What Are NGOs?
A non-governmental organization (NGO) is a non-profit, citizen-based group that
functions independently of government, but may be involved in international
philanthropic, developmental, or social missions. NGOs are often organized on
local, national, and up to the international levels to serve specific social or political
Organizations which are independent of government involvement are known as
non-governmental organizations or non-government organizations.
According to NGO.org "an NGO is any non-profit, voluntary citizens' group
which is organized on a local, national or international level. Task-oriented and
driven by people with a common interest, NGOs perform a variety of service and
DEPARTMENT OF RURAL DEVELOPMENT
humanitarian functions.
Characteristics of NGO
A. An NGO is a non-profit making, voluntary, service-oriented/
development oriented organization, either for the benefit of members (a
grassroots organization) or of other members of the population (an
agency).
B. It is an organization of private individuals who believe in certain basic
social principles and who structure their activities to bring about
development to communities they are servicing.
C. It is a social development organization assisting in empowerment of
people.
D. An organization or group of people working independent of any
external control with specific objectives and aims to fulfill tasks that are
oriented to bring about desirable change in a given community or areas
or situation.
E. An independent, democratic, non-sectarian people’s organization
working for the empowerment of economic and/or socially marginalized
groups.
F. An organization not affiliated to political parties, generally engaged in
working for aid, development and welfare of the community.
G. An organization committed to the root causes of the problems trying to
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better the quality of life especially for the poor, the oppressed, the
marginalized in urban and rural areas.
H. Organizations established by end for the community with or without
little intervention from the government; they are not only a charity
organization, but work on socio¬economic-cultural activities.
NGOs are also traditionally known as:
1. Voluntary Organizations (VOs)
2. Voluntary Agencies (VAs)
3. Voluntary Development Organizations (VDOs)
4. Non Governmental Development Organizations (NGDOs)
Types of NGOs:
NGOs may be classified by their orientation and level of operation.
Based on Orientation
Charities: Often a top-down effort, with little participation or input from
beneficiaries, they include NGOs directed at meeting the needs of
disadvantaged people and groups.
Service: Includes NGOs which provide healthcare (including family
planning) and education.
Participation: Self-help projects with local involvement in the form of
money, tools, land, materials, or labor
Empowerment: Aim to help poor people understand the social, political and
economic factors affecting their lives, and to increase awareness of their
power to control their lives. With maximum involvement by the
beneficiaries, the NGOs are facilitators. [18]
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Based on Level of operation
Community-based organizations (CBOs) are popular initiatives which can
raise the consciousness of the urban poor, helping them understand their
right to services, and providing such services.
City-wide organizations include chambers of commerce and industry,
coalitions of business, ethnic or educational groups, and community
organizations.
State NGOs include state-level organizations, associations, and groups.
Some state NGOs are guided by national and international NGOs.
National NGOs include national organizations such as YMCAs and
YWCAs, professional associations, and similar groups. Some have state or
city branches, and assist local NGOs.
International NGOs range from secular agencies, such as Save the Children,
to religious groups. They may fund local NGOs, institutions and projects,
and implement projects.[18]
Similar terms include third-sector organization (TSO), nonprofit organization
(NPO), voluntary organization (VO), civil society organization (CSO), grassroots
organization (GO), social movement organization (SMO), private voluntary
organization (PVO), self-help organization (SHO) and non-state actors (NSAs).
Other acronyms include.
BINGO: Business-friendly international NGO or Big international NGO
SBO: Social benefit organization, a goal-oriented designation
TANGO: Technical assistance NGO
GONGO: Government-organized non-governmental organization
DONGO: Donor-organized NGO
INGO: International NGO
National NGO: An NGO which exists in only one country; they are rare.[19]
CSO: Civil society organization
ENGO: Environmental NGO, such as Greenpeace and the WWF.
NNGO: Northern (UK) NGO
PANGO: Party NGO, addressing political matters
SNGO: Southern (UK) NGO
SCO: Social change organization
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TNGO: Transnational NGO; coined during the 1970s due to the increase of
environmental and economic issues in the global community. TNGOs exist
in two (or more) countries.
GSO: Grassroots Support Organization
MANGO: Market advocacy NGO
NGDO: Non-governmental development organization
PVDO: Private voluntary development organization;
How NGOs Are Funded
As non-profit organizations, NGOs rely on a variety of sources for funding
projects, operations, salaries and other overhead costs. Because the annual budget
of an NGO can be in the hundreds of millions (or even billions) of dollars,
fundraising efforts are important for the NGO's existence and success.
Funding sources include: membership dues, the sale of goods and services, private
sector for-profit companies, philanthropic foundations, grants from local, state and
federal agencies, and private donations.
Individual private donors comprise a significant portion of NGO funding. Some of
these donations come from wealthy individuals, such as Ted Turner's $1 billion
donation to the United Nations, or Warren Buffett's 2006 pledge to give 10 million
Berkshire-Hathaway class B shares to the Bill and Melinda Gates Foundation
(valued at more than $31 billion in June 2006).
Despite their independence from government, many NGOs rely heavily on
government funding to function.
15 Sources of Funding Sources for Non-Profit Organizations
To implement projects, non-profit organizations (NPOs) would first and foremost
need funds. There are various methods and venues to acquire funds, thus, non-
profits should be strategic in seeking approaches suitable to their needs and
capabilities.
Listed below are a few examples of the various methods an NPO can use to get
started on their projects.
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Grants
Normally, this is the first thing an NPO would aim for. Grant funding agencies
who provide funding for non-profit organizations are the constant topics of
research for non-profits. Applying for grants can be time-consuming and even
stressful especially when denied. However, to continually fund many of their
projects, grants are usually the biggest contributors.
Cash donations
One of the easiest ways to acquire funds would be through the donations some
individuals or organizations give in cash. Sometimes, during an event, or even in
the NPOs office, interested parties would hand over their donations. Although this
is an effective and relatively easy way to find capital, most non-profits don't and
shouldn't really rely on this method. Although they're not relied upon, cash
donations are still highly anticipated by non-profits as it often provides a huge
relief to struggling organizations.
Contributions
Cash donations may sound great but incur the problem that they aren't binding and
constant. On the other hand, contributions may be. Partnering with organizations
will often affect them providing annual contributions to particular NPOs.
Contributions are usually given in large amount by board members of partner
organizations..
Membership Dues
Because acquiring grants on a regular basis can be challenging, some NPOs have
formed memberships with large corporations who in turn will need to pay a certain
fee known as their membership dues. These members are not only beneficial
because of the dues they pay, as they're also often partner institutions for many
projects. Members also help NPOs become more known to the public through their
partnership with big corporations and in effect will give NPOs the capacity to
receive more donations as well.
Investment income
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Investment income, when used and managed properly, can be beneficial to anyone,
NPOs included. Investments can come from bank loans, the stock market, and
many others. Investing in the stock market is often done but can incur losses as
well because assurance isn't something this particular practice can provide.
Fundraising campaigns
Fundraising campaigns can be done through various methods. It can be through a
booth, social media campaigns, and partnerships, among others. Booths can be out
up in malls, offices, and even in partnership with some events where people can
hand in their respective donations after learning about the organization. Another
method of fund-raising could be by hosting events. Mostly, profits from the sale of
tickets or other items will go directly to a project organized by NPOs.
Crowd funding
In recent years, NPOs have been using social media as a form of raising funds.
Websites like GoFundMe have gained popularity where users can read about
NPOs, their advocacies, and projects. Through that, they can donate funds through
the internet. Of all the examples given for fundraising campaigns, the use of social
media is the method used by majority given that it comes with little to no cost to
the organization, and yet can deliver effective results.
Matching grants
Matching grants have been reoccurring in many funding sources for non-profit
organizations. Although not known to many who aren't involved in raising funds,
this practice has been proven to be effective. Basically, a grant funding agency will
only approve a grant if an NPO can prove themselves capable of maintaining the
projects to be funded. To prove themselves, NPOs will need to raise the same
amount of money being offered by the grant funding agency. This way, after the
initial stages of the project, have been fulfilled, there are enough funds to maintain
them. This type of grant is meant for long-term projects that will continually be
monitored.
Corporate matching programs
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Although not very common, corporate matching gifts are very good opportunities
for NPOs to raise funds. Basically, a company employee is to donate funds to your
NPO and if he or she successfully submits the proper paperwork to the company's
human resources department, then the company will donate either the same amount
or even more your NPO. Big corporations such as Apple, Pepsi, Johnson, and
Johnson, are only a few of the many who participate in this kind of set-up.
Program Service Revenue
Program service revenue is similar to fund-raising. In layman's term, this is simply
a fund-raising event. Often, this could be in the form of plays, film shows,
concerts, parties, and more. Most of the time, the money earned from the sale of
tickets will go to a specific project. Often, through the advertisements, people are
informed that it's an event for a cause, which encourages people all the more to
attend.
In-kind donations
Similar to cash donations, in-kind donations are also just received by the particular
NPO. There's no need to apply for such grants, and although it doesn't require
much work to be done, NPOs cannot simply rely on this. In-kind donations are
usually commodities such as clothing, food, furniture, transportation, and etc.
Supposedly, these donations help NPOs and their projects function more
efficiently.
Loan Financing
Because grant receiving funds from grant-funding agencies can be challenging,
NPOs have discovered and have been using loan financing as a method to receive
capital. Loan financing is often easier and a lot quicker to receive, but come with
greater risks. It has to be remembered that a loan needs to be repaid.
Giving circles
Giving circles aren't really known to many who don't function as an NPO. Some
giving circles can be formal or even as informal as possible. Essentially, giving
circles are groups of people who want to help charities. Often times, members
Md. Ibrahim Kholilullah, Lecturer, Dept of AFC, EBAUB Page 7
would also like to get involved instead of just providing funds, although providing
funds is what many of them participate in. In some giving circles, members even
need a minimum annual donation, although not all giving circles actually observe
that practice. Unlike grant funding agencies, giving circles are much more difficult
to search for, as they aren't exactly publicly known.
Unrelated Business Income
Unrelated business income (UBI) comes from a variety of undertakings which isn't
allied with the NPOs tax exemption. Examples of this would be sponsorships and
advertising, among other UBIs.
Other income
This is usually something NPOs generally receive given the form of business
they're at. Since they are exempted from taxes, refunds are quite commonly
received by NPOs.
Role of NGOs:
NGOs are playing crucial role in the present scenario. They are trying to fill the
gaps created by the government. Their contribution is significant particularly in the
following fields.
1. Education of Children:
Some NGOs have played an important role in the education of children, eg. :
Infosys foundation is providing free text books and computers to rural schools.
Voice a NGO at Mumbai teaches under- privileged children at Mumbai.
2. Development of Youth:
NGOs are conducting various programmes to develop youth and bring out their
talents E.g.: “Yavanika”
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3. Protection of animals:
NGOs are taking sufficient care in preventing cruelty and protecting animals. Eg.:
Prani Daya Sangha.
4. Betterment of disabled:
Spastic Society of India, Alert working for the leprosy patients.
5. Development and operation of infrastructure:
NGOs can acquire and develop land, construct housing. They provide basic
amenities like wells, public toilets, and waste collection services. E.g: Infosys has
constructed Public toilets called “Nirmal” at many places in Bangalore city.
6. Technical assistance and training:
NGOs provide technical assistance and training in various fields. E.g.: “Awake” is
a NGO providing development programmes for women entrepreneurs.
7. Facilitating communication:
NGOs facilitate communication from people to the government and government to
people. They also facilitate communication between organisations through
networking.
8. Providing service:
NGOs take up activities such as the provision of health, family planning or
education services. E.g.: Hindu Kusht Nivaran Sangh offering services for people
suffering from the disease and providing rehabilitation programmes. E.g.: Society
for integrated development in rural and urban areas.
9. Emancipation of women:
Some NGOs have engaged in activities pertaining to upliftment of women. E.g.:
Chaitanya, Yuvatiyara Sangha is helping the women in distress.
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10. Helping in distress:
Some NGOs take up general welfare programmes in times of natural calamity such
as flood, earthquake etc. E.g.: “Medhavi”. NGO based at Ahmedabad has rendered
active assistance to 2, 50,000 homeless in Gujarat after the major earthquake.
Many NGOs have rendered financial assistance for Suhami victims.
11. Protection of environment:
Some NGOs are playing a key role in protecting the environment. They have taken
up activities like afforestation, prevention of water and air pollution etc. E.g.: Nasa
Foundation, Ahmadabad, India.
12. Preventing exploitation of unorganised labour:
Some NGOs have carried out such activities as to prevent bonded labour. E.g.:
“Bandhu Mukti Morcha” a NGO played a crucial role in filing a public interest
litigation to prevent exploitation of labourers at stone quarries.
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