NGOs are ‘Voluntary Organisations’ involved in community initiatives, which is featured with self propelled initiatives that steers to resolve community needs, and non-profit motives. The NGO mobilize resources with a goal to find an end to a particular need of the community and this is how it differs from Business organisations. Thus the principles of Business Organisations and NGOs differ not only in their size, composition, objectivities etc but also in the motive –Profit and Non- Profit, respectively, which makes the ultimate difference in the operative principles. The better understanding and internalization of the various aspects like Marketing, Human resource Management, Finance etc, of Business Management is the key to an efficient working of a Business Organisation. And hence serves as an evidence for the necessity of research and understanding of NGOs for the efficient functioning of the same.
While we consider Welfare State principles, which are having non-profit objectives, to that of with the principles of an NGO, only partial applicability of these principles is possible in operating an NGO due to the variation in the size of the organisations in question, the source of funds, the reach, delivery mechanisms etc. Thus all these calls for a research study in and about NGOs.
It can be concluded that governance, staffing, accountability, capacity building, service delivery and fundraising are the important components for the efficient functioning of NGOs, and even if we limit our research to the three components – Capacity Building, Accountability and Governance – we would yet be having sufficient reasons, as Policy making, Continuity in NGOs activities, disseminating information about best practices in NGOs, Information base for NGOs working in areas related to science (e.g., Environment, Health etc.) and networking can be studied from these.
Key words: Business organisation principles, Welfare State Principles, non-profit motives.
A good starting point of this small discourse on why Non – Governmental Organisations ( NGOs) should be researched is I believe in understanding what NGOs are.
NGOs Business Organisations and Research
NGOs are defined in many ways by many organisations that have something to do with NGOs in one way or the other. Without going in to all these definitions1 and analysing hair splitting difference in each one of them, we can consensually say that NGOs are ‘Voluntary Organisations’ involved in community initiatives. One of the very important features of Voluntary Organisation is, the initiative’s voluntarity, this is to say that NGO initiatives are self propelled rather than externally instigated. An important concomitant aspect that follows voluntarity and is central to this discourse is the non-profit nature of this initiative. In fact, conceptual understanding of voluntary organisations or NGOs becomes abundantly clear once we understand them to be organisations, whose goal is non-profit and not profit2. In other words NGOs goal is that of mobilizing resources for a community cause to a particular end of the community. The end of community that a NGO seeks to work at varies with the needs of the community. For instance, interventions in to ends such as empowering women, providing a particular type of a health service, providing vocational education and the like, vary from community to community. At this juncture it will do us well to remember that any of these ends NGOs work at like, Health, Education, Women empowerment and the like, they are essentially engrossed at mobilizing resources required for these ends and realizing these ends with the mobilized resources. At no point in the whole process ‘profits’ or ‘profit motive’ is an end of NGOs. Unlike NGOs Business Organisations are for-profit organisations. Look at any of the activities of Business Organisations or for-profit organisations like, Tata Steel, Tata Automobiles or Reliance Telecommunications. They are no doubt mobilising resources, but are doing so at a cost (unlike NGOs that mobilize resources voluntarily for the end sake) for producing goods at a price and finally would want to sell goods that they have produced for profits. All their activities have profit as the end, no matter how we look at them.
Obviously, Profit maximization is the central goal of any Business organisation as it is untenable for them to exist without making profits. Therefore, it is quite clear for Business Organisations to master the art of profit maximization. In the process of mastering this art, Business Organisations break the process of profit maximization in to several of its components, like Marketing, Human Resource Management, Finance and others. These components in turn are broken down into various special skills – sub components that are needed in running a for-profit organisation efficiently. All of us know that quite a bit of money is spent by the Business Organisations and Business Schools on researching the nature, newer dimensions, conceptual understanding, mutual interfacing and the like of the several components and the sub components of the process of profit maximization. It is a known fact that a better understanding and internalization of these aspects of Business Management is the key to an efficient working of a Business Organisation.
Researching NGOs - Parallels with the State
Now the moot question is, as Business Organisations have some principles of efficient working, do non-profit organisations also have some principles of efficient working? The answer to this question is both yes and no. Yes, as Business Organisations have principles for efficient functioning and furtherance of their fundamental goal of profit maximization, non – profit organisations also have principles of efficient working for attaining their ends. No, as we know only a few principles of efficient functioning of NGOS and few more are unknown and the few that we know are yet to be conceptually well understood. However, at this juncture it is very important for us to note that the principles of efficient working for NGOs/non-profit organisations are not similar to the principles of efficient working for profit organisations. They are different not only because of the different objectives - Profit and non-profit - of these two types of Organisations, though it is one of the most important sources of difference in principles, but also because of differences such as, their size, composition, objectivities etc. And then if we are to ask another question, whether a fuller grasp of the principles of efficient working, whatever they are, are important for NGOs/non-profit organisations? The answer is a categorical yes. I shall detail the reasons as to why and how a fuller grasp of these principles and a need for research in to these principles is important, after I raise a few more questions and answer them. A few questions that bother us before understanding why researching NGO activities is a need are; did ever the efficient principles of non-profit management exist before the existence of NGOs in their present state? If they ever did, has some research gone in to the nature, newer dimensions, conceptual understanding, mutual interfacing and the like of these principles? If yes, is it possible to apply the understanding of these principles to the NGOs/ non-profit organisations as they exist now?
The onset of industrialization3 throughout the world has had two important bearings on society. The first has been the rise in people’s contribution to economic activity and the second is that of the change in the role of state from a police state to welfare state. With the heralding of the welfare state, the activities of the state extended to providing welfare to citizens along with safeguarding borders of the sate. A lot of welfare functions of the state such as transfer payments, public goods, as in today’s society, have non-profit objective. In fact in the discipline of Economics, Public Economics and Welfare Economics are two of many very well developed sub disciplines that studies efficient principles of production and distribution of welfare activities of state. In these two disciplines we find a plethora of efficient non-profit principles that should guide the state in the production and distribution of welfare activities to people. To mention a couple principles of these disciplines that have a deep ramifications to us even today, subsidies – merit and non merit subsidies and the distinction of goods in to public and private goods. In fact an enormous amount of research has gone in to and continues to go in to Public Economics and Welfare Economics. There is a voluminous amount of literature on various concepts involved in these disciplines and innumerable models that make sense of the interface of concepts. Then obviously the next question that comes in to our mind is, can we apply the principles of Welfare Economics and Public Economics in to the activities of the present NGOs/non-profit organisations (as raised earlier in this discourse)? The answer to this question too is both yes and no. Yes, principles of these disciplines do act as an important guide to the understanding of the working of NGOs/non-profit organisations. No, all principles of these disciplines cannot be applied to NGOs/non-profit organisations as they differ from state in many many respects, like, the size of the organisations in question, the source of funds, the reach , delivery mechanisms etc.
Then what are the efficient principles for the functioning of NGOs/non-profit organisations? Though, the answer to this question cannot be very definitive, with the limited research that has gone in to NGOs/non-profit organisations functioning, we can say the following areas concerning the functioning of NGOs are considered important; governance, staffing, accountability, capacity building, service delivery and fundraising.
Why Researching NGO Activities is Important
In the preceding sentence of the last section we have seen that governance, staffing, accountability, capacity building, service delivery and fundraising as components important for the efficient functioning of NGOs. Though all these components have an independent existence of their own, operationally they overlap. For instance, capacity building subsumes major concerns of staffing and fundraising, similarly accountability includes service delivery as one of its important components. Therefore, even if we limit our analysis of why NGO activities need to be researched to the three components – Capacity Building, Accountability and Governance – we would yet be having sufficient reasons to believe that NGO activities need research.
• Capacity Building
Capacity building in a very simple sense means extending capacities – Size, Reach and Functioning of NGOs. As we understand NGOs as organisations working to mitigate social injustice of all forms and as Social Injustice in itself is all pervading cutting across caste, class and communities, particularly in a developing country like India. The need for social justice in India is not only enormous but also very crucial. This places huge pressures on the overstretched and under resourced organisations – NGOs, working at fostering Social Justice. Therefore, in the light of resource crunch for NGOs, Capacity building for these organisations become very important. Even as we recognize capacity building as one of the crucial needs of NGOs there is no universally accepted definition of capacity building (Sahley 1994; Eade 1997; James 1998; Lewis 2001; Smillie &Hailey 2001, James 2002 Hailey and James 2003). The purpose here is not to say that there is an urgent need for research to define capacity building; but to emphasise that along with research to define capacity building in the context of NGOs working in India and elsewhere, we need to know how we can build capacities of NGOs. This assumes greater importance particularly in the face of the urgent need we have of mitigating social injustice through NGO activities. After all if NGOs can empower three individuals in place of two (through efficient utilization of resources) or empower five individuals in place of two (channelising more resources to NGOs), it would be that much better.
The role that the NGOs play while fostering social justice is believed to be that of lifting the marginalised communities out of poverty and social maldevelopment through empowering them. NGOs are further believed to be ideally suited to perform this task by virtue of their close proximity to the marginalised groups with which they work. Recognising the importance of the tasks that are performed by NGOs, there is considerable support for NGO activities by donors, the state and general public. At the same time realizing the kind of support that is being offered to the NGOs, there are a significant number of NGOs who claiming to perform empowering tasks siphon off funds. The large number of black listed NGOs operating throughout the world is a testimony to this. One way of approaching this problem is to make NGOs accountable. Here some important questions arise. What is accountability? Accountability is about the conduct and performance of an individual, a group or an organization, (Day and Klein, 1987; Jenkins and Goetz, 1999; and Mulgan, 2003). Accountability viewed in this way does not confine itself to reports and accounts, rather concerns, power, authority, and ownership (Day and Klein, 1987; Conger and Kanungo, 1988; Mulgan, 2003, and Gray et al. 1997). According to Day and Klien (1987) it involves identifying shared expectations, and it should also provide a common currency for justification, finally putting agreements of accountability in a context in which an individual, group or an organisation is working. Having said this about accountability, whom do we make NGOs accountable? To the donors, to the people with whom they work or to the state? Generally, it is believed that NGOs should be made accountable to their constituencies – donors and supporters, and the state (Edwards and Hulme 1995, Tandon 1995), and their constituency’s values (Tandon 1995, Edwards 1999, and McDonald 1999). This I think is problematic, as by making NGOs accountable to state we risk the danger of making NGOs another arm of state. Particularly in the context of the present state of GNGOs in India, making NGOs accountable to the state is not desirable. Then should we make them accountable to the donors? To the extent of evaluation of the work done by NGOs meeting donor’s objectives, we should make them responsible to donors. Besides donors, NGOs should be made accountable to their ultimate constituency – the people with whom, for whom they work and exist. Though this point of view is shared by many scholars, we do not have a mechanism through which NGOs can be made accountable to the people with whom they work. Therefore researching accountability per se and to retain the effectiveness of NGOs functioning, exploring mechanisms of making it accountable to the people with/for whom NGOS work is very important.
The term governance deals with the processes and systems by which an organization or society operate. The word derives from Latin origins that suggest the notion of ‘steering’. This sense of ‘steering’ a society can be contrasted with the traditional ‘top-down’ approach of governments ‘driving’ society or the distinction between ‘power to’ in contrast to governments ‘power over’. Governance as steering people (John-Mary Kauzya 2002) is one of the very important aspects of governance as applied to NGOs. Governance can be both good and bad, there are qualities of the process of governance that separate the two (Cariño 2003: 75). Governance generally includes the standards of accountability, transparency, participation, and efficiency and effectiveness (UNDP 1997; Cariño 2003). The literature on the Third Sector refers to governance as the exercise of governing functions by responsible persons within the organization, particularly the board or its equivalent, or including the executive. In this sense, the term has an inward looking perspective, an internal relevance (Domingo 2005) Though it is difficult to examine governance as an important aspect of NGOs functioning independent of accountability, we can say that good governance is perhaps one way of taking care of accountability of NGOs to their ultimate constituency – the people with whom they work. Researching good governance would lend a lot of meaning to the very existence of NGOs.
Besides, the reasons cited above, documenting and researching NGOs is very important from the point of view of Policy making, Continuity in NGOs activities, disseminating information about best practices in NGOs, Information base for NGOs working in areas related to science (e.g., Environment, Health etc.) and networking.
Associate Professor, Head Department of Social Work, The Oxford College of Arts
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