Where is my money!!? - A question that NGOs need to find a solution for!

Where is my money?

Figures say that for 1 USD we donate to NGOs, on an average only 70 cents goes to the actual cause.

Rest 30 cents are wasted as fundraising and administration cost.

As per global trend people are increasingly willing to donate today,, but they want each cent of their money to be utilized for the real Purpose. Whereas, in the wake of such facts people end up asking “Where is my money!!?”

This high administration and fund raising cost severely affects NGOs Productivity and Efficiency. 

NGO Productivity   α Total Funds Raised for the cause.

NGO Efficiency (%) = Funds Used for Cause

                     Total Funds Raised

Fund Raising Efficiency = Total Funds Raised

                           Fund Raising Cost

Problem defined:

‘How can NGOs increase their Productivity and Efficiency?’

Reasons explored:

If we assume that all the funds finally available (after deducting fund raising and admin cost) to the NGO are being used completely for the cause then there are two clear factors that affect Productivity and Efficiency of NGOs.

1.  Total Funds Raised

2.  Cost of Fund Raising

So, what are the reasons that are holding back NGOs on these parameters?

1.  Total Funds Raised

a)  Limited Geographical Reach – Fund raising activity is limited to area of operation.

b)  Limited Penetration/Awareness – Even in the area of operation not everyone is aware of the NGOs.

c)  Lack of Credibility – I don’t know if my funds will be completely used for the cause.

d)  Lack of Tangibility/Transparency – I want to see where my funds are being used.

e)  Limited Resources – Limited volunteers and resources.

f)  Poor supporting technology infrastructure – Not using adequate technology and infrastructure because of limited funds.

2.  Cost of Fund Raising

a)  High fund development cost – Capturing new private and corporate donors is costly.

b)  High Marketing Cost – High cost of marketing, road shows, awareness campaigns, etc.

There is a need for an efficient fund raising channel for NGOs.

Solution Proposed:

A web based ecosystem for NGOs

An Internet portal to provide a one stop website solution to connect global donors and various (participating) NGOs.

However, it is not simple as it seems to fill the gaps by simply building a portal.

The portal should be designed to fully exploit the potential of Web 2.0 (Interactive web, social networking, facebook, twitter, etc.) to reach millions of users.

Some of the desirable features of such portal could be:

·         A large user base.

·         Integration with social networking sites like Facebook, Twitter, etc.

·         One Stop Solution for various NGOs.

·         Country, NGO and Project level Transparency.

·         Making donation a fun process.

Potential Benefits:

Contact me at rahulsingh.mail@gmail.com

'To Give' or 'Not to Give'

This was a long settled thought, which resurfaced after reading a blog post ‘It pays to be unemployed’.

‘To Give or Not To Give’ (donate money for charity) is the case in point. The thought first struck when I was discussing the issue of charity with one of my close friend Prasoon. Both of us started up with entirely opposing stands. Prasoon at that time was looking out for charities where he could contribute some money and was a proponent of ‘Giving’. And with Ayn Rand’s Atlas Shrugged still fresh in my mind, I stood as a proponent of ‘Not Giving’ and a non believer in charity.

This was a long discussion but briefly the arguments somewhat followed like this:

Arguments in favor of ‘To Give’

·         We should help (financially) who are under privileged.

·         We should help (financially) who are not born lucky.

Arguments in favor of ‘Not to Give’

·         People should first earn and then eat.

·         People should not be living on alms without producing/contributing anything.

Arguments against ‘To Give’

·         Will it not be injustice to people who are born with under privileged conditions but work hard to earn a living?

·         Will it not be injustice to people (poor, physically challenged, etc.) who follow their dreams with grit and perseverance against all odds?

·         Will it not encourage idling and non working environment?

Arguments against ‘Not to Give’

·         What is their fault if they are born in a poor family which cannot provide a decent two time meals to them?

Amidst all these arguments, agreements and disagreements, we realized that there is a middle way and which came out to be the best alternative on which both of us principally agreed.

‘Give to Facilitate’

We realized that purpose of ‘Giving’ should be ‘To Facilitate’ under privileged to produce, earn and then eat. The charity contributions should be towards creating an environment and ecosystem to help the under privileged learn required skills and become more productive.

If an individual decides to contribute for the sake of social responsibility, the responsibility should not end with giving money alone. As a matter of fact, responsibility of individual should start with giving money. He should ensure that the money or effort which he is contributing should be to facilitate people to produce and earn, and should not encourage spoon feeding.

In Buddhism alms are not considered as simple charity – “In Theravada Buddhism, monks (Pāli: bhikkhus) and nuns go on a daily almsround (or pindacara) to collect food. Alms are given by lay people to monks and nuns to nurture virtue, merit and blessings and to ensure monastic continuity”. Alms are given to monks to facilitate them to continue their spiritual quest. Isn’t it elementary!

So, towards the end, we concluded that there are two efficient ways of contributing that would make real difference:

1.       Imparting skills and knowledge to make under privileged self-sufficient.

2.       Money and Voluntary contributions to those NGOs which facilitates the under-privileged and not to those who spoon feed them.

Ideally speaking, even Non-profits and NGOs should work for ‘Facilitating’ under-privileged and not just for ‘Giving’ or ‘Channelizing’ money they arrange from fund raising. There should be a single definitive purpose for which the NGOs operate and that purpose should be ‘Facilitation’. What these people really need out there is no pittance, no mercy... It’s just ‘facilitation’. ‘Facilitation’ to stand on their own… to Earn their own living.

The irony is that even today individuals, organizations and governments fail to understand and appreciate the basic principles of ‘Giving’ Vs ‘Facilitating’. Or, maybe we have not got them right yet!

Read more on irony of such government policies in article ‘It pays to be unemployed’ here.