NGOs must face up to challenges to win back credibility

NGOs must face up to challenges to win back credibility

By Zaim Saidi

JAKARTA (JP): The non-governmental organizations (NGOs) in
Indonesia have grown as a response to the technocratic, top-down
development approach taken by the government.

Today these groups, known literally as self-reliant community
institutions (LSM), have become a sizable and highly dynamic
component of society. Yet no one can figure out how many groups
exist today or explain precisely their central features. In
terms of its basic approach, however, there are three types of
civil societies.

First, the most traditional ones, which adopt the paradigm of
charity, bringing goods and services directly to the people.
Second, are those which promote self-reliance projects in mostly
economic activities -- the "developmentalist NGOs". The third are
the NGOs which largely emerged in the 1980s and 1990s and which
seek to create a political space. These "political NGOs", along
with students and other prominent reform groups, were among key
forces that led to the demise of the New Order in 1998.

A closer look both within NGOS and in their relation to the
private and state sectors will show complex and ambiguous
interactions. It is doubtful that NGOs are unique entities as the
"nonprofit" sector; we now see diverse social groups struggling
in search of identity.

At least there are five fundamental questions to be answered
in this regard, the first being political legitimacy.

The New Order (1966-1998) was characterized by
authoritarianism, co-optation and corporatism: the latter meaning
that all representational bodies, from different social sectors,
were forced to form single and officially designated
organizations for each functional group. Public participation and
control toward the governing system were very limited.

Yet the NGOs managed to maintain relative independence from
the state, given the government's ambivalence to NGOs. This was
because of its repressiveness, which weakened its apparatus and
opened up the need for public participation.

In the last three years, discourse on civil society has
intensified. Since early 2001, decentralization has led the issue
of partnership between the local government and the civil society
to become an important policy agenda. People's initiative and
political skills have improved, all kinds of advocacy on formerly
taboo issues is now possible, ranging from legislative and
presidential watchdogs, corruption watch to constitutional reform
and those related to civil-military relations.

Many groups identify themselves as ornop, a translation of the
English term NGO, replacing the euphemistic "LSM". Yet, there has
been not been a clear legal framework on the role of civil
society in public policy, neither has there been an official
participatory policy making procedure. It has also never been
clear whom this groups are representing, hence civil society's
role in public policy has always been marginalized.

The second question is legal accountability.

Here a social group can be legally formed and operated as a
private, not-for-profit organization set up by a small group of
citizens. Under the New Order, business activities and individual
income in a nonprofit organization were not clearly specified.

This resulted in much abuse, especially among semiofficial
foundations -- many of which were headed by then president
Soeharto. Thousands of other smaller foundations still run
"social businesses" such as schools and hospitals.

With pressure from various parties, including the
International Monetary Fund (IMF), the government passed the
Foundations Act to minimize these abuses. Despite protest from
NGOs, the act was passed with many clauses that would increase
government control over the nonprofit sector, both in terms of
finance and its internal governing mechanism.

Such control was considered to bring about more harm than
good. The challenge for the nonprofit sector now is to make their
social missions clear, but they may also need to seek a different
legal entity. The confusion is partly caused by what observer
Lester Salamon calls the "duality" phenomenon in Latin America --
the existence of two separate nonprofit sectors. This refers to
the more traditional charitable organizations and other agencies
linked to the elites, and ones associated with various forms of
grassroots organizations and NGOs.

The third question is financial sustainability.

How a nonprofit sector can remain financially sustainable has
been an issue of debate for years. Comprehensive data on sources
of social funds in Indonesia are not yet available. An
illustration of the composition of fund sources shows that 65
percent of revenues of the nonprofit sector comes from
international sources and 35 percent from domestic sources, and
individual contributions account for less than 15 percent.
However, if religious groups were included in the survey, the
figures would be higher.

Several religion-based organizations have revealed that they
were not only able to fully operate with the domestic funding,
but were also able to raise more than 90 percent of funds from
the public.

Rules on taxation now include dispensation for charitable
bodies or individuals engaged in charity. However the law does
not mention contributions apart from zakat, the compulsory
contribution from a Muslim's income.

One option for the nonprofit sector to generate funds is by
running "social enterprises". However, this means confronting the
tension between its mission-driven and market-driven approaches
and strategies.

A fourth question is professional competency.

The voluntary nature of the nonprofit sector and the belief
that committing oneself to social service has "long-lasting
rewards" poses problems. In many social groups, if not most of
them, both activists and the technical personnel are a mix
between those driven by personal mission and those who have no
choice. The nonprofit sector is the easiest access to a decent
job because largely it does not apply professional standards.

This has led to the low quality of most of this sector's
products, and hence its decreased credibility. The crux of the
problem lies in the tension between volunteerism and
professionalism on one hand, and the way the sector relates to
its supporters i.e. donors, on the other. Most donors talk about
projects when they deal with the recipients and forget that these
groups need institutional support beyond their activities.

A fifth issue is clearly social credibility. If this sector
has a problem with its political legitimacy, legal
accountability, professional competency and financial
sustainability, how can it build credibility?

True, the role and interest of the private sector and
individuals have not been well-developed. However, with the
ongoing economic crisis this interest has been increasing. Yet
those aspiring to engage in such activities have difficulty in
seeking the right parties to work with; precisely because of the
reputation of its accountability and professionalism. Neither is
this sector free from the very problems it deals with -- such as
corruption.

Unless it seriously deals with the above fundamental
questions, the true nonprofit sector will never exist -- it will
end up being, as critics say, a mere exercise of "meaningless
social craftsmanship".

The writer is an activist with PIRAC, an independent research and
advocacy center focusing on empowering both consumers and the
nonprofit sector in Indonesia (http://www.pirac.or.id).