Funding crunch for non-profits | The Daily Star
12:00 AM, May 22, 2018 / LAST MODIFIED: 12:27 PM, May 22, 2018

Funding crunch for non-profits

Non-profit organisations (NGOs) in Bangladesh are facing a general downturn in funding according to government data. As per a report in a leading English daily, data from NGO Affairs Bureau (NGOAB) state that donor aid commitment fell by 20 percent over a three-year period from fiscal years 2014 to 2017. This has a lot to do with the way we have drummed the graduation to middle-income country status. It has coincided with a shift in priorities for donor countries as the focus moves from Asia to conflict-ridden regions. When we look at the year-to-year commitments to Bangladesh, things have been going downhill for some time now.

This has affected rights and advocacy-based NGOs more than those that are microcredit oriented and we are seeing a scaling back of operations giving rise to trimming of work forces. Back in 2014, Bangladesh attained a gross national per capita of USD 1,070 which put it in the lower middle-income category. Even the largest of NGOs, BRAC has been forced to lay off more than 3,000 staff. The affected areas have been in water, sanitation and hygiene, basic health care and mitigation programmes. If this is the situation with the most efficient NGO in Bangladesh, it is easy to imagine what the situation is across the sector.

There appears to be a rethinking of how NGOs in Bangladesh should operate from a donor perspective. That more emphasis is being given on “self-sustainability” could very well be a precursor to a general disengagement from Bangladesh's non-profit sector. Needless to say, such a situation is not going to happen in the short term but its ramifications will be felt over the next few years. The trend however has had an impact on NGO registration. According to NGOAB data, the average annual registration during Awami League-led government during its tenure 1996-2001 was 121. That figure has now come down to 78 in the last three years.

As stated before, there has been a progressive withdrawal from Asia by western donors. If we look at the data, there has been a sharp increase for humanitarian support to the Middle East and focus on Sub-Saharan Africa—at the cost of commitments to Asia. According to Global Humanitarian Assistance Report 2016, the top 10 recipients of most international humanitarian assistance in 2015 were Syria, Yemen, South Sudan, Lebanon, Iraq, Jordan, Sudan, Palestine, Somalia and Turkey. Indeed, a handful of conflict-ridden counties including Syria, Iraq, Yemen, Lebanon and South Sudan received nearly 40 percent of all funding.

With this change in strategy, it is now a question of whether the non-profit sector has to change their modus operandi to self-sustenance. With the reduction in funds, the fight for funds will surely intensify among organisations. When we look at the reduction of overseas development assistance, we have to understand that it is not just a shift in focus of donor countries towards new regions but has to do with the global financial crisis. Back in 2016, ODA (Overseas Development Assessment) was 0.4 percent of GDP which was halved to 0.2 percent in 2017. The focus on sustainability of NGOs has come to the forefront whereby fewer organisations are now focused on socioeconomic issues and more are concentrating on social business and business enterprises.

As Bangladesh strives to achieve Sustainable Development Goals, it has been suggested that a dedicated allocation be made in the annual development programme (ADP) which will create a domestic fund for NGOs to tap into. Centre for Policy Dialogue (CPD) has suggested that this fund should not be a government initiative only; rather, both foreign and domestic donors (corporate bodies, non-traditional foreign donors) can pool their resources here. Of course, being dependent on a Trust fund coming out of the national exchequer will undoubtedly put curbs on the independence of non-profits, but what is the alternative?

Unless NGOs are able to find their own paths to self-sustenance, many of them will not survive the drying up of foreign funds. Any large-scale demise of this sector will do the government more harm than good. For decades, the NGO sector has been a development partner of the State in areas of health and education and built up grassroots organisations that work in the villages where government services have had difficulty reaching. The country is now in a financial position to make an allocation out of the ADP for NGOs and it should be done so in the national interest.

Syed Mansur Hashim is Assistant Editor, The Daily Star.

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