September 28, 2020

An air of mistrust around nonprofits

The FCRA Bill 2020 is being used to crackdown on nonprofits, while a lack of transparency continues to surround PM-CARES.

6 min read

The passage of the Foreign Contribution (Regulation) Amendment Bill, 2020 in parliament this week has left both small and big non government organisations very worried. They believe the law not only demonises them in the public mind but also threatens their existence by imposing stiff conditions on working expenditure for big organisations and by stopping the transfer of funds from them to smaller ones.

There are five important features of this Bill. It regulates the acceptance and utilisation of foreign funding by individuals, associations and companies. It prevents transfer of foreign funding to any other person. It reduces the limit of usable foreign contribution for administrative expenses from 50% to 20%. It empowers cancellation of the FCRA certificate for an additional period of 180 days beyond the 180 days allowed at present. Also, the provisions lay down that renewal of licence will happen every six months provided the applicant is not fictitious, not convicted for triggering communal tension and not guilty of diversion of funds.

Related Article: The Foreign Contribution (Regulation) Amendment Bill 2020

Air of mistrust being created around NGOs

Speaking at a webinar on the issue, executive director of Population Foundation of India Poonam Muttreja said the Bill has created “an air of mistrust” around NGOs. “It will hurt civil societies which are all about commitment and caring as it demonises NGOs in the public mind. We are part of the non-profit sector, it is not money but compassion which brings us here,” she asserted.

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Muttreja also questioned, “Why is government fearing NGOs—is it because we have a voice, we speak out, we raise the issues of the most marginalised, about which government does not have any data?”

She lamented that rather than going after NGOs found wanting in ensuring basic statutory compliance, the Bill has sought to paint the entire sector with the same brush. “Criminal investigations have been done against a number of organisations where there has been issue of utilisation of funds in the past. There are empowering laws for that,” she said.

What about transparency in receiving funds for electoral bonds, PM-CARES Fund’

Director of the Centre for Social Impact and Philanthropy Ingrid Srinath lamented that during the discussion on the Bill, “sweeping allegations made on non-disclosure, hiding identity of members, but zero evidence was provided”.

What about over Rs 9,600 crore that came to PM-CARES Fund and in which too contributions were made from abroad but which has been exempted under FCRA?

She said minister of state for home Nityanand Rai said in parliament that the Bill sough to “bring in transparency” and “stop misuse of foreign contributions by people”. “But what Rs 6,000 crores which comes via electoral bonds—even from abroad— but has zero visibility or what about over Rs 9,600 crore that came to PM-CARES Fund and in which too contributions were made from abroad but which has been exempted under FCRA?” she asked

Srinath questioned why only FCRA contributions are being targeted when foreign direct investment is over 15 times more than that. Also, she said, of the 21,490 organisations with licence to receive FCRA, only around 4,000 received sub-grants.

As for the issue of administration cost, she said only 1,803 organisations reported spending over 20 per cent of the contributions received on administrative costs.

Closed green door locked by padlock

“Many NGOs in far-off places cannot access any foreign resources. So large and small organisations work together to ensure funding and growth—that would be impacted.” |Picture courtesy: PxHere

‘Work of NGOs working in remote areas will suffer’

Chief executive officer of VANI, an apex body of Indian voluntary development organisations, Harsh Jaitli said civil society organisations working in remote locations will suffer. “Many NGOs in far-off places cannot access any foreign resources. So large and small organisations work together to ensure funding and growth—that would be impacted.”

Local organisations work with civil administration in times of floods, they did so recently to help migrant workers and in dealing with COVID-19 situation.

In critical moments, like floods or dealing with the recent pandemic situation, he said these NGOs play a major role. “Local organisations work with civil administration in times of floods, they did so recently to help migrant workers and in dealing with COVID-19 situation. Even the Prime Minister and Niti Aayog appreciated the work of NGOs but now these FCRA amendments have been brought with without any consultations,” he charged.

Related article: IDR Explains | FCRA

NGOs in states flooded with calls from concerned workers

The impact of this is being felt the most by smaller NGOs running in states. They have been flooded with calls from grassroots workers who are afraid that the changes to the FCRA Act would deprive them of their livelihood.

As founder and managing director of LEADS Trust, A.K. Singh, who works closely with smaller NGOs in states like Jharkhand, Odisha and Chhattisgarh, said it was painful that this Bill has come in the times of COVID-19 when the government and NGOs are trying to work together and improve the lives of people. “We are pained at the developments over FCRA. I have received over 50 calls since morning and there is panic among the activists working in the sector.”

Explaining the reason, he said, “the format in which we work is that all organisations are not equally competent in raising funds. So the bigger organisations raise funds and pass them to NGOs working among tribals and other backward and unreached sections of society so as to connect them to the development works.”

Many Dalit, Adivasi, women workers may lose jobs’

He said the clause which disallows sub-granting will impact hundreds of small NGOs and thousands of workers in the region. “This will render 5,000-7,000 workers unemployed in Jharkhand alone—most of them are Dalits, Adivasis or women. So in times of COVID, this would impact the most marginalised.”

Terming the passage of the Bill a “painful and brutal act”, he said, rather than targeting issues like religious conversion directly it has gone after organisations working on various social programmes. Singh said, his own organisation that made school development plans for 10,000 schools covering 13 lakh students and encouraged mango plantation over 1,000 acres, has also been engaged in creating a larger impact and provided critical feedback and information on hurdles to the government.

“We also help governments identify programmes for expansion. Like a Rs 60 lakh project of ours was converted to a Rs 9 crore community project with help of government. But if funding dries up then many organisations like ours will not be able to work for improvement of livelihood of the masses,” he cautioned.

Bill hurts atmanirbhar’ movement for women’

Hemal Kamat, director of Madhya Pradesh-based Concept Society, said her organisation has for over 15 years been working with Adivasis and Dalit women but now the Bill has created an alarming situation in which their survival is at stake.

This amendment contradicts the law and hurts the self-reliance of women.

Kamat said it was ironical that “on the one side we are saying women should be made ‘atmanirbhar’ or self reliant through setting up organisations—and many women have also started such units—but on the other this amendment contradicts the law and hurts the self-reliance of women”.

She said there are around 2,000 organisations working for women as also those in sectors such as agriculture, soil and water conservation and climate change who take the policies of the government to the last person. “In these organisations a large number of people work for small salaries but they make a big change in the lives of people.”

During COVID, she said, a lot of these workers addressed domestic violence issues but now with the 20 per cent limit on administration cost, it would become difficult for NGOs to make payments to them.

Related Article: FCRA Bill 2020: Latest updates

In North East, work in remote areas will suffer’

Hasina Kharbhih, founder and chairperson of Impulse Network that works in the North East, said “many of the initiatives that have been progressive—such as those related to human rights and human trafficking—have been funded by international funds.”

The new amendment, she said, will challenge real work on the ground. “The smaller organisations are doing wonderful work and international donors support them especially in tackling national calamities.” The amendments, she said, were “not friendly at all for the development sector” as they would impact such organisations and those working in remote areas.

Appeal to President to return the Bill, refer it to Select Committee

On the way forward, Muttreja said a collective appeal would be made on behalf of the sector to the President of India not to give his consent to the Bill and to return it to Parliament so that it may be sent to a Select Committee for greater discussion. To this, Jaitli added: “We also want to understand what are the real concerns—you should not burn the house to kill an insect.”

As Srinath pointed out that “successive governments have added more and more constraints to FCRA”, Muttreja added that the time for action is now as “no government in future will want to change it in future.”

This article was originally published on The Wire.

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