to the better awareness in ‘relatively’ well-off states like
“Tamil Nadu (Rs 2,244 crore), followed by Delhi (Rs 2,187 crore), Andhra Pradesh (Rs 1,211 crore) and Maharashtra (Rs 1,195 crore).”

Further quotes on their nature of spending

“The interesting information is regarding the purpose of the donations (see Table-2). Establishment expenses top the list, followed by relief and rehabilitation, rural development, child welfare and construction and maintenance of schools and colleges."

"Establishment expenses consist of buying land, buildings, jeeps, setting up fancy offices, mobiles, laptops, expensive cameras, salaries, consultancy fees, honorarium, and importantly, foreign travel etc, which make up 35-70% of the expenses. This goes against the grain of service motto where the ultimate recipient is supposed to get the maximum.

By definition, NGO activity is voluntary and hence one expects that the overheads of the organisations are lean. In financial parlance, the fixed cost is expected to be relatively small.”

A case of large sum of money ‘opaquely’ going un-accounted in the name of establishment cost?


  1. Many of these NGOs are great rip offs. They are like any other business/job, but with a lot of freedom and little accountability.

  2. I would agree with Vinod Sir ...though my experience with them ahs been good too..yet I also am awarethat they usually do little and rake in a lot...all of it with no accountability...

  3. yes UI.. that is what happens -- there is a famous cancer hospice in bombay starting with the letter A. The head ( a woman came here to raise funds ) By hoisting Tumhari Amrita and selling tickets ( $20,000 alone was spent in giving to tumhari amrita ) -- and the rest was used in the foregin travel and stay of the organizer -- all this billed to the NGO. The organizer had a fun family time during all this time --- all billed to the NGO. This is one such. this is the illusion that I feel about NGOs.

    NGO resources can be done by volunteer time ( the many skills that corporate use ) of the employees -- a great way to send corporate employees -- twice benefit for the ngo -- skills and resourcess -- welll, all this rarely happens -- i am thoroughly disillusioned by it. but the case is different if basis of the organization is income generation and the business model of the NGO is - entrepreneurial philanthropy --