Impact of COVID–19 & Its Impact on Development Sector

Impact of COVID–19 & Its Impact on Development Sector

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mr tara chand

The non-profit sector has played a vital role in India’s development over the past several decades. The non-profits have always come forward to serve our communities during some of the most trying times for our country including in times of economic hardship, natural disasters or even health pandemics. These are periods when the government machinery of the day struggled to reach the grassroots. Even still, the government has not given much due credit to the non-profit sector, credit which they have more than earned for themselves. To make matters worse, the non-profit sector has been burdened with heavy compliance and regulations. The irony is that doing charity has become difficult than doing business. Despite these hurdles, it is heartening to see that the non-profit sector has continued to serve communities with unhindered enthusiasm and commitment

Quite recently, the Indian government acknowledged the role played by non-profit sin providing COVID-19 relief where they were visible on the front lines supplementing the efforts of the Government and local administrations. India’s apex planning body- The NITI Aayog, solicited the cooperation of non-profits to help the country deal with the pandemic. COVID-19 response cells have been established in some states and non-profits have been requested to work in coordination with the district administration, particularly to focus on the needs of the millions of migrant labourers who have been left stranded in their host states due to the lockdown. The focus areas are food, shelter, spreading awareness aboutCovid-19 and its precautions, protective provisions (soaps, sanitizers, gloves etc) and mapping and tracking of migrants.

Since the announcement of the lockdown in March 2020, non-profits have been tirelessly working around the clock without thinking about the long-term impact of COVID -19 on themselves. They are indeed one of the corona warriors.A US-based development consulting firm, FSG, recently conducted a study to assess the impact of COVID-19 on Indian non-profits. Many non-profits expressed concerns over their funding for the current financial year and most of them agreed that COVID-19 will definitely have an adverse impact on not only their operations, but also funding. An impact from which they will take time to recover from. They believe that funding from long-term donors who have signed multiyear contracts may continue but CSR funders who mostly sign annual contracts remains a risk to them. It is expected that funding to traditional CSR activities could be reduced by upto 60% due to significant contribution diversion to the “PM Cares Fund” and immediate COVID-19 relief with corporates themselves facing economic headwinds.The FSG study also reveals that medium term focus of most of the CSR funds received by the sector are going to be COVID-19 related only. Hence, the non-profits need to prepare themselves accordingly to continue serving their original core missions.

It has been noticed that many funders, including CSR, have already started communicating verbally to their non-profit partners their inability to fund CSR activities for the current financial year due to COVID-19 and their contribution to the PM Cares Fund. In my view, the largest number of non-profits are small in nature, who directly implement their impact activities in a cluster of villages or at the district level. These small organizations always struggle for their existence due to lack of regular and sustainable funds and quality resources. They would be affected the most.

I believe that all stakeholders including Government, CSR funders, and other institutional funders need to strategically think about the future and sustainability of non-profits inthe post-COVID19 world. The Government and private sector (particularly CSR) need to shift their focus from just “acknowledging and asking” the non-profits fight on the front lines, to instead “understanding and rewarding” their work and contribution to the society despite the sector itself grappling with issues of scarce resources and  a large number of organizations being on the brink of collapse. The government announced packages for various sectors, but what disappoints me is that there has been no announcement thus far for providing any benefits or relief to the non-profit sector. The Government should bring a comprehensive policy on the lines of ease of doing business for non-profits to make it easier for them to operate and provide a level playing field to non-profits by creating institutions such as CAPART to promote volunteerism and provide avenues for innovation, and the creation of development models.

All non-profits need to draw a survival plan post COVID-19 which should not only focus on optimizing costs but also include strategies to enhance and diversify their donor base and build in-house capacities to pursue new forms of fundraising such as crowdfunding, social media marketing and development impact bonds etc.

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