CHEERING UP: Sonu Nigam at a recent function organised by the Cancer Patients Aid Association
Ketan Tanna on how the economic meltdown is hurting NGOs dependent on corporate funding
In the first week of September 2008, Radha Vedantam, project manager at the Society for Service to Voluntary Agencies (SOSVA) was a very happy woman. SOSVA had managed the funds for opening a day care centre for poor children at Dharavi, and everyone was set for the launch. â€œWeâ€™d decorated the room with balloons and confetti,â€™â€™ says Radha. â€œAnd then September 13 happened.â€™â€™ September 13 was the day that global investment bank Lehman Brothers, the chief funder of the project, collapsed. So before the centre could officially open, it was closed.
The galloping meltdown of global financial markets has left many more Indian NGOs, apart from SOSVA, jittery. In the few years prior to the recession, Corporate Social Responsibility (CSR) had been catching on in India, with an extraordinary number of BPOs, financial companies and even real estate firms in India entering the arena to fund charitable activities. The meltdown, however, has put a brake on all that.
Anita Peter, Director of the Cancer Patients Aid Association (CPAA), says that for now her organisation is making do with whatever support it can get but is in the process of cost-cutting. â€œNormally, we approach corporates every January, so weâ€™ll know what has hit us only a couple of months from now,â€™â€™ she says. â€œBut weâ€™ve started feeling the pinch from individual donors already.â€™â€™ In the last three months, individual donations to CPAA have gone down by nearly 40 per cent. â€œWe normally collect Rs 5 lakh a month from individual donors but the monthly collection averages Rs 3 lakh now,â€™â€™ says Peter.
CPAAâ€™s saving grace is that many donors have been giving aid in kind along with a bit of cash. So Wellspun supplies towels, Nestle donates chocolates and milk products and Big Bazaar donates wheat, rice and other daily usage items which CPAA passes on needy cancer patients. But with the cash component going down, the NGO will be forced to cut down on charity. â€œWe will never turn anyone away. But weâ€™re contemplating cutting down on the quantity given to patientsâ€”instead of, say, ten kilos of rice, weâ€™ll give five kilos,â€™â€™ says Peter.
A person working with one of the largest fund-raising NGOs says that the impact of the meltdown will come from those corporates and individuals whoâ€™d become wealthy in the last few years when there was a wealth bubble and now find themselves bleeding. â€œEarlier this year, a big builder had begun talking about CSR,â€™â€™ he says. â€œBut his company is mum on the subject now. These kinds of new clients, who wanted to spruce up their image with CSR, are the ones who will not be able to
keep their commitments.â€™â€™
Several corporates, however, have decided to brave it out. Like ICICI Bank. Despite taking a huge beating in terms of image and with market rumour-mongering about its impending collapse, ICICI has decide to stand by its commitments. Some say itâ€™s a corporate strategy because it would send a message that never mind the problems, ICICI helps the less fortunate.
Venkat Krishnan, Director of Give India, a top NGO that raises funds for hundreds of needy NGOs, says that ICICI Bank remains committed to the â€˜Read 2 Leadâ€™ initiative, where it plans to donate crores of rupees to educate 100,000 children every year. Similarly, a week ago Genpact, Indiaâ€™s largest BPO firm, launched a fresh initiative to get more employees to contribute. â€œAs part of this, not only is Genpact picking up all overheads of the programme so that 100% of its employee contributions go to charities of their choice, but it is even considering matching employee contributionsâ€”which will involve a very substantial contribution,â€™â€™ says Venkat.
As the new financial year rolls in April 2009, the actual figures of CSR will be different. â€œThose who have not diversified their donor list will have problems,â€™â€™ points out Irwin Fernandes, director, resource mobilisation, Child Relief and You (CRY). â€œWe have been only marginally affected because we have diversified significantly as part of our strategy. In fact after the Kargil war, Gujarat riots and Orissa flood, when we were hit the most, we decided to go in for diversification of our donor list. And itâ€™s really helped us.â€™â€™ TNN