A parameterized model for evaluating and rating NGOs

Abstract

A study conducted by the government in 2009 put the number of NGOs (Non GovernmentalOrganizations) operational in India to about 3.3 million. This by far is the largest number of activeNGOs for any country. It is estimated that the NGOs and NPOs (Non Profit Organizations) raiseanywhere between Rs 40,000 crore and Rs 80,000 crore in funding annually.i The corporatesector Hence, with such huge amounts of funds being channelled every year the biggest concern ishow to effectively assess the performance of such organizations so that the money is put to thebest use.The funding for such NGOs can come from government grants and schemes, corporate, andindividual donors. The grants to such institutions increase every year. According to TimesFoundation the CSR spend by corporate was about 30,000 Croreii. The new Companies Bill (2011)would make it mandatory for corporate to earmark 2% of their profit for corporate socialresponsibility (CSR) initiatives.iii The reasons a company might engage in CSR may be many butthere has this been a sharp increase over the last few years in the funds available to the sector andthe number of organizations working to improve the life of the people in the society.Indians have a poor record of accomplishment of giving money to philanthropy. According to astudy by Johns Hopkins Comparative Non-profit Sector Project, Indians give only about 0.4percent of the GDP to social causes. Compare this to the 2.2 percent that is given in the US. A verycommon reason that is cited for not giving is that people don't know where to start.There is also no system in place to facilitate the feedback system for the NGOs. Most of the NGOsare not able to attain their set target and fail to asses why or where they went wrong. Thisframework of rating would help them identify the weak links in their systems and rectify the sameto provide effective service to all its stakeholders.The sector consisting of NGO, NPO, and GO that work for the upliftment of the society are veryunorganized. There are multitudes of players that vary in having its own distinct:* Vision and mission (Some NGOs define the issues that they address on a broad level, thusserving the multitude of problems lying under its purview while some others definespecific narrow targets to achieve).* Modus operandi.* Impact created.Given this diversity it is difficult to judge the NGOs using traditional models of measuringorganizational performance and effectiveness. Not only this, the things that may be important inevaluating NGOs such as, how those have originated, how many years have they been existing for,what are their sources of grants never crop up for traditional corporate organizations. So itbecomes difficult for any individual or organization interested in donating funds or extendingvolunteering support to evaluate the NGO. Nonetheless, analyzing the existing systems would be important to give a head-start on howperformance is usually measured in an organization. If the existing systems have to be adapted todevise a new system to assess the performance of such organization then the biggest challenge isfor the system to be comprehensive enough to judge all such organizations on a common ground.