Bubbles are great, aren’t they? When you’re in one, the transparent nature of its exterior gives you an illusion that you aren’t. You constantly reinforce the feeling of normalcy, like nothing is distorted and everything is alright. Even when people point it out to you, you pay no attention. Instead, you tell yourself, ‘They don’t know what they’re talking about, I have all the information. I know more than them.’ But do you?
Why bubbles? Well, I was reminded of its complacent nature when I was at a workshop conducted by a public policy think tank. During the economic reasoning seminar, the speaker ventured into the topic of mandatory corporate social responsibility [CSR], and how, he said quite boldly, ‘it is horrible.’ Sitting back in my chair, I winced.
However, looking deeper into the structure of how CSR is implemented, and how its carried out by its most important medium, I can attest to his stance, and will go even further to say, ‘NGOs do more harm than good.’
Before we get into the meat of things, let's get a few things out of the way. For the past three years, I’ve been volunteering with an NGO [a not for profit non-government organization] based in Bangalore, and I’ve thoroughly enjoyed the experience. Focusing on bridging the learning gap, the NGO works with underprivileged school and refuge homes to provide personal education through their volunteer pool. Like most big-city NGOs, this one has a standard operating procedure; they work with an educational institution providing after-school help, bring in external volunteers who teach specific subjects, on a micro-student basis with the required supporting ecosystem. The curriculum is well structured, assessments frequent, and extra-curricular activities plenty, but does it create any impact in the long run? I’m not entirely certain.
Taking a step back and looking at the larger picture, one which morphs the general view we have of such big-city social welfare organizations, it can be seen that an NGO is just a cog in a larger vicious cycle. A cycle composed of three other elements — the government, the corporates, and the people in need of assistance. Like the capital markets bridge the gap between borrowers and lenders, NGOs fill a similar gap, one which distorts impact and image.
The government classifies a certain amount as ‘mandatory CSR,’ as the speaker in the seminar alluded to. In India, the minimum requirement is 2 percent of profit before taxes, for companies earning a net profit of more than INR 5 crores [$660,000]. This means every company earning over INR 5 crores is forced by the government to spend 2 percent on CSR activities from an approved list. Now, when force is applied, the obvious motive for any company would be to incentivize the outcome allowing the product of the force to be mutually beneficial to both parties i.e. the entity applying the force and the entity subject to the force.
What is the incentive for companies through CSR? Simple — build the brand.
Generate, what I like to call ‘goodwill points,’ by giving [through force] a part of the net profit to a medium that can do two things. Firstly, funnel it to an entity that can benefit from the money, and secondly, allow the company to build its image. The company parting with their money gives it to an NGO to set up a school/home/ shelter, for those with genuine needs. In return, the company, every couple of months, will send their employees, as part of a “CSR campaign” for what is essentially a “photo-op.” Take a bunch of pictures of employees standing with some children, conducting a class, planting a sapling, or throwing a ball around. At the end of the day, the ‘goodwill points’ are generated, the NGO gets a handout and the children an education.
So, what’s the problem here? Granted the companies are only doing so out of force and using it for building a brand image, but aren’t they solving a problem? Aren’t they giving money to an NGO to educate underprivileged children? How is this cycle ‘vicious’? Yes, they are, and that’s great, but when does this end, and, more importantly, should it?
During the seminar, a person sitting beside me said that most CSR programs only benefit the big cities, and the areas in the periphery while the small towns, and villages, barely marked on the map are often forgotten. Companies see no public-image incentive to partner with organizations in such towns, and hence no NGOs sprout. To be fair, it would not be cost-effective for companies operating in big cities to send their employees to these small towns for a few hours of volunteering, even if it meant higher ‘goodwill points,’ and people living in these small towns understand this inability.
If there are few opportunities in the small town, private or public support is scant, and moving to the city is a possibility, what would the families living here do? Simple, migrate. It would be the best option. Move to the big city, get a low-wage job, and send your children to an NGO-supported school. I understand the primary motive to shift may not be educating the child, but it is an incentive when the costs for the same are low.
While anecdotal evidence should not be used to qualify this argument, I cannot let this go amiss. In my time at the NGO, I noticed that students would often miss school for days and even weeks, stating they were visiting their hometowns. Most of their hometowns fell outside the state, so did their regional language.
This creates a problem of shifting supply and demand, with the NGO as the middleman. Governments force companies to give part of their profits for CSR needs to NGOs. These NGOs provide education, vocational training, food, or shelter to those in need. The families knowing the prevalence of these cyclic facilities move to the cities. Who benefits from this? The government, because they enforce a policy, which can be used to pat themselves on the back, the corporates because they get their ‘photo-op,’ and the NGO because they get some monetary benefits being the middleman. Do the recipients of these NGO-services benefit from them? Not entirely.
Since they’ve been brought to the city, lived in the city, and educated in the city, they’ll tend not to leave. Leaving aside the outliers, the greater proportion of this crowd will eventually gain employment in a menial job, one that is higher paying than their parents’, but still has little to no upward mobility. Their skills will be limited to the general skills of language [English] and basic computers, and specialized skills like driving, cooking, etc., the larger impact, however, will be absent, in fact, it will be much worse.
With the need to stay in the city, these essential components of the vicious cycle, the NGOs, will do more to prolong the cycle than stop it. As the cycle continues, the city in question will inevitably have to expand externally and compress internally. More people will require more housing, more employment, more education, and other necessary infrastructural needs.
Each component has its own vested interest in ensuring this cycle continues. The government in their power enforcement, corporates for the positive optics, and NGOs in, well, continuing to survive. The losers of the equation are the migratory families and the city. Since each organization has a stake in ensuring the survival of the cycle, they make sure it doesn’t stop, and despite their ‘societal upliftment focus,’ so do NGOs.
How would such a cycle stop? More importantly, who could stop such a cycle? The government, by removing the requirements on CSR, or altering it, by diverting the contribution away from cities? Corporates by contributing with a clause of focusing on rural development, rather increasing expansion? NGOs, by changing their modus operandi, and moving to rural areas? While, I personally do not see a change coming from the first two groups, owing to their own vested interests, and lack of single-minded focus on education and development, the onus, hence, shifts on NGOs.
What could an NGO do to address this cycle? Not to continue it by simply acting as a middleman between corporates and migratory beneficiaries, or for volunteers looking for short-term impact? I’m not a development studies expert, nor an economics graduate for that matter, but, in my personal opinion, a move from centralized service dissemination to decentralized service dissemination seems fitting.
By that I mean instead of monopolizing the scarce resources within the big cities, NGOs can move into the smaller towns, the ones which truly need the extra-help, and can build a program from the bottom-up. While the on-ground resources will be scant, owing to the dearth of volunteers, the local residents will see this as an opportunity to better their own community, rather than migrate out. NGOs can pool the resources received from corporates within the big cities and funnel it to the places that require it. Even if for every 1 center opened in a small town, 5 centers can be opened in the city, at least the spread of development will not be skewed. The smaller towns can build their own human capital which can, in turn, plough back into their own society, creating a self-sustainable system. This can wipe out the vicious cycle as mentioned above and instead create a more equitable cycle, spreading the development.
Once the initial goals are met, there should be no need for the NGO. With successive batches of students educated, young adults trained, and food and shelter provided, the NGO should cease to operate in the given town, and instead channelize their operations to another project from a new ground zero. Before departing the NGO should build a local leadership team, infrastructure for ongoing service-dissemination and constant feedback loops to ensure longevity, and continuous development.
Based on this method of gauging impact [and not image] the litmus test for any NGO would be if their project ceases to exist in 3–5 years. If it does, then it means they’ve either achieved their objective and the project can go on independent of them, or it was a dead-end, and pouring more resources would be a waste of time, effort, and money. If it continues to operate, the NGO is either profiteering from a vested interest or simply ineffective. Further, if the project has to be scaled within the original premise, it should be spearheaded by local members, and not by the NGO. The point here being, NGOs should not be seen as a constant middleman, one that is inexhaustible. Every NGO, irrespective of the service provided, should be exhaustible — one day there should be no need for them.
The crux of this argument is — in India, the goal of NGOs, or any development organization, should not be to expand Bangalore, Mumbai, or Chennai, it should be to create more such cities.
There might be NGOs and companies that offer such programs and fellowships, but a larger majority of them follow the vicious cycle approach. To an extent, these NGOs might not be entirely malicious in their understanding of the situation, they might just be catering to the thousands of students and working professionals who genuinely care if a child cannot read or write, or who are simply in need of a ‘social service certificate.’ Either way, their provision satisfies a short-term goal but creates a long-term problem.
By providing this service, be it education, training, shelter, or food, and being an integral component in the vicious cycle, NGOs are simply pandering to their own, and their volunteers’ narcissistic satisfaction, and in the end, do more harm than good. For a growing and unequal country like India, the focus should be on growing the smaller towns and villages and not choking the cities. In this effort, NGOs have the biggest role to play.