Bill Gates handed over charge of Microsoft last week, and — after a brief summer break — will return to a full-time role at the Bill and Melinda Gates Foundation (BMGF). As the world’s largest private philanthropic entity, BMGF has more than $35 billion from the Gates and an additional $30-odd billion from Warren Buffett.
Bill Gates the philanthropist is likely to be an even more controversial figure than Bill Gates the capitalist. Part of this is because of the approach that BMGF has taken in trying to solve global issues, such as eradicating malaria. But a lot of the conflict will stem from more fundamental challenges that the non-governmental organization (NGO) sector faces; BMGF only adds fuel to an already raging fire. And India will be a key country in how this conflict plays out.
India has more than one million NGOs of varying sizes, operating across a vast spectrum of social issues. Only a small handful of these challenges can be solved with market-based approaches — with revenue models that can create self-financing entities run by social entrepreneurs. A majority of our social challenges will always need grant-based support. Mid-day meal schemes, the care of challenged children, women’s rights programmes — these are examples of the kinds of complex social challenges that don’t have “revenue-model” solutions. Such NGOs will need donor funds to hire good people, develop systems and build strong institutions to create sustainable change over long periods of time.
While the NGO sector has a significant role to play in addressing social issues, it is under tremendous pressure, not just in India, but worldwide. The forces of globalization and technology are not only posing challenges for governments and markets, but also for NGOs. Traditional distinctions between state, markets and society are blurring; questions about accountability, transparency and impact of NGOs — which were always being asked — are now being demanded with greater frequency and vigour in the past few years.
In a report titled The 21st century NGO: In the Market for Change, consulting firm SustainAbility states, “New forms of competition are evolving in the ‘NGO market’, with new entrants like companies, business networks, NGO networks and social entrepreneurs blurring traditional boundaries.” In 2002, the United Nations constituted a panel of eminent citizens under the chairmanship of former Brazilian president Enrique Cardoso to address UN-civil society relations. The panel’s report — submitted in 2004 — received substantial criticism from the NGO sector, centrally around the suggestion to expand the current UN-NGO dialogue to multi-stakeholder consultations that included businesses.
These trends are indicative of the increasing scrutiny of NGOs, their governance systems and the measurement of their impact. Rajesh Tandon, chairman of a respected NGO called PRIA and one of the founders of an NGO network called VANI — Voluntary Action Network of India — has made several attempts over the past two decades to develop a self-regulatory framework for the NGO sector. VANI developed a “code of conduct” for NGOs, which identified key parameters such as mission, governance, accountability, transparency and financial management for non-profits.
But implementing and enforcing such voluntary self-regulations is difficult. In a paper titled The Guardians Guarding Themselves..., Mark Sidel, professor of law at the University of Iowa, writes of the Indian experiments: “It is notoriously difficult to develop substantial, detailed, explicit adherence to non-profit norms and codes, particularly where there is no incentive mechanism to back them up.” Message: no financial teeth, little enforcement possibility.
Many experts take strong exception to what they term attempts to muzzle NGOs into a straitjacket of measurement criteria and impact assessments, especially since the practice of measurement is so complex: what to measure, and who decides—the NGO, the donor or the beneficiary of the work of the NGO?
The debate on NGO accountability is not going to get resolved any time soon. But, there is consensus on one point: NGOs are facing pressure to remain relevant. And it’s here that Bill Gates in his new avatar will create enormous friction, globally as well as in India. Many NGOs in India are still uncomfortable with market forces, either as legitimate players in the social change space, or as funders of social initiatives. By being the 800lb gorilla in the donor space, BMGF will force such NGOs to make tough choices: Will they oppose market-based/market-funded social change, or accommodate this new dynamic? Or, worse still, hold their noses as they reluctantly accept funds from the most successful capitalist of the 20th century?
Ramesh Ramanathan is co-founder, Janaagraha. Mobius Strip, much like its mathematical origins, blurs boundaries. It is about the continuum between the state, market and our society. We welcome your comments at firstname.lastname@example.org