2nd corona wave: Could investment being funnelled towards medical supplies impact funding for NGOs in the long run, ask Ashish Karamchandani & Ayesha Marfatia

When the pandemic struck last year, we witnessed the invaluable role that NGOs and civil society played, orchestrating massive relief efforts, aiding migrant workers, and enabling access to food and livelihoods across India. Non-profit organisations were able to do this because of the support they received from philanthropists, CSR, and individual donors.

Now, with the second wave of Covid-19, people have been rallying together to address the most visible issue: the crumbling healthcare infrastructure and the lack of oxygen. Donations from philanthropists and everyday givers alike have primarily been focused on this. Could investment being funnelled towards medical supplies impact funding for NGOs in the longer run? We tried to answer this question and conducted interviews with 23 experts, economists, NGOs, and statisticians to find out.

While the situation on the ground due to the second wave is still evolving and it’s too early to get a clear idea of long-term impact, the perspectives shared with us were interesting:

The second wave is not going anywhere anytime soon

All experts we spoke with agree that the second wave’s variants are more infectious and are infecting a much higher number of people, faster. Mainstream media attention has been centred on urban areas, but the death and devastation in rural areas is also coming to light now. Most experts predict that this second wave could ‘peak’ in mid- to end-May and then soon taper off. But while the number of infections is coming down in some locations, the wave is just getting started in certain geographies and is likely to spread to others, so it could continue to ravage the country for 3-6 months.

People need healthcare, but there are other pressing issues too

On the ground, apart from the lack of oxygen and healthcare infrastructure like beds, ICUs, and ventilators, there is also confusion around protocols—when to seek treatment at hospitals and when to stay at home. In rural areas, many primary health centres (PHCs) are not functioning. NGOs working at the grassroots reported that while there is no question that the most immediate (and most visible) need is healthcare, there’s also a big need for other immediate relief: dry goods, rations, and financial support for necessities and medicines. A lot of NGOs are also supporting the communities they work with to deal with mental health issues and another big problem—job and income loss.

NGOs, like companies across India, are also trying to support their own staff. A large number of employees, volunteers, and frontline workers have been directly hit by the second wave. Apart from the virus itself, the mental health burden and feeling burnt out are huge concerns. Even when the second wave subsides, the impact on NGOs will linger.

A look at where funding may go—will NGOs be supported after the second wave subsides?

Interestingly, since corporate profitability in FY 20-21 was higher than in FY 17-18 (CSR budgets are based on the past three years), CSR budgets for FY 21-22 will be higher than FY 20-21. Money being diverted away from NGOs and into PM CARES (like we saw last year) does not seem like an imminent issue, but a large amount of CSR, retail, and philanthropic funds are likely to go to healthcare and immediate relief, both now and in the near future. This could impact the overall funds available to NGOs, with an even larger impact on non-Covid issues that these funders traditionally support: livelihoods, education, skilling, poverty alleviation, and more.

In addition to the potential use of funds for healthcare and immediate relief, the money that is currently coming into the country to support NGOs is difficult to access, due to FCRA compliance requirements. NGOs also face issues with operating the SBI accounts mandated for foreign funding by the government, and as a result, difficulty accessing these funds.

The reduced funding could likely lead to closures and job cuts—potentially even more than last year, as many NGOs have eaten into their reserves. This may have far-reaching consequences both because of the work NGOs do, and because the sector accounts for seven million jobs within the Indian economy.

It is imperative that as the second wave diminishes, donors should think strategically about where their money is going and the government needs to create an enabling regulatory environment, so that NGOs are able to do their jobs.

Ashish Karamchandani is President, The/Nudge Foundation and Ayesha Marfatia is Communications Consultant, The/Nudge Foundation.

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