NGO accountability

Abroad NGOs are treated like any other business organization. Their accounts are audited and they even pay taxes (although at a very low rate and govt grants exceed the taxes paid). However in India most NGOs don’t audit their account. They might have assets worth millions of rupees, yet instead of a finance controller, there will be part time clerk who voluntarily (or at marginal salary) would update the ledger over the weekend.
Very few of the NGO’s in the country are self sustaining. Also even amongst those who are self-sustaining often require capex support whenever they want to expand their operations. There are Indian nationals, Govt of India, NRI or even foreign agencies which are more than willing to support these NGO in their noble causes. However if you take someone’s money, then it is expected that
a. You prove that you need the money
b. You have spend wisely whatever you have received
c. Share the results of the actions.
Unless all the above 3 are taken care of, the donor will not feel proud of his donation. It makes financial sense for the NGO also because a satisfied donor will not only repeatedly fund your cause, but will also promote and solicit funds from his/her friends.
The problem in India is that NGOs in India have evolved from the Trusts which the rich use to lessen their tax burden (both personal tax and wealth tax). Via inflated/fake bills the trustees used the trusts to fund their lavish lifestyle. I have known families were almost every member is on the board of different trust and they use it as an expense account to bill almost anything and everything to these trusts.

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7 thoughts on “NGO accountability

  1. there is a large percentage of ngos that have vested interests and are into pursuing agendas, as rules are lax , essentially to benefit the political class

    well not just ngos there are many public trusts that are in it too
    The easiest scam is to make a political party and accept tax free donations.

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  2. Goi needs it and promotes it .for obvious reasons. at least the babus and the politicians do.
    Do u know about the ngos opened by politicians usurping huge tracts of land in mumbai at a pitiance ?

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  3. may also include trusts of politicans.
    There is so much open space given to politicians to manage …
    Wherever there is money and ablity of political interference there is bound to be corruption.

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  4. Yes, perfectly stated by Ankur. Lot many organisations and individuals are more than willing to donate funds for a cause but it is a sorry state of affairs that proper accounting and financial decipline is not being maintained by NGOs

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