NGOs facing crunch as funds get diverted to COVID-19

This was the finding of a survey, which covered NGOs, experts, economists, and statisticians

Many non-governmental organisations (NGOs) are facing severe financial difficulties as most of the funds and donations are being diverted towards management of the COVID-19 pandemic and relief efforts, revealed a survey.

With funds diverted to COVID-19 healthcare and immediate relief, many NGOs are facing the threat of closure and job cuts. A large amount of CSR, retail and philanthropic funds were expected to go to COVID-19 healthcare and relief, both in the near- and medium-term, and the overall funds available to NGOs would be impacted, with an even larger impact on non-COVID-19 issues, according to a survey conducted by a Bengaluru-based The/Nudge Foundation, an NGO.

“The reduced funding is likely to lead to closures and job cuts, potentially even more than the past year as many NGOs have eaten into their reserves. This may have far-reaching consequences both because of the work NGOs do, and because the sector had seven million jobs,” said the survey titled ‘Some potential implications of the second wave of COVID-19 for NGOs’ conducted by Ayesha Marfatia and Ashish Karamchandani.

On the impact on NGOs in the medium term, the survey said NGOs were increasingly seeing burnout and mental health issues in their teams. In addition to the stress of the past year, a significant amount of people working in the sector have now been affected directly. “Job security is also a looming worry,” said the survey.

The survey, which covered many NGOs, 23 experts, economists, and statisticians, revealed that “compliance requirements are becoming more onerous and for many NGOs, with Foreign Contribution (Regulation) Act, there are issues with sub-granting and operating the SBI accounts mandated for use by the government, and as a result, difficulty accessing foreign funds. This is impacting the effective use of the foreign aid coming into the country,” the survey said.

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