India has strong measures of social protection for people from underserved communities through various entitlements, rights, and schemes. Access to these protective entitlements is often riddled with gaps stemming from underlying socio-economic and geographical factors. Civil society organisations (CSOs) play a crucial role in bridging these gaps and ensuring the last-mile delivery of public services. In this process, they also address the root causes for these gaps and inform government policies in accordance with the requirements of marginalised sections. CSOs, thereby, make for an effective link between the government and the people.
Ensuring last-mile delivery of services, informing policies, and achieving the desired impact are outcomes that have their foundations in strong, resilient organisations. The institutional well-being of CSOs encompasses the aspects of employee well-being, the ability to carry out their programs and research in a non-partisan manner, as required by the communities they are serving, and their strength to carry on their operations during crises. These are aspects, for which CSOs are largely dependent upon the funds they can raise.
Philanthropic and corporate social responsibility (CSR) funding is akin to the fuel that drives civil society organisations and their interventions. CSOs are dependent on these funds not only for running their programmes, but also for developing essential capabilities, which take their projects to fruition. Owing to existing practices in funding, typically, the flow of funds is overwhelmingly directed to programme-linked expenses, and not the indirect costs that go towards strengthening an organisation. In a survey for gathering evidence on the financial resilience of CSOs in India, conducted by the Bridgespan Group in 2021, 83 per cent of respondents mentioned that they struggled to secure coverage of indirect costs. Apportioning funding towards indirect expenses can help organisations become more resilient and enhance their capacity to effectively deliver crucial services to communities.
The underfunded non-programme expenses are indirect costs that include expenses incurred towards administrative, and support functions, along with hiring and retaining employees, and their learning and development within the organisation. These areas are not only critical to ensuring project outcomes, but also have a bearing on the capacity of organisations to sustain themselves during periods of crisis. Therefore, to ensure the efficiency of the organisations’ programs and their longevity, it is necessary to invest in its administrative and support functions.
The dominant focus on scaling up programmes comes at the cost of institutional well-being and can compromise the financial resilience of CSOs. The COVID-19 crisis highlighted financial resilience as a crucial aspect of effective disaster response by CSOs. During this time, grassroots organisations were instrumental in providing aid and relief to low-income and marginalised communities.
However, since the regular programmes, to which the majority of funding is directed, were halted, these organisations’ finances plummeted. With little cash reserves, these grassroots organisations were hard-pressed to pay employees and simultaneously, provide adequate aid to the communities they served. According to a 2020 report by the Centre for Social Impact and Philanthropy (CSIP), 30 per cent of non-profit organisations do not have enough funds to sustain beyond six months or less as an impact of COVID-19.
Further, the existing funding patterns, and their consequences, especially during crises, make the need for sound organisational structures evident in order to maximise benefits to communities. The well-being of employees is a significant contributor to the long-term success of CSOs. As the importance of job specialisations increases, the employees require regular upskilling so that they are up to date on sectoral developments.
The emotional and mental well-being of employees, especially those who work at the grassroots, must also be protected as it not only affects productivity but also their capacity to engage and interact with the communities for whose benefit the organisation is working. As CSOs are also instrumental in informing policies – with many organisations engaged in solely that function – it is essential that their work remains independent and non-partisan. Focusing on organisations’ processes, enabling them to hire and retain the right people, and enhancing their decision-making capabilities can create an environment conducive for carrying out independent research.
The stability of CSOs can be built through grants which allow for long-term planning that necessitates the diversification of the funder base. Collaborative philanthropy – where a group of funders collaborate with multiple CSOs to holistically address an issue – not only effectively stabilises the flow of funds but also creates opportunities for cross-learning which organisations can internalise and use for strengthening their structures and processes. For example, the GROW Fund, a recent initiative by EdelGive Foundation, brings together a diverse group of funders to support the institutional well-being of CSOs in India. The idea is to enable these organisations to address their development needs, build resilience to face unforeseen contingencies, and enhance their capacities for scaling up their initiatives.
With the growing understanding of the intersectionality of social issues, the roles played by civil society organisations are also evolving. There is more need in the sector for a variety of subject matter experts who bring in different perspectives about issues. Proactively measuring programmatic indicators, financial performance, and the creation of financial reserves further warrants a workforce with diverse capabilities. In this regard, the role of CSOs is not solely limited to empowering communities but also extends as a viable avenue of employment for people and providing them with opportunities to grow in their careers.
The need of the hour is to acknowledge that the success of CSOs, like any other organisation, is dependent upon the strength of their vision, their expertise, and their capability to hire and retain the right workforce. Stable, long-term funding has the potential to create resilient organisations that can sustain and scale up the positive outcomes in the communities they work for. Working towards their institutional well-being by improving their processes, efficiency, and financial planning can help these organisations achieve maximum impact at the grassroots level and prepare them for facing future adversities.
The author is CEO, Edelgive Foundation. Views are personal.
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