When COVID-19 spurred a nationwide lockdown in India in 2020, a grave need for localised social support emerged. Giving, both private and public, flowed to NGOs working towards combating pandemic-induced challenges such as loss of livelihood for vulnerable communities, food banks, and health and medical support.
In any such social effort, programme expenses attract the big cheques — especially when they come from corporate social responsibility (CSR) initiatives in India. For example, an NGO working on education outcomes might receive funding for books, other online resources, teacher training, curriculum design, etc. But NGOs have other expenses too. In order to achieve long-term and sustained impact, they need to pay for administrative and support expenses not specifically tied to programmes— for instance, rent, electricity, technology and human resource costs. These organisational development and indirect costs, combined with programme expenses, make up an NGOs’ true costs. And underfunding an NGO’s true costs reduces the efficacy and impact of the very programmes that funders support.
Editorial | Killing the licence: On NGOs and funding
