Opinion: Before the third wave, we urgently need to relax NGO regulations

Services within the non-profit sector that go beyond the call of duty are profoundly inspiring. However, time-consuming regulatory requirements are weakening the efforts needed during this hour of crisis

Updated: Jul 26, 2021 09:30:33 AM UTC
Image: Shutterstock

In the first week of May 2020, NITI Aayog appealed to over 90,000 NGOs and civil society organisations (CSOs) to assist in cross-sectoral collaboration to deliver essential services to the most vulnerable during the Covid-19 pandemic. Many such organisations responded positively and rapidly engaged in providing immediate relief by feeding migrant workers, distributing hygiene and ration kits as well as essential personal protective equipment (PPE) to frontline health and sanitation workers. While the contributions and sacrifices of several frontline workers and media personnel have been brought to the limelight, the number of fatalities incurred by the NGO sector while responding to the pandemic from the frontlines remains unknown.

The Covid-19 pandemic has had a multi-fold impact on India’s non-profit sector, resulting in staff shortages, cash liquidity, distressed communities, and complex regulatory compliance requirements. Non-profits and faith-based organisations have been at the forefront of the Covid-19 response across geographies despite operating within limiting and high-risk environments. Enabling these brave warriors to continue serving through an agile, trust-based, and digitally secure model that saves time and ensures compliance will be integral to strengthening our efforts as the operating environment becomes even more complex.

Building a supportive regulatory environment
Services within the non-profit sector that go beyond the call of duty are profoundly inspiring. However, time-consuming regulatory requirements are weakening the efforts needed during this hour of crisis. While extending the FCRA certificates until June 30, 2021, and exempting medical and lifesaving goods from taxation are positive steps being taken by the government, non-profits are seeking a revision of rules disallowing the subcontracting of aid to other NGOs.

The requirement to open FCRA accounts in New Delhi for closer monitoring by government bodies is another bottleneck for non-profits. This may disrupt their efforts in remote regions with limited access to transport and internet connectivity. As of March 31, 2021, only 16 percent of the 22,457 NGOs with active FCRA licences had active bank accounts with the main branch of the State Bank of India, Delhi.

For funding agencies, and for private sector mobilising funds and in-kind goods from their offshore partners, the existing regulations have significantly hindered response time and caused donor fatigue when much-needed aid is reducing. These regulations need to change, considering the possibility of a third wave and other humanitarian emergencies.

Further, NGOs with FCRA accounts receiving surplus funds are being disallowed from subcontracting and sharing resources. This can impede response in regions where NGOs need on-ground partners with a strong community presence. Sustaining the basic incomes and well-being of non-profit staff during lean funding periods is also a priority, and subcontracting enables staff to continue with their relief work.

In order to address such bottlenecks while responding to similar future emergencies, multi-stakeholder led collaborative models can be proposed to save lives and allocate funds more effectively. Such models have been previously deployed to allow Indian private-sector and humanitarian organisations to assist non-profits in Nepal post the 2015 earthquake. A similar model could be replicated where the Government of India, NGOs, and the private sector are at the forefront of providing relief and assistance.

Relief organisations, skilled experts and non-profit agencies, including corporates in India, raised funds locally to support communities in Nepal for a mutually agreed timespan post the earthquake. With regulations relaxed, a large private-sector foundation in Nepal, experienced in logistics, provided on-ground support to a corporate foundation and a leading Indian NGO specialising in disaster resilience. The resulting association brought together funding, regional and technical expertise to help bring shelter for hundreds of families in the worst-affected district of Gokarn. This was because the governments of Nepal and India allowed for cross-border collaborations with clear oversight parameters.

Transparency to build trust
While the Government may be encouraged to support the non-profit sector through relaxed regulatory measures for a fixed time period, the sector will need to adhere to transparent and timely reporting of beneficiary data, outreach and grant utilisation. This can be done remotely at mutually agreeable timelines, and further improved through artificial intelligence (AI) enabled digital platforms being utilised by frontline staff such as ASHA workers.

The emerging challenges in managing foreign donations and funds to address the Covid-19 crisis indicate an urgent need for a simplified, digitally secure and transparent monitoring of resources. A robust and accessible real-time reporting platform may enhance transparency and flag gaps in responses by non-profits.

Evaluating our response to the challenges emerging from the first wave and the ongoing second one presents a clearer pathway to enhance response quality and timeliness in emergencies. At this time, it is critical to help build trust between public institutions, private-sector entities, the civil society and community at large. Building trust will empower us as a whole to build skill-based consortiums for stakeholders and ensure that nobody is left behind, thereby enabling us to act together, in time, with quality in design, delivery and compassion.

The author is a Vice-Chairman of PwC India Foundation and Leader of PwC Global Office for Humanitarian Affairs

The thoughts and opinions shared here are of the author.

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