Should board members and trustees of non-profit organisations be treated as “public servants” if they are partially funded by the government? If NGOs receive foreign funding, should their office bearers be made to declare their assets to the public?
India’s non-profit sector has been grappling with these questions for more than two weeks, ever since the Union government issued a notification to bring large numbers of NGOs under the Lokpal and Lokayuktas Act of 2013. The notification, issued on June 20, specifies that the Lokpal law will now apply to any registered society, trust or non-profit organisation receiving annual government grants of Rs 1 crore or more, or receiving foreign funds worth Rs 10 lakh or more. This would cover a large number of charitable organisations in India.
As “public servants” under this law, the office bearers of these NGOs can be charged by the Lokpal in case of any corruption. But even when there are no irregularities, the law requires them to declare their assets in public, a clause that has irked several charitable enterprises across the country.
Board members resigning
According to the government notification, all board members, trustees, chairpersons and other office bearers of organisations governed by the Lokpal have to declare their individual assets – as well as the moveable and immoveable assets of their dependents – to the Union Ministry of Home Affairs. Their deadline to comply with this rule is July 31.
While some NGOs are still not aware of the new notification and its implications, many charitable organisations are afraid of losing board members and trustees working in an honorary position.
“I am upset about this rule because many of my board members are industrialists, doctors or advocates who earn nothing from the NGO and may not want to make their assets public,” said Meena Seshu, general secretary of Sangram, a non-profit working for the rights of sex workers in Maharashtra. Any registered trust or society needs at least seven board members, and if some resign, Seshu is worried she would find it difficult to get new members on board. “Why would people be willing to come under scrutiny for doing nothing and just being supportive? This is just an added complication for them.”
Pooja Taparia, founder of child rights NGO Arpan, believes people with honest incomes have nothing to really worry about. “But some people may not want to disclose their assets, and it would be unfortunate if they stepped down from boards,” said Taparia. “That would be unfortunate for the non-profit sector, which has benefited from the involvement of people from the corporate sector.”
Board members of some non-profits – like Nawshir Mirza of the Centre for Advancement of Philanthropy – have already announced their plans to resign from their positions.
“Nobody is against transparency, but board members of NGOs are afraid they would be vulnerable to extortionists if they disclose their personal assets online,” said Noshir Dadrawala, the chief executive officer of the Centre for Advancement of Philanthropy India. Dadrawala has been conducting workshops with representatives of various non-profits and has found many board members keen to now resign from their roles because of the new rules.
“The government is attempting to specifically target NGOs,” he said. “Why not enforce the same rules on private corporations, who receive much larger amounts in foreign funding?”
Dadrawala is not the only one indignant about the manner in which profit-making corporations have been kept out of the purview of the Lokpal, particularly in the context of the crackdown on NGOs receiving funds under the Foreign Contribution (Regulation) Act.
Just last month, the Union home ministry suspended the FCRA license of non-profit Lawyer’s Collective for alleged discrepancies in its foreign fund accounts, and cancelled the FCRA license of Teesta Setalvad’s Sabrang Trust. Both organisations have been involved in fighting cases on behalf of the victims of communal violence during the 2002 Gujarat riots.
Last year, the government also cancelled the FCRA license of Greenpeace India, an organisation agitating against environmental violations in the country, while suspending licenses of hundreds of other NGOs.
“Asking NGOs to follow the principle of transparency cannot be faulted if it is done in a bona fide way,” said Harsh Mander, a social worker and former bureaucrat. “But this measure comes behind a whole series of very partisan attacks on the NGO sector, targeting those dissenting against the economic model or the majoritarian politics of the government.”
Excluding private companies from the same rules only compounds the belief that the state is attempting to clamp down on dissenting civil society organisations. “The state is encouraging the high participation by foreign entities in for-profit enterprises, but we see no attempt to institute similar measures with regard to non-profit organisations,” said Mander.