Acknowledgement. Dr. Rajesh Tandon and Dr. S.S. Srivastava of PRIA prepared the text of this report.

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3 Acknowledgement This study has been carried out in collaboration with the Institute for Policy Studies, Johns Hopkins University, USA as a part of the comparative global study. Dr. S.S. Srivastava in PRIA acted as the Principal Researcher and provided overall leadership and guidance to the study. Several experts provided advice and technical guidance to the study. The study was made possible through resources provided by JHU, Ford Foundation (Delhi), Aga Khan Foundation, Action Aid and CORDAID. This publication has been supported by Sir RatanTata Trust. Dr. Rajesh Tandon and Dr. S.S. Srivastava of PRIA prepared the text of this report. Detailed reports on Definition, Legal Framework, History, Methodology and state level data are separately available in PRIA as working papers. December, 2002

4 Introduction Most readers would be astonished to learn that there are more than 50,000 NGOs currently working in the developing world, which receive over $10 billion in funding from global financial institutions and American, Japanese and European governmental agencies. October 22, 2002, The Hindu Business Line No figures are available on how much Indian NGOs raise domesticaly but the feeling among the NGOs is that they mainly depend on funds from abroad for their work. December 9, 2002, Business Standard Those who think modern-day social workers are sitting pretty on massive cushions provided by donors don t know half the picutre. The latest trend is to ask country directors or their equivalents to raise funds locally and make their units independent financially. December 13, 2002, Delhi Mid-Day The above recent newspaper headlines adequately reflect the prevalent (mis)understanding of the non-profit activities and organizations in the country today. A plethora of concepts and definitions have gained currency in recent years : Voluntary organization : generally implies volunteering Community based organization : local association of the community itself Non-governmental organization : intermediary development organization Civil society organization : recent concept of defining non-state, non-market sector Do these terms provide a clear picture of the spread or scope of the totality of private initiatives for promotion of public good? No, certainly not! In the absence of any authentic data-base, most descriptions of the work of these types of organizations remain personalized and anecdotal. This report presents the preliminary findings of a nation-wide study. For the first time in the country, a detailed, reliable and authentic picture of the non-profit sector emerges in the following pages.

5 NON-PROFIT ORGANIZATION IN THE STUDY ORGANIZED : legally registered or not, it has some ongoing institutional identity PRIVATE : institutionally separate from government and non-exercise of any governmental authority NON-PROFIT DISTRIBUTING : even if surplus is generated, it is ploughed back to the work of the organization SELF GOVERNING : autonomous functioning, independent of government and private business control VOLUNTARY : voluntary participation of people contributing time and effort without full compensation WHO IS EXCLUDED? Self-help groups, cooperatives, political parties, only religious worship establishments WHO IS INCLUDED? School, clinic, orphanage, sports club, cultural organization, social service providers, research and training institutes, development organizations

6 Methodology The study began in 1998 by examining available secondary sources to estimate the size and scale of the non-profit sector in India. Most existing directories and lists of NPOs were not comprehensive. The Central Statistical Organization (CSO) of Government of India also did not maintain any separate data on NPOs. The Census of Enterprises and Establishments, 1990 gave a listing of all non-agricultural enterprises and establishments by ownership: govt., cooperative and private. It was in the private ownership category that NPOs were hidden. Based on some estimates of employment in NPOs, top four states from the four regions (East, West, North, South) of the country were identified for in-depth survey : West Bengal, Maharashtra, Delhi, Tamil Nadu. Meghalaya was included as a special case of smaller North-Eastern states. A pilot organizational survey was launched in U.P. and Tamil Nadu in Instruments and methods of survey were improved on the basis of pilot experience. U.P. was dropped for indepth survey as the state had been bifurcated by November By this time, preliminary estimates of employment in enterprises identified as non-profit by ownership were made available by the CSO in the Census of Enterprises and Establishments, These data were used to plan the organizational surveys in the five states. The three-stage design began by selecting one district in each NSS defined region of the state. The sample size of the survey was pre-fixed at 1% of all villages and 1% of all urban frame blocks in the selected districts. Tehsils in second stage and villages/urban frame blocks in the third stage were sampled for 100% listing and survey of all existing and operating NPOs. Survey on giving was integrated in the same. All households in sampled villages and urban frame blocks were listed and 10 giver households randomly selected for in-depth coverage in each location identified. More than one lakh households were covered in this survey. Most field data-collection was carried out during late 2000 to mid National estimates were drawn from these survey results to project the overall picture in the country. 3

7 Size How large is the non-profit sector in India? How many non-profit organizations (NPOs) are existing in India today? A total of nearly 1.2 million NPOs in India today And where are they based? in cities?? Chart - I The non-profit sector in India is predominantly rural based. Chart I shows the spread across the surveyed states. More than half the NPOs in the country are based in rural areas. The number is nearly two-thirds in West Bengal. Of course, several NPOs based in urban area serve rural communities. Nearly Half the NPOs Are Unregistered 4 Chart - II The data across the states is shown in Chart II. The percentage of registered NPOs is highest in Maharashtra (74%) and lowest in Tamil Nadu (47%). An overwhelming majority of these registered NPOs are registered under Society Registration Acts. Most of the unregistered NPOs are in rural areas. But even in urban Delhi, nearly 30% of NPOs are not legally incorporated. Informal and organized characteristics of the NPOs are the most challenging realities today.

8 How does the size vary? Indian NPOs are essentially small : nearly three-fourth of all NPOs have only volunteers or at most one paid staff. Only one in 12 NPOs (8.5%) employs more then 10 paid staff (Chart III) Chart - III one or less paid staff between 2-5 between 6-10 above 10 paid staff Variation on Size of NPOs nationwide So, the sector of Indian NPOs is characterized by: Nearly 12 lakh organizations Mostly rural Typically very small Half unregistered 5

9 Activities What kinds of activities these NPOs engage in? In other words, what is the nature of their charitable enterprise? Five dominant activities at all India level : Religious (engaged in social development 26.5% every fourth NPO though primary identity is a religious institution) Community/Social Service 21.3% every fifth NPO Education 20.4% every fifth NPO Sports/Culture 18.0% every sixth NPO Health 6.6% every fifteenth NPO The variations across states are shown in Chart IV More than half the NPOs in Delhi have primary activity as religious affiliation services highest in the country In Meghalaya, nearly half the NPOs are engaged in education In West Bengal, more than a third NPOs have primary activity as sports and culture In Tamil Nadu, community/social services and education account for nearly one third NPOs each In Maharashtra, nearly one third NPOs have religious affiliation services as primary activity Chart - IV 6 Activities of NPOs in India

10 Employment How many persons work in NPOs in India? Nearly 20 million persons work on a paid or volunteer basis in NPOs. This is 3.4% of total adult population In Delhi, one out of very eight adult person is working in NPO In West Bengal, 90% of all the persons working in NPOs are volunteers Overall, volunteers are nearly five and a half times more than paid staff in NPOs nationwide Chart - V No. of Persons Working in NPOs (in millions) % Paid employees Volunteers % % % 85% 83% 15% 20% 10% 28% 17% 11% DELHI MEGHALAYA WEST BENGAL TAMIL NADU MAHARASHTRA INDIA Employment in NPOs in India 7

11 Variation across states in employment (both paid and volunteer) in NPOs as a percentage of total non-agriculture workforce and total adult population are shown in Chart VI. Chart - VI Percentage of Non-profit Employment Some of the highlights of the findings from Chart VII Every eighth adult person in Delhi is working with NPOs In Meghalaya, more than a third of its non-agricultural workforce is working in NPOs In West Bengal and Tamil Nadu, every tenth person in the non-agricultural workforce (industry and services taken together) is engaged in NPOs Nationwide, every eighth person in non-agricultural workforce is engaged in NPOs 8

12 However, the nature of NPO activity in India is such that a wide variety of employment patterns exist. Paid employment is both full and part time. Volunteers also work in NPOs both full time and part time. Further pattern of employment emerges when these are converted into full-time equivalent persons working in NPOs in India. This picture is shown graphically in Chart VII Nationwide, NPOs have nearly 27 lakh (2.7 million) full-time equivalent paid employees. NPO paid employees (full-time equivalent) are nearly: Four-fifth (82%) of all central government employees One quarter (25%) of all central and state government employees taken together One seventh (14%) of all public sector employees One third (31%) of all employees in the organized private sector One twelfth of all employees in community, social and personal services (which means that every twelfth employee in services like health, education, welfare, community development etc. taken together is working in a NPO) In the surveyed states, NPO paid employees (full-time equivalent) constitute nearly: a quarter of all state government employees in Delhi (27.5%), Meghalaya (27.3%) and Tamil Nadu (22.5%) respectively a twelfth of the state government employees in West Bengal Total paid employment (full-time equivalent) in NPOs in India is 1.6% of total nonagricultural workforce; the average for 22 countries (developed and Latin American) is 4.8% (Salamon, et.al.,1999) Chart - VII No. of Full time Equivalent Persons Working in NPOs (in lakhs) % 50% Paid em ployees Volunteers % 45% % 38% % 57.5% % 56% 44% DELHI MEG HALAYA WEST B ENGA L TA MIL NADU MA HA RA SHTRA INDIA 9

13 Revenue How much resource does the sector of non-profits mobilize? All India estimates of total receipts of NPOs for were Rs. 17,922 crores* What was the source of this revenue? Four main sources of receipts for NPOs in India are : Self-generated Loans Grants Donations (grants are funds received from government and international sources; donations can be from both Indian and foreign sources, mainly individuals and corporations) The pattern of distribution of receipts on the basis of above sources is shown in Chart VIII. The patterns illustrate that : More than half of all receipts of NPOs in India are self generated (through fees, charges for services, etc.) NPOs in West Bengal have slightly more than a sixth (17.5%) of their receipts from loans For Tamil Nadu, the percentage of self-generated resources is nearly two-thirds of the total Grants and donations taken together constitute two-fifth (41.9%) of total NPO receipts in India 17,922 Chart - VIII Distribution of NPO receipts (Rs. crores in ) Self Generated Loans 2,056 Grants Donations 51% 1,336 1, % 23.4% 7.1% 22% 0.5% 17.5% 36.1% % 29% 11% 0.1% 51.3% 16.4% 41.4% 71.9% 14.7% 12.9% 17% 7.8% DELHI MEGHALAYA WEST BENGAL TAMIL NADU INDIA * A crore is equivalent to 10 million 10

14 How does it compare internationally? Salamon et.al., (1999) report that average for 22 countries (developed and Latin American) taken together shows the following patterns : Self Generated Government Funds Private Funds International Figure in % India The above shows a comparable picture for India vis-à-vis other countries. Relatively speaking, government funds are less than a third for Indian NPOs while such funds are two-fifth for other countries. Private funds in India include private Indian and foreign contribution. Do foreign funds matter for Indian NPOs? Chart IX shows percentage of foreign funds in total receipts of NPOs during Chart - IX DELHI 13.5 MEGHALAYA 9.1 WEST BENGAL 1.8 TAMIL NADU 13.2 INDIA Foreign funds as percentage of total receipts on NPOs ( ) Nationwide, only 7.4% of total receipts of NPOs are foreign funds Foreign funds constitute nearly one eighth of total receipts for Tamil Nadu and Delhi Foreign funds as share of total receipts of NPOs in West Bengal are insignificant 11

15 For NPOs included in the survey, nationwide estimates show foreign receipts of Rs crores (which is nearly one-third of Rs crores reported as receipt by Ministry of Home Affairs, Government of India ) What is the relative significance of total receipts by the sector of non-profit organizations in India today? Nationwide, total revenue of NPOs is 7.7% of the total central government expenditure (plan and non-plan) on social services for Nearly one in every 25 rupees (3.9%) is self-generated by NPOs as a share of total government expenditure (plan and non-plan) on social services for NPOs in India contribute to Indian economy in significant ways. Chart X provides some interesting patterns Nationwide, share of NPO contribution (based on paid employment only) to the gross product (other services community, social and personal services-sector) at current prices stands at 14.8% - one sixth DELHI 34.2 Chart - X 68.5 MEGHALAYA WEST BENGAL TAMIL NADU MAHARASHTRA Share of NPO Gross Product based on total Employment as percentage of total Gross Product (other services) at current prices Share of NPO Gross Product based on paid employ ment as percentage of total Gross Product (other services) at current prices INDIA This share of NPO contribution to Gross Product (other services) is one-third in Delhi, one-fourth in Tamil Nadu, one-ninth in Maharashtra and two-fifth in Meghalaya 12 When total employment in NPOs (paid and voluntary) is taken into account, this contribution nearly doubles; nationwide, share of NPOs contribution to Gross Product (other services) at current prices is nearly one-third

16 Givers Do people give money to NPOs in India? Who are these people who contribute to philanthropic causes? Households give in India, not individuals Chart XI shows relative size of giving population (as percentage of total households) Chart - XI Nationwide, more than 75 million households give for charitable causes - nearly two-fifth (40.7%) of all households in India Two-thirds (68%) of all givers live in rural areas Nearly two million households give in Delhi more than four-fifth (80.7%) of all households in Delhi The pattern for Meghalaya and West Bengal shows that more than two-thirds of all households are givers (72.5% in Meghalaya and 66.6% in West Bengal) Nearly a quarter of all households in Maharashtra give for charitable causes In Tamil Nadu, the giver households account for one-tenth of all households 13

17 Educational profile of givers in India presents interesting trends (Chart XII) Chart - XII Distribution of Givers by Education 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% DELHI MEGHALAYA WEST BENGAL TAMIL NADU MAHARASHTRA INDIA Below Primary Primary Secondary Graduate & above Givers come from all educational categories Two-fifth of all givers have education at primary (or below) level only; in comparison, only a quarter of the givers are graduates (and above) In West Bengal, nearly two-thirds of all givers have educational levels primary or below In Maharashtra, nearly a third of all givers have eductional levels primary or below In Tamil Nadu, nearly half of all givers are graduates and above 14

18 Economic profile of all givers presents an interesting picture (Chart XIII) Nationwide, two-fifth of all givers are poor households (annual income below Rs. 25,000) Only a small percentage of givers are from households whose annual income is above income tax paying level (Rs. 1 lakh per annum) A majority of givers in Delhi and West Bengal are from poor households; nearly a third of all givers in Maharashtra are from poor households. Chart - XIII Percentage Distribution of Givers by Annual Income 10 0% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% DELHI MEGHA LAYA WEST BENGA L TA MIL NADU MA HARASHTRA INDIA Less than Rs. 25,000 Between Rs. 25,000-1 lakh Above Rs. 1 lakh And how much do Indians give to NPOs? Average amounts per giver vary significantly across states and income categories: Poor in Delhi and Tamil Nadu (at Rs. 553 and Rs per annum per household) give more than the middle income group (at Rs. 470 and Rs respectively) In West Bengal, Maharashtra and Meghalaya, middle income giver gives substantially more per annum than the poor household (Rs. 445 vs Rs. 200 in West Bengal, Rs. 849 vs. Rs. 245 in Maharashtra and Rs. 758 vs Rs. 272 in Meghalaya) The richer households give substantially more in the all states: Delhi : Rs Meghalaya : Rs Tamil Nadu : Rs West Bengal : Rs Maharashtra : Rs Overall Indians give Rs crores per year; nearly 55% of these resources go to individuals, balance to organizations 15

19 And why do Indians give? The survey results show that : 78% want to give something back to society 81% feel moral obligation to give 66% feel giving upholds their religious belief More than half believe that if government were more responsible there will be less need for giving Half are not tired of giving (willing to give more) Indians Give as well as Volunteer Besides giving in cash and kind, Indians also contribute their time, energy and capacities to charitable causes in society. Volunteering is alive and well in India today. Nearly ten million households reported volunteering regularly in recent months. Volunteers come from all educational backgrounds a quarter from primary and below level Volunteers are from all income groups nearly one-third from poor households Two-thirds of all volunteers are in rural areas 88% of all volunteers believe they offer value addition through volunteering 87% believe every one has a moral obligation to volunteer Three-quarter would volunteer more, if asked For 82% of all volunteers, it is an experience that broadens their life For two-third of volunteers, it helps to advance their career 16

20 What does it all mean? The survey findings challenge several myths and raise many new questions. Explanations of these complex patterns are also important. Some preliminary implications of these patterns are : The identity of NPOs in India remains largely invisible; while there is a wide diversity of NPOs, there are also interesting patterns. Associations and supporters of NPOs need to address this challenge of building and sustaining a coherent identity of the non-profit sector in India. Despite being invisible, the sector of NPOs in India is widespread. Its scale is huge and significant on several accounts: employment, revenue and types of activities. This scale of NPOs demands serious attention and strong support from policy-makers, government officials and political leaders. Greater effort in promoting, and effectively utilizing, giving and volunteering is feasible in the country today. Further research into the size, scope and dynamics of NPOs in India needs to be carried out and supported. For example, such indepth surveys should be conducted for all states in the country. The data, and system of data-collection, about NPOs should be organically integrated into the work of Central Statistical Organization of the Government of India. Such data should emerge automatically and organically along with other statistics in the country. Finally, the entire system of registration, reporting and record-keeping in various departments and agencies of central and state governments should be streamlined, modernized, computerised and made more transparent to NPOs and the public. 17

21 PRIA PRIA is a civil society organisation, undertaking development initiatives to positively impact the lives of poor, weak, marginalised and excluded sections of the society, by encouraging and enabling their participation in the processes of their governance. It strives for achievement of equity and justice, through a people-centered approach, focusing on Citizens - their participation and inclusion, awareness and empowerment and their democratic rights. It recognises the value of people s knowledge, challenges traditional myths and concepts, raises awareness of people s rights and promotes experiential learning. PRIA applies a multi-dimensional strategic approach of creating knowledge, training and capacity building of stakeholders, public education and policy advocacy and intervenes at various levels of the demand and the supply segments, to reach out locally, nationally and globally. It engages itself in strengthening of panchayati-raj institutions and municipalities, promoting environmental and occupational health, facilitating a network of strong civil society organizations, promoting citizen leadership, monitoring policies and programmes of bilateral, multilateral and government agencies, to achieve an agenda of Governance where People Matter. PRIA proactively involves and engages a range of stakeholders including civil society organizations, trade unions, academia, media, donors, including bi-lateral and multi-lateral agencies, industry, corporate and government institutes in its efforts and provides a platform for a multi-stakeholder development approach. Ongoing grass-root level research, studies and analysis provide inputs and directions to its interventions. PRIA is an International Centre for learning and promotion of participation and democratic governance.

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