In God we trust; all others must bring data,” goes the saying. How many non-profits does India have? How many are large, small, micro? Are they growing? No one has answers, as there is no data! At least not in one place, as we do not have a unified registry of non-profit organizations (NGOs). These exist in myriad avatars, as societies, trusts, section 8 companies and more, all governed by different laws at the central and state levels. There is no single government agency that regulates, governs or monitors this sector.
An active NGO sector has existed in India for decades. Estimates of total NGOs range up to 3 million. The Niti Aayog’s Darpan portal shows over 175,000 registered non-profits. And yet we lack credible and updated data on the size, funding patterns, sectoral trends, growth or anything else that can help thoughtful decisions of policy and/or philanthropy. As a step towards addressing this glaring gap, we tried to map the top 200 non-profits in India. We chose the annual budget size as the criteria because it is the only objective and verified (signed by auditors) parameter that’s publicly available for size.
We chose to look at a particular type of NGO: an independent one with its own mission statement, with at least a part of its work in implementation, raising money from multiple sources without being predominantly funded by a single donor. This is the kind of impact-oriented NGO that you and I donate to or corporate social responsibility (CSR) teams engage with. In a nutshell, the kind that will eventually raise money on the Social Stock Exchange (as per current criteria). This excludes most corporate CSR foundations, philanthropic, high net-worth individual or family foundations that are chiefly funding agencies, multilateral institutions and large educational institutions and hospitals that generate significant revenue through operations.
Our takeaways from the exercise:
The top 200 non-profits in India are in the annual budget range of ₹10 crore to ₹800 crore. This cohort secures about ₹8,000-9,000 crore in annual funding, which is split almost equally between domestic and foreign funding. In the three years we looked at (2019-20 to 2021-22), the total pool of capital to this cohort did not change significantly when adjusted for inflation and a covid-related spike. At an aggregate level, this cohort has a year-end income surplus ranging from 4% to 7% of the total money raised each year. Finances are volatile; almost 20% of the cohort saw an income change of over 50% year-on-year in 2021-22. Children, community development, education, healthcare and livelihood are the top fields they work in. About 18% of these NGOs have a global origin or affiliation, and they received 30% of the total funding. Beyond these 200, there are thousands doing good work but are small. Many of the NGOs that are large today started in the last two decades. For more details, do see Mint (bit.ly/47cqNj3).
Today, India’s largest private company spends as much on social impact through CSR single-handedly, as does the largest non-profit in India funded by multiple donors. To achieve sustainable and inclusive growth as envisioned in the Sustainable Development Goals 2030, impact-focused NGOs must grow along with the Indian economy and its private sector. What can help?
A regulatory overhaul: The definition of an NGO in India is broad, covering organizations varying widely in their structure, size, mission, funding patterns and impact footprint. They could be grassroot programme organizations, schools and universities, hospitals or research think-tanks. A comprehensive relook at legal entity definitions and governance structures is long overdue, given how much the country’s economy and the nature of societal problems have evolved.
Nuanced policy measures: Micro-sized organizations comprise a large share of this sector and that’s true across the world. Tax structures for philanthropy, rules around donations from abroad, compliance and reporting standards for non-profits need to be designed taking into consideration this sector’s composition in the same way that our business policies do for MSMEs.
Focus on organization building: Private and corporate philanthropy in India is growing, CSR funds are placed at around ₹25,000 crore annually. We need NGOs with larger capacity to take in this growing impact-capital and deploy it fruitfully. Given the size of problems to solve, organizations with demonstrated impact should be enabled to grow out of their micro size, scale up to bigger operations and thus help more people. However, most have neither equity capital nor significant retained profits to invest in building organizational capabilities. Philanthropists can make a difference here with non-programmatic grants and capacity building support.
Create transparency and trust: Think of all the mandatory reporting and disclosures that listed companies must comply with while raising money from the public. NGOs soliciting donations do not have a specific mandate on what information they need to make publicly available. Trust is a bridge both donors and recipients need to build with honest and transparent disclosures. Much needs to be done on this front.
