NGOs Financial Dependence on Governments: Risking their Existence

This essay examines the financial dependence of NGOs on governments and the risks it poses to their existence. It discusses the positive and negative aspects of NGOs, their financial sources, and whether they are completely dependent on government funds. It also examines the risks NGOs face and plans of action to address them.

“NGOs have got too financially
dependent upon governments and
generally are too close for
comfort. Their very reason for
existence is at risk.”
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Table of contents
Introduction......................................................................................................................................3
Main body .......................................................................................................................................3
NGOs monetary reliant on government : jeopardizing its existence .........................................3
Plans of action and response........................................................................................................8
Conclusion.......................................................................................................................................9
References .....................................................................................................................................10
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Introduction
The present report will examine the statements which is NGOs have got too financially
dependent upon government and generally are too close for comfort. Their very reason for
existence is at risk”. The report will provide an essay on this statement and determine the
positive as well as negative aspects of the NGOs in effective as well as efficient manner. The
essay will mainly elaborate on the context NGOs, its kinds, financial sources and to evaluate
whether NGOs is completely hinge on government for funds. Lastly, it will examine that the risk
of NGOs is at risk or not.
Main body
NGOs monetary reliant on government : jeopardizing its existence
World bank defined NGOs as “private organizations that pursue activities to relieve the
suffering, promote the interests of the poor, protect the environment, provide basic social
services, or undertake community development.” In simple words, it refers to the non-mandatory
Class of individuals and associations who are not indulged with any government, formed to
furnish services or to support a public policy. World bank had divided the NGOs into two
groups, firstly operational NGOs which put emphasis on development projects and secondly
advocacy NGOs which focus to promote specific causes (yuen, 2018). The common perception
of the people with regard to the NGOs is that these organizations or institutions are an
independent powerful bodies having better relation with the government and private donors.
According to the ACFID the level of funding is changed as in the year 2018 to 2019 the
funding of the NGOs is increased by 10 per cent which is in the monetary term $1.6 billion.
Along with that for the development of the nation the funding is enhanced by the 15% in the
year of 2919 to 2020 which is higher than the previous year (Australian Council for international
development 2018.). Yes the government funding of NGOs come with the terms and condition
the government willing to bring the changes in the society and develop the area in affective as
well as efficient manner. The NGOs provide the surety to develop the area and in context to that
the organizations are keep changing and improving the condition of nation delivering the quality
of life by educating them as well as providing livelihood to the needy person. As per the
researches with the assistance of the NGOs the poverty rate and unemployment rate is
contentiously declining which is good for the citizen of the nation. From the analysation of the
report of ACFID the government funding is increased by the 15% in the year of 2019 to 2020.
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the mission of the NGO is to deliver values or support to human body in effective as well as
efficient manner (Australian Council for international development 2018)..
The NGOs financing is based on two different relationship: the first one is between the NGOs
and the individual donor and the second one is between the NGOs and government (national and
foreign). NGOs and donor relation contract can be characterized into two i.e. demand-led and
supply-led. Demand-led contracts are best suitable for NGOs because they don't loose the
autonomy of the organisation whereas in later case donors are in control of the organisation.
Supply-led situation is not ideal for the NGOs where the private investor having excessive power
manipulate for their personal agendas. The second financing source i.e. government whether
national or foreign increases the NGOs's susceptibility. The unhealthy relation between the two
can result in great harm in the effective and efficient working of the organisation. Controlling the
funds is the most efficient way to control the management of NGOs. For example, regulation laid
down in Russia and Egypt restricts the international funding with the purpose of no
involvement of foreign government (aldashev, and navarra2018).
Government funds allow NGOs to substantially broaden their functions and achieving the
success in an effective and efficient manner. With the government support NGOs can attain an
image in the market. NGOs having no government support may be either started.
Prior to 1980, subsidies, grants and schemes are the main sources of funding but with the
passage of time it includes foundation grant, corporate grant, membership dues, individual
donations, government grant, endowment income, investment. Government grants can be
provided through different ways like reimbursements, vouchers, tax deductions or special tax
exemption ((wang, 2018)..
Advocacy, campaigning, fundraising and aiding are the objectives behind the NGOs
formation. There are many NGOs who are fighting for the human rights, lgbtq rights,
fundamental rights, property rights etc on a probono basis. Fundraising and campaigning go
hand-in-hand as to run any organisation money is the number one priority. NGOs provide aid to
promote the education among children, providing basic necessity i.e. food, shelter and cloth,
fighting for refugees rights.
The department for international development (DFID), formed in 1997 works in the
direction to end poverty. DFID is dealing with challenges including poverty, disease, mass
migration, conflict and insecurity. In developing countries DFID's work is building a safer,
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healthier and more prosperous world for living. DFID have set priority to strengthen global
peace, security and governance while promoting global prosperity. It works in the improvement
of girl and women lives with the help of proper education and also by preventing them from the
violence (brass, and et.al 2018.) .
Reason for existences: the NGOs is non-financial organisation which deliver assistance in
development of the society. it is considered as the non-profit organisation and formed
independently. The organisation worked for the human rights, social, conservation and
encouragement of society. it improve the quality and standard of individuals life in effective as
well as efficient manner. the non-financial organisation is formed for the welfare of the
community or society on the national as well as international level. It is basically representing
group of individual peoples or the organisation who are associate for the positive activities of the
social work. different countries have variety of the NGOs for the welfare of countries. The
presence of NGOs all over the world is approx. 10 million which is quite higher and around 50
million of the employees are associated with the NGOs and acquiring same salary as the
profitable organisation deliver to the workers. the organisation collected the whole fund from the
government or the charitable groups in effective as well as efficient manner (bush, and hadden,
2019). furthermore it deliver assistance in maintaining peace in the nation provide justices to the
women, children or the needy person. The organisation take initiative steps for offering equal
rights to the people and address the issues of individual person. The non-government body work
in different situation like natural disaster that includes, floods, earthquake, tsunami, earthquake
etc. in context to that the organisations required fund for helping the people, providing food,
cloths and shelter to the needy person. Basically the organisation worked as the helping hands to
the homeless and helpless people.
The aim of collecting fund is to deliver values to the people for welfare of the society the
authority or non profit organisation collect the fund from the individual person, government,
profit making companies as well as charitable group. In the current period of the financial value
of the organisation is highly affected by the covid 19. It is the pandemic which affect the lives of
various people or the living things (demir, and budur, 2019). Along with that due to corona virus
the government implement rules and regulation for controlling the situation and control the
spread of the coronavirus. in context to that the many organisations or the nation face financial
crises or downfall in the profitability of the various organisation.
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Due to that the people or the profit making organisation avoiding the process of the donation as
they are willing to recover all the losses the organisation face due to implementation of the lock
down the authority for the welfare of the people and the society. it also reduce the funding
capability of the individual or the business enterprises in various nations. Due to that the
organisation is fully depend on the government body for the financial help. It is essential to
collect the fund for providing and helping the people in effective as well as efficient manner. the
organisation is depend on the government because it is for the welfare of the public and it is
responsibility of the governing body to take care the citizen of nation in appropriate manner. the
government willing to contribute in the development of the nation and life of the people
(gajdová, and majdúchová, 2018) . so the NGOs are taking advantages of the government as the
governing body promoting the social work. the government contributes in the charity because it
deliver assistance in uplifting the status and standard of the individual person which is the motive
of the government too. For the well being of the society the NGOs conduct the research in order
to acquire the skills and knowledge in appropriate manner for the development . the non-
government organisation collaborate with the government in order to lead various positive
aspects in the world. The NGOs are not profit making organisation and the individual person or
the organisation is not have adequate money to spend on the society, and so they are largely
depend on the variety of investor or the government for increasing the funds for the continuing
the services. with the assistance of the give rent the organisation are able to deal with the
forthcoming challenges and able to survive and obtain success in the department of social work.
funding from the government deliver assistance in meeting the goal of the association and
completely satisfy the people (hege, and demailly, 2018). The mission of the NGOs is for the
development of society and empowering the women that including various right such as right to
educate, right to freedom due to that the women’s are able to contribute in the development of
country. it increase the contribution in the development of the nation. For the collection of fund
the funding is bifurcated into four parts which are mentioned as follows:
Government funding: in this type of funding the authority directly collect the whole fund from
the leading or governing body organisation. In order to collect the capital from the government
the organisation form or develop the budget which includes all the expenses required for the
social work. the organisation submits the budget and project to the higher authority for the
verification so it will easy for the government to determine the area of investment. The ruling
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body of nation approve the project and provide funds to the association after proper research on
the project. In general the non government collaborate the governing body positively in order to
settle down everything.
Corporate funding: the organization have the opportunity to collect the fund from the various
organisation for the sustainability of the resources and saving the environment. In the modern
era it is important for the business corporation is to follow rules and regulation of corporate
social responsibility in effective as well as efficient manner. in these types of the funding the
profit making enterprises are liable to pay some amount from the annual profit for welfare of the
society to the charitable group and spend some money in the charitable performing of work
(hung, and hager,2019) . the NGOs of the nation asked the financial firm for the contribution of
charity in the charitable projects. the business enterprises donate some amount for the initiate of
society welfare project.
Foreign funding: in the process of foreign funding the NGOs received the advantages of
collecting fund from different country or outsides the nation in an appropriate manner. The
foreign companies provide the funds to the organisation under foreign contribution regulation
act. In the covid 19 society various organisation help the people in providing the resources to
another country which are necessary in order to improve the condition and support the
neighbouring countries. For the human values the foreign country provide fund and receive from
world health organisation. Apart from that due to the foreign funding process the country
acquire able to deal with the shortages of resources. The other nation provide free mask, sanitizer
ppe kit to the different nation in order to deliver ethical values and humanities.
Personal funding: it is also renowned as best types of funding as in this kind of funding the
individual person contributes the amount as per their willing to the non-profit organisation. there
is no fixed amount decided by the NGOs for the charity purpose. The individual person deliver
the fund as per their household income and profitability. The people donate the amount i order
to share their human or ethical values and treat the nature in appropriate manner. by the donation
in the charity the individual person acquire the benefit of 100% tax exemption. In context to that
the organisation or the community provide certificate to the people or the investors for
apprenticing them and encouraging them for more contribution (stroup, 2019.).
Therefore it is analysis that the non-profit organization are largely depend on funds only and
received financial sources from the government as there is stability of the governing body is
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presented in the nation. The organization provide equal right to the employees of both profit and
non-profit-making organisation. the workers of the association acquire fare skills and knowledge
to perform their job roles and responsibility in effective as well as efficient manner. the workers
are responsible for raising the satisfying fund for the welfare organisation in context to that they
develop the fund-raising ventures according to the plans of action. basically it strengthen the
efforts of the individual person. The members of the NGOs enhance their ability to think for
increasing the credibility and manage the finance. With the assistance of appropriate financial
strategy the organisations are able to improve their brand image in domestic as well as
international marketplace which further result in raising more fund for the society. The fund is
directly provided with the assistance of fund-raising organization.
From the research it is examined that the contribution of the government is essential for the non
profit organization. The impact of funding from the government affect the culture of the nation
as the NGOs are totally depend on the government and no longer they apart from that the non
profit organisation are getting too comfortable and changing the nature of the organisation
(ismail, and kamat, 2018) . Due to higher competition in collecting the fund from the different
association the variety of NGOs turn the fund-raising process into a business of generating
higher profit as compared to other association.
Plans of action and response
For increasing the fund of non profit organization the association should work on the financial
values of the association. The organization should focus on the financial budgets of the
association for collecting the adequate fund from the marketplace. For raising the fund form
different place the government or the authority should increase the capability of providing fund
to the NGOs. Apart from that the NGOs should form the adequate budget that include all the
expenditure regarding the facilitates provide to the people in effective as well as efficient
manner. The budget should include all the reliable information in order to develop adequate
plans of action of the development of the society. Along with for the proper funding the
organizations need to maintain hard as well as soft copy of all the records. The record should
include cash receipts, disbursements, petty cash, payroll, grants gifts and assets of the
organisations (peng, jia, and doherty, 2021). Beside all this for the success and survival of the
organisation or the association head or the responsible person need to share the values and
responsibility in way that the employees of the company is able to maintain the image of the
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company in front of the society. For the further improvement the NGOs need to maintain the
transaction for the long period of time and bifurcate the duties to the people. Due to that the
company is able to smooth the turnover of the company and deliver more ethical values to the
people. Further it help in issues of reducing poverty, unemployment rate and increase the
education. In order to deliver the transparency and build the trust of the people the organization
need to have bookkeeper in the organization. It also deliver support in maintain the issues and
quires associated with the organization. The auditing of the financial years should be proper for
representing the plans of action
Conclusion
From the above report it will be concluded that non financial organization is contributing largely
for the welfare of the people and providing equal right and justices in effective as well as
efficient manner. Along with the report mentioned that the non profit organisation is having the
opportunity to expend sources of funding, association need to develop relationship with the
organisation or the people for helping out the needy person. The non profit organization aim to
strengthen the power of the individual person and government is responsible for the
development on nation in context to that the organization collect the fund and financially
depend on the government. From the examination it is determined that the NGOs are not at risk
as the demand is continuously increasing. After te covid 19 situations the requirement of non
profit organization is increased.
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References
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Online references
,Australian Council for international development 2018. [Online]. Available through
<https://acfid.asn.au/>
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