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Sustainability of Civil Society Organisations

This article is based on a talk by Dr Brian Pratt, Founding Director of INTRAC (www.intrac.org) at PRIA Head Office on 25 October 2017, in which he shared the results of a recent study INTRAC undertook on organisational sustainability, financial sustainability and the reduced space for civil society in different countries. Dr Pratt discussed the challenges to sustainability that civil society as a sector faces across the globe, and possible ways in which civil society organisations can find options for sustainability.

The dominant model for any developing country NGO and other civil society groups is one of depending on grants from international donors/national governments. This model has been fast-changing for the past several years, affecting the sustainability of many civil society organisations and networks. What are the challenges to civil society sustainability, in the face of reduced (or often removed) external funding? How can civil society sustain itself in the face of these challenges?

Civil society organisations are facing a crisis of financing, including international NGOs (INGOs) based out of the UK and Europe, and national NGOs. This has deeply affected their sustainability. But there are many aspects of sustainability, not least of which is financial sustainability. Civil society sustainability is linked to the nature of civil society -- what it stands for and other constraints (social and political) the sector faces.

Shifts in funding by donor countries is the major cause of financial unsustainability of many NGOs worldwide. Donors have cut back on development funding to emerging economies (like India, Brazil and South Africa) in the past decade. Such cuts have also affected INGOs (those in the UK and Netherlands, for example) which had become increasingly dependent on tax funding. Cutbacks in funding can be seen as the result of an increasingly right-wing press, which questions giving money away to other countries when domestic fiscal health is not strong.

Donors are no longer giving funds for strategic purposes; flexible funding has long since dried up. The focus is on “tangible results” and on “allies” (regardless of a recipient country’s track record in human rights, etc). Funding patterns do not ignore geopolitical considerations or trade concerns. For example, a lot of the funding provided by Canadian CIDA in South America is linked to trade concerns. Restrictions on funding, imposed by national governments, are also used to stifle a particular kind of work. The easiest way to restrict human rights groups within a country, for example, is to put curbs on foreign funding. Public money (taxes) coming from Northern government is often given with political and economic conditionalities (e.g., Structural Adjustment Program); these have not always been good for developing economies.

Funding is now available through a commercial bidding process, and INGOs find themselves in competition with private companies. In contract work, payments are released in arrears. This means a small NGO has to have sufficient financial resources to fund its operations and work for at least one quarter, to then raise bills and be paid in the next quarter. Nationally, NGOs have become contractors for government services in order to remain financially viable. Old structures that worked in one political framework do not work in the new order. For example, NGOs in South Africa were structured around apartheid and resistance to it. With the dismantling of apartheid, many of them are still learning new ways of working with government, communication and sharing information.

One alternative proposed is for NGOs to create federations nationally, register locally and capture funds, which can be distributed among all members. However, the politics of distribution of such funds cannot be ignored. NGOs are also chasing corporate funds, often resulting in unhealthy relationships (e.g. board corporate representatives on NGO boards). Corporate funds are given under tight contracts, focus on the use of technology, make demands for younger teams, etc.

When finances dry up for an NGO, it finds it difficult to survive because unlike the corporate sector (e.g., when a company goes bankrupt or is facing cash difficulties), NGOs cannot merge with each other, or “buy another NGO” to acquire access to funds, or close down one service and take up a new one. The legal restrictions in place in most countries do not allow this for non-profit organisations.

Are NGOs then still agents of transformation or are they willing to accommodate changes to take money from where it is available? In following the money, are NGOs then ignoring local realities and inequalities, just to remain sustainable themselves?

Civil society organisations need re-evaluate their own social relevance. Civil society action has a far longer history than international development cooperation (which has been around for about 70 years). Social movements have been quite successful in lobbying without access to large funding resources. Finding support from local communities and individuals is one way forward. Niche groups have always found ardent supporters, and can continue to do their work, at local level, with small staff. NGOs can rediscover local philanthropy, and build partnerships with local businesses for long term sustainability.

Drying up of finances, especially large funds from donor countries, can be seen as an opportunity to define a new kind of social transformation and the vehicle (i.e., civil society organisations) which can help create it.



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