Impact of COVID-19 on NGOs and Social Enterprises

The rising score of Covid-19 across the world implies that no single organization can work in isolation in responding to the pandemic and its consequential impacts. Hence, governments must collaborate with a wide range of agencies, including NGOs and social enterprises to facilitate behavioural change and build social cohesiveness.

In India, NITI Aayog appealed to over 92,000 NGOs to assist the government in identifying Covid-19 hotspots and delivering services to vulnerable groups. Much before the appeal came in NGOs and social enterprises across India stepped up to complement the efforts of the Indian Government by shifting their focus from their primary activities to providing relief measures.

This shift coupled with COVID 19 crisis is likely to have an unintended impact on the functioning of developmental organizations in the near future. To examine this aspect the Jasani Centre of Social Entrepreneurship & Sustainability Management, NMIMS conducted an online study on ‘Impact of COVID19 on NGOs and Social Enterprises’.

The study was based on 30 NGOs, not for profit and for-profit social enterprises operating in Maharashtra. From this 43 % were from rural areas, 46 % from urban areas and rest were operational in both urban and rural areas. The key priority areas of their interventions comprised of education, health, skill development, child welfare, economic empowerment of women, environmental conservation, rural & urban community development, and working with differently-abled.

Contributions Made

With the changed context of the COVID-19 pandemic, a little over 90 % of NGOs and social enterprises have pivoted rapidly to respond to different and additional needs of local communities. Around 67 % of organizations were able to mobilize resources to provide relief measures. Social enterprises like Green India Initiative Pvt Ltd, Unity Group, Ecoexist, Srujna Charitable Trust, The Aangan Trust, Renovate India, Need Vikas Sanstha, Mann, Child Health Foundation, CCDT and Childline provided groceries and sanitation kits to people staying on streets, daily wage earners and migrants. Around 50 % of organizations in the study were found to be engaged in taking care of the basic requirements of the vulnerable communities. Some NGOs collaborated with government and corporates to avoid duplication of service and ensured that the essentials reach the affected communities.

Besides the distribution of grocery, one-third of organizations were engaged in creating community awareness for personal hygiene, community sanitation, raising resources, providing important medical information to communities. For instance, Watawaran was engaged in disseminating information about the food distribution system and other schemes in simple languages in rural areas of Maharashtra.

Organizations working in education in rural Maharashtra like Shivaji Rao Deshmukh Group of Institutes provided masks and sanitizers to government staff. Life Supporters Institute of Health Sciences (LIHS) is engaged in supporting Ambulance operators with designing SOPs for handling COVID19 patients and sanitization of the ambulance after the call. Childline coordinators also assisted government authorities to provide tele-counselling to suspected patients quarantined at homes.

Impact

It is an undisputed fact that the development sector across the globe is facing a critical threat from the pandemic. But, in India as our NGOs and social enterprises lack contingency planning the impact would be felt more.  83% of organizations reported that due to COVID19 their organizations’ work has been significantly impacted. Executives reported that the lockdown has impacted their project operations and they are sure of having financial challenges ahead.

The financial and operational risk burden has fallen disproportionately on the NGOs and social enterprises. The implications of this for cash flows are critical at this time. A little more than one-third of executives stated that managing costs of running the organization, payment of staff salaries, early closure of projects, scaling down projects, delays in starting new projects are some of the many problems which social sector organizations will have to face now. Some are contemplating reducing the staff size, but that would be catastrophic to the organization. As their capacity to respond to both the immediate as well as long term needs which are likely to escalate as a result of this pandemic will be impacted.

Akhand Jyoti Eye Hospital’s health operations were severely impacted as patients were unable to reach the hospital. Remote counselling of cases of child abuse and domestic violence was a big challenge for organizations like Arpan and Child Aid Foundation. Srujna’s livelihood support activities have been severely impacted and increased the economic vulnerability of poor women.

Another important concern expressed by for-profit social enterprises like Awaaj, Ecoexist enterprises, Green India Initiative Pvt Ltd is related to business continuity and gaining market access as the spending patterns would now significantly differ. By and large, executives expressed that they are worried about the safety of their staff to work in slums and high-risk areas. Hence, a few organizations are now engaged in devising their service delivery strategy.

The colossal economic downturn implies an impact on future aid assistance. More than 50 % of executives feared that they may experience a reduction in grant in aid support from the government as well as corporates due to funds getting diverted to COVID19 relief and rehabilitation activities. The economic crisis is expected to limit both capacity and availability of donors and investors. Development organizations will have to re-think and redesign their business model to diversify their income and create a sustained impact.

Expectations: Government

 To enable NGOs and social enterprises to function effectively and address the challenges created by COVID19, respondents shared that there is a need for developing new ideas and innovative solutions in the area of health care, livelihood support, and provision of energy. These solutions can evolve through cross-sector collaboration between development organizations, government, and corporates. It was echoed by almost all respondents that governments at all levels can play a key role in promoting these partnerships.

Almost 80 % of the executives shared that governments should design an innovative financing model for NGOs and social enterprises. Proposed solutions include the provision of an anticipatory financing mechanism like the provision of soft loans to social enterprises to raise finance in advance to address immediate needs, establishing an NGO Liquidity Fund for enabling NGOs to cover overheads during critical periods and payback over a period of time. Additionally, provision of tax relaxations and that of demand-led grant in aid support were recommended.

As development organizations work in high-risk environments there is a need to design risk-sharing models so that they will not be forced to shoulder the burden of financial risk all by themselves; rather it should be shared with donors/investors equally well.

Dr Meena Galliara is Director, Jasani Centre of Social Entrepreneur & Sustainability Management, SBM NMIMS. Dr Galliara has accumulated work and teaching experience for close to three decades. Her areas of interest include Social Marketing, Corporate Social Responsibility & Corporate Governance, Corporate Social Responsibility, Strategic Planning & Management in Social Enterprises, Social Venture Development and Costing of Social Projects and Management of Cross-Sector Partnership. Additionally, she has handled CSR teaching assignments at prestigious institutions including the Euromed- Marseille School of Management, France; Athens University of Economics and Business, Greece; Reitaku University, Tokyo and Rouen Business School, France.

Views of the author are personal and do not necessarily represent the website’s views.

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