Few NGOs implement good governance practices, Verite Research says
View(s):Only a small number of Civil Society Organisations (CSOs) implement good governance practices. Most CSOs either lack a clear distinction between the roles and responsibilities of the organisation’s management and board of directors, or disregard existing management structures in day-to-day operations, a new report by a Colombo-based research agency has said. “Instead, the leadership of an organisation is often heavily concentrated in just a few individuals, limiting transparency and accountability, Verite Research said in a country report on Sri Lanka for the Civil Society Organisation Sustainability Index.
It said a large number of CSOs lack transparent and reliable financial management systems, including procedure manuals, accounting systems, and operational plans. The index, in existence since 1997, covers over 60 countries and for the first time Sri Lanka has been included in the report which has been handled by Verite Research. It said the business community’s perception of CSOs is mixed. “Some entities recognise CSOs as sources of expertise and credible information, while others are unwilling to collaborate with CSOs perceived as contentious or anti-government.” Given below are extracts of the Sri Lanka report which details out the operations and public perceptions since the conflict years:
Sri Lankan civil society consists of a diverse range of organisations, including service providing CSOs and advocacy CSOs promoting human rights, democracy, and good governance. According to the National Secretariat for Non-Governmental Organisations (NGO Secretariat), there are currently 1,439 NGOs registered with the Secretariat under the Voluntary Social Service Organisations (Registration and Supervision) Act of 1980 (VSSO). The VSSO also covers a range of organisations besides NGOs, but official statistics on these other registered organisations are not available. The number of unregistered organisations is currently unknown, but most CSOs are registered.”
Legal Environment
“CSOs in Sri Lanka can register through one of five legal instruments: the Societies Ordinance of 1891; the Companies Act of 2007; the Co-operative Societies Act of 1992; the VSSO; and an Act of Parliament sponsored by a Member of Parliament through a Private Member’s Bill.
An amendment to the VSSO in 1998 gave the Registrar of the NGO Secretariat the power of interim management if a registered CSO is suspected of fraud or misappropriation. This power is used selectively to suspend the operations of CSOs that are perceived to be anti-government. For example, the management of Community Trust Fund (CTF) was forcibly taken over by the Ministry of Defense in 2011 on charges of financial mismanagement.
In July 2014, the Ministry of Defense issued a letter instructing all CSOs to refrain from holding press conferences, workshops, and training for journalists, and disseminating press releases. Prior to the letter, workshops for investigative journalists organised by Transparency International Sri Lanka were called off after being disrupted by organised mobs. While the Ministry of Defence’s letter does not have the force of law, it sanctioned previous disruptions and overtly intimidated CSOs. It also prevented a number of CSOs from conducting programmes. Around the same time, the Ministry of Finance and Planning issued a public notice to all government officials, CSOs, and the general public to exercise due diligence on the utilisation of foreign funds received by CSOs. This action also discouraged public participation in CSO operations.
CSOs can legally earn income through the provision of goods and services, but do not receive any tax exemptions on earned income. CSOs typically cannot afford professional legal advice on registration processes, responses to government interference in CSO operations, or taxation. Moreover, lawyers in Sri Lanka rarely specialise in this area and very few are knowledgeable on the laws pertaining to CSOs, possibly because there is a lack of awareness of a need for specialists in this area.
Organisational capability
Many CSOs in Sri Lanka strive to build local constituency support for their initiatives. CSOs engaged in service provision and trade union activities regularly build informal constituencies comprised of a wide spectrum of actors, including government officials, media personnel, and donors. In contrast, CSOs engaged in advocacy often lack the capacity to reach out beyond their immediate beneficiaries both because of funding limitations and their limited use of social media platforms for advocacy.
Most CSOs, especially those operating in urban areas, are not successful in engaging local beneficiaries in the design of their programmes. In part, this is because these CSOs focus on implementing programmes based on donor priorities. At the same time, urban CSOs have limited access to communities outside of Colombo because of the operating environment in the country and their lack of branch offices in rural areas. By contrast, rural CSOs operating at the grassroots level have relatively high levels of community participation, both because of their proximity to beneficiaries and the efforts they have taken to build local trust. However, these CSOs lack the capacity to design sustainable programmes and often rely on the support of larger CSOs based in urban areas.”
Financial viability
“International donor organisations are the primary source of funding for CSOs in Sri Lanka. CSOs believe that four factors led to this reduction in donor funding: the World Bank designated Sri Lanka as a middle income country; government harassment of CSOs increased; bilateral relations deteriorated; and the Government of Sri Lanka failed to engage meaningfully with international and domestic CSOs to serve vulnerable populations in the North and East. Local sources of funding are virtually non-existent. Some corporations such as Dialog PLC, MAS Holdings, Hayleys PLC, John Keels Holdings, and Brandix Lanka Ltd donate to CSOs as part of their corporate social responsibility (CSR) programmes. However, these are often short term and do not adequately reflect the needs of local communities.
Although CSOs are legally allowed to earn revenue from various services and products, few organisations engage in income-generating activity, as most CSOs do not see the need to supplement donor funds with earned income. As a result, CSOs in Sri Lanka, especially those operating in rural areas, do not have revenue streams that would allow them to remain viable in the long-term. In addition, there is a broad-based public perception in Sri Lanka that CSOs have significant financial resources, which makes people reluctant to pay for goods and services provided by CSOs. However, some organisations, such as Habitat for Humanity, charge local communities subsidised rates for services such as healthcare and housing.”
Advocacy
Channels of communication between CSOs and policy makers are mostly restricted and ineffective, while others rely on informal and personal relationships. In 2014, CSOs did not readily address human rights and governance issues with the central government, as the risk of government harassment was high. Furthermore, officials at the local and provincial levels remained reluctant to collaborate with CSOs for fear of reprisal from the central government. In contrast, certain service providing CSOs working on issues that are perceived as being less adverse to government interests, such as development, women’s rights, and child welfare, were able to collaborate with government on donor-funded projects.
After the announcement of the (2015) presidential election, CSOs and civil society coalitions became heavily involved in campaigns to raise awareness of proposed constitutional, electoral, and governance reforms in the run-up to the elections. In 2014, lobbying mechanisms between CSOs and government at the central and local levels remained weak. Nevertheless, certain CSOs working on issues aligned with government priorities, such as alcohol and cigarette taxation, were successful in making policy recommendations.”
Services
“In 2014, CSOs offered a wide range of services in Sri Lanka, including in healthcare, environmental protection, education, and agriculture. Service-providing CSOs engage in sustainable development, and faith-based organisations provide basic services to local communities, including health and education services as well as direct humanitarian aid in the aftermath of natural disasters. However, due to Sri Lanka’s middle income status and the government’s lack of political will to engage in development programs in the North and East, donor funding decreased for projects focused exclusively on service delivery, including poverty alleviation services, and services to increase health and nutrition in local communities, especially among pregnant women and infants.
Law enforcement remained suspicious that even service providing CSOs in the North and East were implementing foreign agendas. Moreover, CSOs often lack a formal practice of conducting scoping exercises or needs assessments to ensure the prioritisation of community needs in service delivery. CSOs are typically unable to recover the costs of their services by charging fees. Most CSOs cannot analyse the market for their goods and services, which limits the scope for cost recovery. However, some service providing CSOs working in development were able to incorporate cost recovery models.”
Infrastructure
There are no permanent resource centres in Sri Lanka that provide information services, research material, or training to CSOs. The services offered are provided through donor-funded programmes delivered by individual CSOs or external contractors. Few trainers specialise in CSO management issues such as human resource management, financial planning, and project design.
Local grant-making organisations are nearly non-existent. A few organisations such as the Neelan Tiruchelvam Trust (NTT), the Sunera Foundation, and the Esufally Family Foundation (EFF) support local activities in social transformation and the arts, including some implemented by CSOs. In more recent years, CSO coalitions, collectives, and networks were formed to create public and government awareness of the need for government accountability and national reconciliation.
Public image and media
“Media freedom in Sri Lanka has eroded over time and is now marked by increasing state control over the media and the frequent intimidation of journalists by agents of the state. However, certain CSOs and journalists have been able to circumvent state control over traditional media by using social media platforms to disseminate information. Despite the anti-CSO sentiment in the press, CSOs frequently invited the media to cover their activities in 2014 and enjoyed a largely cordial and professional relationship with journalists. However, there is no sustained collaboration between CSOs and the media to reverse the negative image of CSOs in the press.
The public often lacks understanding of the role of CSOs due to the negative media coverage of the sector, as well as the decision of many CSOs not to publicise their activities out of fear of reprisal from the state. The government’s perception of CSOs was largely negative in 2014, particularly with respect to CSOs that were not aligned with government policies. However, certain members of the government—some of whom have roots in the CSO sector—did maintain ties with CSOs that supported their policies.