05Jul2022

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Tag: NGOs

Research Commentaries

NRC0014 – Individual’s Contributions in Nonprofit Funding: Prospects for Nepali Nonprofits

Kaushal Sapkota

Synopsis

This commentary explores the prospects of individual fundraising in the context of Nepali nonprofit organizations. It attempts to evaluate individual giving in the U.S., other developed countries and in India, through secondary research. While comprehensive research on individual giving in Nepal does not exist, the article identifies favorable patterns and evidence within the social structure, literature, history, and religion of Nepal. Based on my research, I find that Nepali society is built around a giving culture thereby proving that individual giving is not an alien concept for the country. It is not a philosophical challenge, rather a communication exercise for nonprofit organizations to use it for their benefit.

Individual’s Contributions in Nonprofit Funding: Prospects for Nepali Nonprofits

A couple of months ago, I was discussing fundraising with a group of nonprofit leaders in Nepal, trying to explore their thoughts on raising funds from individuals to be sustainable and “somewhat” independent of grants. As a recent graduate of nonprofit management, it was surprising to me that almost everyone believed that individual fundraising is an “alien” concept surviving only in the U.S. or other developed nations because of their “generous” tax benefits and wealthy status. Intrigued by their response, I explored what literature and data had to say about raising funds from individuals.

Individual Giving in the U.S.

A total of 1.56 million nonprofit organizations registered at the Internal Revenue Service (IRS), contributed an estimated $985.4 billion to the US GDP (5.6 percent) in 2015. In 2016, nearly 12.3 million people worked for nonprofits, accounting for 10.2 percent of the total private-sector employment, as nonprofits became the third-largest sector of US employment that year. The role of nonprofit organizations in the civil society and the US economy is significant. Klein claims that private-sector funding accounts for 13 percent of the total revenue received by nonprofits, while earned income and public funding contribute 55 percent and 32 percent respectively. Analyzing private-sector funding for nonprofit organizations reveal that:

    • Individuals in the U.S. give to charities. In 2017, American individuals, bequests, foundations, and corporations gave $410.02 billion as charitable giving, increasing by 5.2 percent from 2016 and reaching the $400-billion mark for the first time. Out of the total private sector giving, 70 percent was contributed by individuals, 16 percent by foundations, 9 percent by bequests, and only 5 percent by corporate foundations.
    • The demographic distribution of donors debunks myths about individual donations. In 2013, the wealthiest Americans donated 1.3 percent of their income, while the poorest donated 3.2 percent. Seven out of ten individuals donate, and most people who give to nonprofits give to at least five groups. Every year, about 20 percent of the population on some kind of welfare programs give, and 97 percent of the millionaires donate.
    • Religion motivates giving. In Fundraising for Social Change (2016) Kim Klein writes, “the majority of people who give money in describe themselves as religious or spiritual, regardless of their involvement in a formal religious or spiritual community”. In 2014, out of the $358.38 billion contributions made to nonprofit organizations, 32 percent of such donations were made to the religious organizations.

Individual Giving Elsewhere

People give for different reasons like expressing their altruistic self by giving to causes they care, gaining instrumental benefits like tax deductions and network gains, and out of social pressures. The giving trend of the U.S. is replicated in other developed economies around the world. Eight out of ten Canadians give, while in Holland, almost 90 percent of the population donates despite paying high taxes. 64 percent in South Korea and 80 percent in the Philippines give. In the U.K., 60 percent of the population donated in 2017, out of which 25 percent donated monthly and the size of an average donation was £44. In 2016, the Charity Aid Foundation published its findings from a survey on 195,000 people from 153 countries in the form of the Global Giving Index. The index claimed that a fifth of the global population volunteered, a third had given money to charity, while 45 percent helped a stranger.

Although there has not been comprehensive research on individual giving in Nepal, we can withdraw few relatable conclusions from the Everyday Giving in India Report 2019, jointly published by Sattva, Rohini Nilekani Philanthropies and Bill and Melinda Gates Foundation. Defining everyday giver as “individuals (residents, diaspora, global citizens) with an annual income of over INR 2.5 lakhs and a net worth below”, the report valued total everyday giving in India at INR 34,000 crore ($3.1 billion) out of which 90 percent was informal everyday giving and only 10 percent was the formal everyday giving. In the meantime, 10.2 percent of the total charitable giving was made to Social Purpose Organizations (SPOs). India’s everyday givers were motivated by the urgency of cause, the convenience of the process, community influence and impact of giving. 64 percent of the everyday giving was community giving and 26 percent was religious. The report further claims that an increasing propensity to give and an accelerating digital revolution will contribute to larger everyday giving in India in the future. The report accounted for four kinds of giving: money, goods, voice, and time and skills.

Individual Giving in Nepal

The first poet of Nepali literature, Adikavi Bhanubhakta Acharya (1814-1868), wrote a poem to express his guilt of not giving to the society despite his riches as he compared himself with poor grasscutter who had built a well for travelers:

भर् जन्म घाँसतिर मन दिइ धन् कमायो (Bhara Janma Ghastira Mana Diyi Dhana Kamayo)

नाम क्यै रहोस् पछि भनेर कुवा खनायो (Nama Kei Rahos Pachi Bhanera Kuwa Khanayo)

घाँसी दरिद्रि घरको तर बुद्धि कस्तो (Ghansi Daridra Tara Buddhi Kasto)

म भानुभक्त धनि भै कन आज यस्तो ! (Ma Bhanubhakta Bhai Kana Aja Yesto)

मेरो इनार न त सातल पाटि कै छन् (Mero Inaar Na Ta Satala Paati Kai Chhan)

जे धन र चीज हरु छन् घर भित्र नै छन् (Je Dhana Ra Cheej Haru Chan Ghara Bhitrai Chan)

त्यस घासीले आज कसरी दिएछन् अर्थी (Tyas Ghansile Aaja Kasari Diyechan Arthi)

धिक्कार हो मकन बस्नु नराखी कृति ! (Dhikkar Ho Makana Basnu Narakhi Kriti)

Matri summarizes the poem as: “This grasscutter is poor, but his heart is generous…he has planned to do a noble deed like digging a pond with his meager savings. Whereas, I, Bhanubhakta, though a son of a well-to-do family, do not think of any service to others…My thoughts are centered around me…fie on my life which is devoid of any good work.”

Centuries before Bhanubhakta, Nepal developed the “Guthi” System (derived from the Sanskrit “Gosthi” meaning “assembly” or “association”) to preserve the heritage of Kathmandu Valley by generating capital from collective land ownership thereby financing cultural preservation and maintenance communally. The history of Guthi can be traced back to the Lichchavi period; between the 5th and the 9th centuries, and have been used widely in different periods for different purposes. Different types of Guthis serve different missions and their existence is still communal.

Individual giving is also prevalent in the major religions of Nepal. In Hinduism, the Upanishad (religious text) identifies Dana (donation or charity) as one of the three characteristics of a good person. It is also visible in donations during events like Saptaha (week-long worship) or in stone inscriptions outside each temple. The concept of Dana (donation) in Buddhism, Zakat (one of the five principles of Islam asking individuals to donate certain part of their income) and Sadaqa (voluntary donations) in Islam, and charity in Christianity, focus on individual giving.

Conclusion

Nepali Society is built around a giving culture. It is evident in the social structure, literature, folklore, history, religion, and noticeably in the post-disaster relief efforts in recent years. Individual giving is not an alien concept for Nepal. Considering the need for diversifying their revenue sources, Nepali nonprofits have to be courageous. I see it as a marketing and communication challenge rather than a philosophical one.

References

  1. Bureau of Labor Statistics, US Department of Labor. (2018). Nonprofits account for 12.3 million jobs, 10.2 percent of private-sector employment in 2016. Retrieved from https://www.bls.gov/opub/ted/2018/nonprofits-account-for-12-3-million-jobs-10-2-percent-of-private-sector-employment-in-2016.htm
  2. Burke, G. A. (n.d.). Charity and the Three Gunas. Light of the Spirit Monastery. New Mexico. USA.
  3. Center for Civil Society Studies, John Hopkins University. (2019). The 2019 Nonprofit Employment Report. Retrieved from http://ccss.jhu.edu/wp-content/uploads/downloads/2019/01/2019-NP-Employment-Report_FINAL_1.8.2019.pdf
  4. Charities Aid Foundation. (2016). World Giving Index 2016
  5. Giving USA. (2018). Giving USA 2018: Americans gave $410.02 billion to charity in 2017, crossing the $400 billion mark for the first time. Retrieved from https://givingusa.org/giving-usa-2018-americans-gave-410-02-billion-to-charity-in-2017-crossing-the-400-billion-mark-for-the-first-time/
  6. Klein, K. (2016). Fundraising for Social Change. 7th edition. pp. 3-11. Wiley.
  7. Maitra, K. S. (1982). The First Poet of Nepali Literature. Indian Literature Vol. 25, No. 5 (September-October 1982). Retrieved from https://www.jstor.org/stable/23331113
  8. Müller-Böker, U. (1988). Spatial Organization of a Caste Society: The Example of the Newar in the Kathmandu Valley, Nepal. Mountain Research and Development, 8(1), 23-31.
  9. National Philanthropic Trust. (2019). Charitable Giving Statistics in the U.K. Retrieved from https://www.nptuk.org/philanthropic-resources/uk-charitable-giving-statistics/
  10. Pradhananga, N., Shrestha, K. K. & Dee, J. (2009). Sustaining Indigenous Heritage: Learning from the Guthi System in Nepal. Retrieved from https://ocoy.org/dharma-for-christians/bhagavad-gita-for-awakening/charity-and-the-three-gunas/
  11. Salamon, L. M. & Newhouse, C. L. (2019). The 2019 Nonprofit Employment Report. John Hopkins
  12. Sattva, Rohini Nilekani Philanthropies and Bill & Melinda Gates Foundation. (2019). Everyday Giving in India Report 2019
  13. Shaha, R. S. (1992). Ancient and medieval Nepal. New Delhi: Manohar Publishers and Distributors.
  14. Urban Institute. (2018). The Nonprofit Sector in Brief 2018. National Center for Charitable Statistics. Retrieved from https://nccs.urban.org/publication/nonprofit-sector-brief-2018#the-nonprofit-sector-in-brief-2018-public-charites-giving-and-volunteering
  15. Weber, E. (2016). Charity of religions with special references to Hinduism, Islam, Christianity: an interreligious perspective. Journal of Religious Culture. No. 213. Retrieved from https://www.researchgate.net/publication/316454842
Research Commentaries

NRC0005 – Proposed Social Organization Act and Silent NGOs

Proposed Social Organization Act and Silent NGOs

Dipendra K C

Synopsis

The existence of non-partisan and active civil society representatives – individuals, loose networks and formal institutions – are crucial for maintaining a democratic society and also maintaining basic norms and values within. This commentary discusses evolving civil society landscape across countries in the Asia-Pacific region and outlines recent policy debates in Nepal that are likely to affect works and impacts of local NGOs and civil society. Also, it explores existing linkages between non-government institutions and their amicable relationship with politics in Nepal.

Introduction

Last month, the 11th ISTR Asia-Pacific Regional Conference brought together over 150 civil society researchers from the Asia-Pacific Region. The theme of the conference was shifting regimes and their implications for civil society organizations in the Asia Pacific region. While many of the countries in this enormous region of the world are home to a vibrant civil society or third sector, engaged in a wide range of activities from social services, to advocacy, to budding social entrepreneurship. Yet in many countries in Asia, governments are expanding their oversight and/or control over the activities of advocacy groups and organizations engaged in independent services and support through tighter regulatory controls and scrutiny. Since 2013, over 180 restrictive initiatives have been initiated in 82 countries tracked by the International Center for Not for Profit Law (ICNL), Nepal being one of them. The Asia Pacific region alone has 27 countries that have faced restrictive legal initiatives. These initiatives range from severe restrictions like constraining the right to assembly to more softer – limiting access to foreign funding. This phenomenon is evident in countries as diverse as India, China, Malaysia, Thailand, and Vietnam.

As I reflect back on the conference and look at some of the bills under discussion and some recent incidents, I reckon Nepali state is taking proactive actions to shrink the civic space. Be it the proposed media council bill, proposed Guthi Bill – that’s now retracted, proposed bill to amend university acts, or proposed social organization act in the name of making NGOs and INGOs transparent – all these have one thing in common – they aim to maintain a tight grip on the civic space in one or the other form. No wonder, Civicus, an international citizen alliance that tracks threats to civil society categorizes Nepal as a country where the civic space is obstructed.

Proposed Social Organization Act and Ambiguities

Existing Nepali NGOs are already facing onerous process in renewing their registration every year. The mandatory renewal process requires these citizen-led organizations to have clearance letters from the ward office and district development committee before initiating the process at the District Administration Office. Furthermore, NGOs receiving assistance from foreign entities are mandated to take permission from Social Welfare Council.

Nepali government is drafting a new Social Organization Act, 2075, an umbrella law which would regulate nearly every form of association. This law would replace Association Registration Act, 2034, National Directorate Act, 2018 and Social Welfare Act, 2049. This draft law is being reviewed and redrafted by multiple ministries. There are several issues in the bill that is under discussion.

First, the draft clearly envisions NGOs as service providers that would operate within a certain geographical area engaged in one type of activities. For instance, the draft law proposes organization to identify its work only in one category among thirteen functional categories of their work. It is practically impossible to demarcate the boundaries of the proposed functional categories. For instance, raising awareness is one category and the second category is the advocacy and promotion of rights. The proposed bill is geared towards discouraging NGOs to engage in more than one functional area with the provision of additional fees for those declaring more than one functional area of their work.

Second, the bill envisions a central registrar’s office for the registration, operation and to regulate organizations that operate nationwide or have working area in more than two provinces, professional associations, INGOs, and NGOs that register in Nepal but want to operate internationally. This proposed body is somehow identical to existing Social Welfare Council. In the meantime, it also envisions provincial and local registrar’s office for organizations operating province wide or more than two local levels. Furthermore, proposed bill is ambiguous in determining the standard process for the renewal process. It gives power to the local level in determining the requirements for the renewal of such organizations. While the idea of empowering the local level is encouraging, yet, having a clear standard nationwide for organization renewal would avoid confusion among organizations.

As I look at the proposed bill, it is clear that NGOs and other associations envisioned by the proposed bill are clearly seen as the service delivery agents – often from the neoliberal perspective. In Nepali public rhetoric, NGOs are understood as the service delivery agents, predominantly fueled by foreign aid. The fact that NGOs receive foreign aid is then used to delegitimize these organizations as “dollar harvesters”.

NGO & Politics: An Amicable Relationship

Varying statistics project different images of Nepali NGOs, Social Welfare Council Database suggests over 50,000 NGOs have registered in Nepal, while the president of NGO Federation of Nepal estimates active Nepali NGOs to be somewhere around 8,000. At any number, the associational revolution in Nepal and the influence of these citizen-led organizations cannot be ignored. Despite the strong organizational capacity, Nepali NGOs have not been as vocal in expressing their dissent as the civic space shrinks.

Guthis and media personnel came out on the street, former vice-rectors of the universities expressed their grave concerns through public forums. Interestingly, Nepali NGOs – often understood as the de facto civil society have not demonstrated a strong willpower or resistance to the ongoing encroachments from the state.

Theoretically speaking, NGOs are often understood as apolitical actors operating between the power of state and market forces. However, growing body of evidence suggests otherwise like a recent study doubts the political neutrality of Nepali NGOs.

In a candid conversation with this author, current president of NGO Federation of Nepal claimed 70% of the elected representatives at the local level have come from the NGO background. On one hand, the civil society organizations should take pride in their ability to groom leaders at the local level, in the meantime, it also suggests the politicization of the civic space that is ideally supposed to be free from politics.

Some examples can illustrate how the civic space is no more a neutral space and how the civil society organizations operated as the incubation center for the politicians. Ghanashyam Pandey, is the current mayor of Tulsipur sub-metropolitan city from former UML and Dilli Chaudhary is the member of parliament of province number five from Nepali Congress. Despite their ideological differences, they have one thing in common, both of them were affiliated with NGOs and led NGOs before jumping in as politician. While Chaudhary led Backward Society Education (BASE) that worked for empowerment of Tharus in mid-western Nepal, Pandey led the Federation of Community Forestry Users Group Nepal (FECOFUN). These two may sound anecdotal examples, yet, the amicable relationship between the leaders of NGOs and state might potentially explain the looming silence around the encroachment by the state.

References
  1. Civicus. (2019, July 31). Updates on Nepal. Retrieved from https://monitor.civicus.org/country/nepal/
  2. International Center for Not-for-Profit Law (ICNL). (2019, Jul 31). Civic Freedom Monitor. Retrieved from https://nipore.org/libra-and-the-future-of-nepals-financial-system/
  3. KC, Dipendra (2018, August 03). Between Rhetoric and Action: Do NGOs Go Where They Are Needed?. Retrieved from https://doi.org/10.1007/s11266-018-0024-9
  4. Nepal Government. (2075 BS). Act for Amendment of Education Related Nepali Acts, 2075. Retried from http://na.parliament.gov.np/uploads/attachments/gdxaosxecwrfh2yc.pdf
  5. Nepal Government. (2075 BS). Social Organization Act, 2075. Retrieved from http://bit.ly/2SMRy8o

Publisher’s Note: The Contributor co-chaired the 11th ISTR Asia-Pacific Regional Conference held in Bangkok, Thailand