THE MEANING AND DEFINITION OF NGO

NGO is an organization consisting of private individuals who believe in certain basic social
principles/ obligations and who structure their activities to bring about development to
communities that they are servicing. “NGOs include groups and institutions that are entirely
or largely independent of Government and that have primarily humanitarian rather than
commercial objectives”. They are non-profit making, voluntary and service oriented
organizations. Working on various issues like Environment protection, Save the Planet Earth,
Disability, Science and Technology, Health, Agriculture, Animal welfare, Art and Culture,
Education. NGOs are known by different names: Voluntary organizations (VOs), Voluntary
Agencies (VAs), Voluntary Development Organizations (VDOs) and Non-Governmental
Development Organizations (NDGO). NGOs vary greatly according to their philosophy,
purpose, programs, approach, and orientation, scope of activities, expertise and structures. To
a layman, NGO is a social institute, it is non-governmental and has a purpose of charity.
Following are the different definitions of NGOs to have a better understanding of NGOs: The
World Bank defines NGOs as “Private organisations that pursue activities to relieve
suffering, promote the interests of the poor, protect the environment, provide basic social
services, or undertake community development.” In wider usage, the term, „NGO‟ can be
applied to any non-profit organisation which is independent from government. NGOs are
typically value based organisations which depend, in whole or in part, on donations and
voluntary service2.
The United Nations describes an NGO as: Any non-profit, voluntary citizens' group which is
organized on a local, national or international level. Task-oriented and driven by people with
a common interest, NGOs perform a variety of services and humanitarian functions, bring
citizens’ concerns to governments, monitor policies and encourage political participation at
the community level. They provide analysis and expertise, serve as early warning
mechanisms and help monitor and implement international agreements.
In simple terms, NGOs can be defined as “self-governing, private, not-for - profit
organizations that are geared to improving the quality of life for disadvantaged people”
(Vakil, 1997).

NGO’s and Voluntary Organisation

Although the terms VOs & NGOs are used interchangeably, however, they differ widely in
their objectives, methodology, style of functioning, motives, legal status, socio-political
orientation, ideological affinity, economic strength etc. Voluntary organisations are opposite
to business, cooperative and trade settings associations. Voluntary organisations or agencies
are essentially non-profit and non-partisan organisations. They are largely independent of the
government and are characterised primarily by humanitarian or cooperative rather than profit
making objectives. The quintessence of VOs is voluntarism and the spirit of voluntarism
stems from varied sources such as e.g., love of humanity, charity, welfare of the needy and
destitute etc. VOs are controlled and administered by an association of citizens rather than
any influence from the government. The term NGO, has acquired wide acceptance
internationally. The United Nations nomenclature of an NGO refers to any international
organisation not established by intergovernmental agreement including organisations which
accept members designated by governmental authorities, provided that such membership
does not interfere with the organisation's free expression of views. NGOs are different from
the market induced organisations and other organisations of the State. They are formalised
organisations beyond the market and the State, receiving their resources partly from
voluntary contributions of the society. The term NGO in India has been used to denote a wide
spectrum of organisations which may be non-governmental, quasi or semi-governmental,
voluntary or non-voluntary, partisan or non-partisan, formal or informal, non-profit or profit
oriented bodies, with a legal status and registered under special Acts (like Companies Act,
Societies Registration Act, etc.). To be eligible for funding from various agencies, it should
have legal status (i.e. a legal personality).

TYPES OF NGO
Different classifications of the NGOs are mentioned in literature. The classification of NGOs
retrieved from different sources is as under:

NGO type can be understood by-

a) Orientation
b) Level of operation

a) NGO type by orientation:

Charitable orientation: It often involves a top – down paternalistic effort with little
participation by the “beneficiaries”. It includes NGOs with activities like food, clothing, and
housing of needy. Such NGOs may also undertake relief activities during a natural or
manmade disaster.
Service orientation: It includes NGOs with activities such as the provision of health, family
planning or education service in which the program is designed by the NGO and people are
expected to participate in its implementation and in receiving the service.

Participatory orientation: It includes NGOs with participation of local people in

organization’s activities. It is characterized by self – help projects where local people are
involved particularly in the implementation of project by contributing cash, tools, land,
materials, labour, etc.

Empowering orientation: It is where the aim is to help poor people develop a clearer
understanding of the social, political and economic factors affecting their lives, and to
strengthen their awareness of their own potential power to control their lives.

b) NGO type by level of Operation

Community-Based Organization: CBOs arise out of people’s own initiatives. These can
include sports clubs, women’s organizations, and neighbourhood organizations, religious or
educational organizations.
City Wide Organization: It includes organizations like Rotary or Lion’s Club, Chamber of
Commerce and industry, coalitions of business, ethnic or educational groups and associations
of community organizations. Some exist for other purposes, and become involved in helping
the poor as one of many activities, while others are created for the specific purpose of helping
the poor.

National NGOs: It includes organizations such as Red Cross, YMCAs / YWCAs,

professional organizations, etc.

International NGOs: These ranges from secular agencies such as CARE, Ford and
Rockefeller Foundations to religiously motivated groups. Their activities vary from mainly
funding local NGOs, institutions and projects, to implementing the projects themselves.

CHARACTERISTICS OF NGOs
Though NGOs vary in different aspects like nature, structure and ideology but they have
some characteristics which make them fall into a category of non-government organizations.
In general, following are the common characteristics of NGOs:

i) The NGOs are not created for profit making, they are non–profit making organizations. The
profit generated, if any is used for working of organization’s programmes and is not
distributed among its members.
ii) NGOs are independent of government.
iii) The NGOs are formed on voluntary basis and possess spirit of voluntarism.
iv) The NGOs have legal status/ identity. They need to be registered under appropriate Act
(e.g. Trust Act, Society Registration Act or Companies Act). For obtaining foreign funding,
they need to be registered under Foreign Contribution Regulation Act (FCRA) with Ministry
of Home Affairs, Government of India.
v) All NGOs are formed to serve a common purpose of benefit and / or development of
community. They aim towards helping the needy.

STRENGTHS AND WEAKNESSES OF NGO

As in case of any other type of organization, every NGO has its own set of strengths and
weaknesses. No thumb–rule could be applied to list the strengths and weaknesses of NGOs as
no two NGOs are totally identical. In general following are the most common strengths and
weaknesses of NGOs:

Strengths of NGO:

 Proximity to grass root levels: NGOs are close to community and can understand
people’s needs and expectations. This is the major strength of NGOs. There is clarity
about the nature and extent of problem or need prevailing in the community.
  Enthusiasm and inner drive of the members: NGO people have an inner drive towards
social cause and they are enthusiastic about their work which results in timely
achievement of their goals.
 Creativity and innovation: NGOs are generally known for their creative and
innovative nature. Due to their freedom in working, NGOs are not under any kind of
pressure of doing a job in a particular way, which in turn make them think creatively
and brings innovation.

 Quality of work: NGOs utilise the funds economically as already most of the NGOs
face shortage of funds. NGOs projects or activities are met in time and have long term
effect.

 Speed of work: The communication is faster in case of NGOs since they do not
contain long chain of commands in the organization. Fast communication, flexibility,
field experience and field presence of NGOs increase the working speed.

Weaknesses of NGO:

 Dependence on donors: This is the biggest weakness of NGO which makes them
unsustainable. Most of the NGOs are dependent on external funds for running their
projects. In absence/ shortage of funds, the work of NGOs is slowed down or even
stopped till the funds are available.

 Lack of skilled manpower: Technical ability is required for running the projects
successfully, which is not available easily for NGOs. Also in NGOs working in rural
areas or remote places, there is problem of inadequacy of trained people which is
really a challenging situation.

 Limitations with long term and large scale projects: NGOs are efficient in short range
projects, but they might find big projects difficult to manage because of insufficiency
of funds and inadequacy of suitable manpower. The NGOs are close to grass roots but
may be unaware of global socio – economic scenario which may make them
unsuitable for large scale projects.

SOURCES OF FUNDING OF NGOs:

The NGOs rely on funding from variety of sources for their projects, administrative costs and
their overall functioning. These sources could be internal sources like membership fees or
could be external sources like funding from government. NGOs may depend on some large
number of donations or more small number of donations.
Internal sources:
Internal sources of funding are membership fees, subscriptions, interests/ dividends, sales of
products, individual donations and rent.
 Membership fees – Annual fees charged for becoming a member of the organization
is the membership fees.
  Subscription – Fees is charged by the organization for subscribing in-house
magazine or bulletin or any other type of publication.
 Interests/dividends – On any short term or long term investment of NGO, interest /
dividend is received.
 Sales of products – Funds are raised by sale of products like handicraft items, food
items and candles that are generally prepared by the beneficiaries.
 Individual donations – Any member of the NGO may give funds from his pocket as
individual donation.
 Rent- In case the NGO leases out its property like office, rent becomes the internal
funding source.
External sources
External sources include Government, Foundations, Trusts, Funding Agencies, Corporations,
Public donations, Self-financing.
 Government- “By and large, funds from government to the work of voluntary
organizations have been coming right from independence. Central Social Welfare
Board and Khadi and Village Industries Corporation are two early examples of
funding the work of certain types of activities of Voluntary Development
Organisations”. The Central and State Governments have many schemes of various
Ministries and Departments in the areas like Education, Health, Children and Women
welfare, Human Resource Development, Environment, and Rural Development.
Many NGOs receive funds from government to work on their projects.
 Foundations, Trusts, Funding Agencies: National Foundations/ Funding Agencies,
Foreign/international foundations / Funding Agencies and Trusts are one of the major
sources of funds for NGOs.
 Corporations: Corporate sector includes the corporations and business houses acting
as a funding source for NGOs.
 Public donations: Donations given by an individual or a group of individual for
charitable cause, fall under this category.