Most Read

Josy Joseph’s Feast of Vultures

An award-winning journalist draws up on the stories of anonymous poor and famous Indians to weave together the challenges facing the nation.
Read More

Mahasweta : Life And Legacy

Mahasweta Devi's ideas and writing will continue to be the guiding principle for generations of writers, activists, academics and journalists.
Read More


Galloping overheads can often bleed voluntary effort negating all the good work undertaken for the benefit of needy sections in the society. Therefore, it is very important for NGOs to restrict overhead costs and focus on doing good work. Ritu Goyal Harish brings to you the extraordinary story of  Ashwini Charitable Trust, Bengaluru. Led by committed social workers Sujata Mukherjee and Dr. Bhavani Ramesh, this trust spends barely 10% of its funds on overheads and remains sharply focused on its work.

Until I met the mentors of a Bengaluru-based charitable organisation I didn’t think it was possible. Too many brushes with NGOs; some with fancy offices, unnecessary staff and fancy ‘projects’; some located in squalid environs lacking basic hygiene and cleanliness, handling more responsibility than their infrastructure allowed. Some making do in nondescript and decrepit surroundings due to ‘lack of funds’ for administrative costs…

There are many NGOs who lament that the costs of running their establishment was never looked upon as an important element of their financial burden by those making project-specific contributions. They were struggling to retain their slender staff, sometimes unable to pay electricity bills, and having to approach the corporate sector for funds just to run their setup. Simultaneously I had also met voluntary agencies that had employed MBA graduates as CEOs and Marketing Directors, paying them handsome salaries and housing them in office spaces that were as good, or even better than some of the corporate offices in the country.

Meeting Sujata Mukherjee and Dr Bhavani Ramesh, the two-woman army that runs Ashwini Charitable Trust (ACT) and their volunteers was like a breath of fresh air. Not only did they chat candidly about how they keep costs down, but also showed me their balance sheets.

An NGO for Every 400 Indians
Did you know that India has 3.3 million registered NGOs (as of 2009)?

A pioneering study commissioned by the government in 2009 showed that the figure 3.3 million meant that there was an NGO for every 400 people in the country. A lot more than the number of primary schools and primary health care centers in India! (Source: Indian Express, July 07, 2010).

The same report said that the actual number of NGOs active in India was perhaps a much larger since the study commissioned in 2008 had only taken into account “bodies registered under the Societies Registration Act, 1860 or the Mumbai Public Trust Act and its variants in other states.”

It’s All About Money!
The report put the revenue generated from these entities at roughly Rs. 40,000 – 80,000 crores. These figures will be ratified once the survey on the finances raised by these bodies is completed in the second phase of the study.

The fact is that most organisations in the sector are not known for their transparent financial dealings. India’s NGOs widely misuse the funds they receive. The lack of transparency in the sector has been a cause of serious concern for industry experts.

“The government study included, these are all broad estimates. Nobody really knows the ground reality because this sector has grown very fast in the past many years. Besides, there have been no efforts to maintain an official database or even to encourage such entities to be transparent about their activities as well as fundings,” said Soumitro Ghosh, founder CEO, CSO Partners, a Chennai-based organisation set up to encourage transparency in the functioning of the sector.
(Source: Indian Express, July 07, 2010)

Where Does the Money Go?
According to industry watchers, the overhead costs (that include the cost of maintaining the office and managing the day-to-day affairs of the organisation) should ideally not exceed 10% of the total budget of any good NGO. Yet, overheads account for a large chunk of spending by NGOs. It is a known fact that larger the NGO the higher are its operating/running costs.

“One of the key complaints against Indian nonprofits is their overspending on overheads. A 2006-07 government report on utilization of foreign funds by Indian NGOs shows that out of the $2.15 billion in foreign aid received, around $680 million was used for organisational expenses.”

  • TIME magazine, December 14, 2010

In 2008, the latest available data, the total official foreign aid to India was $2.15 billion. But according to NGO watchdogs, almost half of that money is misused, mostly to support high administrative costs of running organisations."
- Indian Express, July 07, 2010

These figures are quite startling because by the very nature of the term N G O (non-governmental organisation) we assume that the work carried out by them is of a philanthropic, charitable, not-for-profit nature. Why then are the running expenses of some of the biggest NGOs so high? Can they restrict the overhead costs and still achieve their goals? Is it possible to run an efficient and effective programme without spending large chunks of funds on salaries of staff, rentals and other operating costs?

Bengaluru based Ashwini Charitable Trust shows us how.

Ashwini Charitable Trust
It was year 2000 and Sujata Mukherjee’s two young girls had become self-sufficient; she was no longer needed to be involved in their lives 24/7. Spurred by her desire to educate a girl from the school near her home in Bengaluru, she, with a contribution of Rs 5,000 from her husband met the headmaster only to be told that the annual fee for one child was just Rs 500.

She paid for the education of nine girls, and kept Rs 500 as a buffer for the next year. Soon, at parties and family gatherings she began talking about it and contributions began pouring in.

In 2002 she gave a formal structure to this initiative by registering her  organisation after being told that she could not accept money without formalising the arrangement. Thus was born Ashwini Charitable Trust, named after the first girl she sponsored.

ACT’s motto is clear: They educate and empower underprivileged children till they are gainfully employed.

The organisation runs out of what was a warehouse, donated to them by a kind citizen. It educates 137 children, all progenies of housemaids and the like. Some of the fathers are tailors, drivers, etc. and many are unemployed. ACT pays for their school/college fees and stationery, gives regular health care (including vaccinations) and a wholesome life experience that would otherwise be denied to these children.

Children learn extra-curricular skills such as dancing, painting, karate, jewellery-making, candle-making etc. in addition to subject related academic assistance. Most importantly they are taught life skills; confidence, ability to take on responsibility, being a team player etc. They are taught the value of education – the only empowerment that will make them realise their dreams.

Yet, it is not all serious work. Outings, picnics, visit to corporates, birthdays etc. are all thrown in for good measure. Given a snack upon their arrival straight from school at about 3.30pm, the children then participate in miscellaneous activities before they leave for home at 6 pm.

Speaking in English at the center is mandatory because “they will find it easy to get integrated into regular colleges after schooling”  says Sujata.

Most of the children go to government schools, but the exposure to English boosts their confidence immensely. In addition all children are now also exposed to computers, laptops, camera, video cameras etc. By the time they reach colleges they feel no different from a child from a privileged background. Their confidence is astounding and their effervescent smiles, infectious.

Vinita’s Story
Vinita who has been with ACT since 2005 is a confident young girl who wants to become a Bank Manager. She consistently scores above 60% marks in commerce (that she is pursuing from St Joseph’s College of Commerce), which has entitled her to appear for campus placements.

Swati who has been with ACT since class V and is also pursuing commerce in the same college is undecided about a career. She dwindles between wanting to become a Bank Manager and pursuing Hotel Management.

Choices! These children are exposed to choices. They get the opportunity to break out of the cycle of poverty. They are empowered with life skills that will help them compete with mainstream children; take on life’s challenges and lead better lives.

Children completing college are given training in resume writing, mock interviews etc. to enable them to appear for interviews, campus placements etc.

ACT also recently began a parallel programme for mothers, where they are taught English skills and encouraged in activities of their interest. As a result of this, ACT has recently hired three mothers as staff for bank work, home visits, form filling, procurement of provisions, and maintenance of the centres.

Bhavani, a PhD in English found her calling in philanthropy almost a decade ago when she joined Sujata. She has ‘never been able to discount the magic behind it’ and says, “Their children should never need an ACT. That’s our goal; to change their mindset, to change their thought process.”

The Figures
According to their balance sheet for year 2011-2012, ACT spent just Rs. 3.16 lakhs on overheads which is barely 10% of their overall expenditure. Major portion of their funds went towards development programs run by them.

How Do They Do It?
How does an organisation that functions out of a donated warehouse with a lean staff of five manage their day-to-day activities?

The answer is – Volunteers.
“We are an organisation by volunteers, for volunteers” reiterates Bhavani, and to them volunteering begins at home.

Children enrolled with ACT are given a set of mandatory rules. Apart from issues of discipline, daily attendance and volunteering responsibilities, there are rules for their mothers who have to save a minimum of Rs 50 a month in a bank account and volunteer for one month according to a roster.

“Volunteering gives all of them a sense of ownership and responsibility” says Sujata. “Taking attendance, distributing snacks, overseeing the learning centre etc. are all activities that the older children undertake.” Children who have passed out of ACT are also expected to volunteer.

Mothers who volunteer are given duties like dusting, cleaning, chopping, cooking etc. “Involving mothers is necessary because they need to understand how people come and help their children out of their goodness and nothing else. It makes them stakeholders, not just bystanders” says Sujata.

At ACT there is no peon to serve you tea or security guard manning the entrance. It’s all basic, need-based and self-sufficient. Neither Sujata nor Bhavani take salaries. Both admit to being volunteers first and foremost. “We are very heart driven” admits Bhavani who manages the accounts single handedly.

In addition to this, ACT clocked an incredible 16,000 hours of volunteer work by 363 volunteers in 2011-2012.
Our volunteers are our life force. We’ve had volunteers who have walked in to help serve the underprivileged and have instead told us that the experience has empowered them. They have seen the struggles of these women, many who are exploited, their hope for a future and are inspired in turn” says Bhavani.

“Volunteers working here realise that it has not only made a difference in the lives of these mothers and children, but in their own lives also. There is a lot of learning in volunteering” she submits.

ACT plans and structures volunteer activities for maximization of effort. “In November we had 28 volunteers from a corporate who wanted to spend a day with us. We had 300 hours of volunteering to maximize!” says Sujata. They divided the volunteers into groups; some painted walls, some cleaned up the library, cupboards etc. After the children arrived at 330 pm they were taken to a museum, magic show etc.

“Our children are privileged to get the support of so many people. It is the goodness of the volunteers that we are able to achieve so much” she adds.

Critics discount the struggle to arrest overhead costs by NGOs citing that if organisations don’t hire the right people (for fund raising and marketing or as support staff), or spend enough on strengthening their infrastructure, they won’t grow and their goals will remain unachievable.

To Sujata and Bhavani it’s a misnomer. “We are not in a race. If we are able to change the lives of 137 children, we have given 137 future families of this country a shot at a poverty-free future.”

Add comment

Security code