The Unwelcome Costs of Running an NGO in India

Rs. 20,000 is the typical bribe that must be paid for filing or renewing an 80G (which is kind of like a US 501(c)3 but allows your donors to deduct 50% of their donation from income taxes). This is pretty much standard in any part of India except in Delhi, where the crooks in the Income Tax office will only renew your certificate for one year, as opposed to the standard three years.

Rs. 20,000 is a lot of money for an NGO in India. Rs. 20,000 (approximately US $500 ) will pay for 3 years and 4 months of education for a girl child in Andhra Pradesh, or 2 years of education for 10 slum children in Gujarat, or provide almost a year’s worth of medication for an HIV-infected person in New Delhi. (To see more examples of what US $500 will buy – or better yet, to donate online for any one of these causes – check out GiveIndia, a portal that facilitates online retail donations for accredited NGOs in India; in the US, go to GiveWorld.)

Rs. 1.25 lakh (Rs. 1,25,000 or approximately US $3,125) is the bribe for FCRA (Foreign Contributions Regulations Act) – the ability to accept foreign donations. The irony here is that most of the NGOs that apply for and even get FCRA will never get a Dollar or Euro or Yen of foreign funding. (This would actually make a good research project – any takers?) Those NGOs that have friends in high places and can get away with not paying the bribe get FCRA clearance in the eternal hope that the grass is always greener on the other side of the ocean.  It is true that a Dollar or Euro or Yen does go far in India, but most of these NGOs do not know how to reach potential donors with those Dollars or Euros or Yen.  But I digress… Back to those not-so-hidden costs…

In Bombay, many NGOs are housed in formerly vacant, dilapidated BMC (Brihanmumbai Municipal Corporation – i.e. government) school buildings.  The buildings are vacant because BMC schools are so bad that they do not retain students, even the poor students that make up their constituency.  The government employees that run these schools and buildings basically pocket all the money that would go into higher quality education or building maintenance, so both suffer.  Teachers don’t show up because they are paid so poorly.  These very same teachers get paid to give “tuitions” (additional tutoring that almost every student in India pays for in order to get into good schools in the next level of education) to the very students that drop out of the municipal schools and enter whatever private schools they can afford. (There’s probably some kind of organized scam here too.)  But again, I digress…

Once an NGO or group of NGOs have fixed up the run-down buildings and made a home for themselves, the “requests” and sometimes threats begin.  “Why don’t you help us renovate our school building – look at the conditions the students have to face.  Why don’t you make a nice garden on the school grounds?  Why don’t you build a playground for the students?”  And every time an NGO gives in and pays for a renovation, the official in charge takes credit for the renovation, bills the BMC, and pockets the reimbursement.  If the NGO refuses to cooperate, they are threatened with eviction.  One NGO was even given a fake letter from the Department of Education (written by a Deputy Education Officer) that the policy of allowing NGOs to rent school property had been changed and that the policy would be applied retroactively, throwing out all NGOs that are already in school buildings.

And the list goes on.  What do the NGOs do?  They pay what they have to pay and get on with their work.  For if you fight the petty bureaucrat, a higher-level bureaucrat will come down on you even harder.