Wednesday, May 21, 2008

'Charity Research' comes of age as donors look for results

Back in 2006, an international funding agency was shocked when it found out that the $100,000 it paid to an NGO’s handicraft project for providing employment to underprivileged women was not used for the intended purpose. On the face of it, there was nothing suspicious about the project — delivery system, quantification of benefit, business plan — everything looked perfect on paper.

But somewhere, somebody sounded the alarm and the donors roped in management consultants Ernst & Young to dig out the truth from the interiors of Haryana, where the project was being executed. The E&Y investigation revealed that no project was taken up and whenever a team from the donor agency came for inspection, the NGO just created a perfect dummy set-up to avoid any suspicion.

Since then, the business of ‘charity research’ has steadily gained ground in India. Today, consultants like E&Y, KPMG and Copal Partners help international and domestic donors audit NGO credentials, right from background checks, legal presence & compliance, bandwidth to handle projects and credibility with money and communities they supposedly intend to serve.

India is still far from the rest of the world in policing the mushrooming charity organisations across the country. India does not have an NGO-rating system and lacks charity-profiling agencies like Intelligent Giving in the UK and Charity Navigator in the US. But the growing number of donors have started looking for results.

“Companies and individuals want to be very sure before they put in their money,” says KPMG executive director, India business, Vikas Vasal who also looks after the international aid and development services. “That’s why we carry out a full-fledged check right from legal presence to compliance to an NGOs capability of carrying out projects,” he adds.

With the market for charity already over $1 billion and the rush amongst businesses to present a corporate social responsibility (CSR) compliant image, the market for offering charity research is opening up in India, chiefly because of demand from international donors. “As of now there are few organisations in India offering such advisory services but the demand is growing very fast. Those who do quality work will be able to tap this market well,” says Copal Partners CEO Rishi Khosla.

Copal Partners already has 10 clients.

For instance, in January, Gurgaon-based Copal Partners, an offshore global financial analytics entered into a joint charity research partnership with UK charity organisation National Philanthropy Capital (NPC) to provide information and advice on charities in developing countries.

E&Y India partner, fraud investigation & dispute services, Navita Srikant, however, feels the donors are not as proactive as they should be: “People wait till they get into trouble. They don’t need to wait for incidents to happen to correct things. Its imperative for organisations and companies to know what they are getting into.” E&Y is adding about eight clients every year for its forensic funding business.

KPMG, which boasts of around 25 clients for its charity research business, has added the last 15 in the last couple of years itself. Companies mindful of the productivity of their CSR spends, and egged on by increasing media reports exposing the shallowness of many NGOs are feeding this relatively new practice for players like E&Y and KPMG.


Source: http://economictimes.indiatimes.com/Corporate_Trends/Charity_Research_comes_of_age_as_donors_look_for_results/articleshow/3057350.cms

Forget yourself for others, and others will never forget you.

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