The not-for-profit sector in India

Current challenges and opportunities

While significant contributions have been made by not-for-profit organisations to the social and economic development of Indian society, some challenges still need to be addressed for their long-term viability and impact.

Capacity building

Sustained focus is required to build human and institutional capabilities within not-for-profit organizations to enable them to function effectively. Systematic professionalism in the sector has begun but needs a lot more input.

Critical aspects of future growth include:

  • development of and improvement in managerial skills
  • inculcation of a professional approach to work performance
  • sustained improvement in human resource development

Governance

Regulatory issues of self-governance and of financial accountability are extremely important for the sector as a whole.

Not-for profit organizations need to address the following issues related to governance:

  • institutional and leadership renewal
  • systems and practices requiring due diligence
  • transparent and accountable self-regulation

Enhanced resource base

Existing funding - from the government, from corporates and from international donors - while extremely valuable, is still inadequate for sectoral sustainability especially since most of it focuses on short-term projects and programmes. Sector-wide efforts need to be made to build institutional mechanisms for accessing funds from:

  • the general public
  • the corporate sector
  • the Indian Diaspora

These sectors are tapped effectively for relief and rehabilitation work in times of disaster, but need to be channelled into sustainable support for long-term projects.

The not-for-profit sector also needs foundation-type organisations to obtain resources on a continuing basis for long-term development issues and programmes.

Sustainability

Sustainability requires the ability to revitalize the not-for-profit organisations in response to trends and changes taking place in the wider environment.

Sustainability also requires ensuring:

  • a reliable long-term flow of resources thus changing current patterns of limited project and programme based funding
  • systematic funding for maintaining core operational costs: organisational renewal, internal capacity building and minimum infrastructure

Infrastructure

Developing infrastructure to ensure the long-term and sustained contribution of not-for-profit organisations to Indian society is another major challenge. The following need to be addressed:

  • legislation: laws that govern registration, functioning and finances of not for profits need to be reviewed to accommodate changing scenarios
  • information base: there is a need to develop up-to-date information about the sector in a format that allows constant updating
  • institutional structures that address issues such as human resource development, regular capacity building interventions and public advocacy mechanisms for the not-for-profit sector need to be developed, as do institutions that provide financial management and investment advice

Scaling up

Given the size, diversity and complexity of the nation, it is important that the programmes and interventions in the not-for-profit sector are expanded to match the challenges posed.

There is a need to convert the micro-experiments that have been undertaken by not-for-profit organisations in a variety of social service and development endeavours into large-scale programmes and interventions. Small efforts in micro-locations get undermined in the absence of a minimum critical mass of coverage.

There is a need to develop the systems that enable and sustain scaling up operations, especially leadership, institutional capacity and resources.