GOVERNANCE AND NGO’S

Abhinav Goyal

Dhananjay Patil

Nitin Gaopande

Nupur Ajmera

Sonali Gupta

GOVERNANCE

…relates to Decisions that define expectations, Grant power, Verify performance

AID TO HAITI FAILED

80% of public services in HAITI are delivered by NGO’s

Donors sometimes by-pass government and donate directly to NGO’s

A/c to a reseach survey done Haitian Govt indifferent to the programs initiated

by the NGO’s NGO’s creating an “internal” brain drain. People

moving from Govt to NGO’s Numerous NGO’s independent of each other and

difficult to manage

NGO’s in Haiti virtually running parallel service delivery systems There by eroding the legitimacy of the

government system

NGO’s were unwilling to transfer power back to the government

Few of the NGO were feared to be doing “ADVOCACY” Sufficing political agenda.

ANOTHER TYPE OF EHTICAL ISSUE

Unchallengeable phenomena: Whenever there is a new door invented/discovered to create money/value, there will be scores of copycats taking advantage of the bandwagon… one or the other way

Bangladesh - Birthplace of microfinance Districts Natore, Rajshahi and others

30 Fake NGO’s reported Swindled around 10 lakh poor NGO Freedom Unnayan Sangstha had

vanished overnight with nearly taka 250 crore

REASON

Slack regulations and registration norms for NGO’s Registration as Voluntary Social Welfare Agencies

gives way for fake NGO’s to register

NO government regulatory authority which supervises over the MFI NGO’s

NO central agency that evaluates FINANCIAL PERFORMANCE

CHALLENGES IN FRONT OF AN NGO

Rising expectations Talent & passion is not freely available Increasing interference and demand for

interaction by governmental authorities. Conflicting goals Expansion dilemma Fund raising Long term Sustainability

WHAT NEXT?

REGULATORY FRAMEWORK AND FINANCIAL ACCOUNTABILITY

Legal framework (registration, oversight, tax) outdated and the multiple implementing agencies lack capacity.

Laws relating to internal governance, accounting, disclosure and transparency are rudimentary

NGO Boards face similar corporate governance problems as corporate sector (family members, lack of term limits, lack of role clarity)

Donor financial reporting requirements are questionable

Quality of external audits and public access to reports vary significantly

REGULATORY FRAMEWORK AND FINANCIAL ACCOUNTABILITY (CONTD…)

Uniform accounting standards using IAS, oversight system for audit quality through proposed Financial Reporting Council and public access to audit reports would help

Board composition and functions could be strengthened in line with Code of Corporate Governance

An Independent NGO Commission is one option for improving institutional framework

Certification bodies, as in Philippines and Pakistan PCNC, Philippine Council for NGO Certification Pakistan Centre for Philanthropy (PCP)

Legislative revision carries risks as does current status quo.

MORE GOVERNANCE

Accountability of an NGO Performance Disclosures

Protection of donors money Code of practice on client/donor protection

Independent National Rating agencies Rate on performance Initiatives Fulfillment of milestones

MORE GOVERNANCE

A ‘strategic compact’ between Government, Donors, NGOs and Clients

Each improves certain aspects of its current practices could further enhance development impact of NGOs

In India few organizations are involved in creating governance guidelines and assisting NGO’s in direct or indirect way. The Center for NGO Governance Global Forum on NGO Governance www.ngopulse.org

NO ORGANISATION IS A REGULATORY BODY

THANK YOU