Trial by Covid: Despite the challenges for the nonprofit sector, six reasons for optimism

The harrowing stories of migrant workers walking thousands of kilometres after they were reduced to penury overnight by the nationwide lockdown of March 2020 may already be fading from memory. So too the desperate social media posts seeking oxygen, hospital beds, medicines, even space in cemeteries and crematoria.

We may also be at risk of forgetting how India’s citizens had to depend on each other and on nonprofits to step up to these enormous challenges as our public systems failed us.

Covid-19 presented India’s nonprofits with a barrage of simultaneous challenges, as it did their counterparts in many other parts of the world. How severe has the impact of the crisis been on the sector? How have nonprofits coped? What can we learn from the experience?

A recent research study from the Centre for Social Impact and Philanthropy at Ashoka University throws light on these questions. The study surveyed 312 nonprofits across the country, representing organisations large and small, working across a range of issues. Data were collected prior to the second wave of the pandemic and likely do not capture the most severe impact of the crisis. The picture, though grim, is also one of resilience and resourcefulness.

Significant challenges

On the one hand, India’s nonprofits were confronted with surging needs from the communities they serve as poverty, unemployment, hunger, child marriage, child labour and violence against women all spiked, especially among people on the margins of our society – lower castes, LGBTQI communities, people with disabilities, and countless others whose stories never made the headlines. Sixty-three percent of the organisations in the study reported increased demand for their services.

As in other countries, nonprofits in India too scrambled to meet these needs while simultaneously struggling to keep their own staff and families safe. Seventy percent listed this as their most significant challenge. Sixty-one percent said their biggest challenge was transitioning to online modes of operating.

Uncertain finances as funders en masse moved their support away from ongoing programmes and core institutional support to the PM Cares fund and other Covid-19 relief activities was the other major challenge, according to 55% of the organisations.

Unlike their counterparts in other countries, however, India’s nonprofits were excluded from relief programmes that protected jobs and ensured nonprofits’ survival at the time they were most critically needed. The UK government set aside 750 million pounds to support furloughs for staff and other relief measures. Australia’s Job Keeper scheme helped in the same way. In the US, nonprofits were included in the $1 trillion CARES package.

Even countries not particularly reputed for their support to the nonprofit sector, like Russia and China, introduced or increased tax incentives for philanthropy. Nonprofits in India instead found themselves competing with the PM Cares fund that swept up an estimated half of available philanthropic resources.

Over and above all this, international support was choked off by draconian amendments to the Foreign Contribution Regulation Act that imposed stringent new constraints to receiving funding from abroad.

Simultaneously, new requirements for renewals of tax exemptions and registrations to receive Corporate Social Responsibility funding were also scheduled to take effect at the height of the pandemic.

Despite intense lobbying and advocacy, in India and internationally, very little respite has been granted. Nonprofits have struggled to open the new bank accounts mandated, grappled with clunky website application and reporting systems, and run helter-skelter to complete all the necessary paperwork even as lockdowns constrained movement and access to documents.

Outpouring of generosity

As in so many other countries, it has been the actions of those we call “ordinary” citizens that have saved lives and livelihoods. Citizen groups and nonprofits mobilised through social media to provide food, transport, cash transfers, and oxygen concentrators, as well as help with hospital admissions and access to vaccines and advocacy for those being systematically excluded. This wave of mutual aid has been supported by an outpouring of generosity from individuals.

Online giving platforms are reporting growth between 180% and 300% in donations. The response from the Indian diaspora, especially during the second wave of the pandemic, has been absolutely incredible. Indians overseas mobilised as individuals, families, employees, entrepreneurs and nonprofits to provide support in cash, kind and advocacy at all levels of business and government.

Since reporting deadlines have been extended, hard data on corporate philanthropy and giving by wealthy individuals in India isn’t yet available, but these too have likely increased. Most of this support has gone towards immediate relief – food, equipment, livelihood support – substituting for the huge gaps in public infrastructure and services.

This has left nonprofits’ regular programmes starved for resources. In the Centre for Social Impact and Philanthropy survey, over 70% of nonprofits had engaged in Covid relief work. Sixty-three per cent had seen their programmes negatively impacted, with 55% having had to suspend some programme activities or events. Fifty-two per cent have had to reduce budgets, and 20% have cut staffing.

In February 2021, only 12% had funding to cover the next 12 months or more. As you’d expect, smaller, more rural nonprofits, those with limited digital capacities and those led by the marginalised have been the worst hit.

Organisations that have coped well, even grown through the crisis, share four characteristics. They have deep roots in the communities they serve allowing them to rapidly assess needs as they emerge and change. Second, they have decentralised decision-making structures permitting high levels of autonomy in their frontline response. Third, their funding permits high degrees of flexibility permitting rapid deployment. And finally, they have the capacity to turn the evidence and stories they are hearing from their communities into compelling communication to all their stakeholders.

Responding to the needs of stakeholders, nonprofits have redefined their service offerings, included new target groups, expanded geographical scope and embraced technology in a wave of unprecedented innovation.

The transformations were far from painless. Conversations with a range of nonprofit leaders over recent months have uncovered high levels of burnout as leaders and frontline workers struggled to cope with grief, stress, fatigue and loss not just of family, friends and staff but also widespread devastation in the communities they serve.

Most nonprofit staff have no safety net by way of health insurance or other benefits nor can they access mental health support. In several cases, leaders have expended their own meagre savings to meet the needs of community members and staff where donors have not been forthcoming.

A lost decade

India needs all those skills, resources and more as it continues to battle the spread of the virus especially in rural India, where nonprofits are often the only voices trusted by communities fearful about vaccines, testing and reporting. Much recent nonprofit activity has focused on strengthening rural public health infrastructure. Addressing the massive reversals in progress that the pandemic has caused will require the nonprofit sector to operate at its full potential.

Some estimates suggest that India has lost a decade of progress on the United Nations-mandated Sustainable Development Goals to be achieved by 2030. The data on poverty, unemployment, malnutrition, child labour, learning outcomes among children, gender based violence and inequality have all regressed significantly. And then there’s the climate crisis. India has never needed its nonprofits to deliver more, more urgently on more fronts.

Beyond issues of socio-economic development, India’s democracy is fraying at the seams with civil society actors facing prison and worse often simply for seeking to counter disinformation on the impact of the virus. Basic freedoms of expression, association and assembly come under greater threat each week with loss of internet access and social media regulation combining with surveillance to silence criticism, dissent and advocacy.

Institutions critical to the health of our democracy – the judiciary, law enforcement and investigating agencies, human rights bodies, the Election Commission and many others are being systematically eroded. And the space for civil society, despite its stellar contribution during the pandemic, is shrinking rapidly. Business, philanthropy and much of the mainstream media have been effectively silenced or coopted.

Are there any reasons for optimism amidst the pervasive gloom? I see at least six. First, the pandemic has drawn many new actors to social impact work and philanthropy. These new entrants bring new perspectives, ambition and energy to the field. Then, philanthropy and civil society have had many of their assumptions challenged – about their capacity for scale, their modes of programme design and delivery, who their target clients are and what they can be offered. They have responded with creativity, innovation and courage.

Thirdly, funders everywhere have learned that they can significantly reduce the bureaucracy involved in grant-making and that they can trust their nonprofit partners to know what the best solutions for their communities are, especially when those organisations are led by people within those communities.

Fourth, the sector has a growing appreciation of the value of support ecosystems – those entities that provide the knowledge, networks, norms and narratives that allow it to function most effectively. Fifth, we have been clearly shown the limitations of untrammelled markets and the criticality of strong public infrastructure and services. And finally, we have learned that only partnership and collaboration can multiply our capacity to solve the colossal problems that lie ahead of us.

The choices we make now as nonprofits, funders, citizens and policymakers will determine whether we emerge more just, strong and resilient or lurch from one crisis to another with increasingly unsustainable divisions threatening the very fabric of our society. The pandemic has starkly revealed the crucial value that the nonprofit sector adds to our lives and what is necessary to ensure that it can continue to do so.

Ingrid Srinath is Founder Director at the Centre for Social Impact and Philanthropy at Ashoka University. The views here are personal.