The government’s role should be in building a large policy framework that is in the interest of the public. Government should be a watchdog for people’s interests. For example, after the terrorist attacks of Sept. 11, the U.S. government immediately passed new laws, formed new policies and defined new requirements. This is what governments are supposed to do efficiently, quickly, at low cost and with the public’s interest in mind.

The private sector takes things from there and creates products and services that people can buy. After Sept.11, the government decided to increase the number of X-ray machines at airports, so companies increased their production. Private firms create economic activity.

The role of NGOs is to find funding and execute programs for people who have no resources of their own. The corporate world is not looking at these people, since they do not have the money to buy the products and services that companies provide. Market dynamics do not work in this bottom rung of the economic paradigm; but they need attention, and that need is fulfilled through voluntary activity. The relationship is very complex, since each can pressure the other to change their policies and actions in varying degrees.

In my experience, there are three types of voluntary organizations:

Small, local, well focused organizations that concern themselves with the basic needs of the local community. They get funded partly from the government and partly from private organizations, initiatives and entrepreneurs. These are difficult to replicate because they are highly personality-based. They depend on one or two key individuals in that area, and their charisma is always reflected in the things they do locally. These foundations have traditionally focused predominantly on satisfying basic human needs — water, education, housing and the environment, as well as issues related to women and children.

Second are institutions involved with large-scale philanthropy, like the Bill Gates Foundation, Ford Foundation, Rockefeller Foundation and so on. These foundations distribute money to local and international organizations for a contract. The Bill Gates foundation focused on immunizations, which I thought was a great area of focus because it affects large numbers of children all over the world. This is the future generation. Rather than just giving money, The Bill Gates Foundation created a whole new market dynamic in a very interesting way. By using a large amount of funding, it lowered the price of immunization and created improved distribution, so that for the same amount of money, more vaccines could be delivered to more children around the world. This is the new way of looking at voluntary activity — rather than just giving money to small organizations to do field work, use that money to create a new market dynamic to distribute products and services that are needed widely.

Third are voluntary organizations focused on policy issues. What happens at WTO or World Bank meetings? Organizations come together to put pressure on these bodies to change policies. The Internet can be used to connect with these people and create media pressure. And as technology has increasingly entered the basic areas of heath services, education and so on in the last decade, the attention has been diverted to policy issues (to some extent, rightfully so). As a result, the role of voluntary agencies is being redefined. To some extent, instead of merely executing, they are becoming catalysts and policy makers as well.

Similarities With the Corporate World

Like the corporate world, non-profit organizations also have issues of leadership, human resource development, finance, productivity and local politics. The only difference is that they don’t have a competitive nature, and, as a result, they don’t focus on productivity and efficiency. They are hidden, as nobody challenges them. That is what needs to be reviewed. These organizations get tax breaks, and if they are not efficient and money is not properly managed, they should be held accountable.

Strategy is another issue. What is their core competence? What should they be doing? Are they doing too much? Too little? Do they have enough funding?

An ideal non-profit organization, like an ideal company, is one that can optimize its resources. The question is: where do you make the maximum impact with the money you have? How do you improve productivity and efficiency? Why do you want to work in health services as opposed to housing, education, et cetera?

Impact of Technology

I think that as a result of technology, and the media, people will come to know what’s going on, and NGOs will have to change. Earlier, if we wanted to find about an NGO in Orissa, it was not possible. Now, sitting in the U.S., an Oriya can know what is going in Orissa and pressure the existing NGO to change. Conversely, if an individual has enough money, he can even set up a new NGO. Bill Gates has been a great promoter of transparency, and has said that he would like to monitor the activities of NGOs through remote sensing and the Internet. A few years back this was not even thinkable, and will now generate a lot of pressure on NGOs to perform.

Indian NGOs

Based on my experience, Indian non-profit organizations tend to be highly political. They get into local politics and side with this party or the other, and they lose sight of the fact that they ought to be focusing on a developmental agenda and not a political one.

Second, since there is no accountability, people tend to be too lethargic and inefficient. It’s hard to measure the activities of NGOs in India, and a whole lot of work needs to be done in that regard. There are a lot of challenges.

Reviewing NGOs

There are many prominent NGOs and foundations that come to mind that have contributed toward the greater good, both in India and the United States. Think about the Peace Corps and the people it helped. In the next six to 10 columns, I will discuss these voluntary organizations individually, review their contributions and how they use technology, management and investment like corporate structures to really expedite the process of development.

Unlike in the past, it is now a well-accepted fact that, besides government, you need private sector and NGO participation to achieve progress. I also believe that more and more development will be in the hands of the voluntary organizations.

Sam Pitroda is chairman and CEO of WorldTel. He has been a founder of several companies in Europe and North America and the first chairman of India’s Telecom Commission. To exchange ideas with him, write to pitroda@corp.siliconindia.com.
This article is based on a telephone conversation with Mr. Pitroda. si