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NGOs and Funding- A brief Guide

NGOs and Funding

NGOs are those organizations that work for social upliftment. They do so by primarily focusing on a social issue and addressing it. Unlike government sectors, they work independently. In groups, in a trust, or individually.

NGOs FUNDING

Funding is a very important aspect of the proper functioning of an NGO. Since they are not funded by the Government in the majority of the cases, it becomes even more crucial to consider this aspect in the workings of NGOs.

All the strategies, plans for implementing the programs are futile when resources are not available for work. Though volunteer needs are the first priority when it comes to resources in NGOs.

The essentials for a functioning NGO are as below-

  • Members and Volunteers
  • Lawful motive
  • Funds

Funding Types

  1. Conventional
  2. Non-Conventional

Conventional funding involves sources such as various donors. These donors can be private individuals, groups of people, companies, organizations at the local or international level.

Non-conventional type of funding includes fundraising such as- 

Sports Competition: Marathons or car racing have always been fun to participate in and watch. The participants can hit two birds with one stone because they are enjoying their passions and helping those in need.

 Auction: It is one of the most effective ways of raising funds. The individuals get more recognition whose work, property, or anything gets auctioned. It accumulates great funds for the program.

  Art Exhibition: Many artists organize art exhibitions to donate the profit to NGOs. An act of goodwill, influences people to come for exhibitions more. Not only does it bring fame to the artists but also helps NGOs.

Talent Shows: Schools organize various programs and functions for students. NGOs partner with schools, and it encourages students to participate in the functions more.

Sources

A huge fraction of NGO financing is provided by individual private contributors. The donations are usually made in the form of materialistic gifts such as hampers for refugees or monetarily. Despite being an independent entity from the government, many NGOs rely on government funds to run.

As a non-profit enterprise, it can get financial support by-

  • Selling of goods and services
  •  Subscribership 
  • Funds from Government

 Aids can come from two sources

  •  Locally
  •  Internationally

Locally

Private donors play a major role in aiding the NGOs locally. Since many of the donors are citizens of the country, local donation is easier and more transparent.

In India, central and state governments also provide various schemes and policies to raise or grant funds to NGOs such as NGO DARPAN. (https://ngodarpan.gov.in/)

NGO DARPAN

It is a simple platform for NGOs which reduces the long financing process and boosts the status of NGOs across India. National Information Technology Center and NITI Ayog collaborated to launch this platform. The NGO-DARPAN acts as an interface that allows NGOs, voluntary companies, and governments to connect. It also helps NGOs to obtain important guidelines on governmental subsidies and systems once registered in DARPAN’s NGO portal assistance

Benefits Of Registering In NGO DARPAN

Connect NGOs with various volunteering agencies. 2. Provide a unique ID to emphasize the NGO’s goodwill and reputation. 3. Create a database of NGO information. 4. Give details of new projects, plans, or status

Internationally

The NGOs can receive bilateral or multilateral aid from offices of developed countries or international organizations such as the UN, World Bank, and Asian Development Bank. Some of the examples are given below

1. UN Agencies- The United Nations has 15 different agencies that aim for various particular issues. Many NGOs receive grants from these agencies by partnering with them.

 2. Development Banks- It’s necessary to strengthen the world globally by offering help to those in need. The role of development banks is to loan money to the country. They also offer grants to NGOs to support developing countries.

 Large Scale NGOs- Many big NGOs share the same goals and initiatives with other smaller NGOs. So the formal ones back up the smaller ones like a big brother. They empower the smaller ones by funding and providing partnerships.

 Development Assistance Agencies- Helping others in need of help is the greatest service to humanity. Many developed countries have their own development assistance agencies to aid the developing countries. On various occasions, these agencies donate funds to NGOs for specific projects.

Challenges

India as a developing country with a huge population acts as fuel on the fire, thus it appreciates the helping hands of NGOs. It is evident that the authorities need more than people outside their jurisdiction so they support NGOs by getting funds or granting them information, programs, and platforms to raise funds.

 The support of the government is phenomenal, but it is limited to certain conditions and a certain number of groups. A donor’s trust depends on the relationship with NGOs and its reputation in the market.

The newly set-up NGOs need to provide proximity, accountability, and flexibility to attract funds for implementing their policies. But this increases the work of management with uncertain rewards. Getting funds from the government can cause friction in political struggles. Many organizations struggle to put ideas on paper when asking for proposals. In order to attract charities, donations, and aid, an NGO needs to convince outsiders. But many NGOs fail to knock at the right door due to communication gaps.

NGOs and Funding
NGOs and Funding

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