NGO Compilation

7/28/2019 NGO Compilation

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Industry/Sector StrategicIndustry/Sector Strategic

AnalysisAnalysis

SECTOR: NGOSECTOR: NGOss

PREPARED for:

Professor Dr. A. K. M. Saiful Majid

Course Instructor

W650: Business Strategy

PREPARED by:

Monamee Afroze Ishika (Roll: 119, MBA 46D)

Mohammad Zulqar Nayen (Roll: 126, MBA 46D)

Tahmina Tamanna (Roll: 153, MBA 46D)

Institute of Business Administration

University of Dhaka

May 31, 2013


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LETTER of TRANSMITTAL

May 31, 2013

Dr. A.K.M. Saiful Majid

Professor

Institute of Business Administration

University of Dhaka

Dear Sir:

We are submitting to you our assigned term paper entitled Industry/Sector Strategic Analysis:Sector-NGOsas part of the course requirement. By working on this report we were given a

chance to test our analytical ability and to apply our theoretical conceptual knowledge in apractical scenario.

This report was done through both primary and secondary information gathering and analysis.Data were recorded and analyzed explain the facts accurately. Findings from the informationanalysis regarding the strategic aspects are revealed and discussed in this report. We also havecited some recommendation for the sector improvement as per the analysis. We are hoping thatyou will overlook minor inconsistencies found in the report.

Thank you for giving us the opportunity to work on this paper. It's been a real educative journey.If you have any questions about the report, please contact any of us at any time.

Sincerely,

Monamee Afroze Ishika (Roll :119, MBA 46D)

Mohammad Zulqar Nayen (Roll :126, MBA 46D)

Tahmina Tamanna (Roll :153, MBA 46D)


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Acknowledgement

We would like to express our heartiest gratitude to our course instructorDr. A.K.M. Saiful

Majid, Professor, Institute of Business Administration, University of Dhaka, for assigning us

with this term paper work and giving us the opportunity for a educative journey.

Our special thanks goes to the expert who spend valuable time giving us valuable information,

without which completion of this report would not have been possible. Here, we specially

mention about the expert for her support,

Ms. Nirjharinee Hasan, Country Director, HelpAge International, Dhaka, Bangladesh

We thank all the websites and also all the reports and journal authors, from which we got all the

valuable information for completion of this report.

Above all, we want to acknowledge and thank God that we have been able to complete this

journey successfully.


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EXECUTIVE SUMMARY

This report work is an initiative to understand and conceptualize the strategic practices in

different industries/sectors in Bangladesh thoroughly and to compare and contrast the practical

and theoretical scenario. Information for analysis was collected from both primary and secondaryinformation sources to complete this term paper. Bangladesh is a country where approximately

22,000 NGOs (Devine 2003) operate with different objectives and activities. There are both local

and international NGOs in the sector. NGOs in Bangladesh serve different kinds of with having

different kinds of problem and background including rural poor people, unemployed people,

women etc. NGOs in Bangladesh are now in the third stage of their growth. The impact of

political, economic, legal factors on Sector in is High on a three point scale. On the other hand

the impact of social factors on NGO sector will be Low in the three point scale. Drivers of

changes are donor agencies, regulations and policies, government initiatives and alliances with

different organizations. NGOs have been playing an important role for the socioeconomic

development of the country especially for the disadvantaged group- women, children and the

poor. Bangladesh has made remarkable progress on a range of social indicators over the last 15

years, an achievement widely credited to the country's pluralist service provision regime. As per

complementary strategies this sectors members have gone for strategic alliances with

government, donor agencies banks etc. The legal framework for NGOs in Bangladesh set the

code for operation for all the organizations. Ethical issues in NGO sectors can be divided into

three important sub parts, Accountability, Transparency and Intention. For the betterment of the

destitute and the helpless, the untended population of the society, NGOs are much

acknowledged. Active presences of NGOs are essential for the overall and social development of

Bangladesh in every aspect.


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Table of Content

1. Executive summary

2. Introduction to the report

2.1. Origin of the report

2.2. Rationale of the Report

2.3. Objective of the report

2.3.1. Broad objectives

2.3.2. Specific objectives

2.4. Data Collection Method

2.5. Limitation

3. Sector profile

3.1. History/Background

3.2. Sector Size

3.3. Major players in the sector and competition

3.4. Beneficiary profile analysis

4. Sector life cycle analysis

5. PESTEL analysis

6. Factors driving the changes in the sector

7. Key activities and impact for the sector

8. Growing opportunity and threats in the sector

9. Diversification analysis


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10. Complementary strategy analysis

11. Legal issues in the sector

12. Ethical issues in the sector

13. Conclusion

14. Recommendation

15. Bibliography

16. Appendix


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Introduction

Origin of the report

This report on Industry/Sector Strategic Analysis: NGO sector has been authorized by Professor

Dr. A. K. M. Saiful Majidas a fulfillment of the Business Strategy course (W650) requirement.

This report contains detail strategic analysis on various aspects of NGO sector in Bangladesh.

Rationale of the Report

This report work is an initiative to understand and conceptualize the strategic practices in

different industries/sectors in Bangladesh thoroughly and to compare and contrast the practical

and theoretical scenario. This particular report is on NGOs of Bangladesh, which is one of the

dominant sectors in Bangladesh. This report can help to have a picture how NGOs are operating

their strategic thinking behind every decision they make.

Objective of the study

Broad Objective To identify how the NGO sector work on different strategic aspects while

operating in Bangladesh and how these strategic choices has made them able to have growth and

sustainable position among other sectors.

Specific Components To attain the broad objective, following specific objectives will be

pursued:

To analyze the life cycle of the sector to identify in which position are this now and what

are the opportunities and threats they can face

To do the PESTEL analysis to understand the impact of external environment on NGO

sector.

To analyze the legal and ethical issues related to the sector


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To understand how the complementary strategies work in this sector identifying the

outsourcing and strategic analysis activities by the organizations in this sector

To analyze diversification strategy followed in the sector and

To identify the foreign competition and relevant strategies followed in the sector

Data Collection Method

Information for analysis was collected from both primary and secondary information sources to

complete this term paper.

Primary Sources: Data was collected through interview from one expert in the relevant

sector. The expert gave valuable insights on the sector and shared her experienceregarding several issues. Due to time constraint the group could manage to get

appointment of one expert and collect information.

Secondary Data: Secondary data has been collected from following sources were the

main source of collecting information due to shortage of time and this source is used to

know in depth about the sector and also different information on strategic aspects.

o Literary publications (e.g.: Conference papers, journals, Text books)

o Previous strategic analysis reports by other authors

o Several NGOs website and other relevant websites

Limitations

There are few limitations for this term paper which might have an impact on the analysis part inthe paper. Due to time constraint and busyness on respondents part, only one appointment could

be arranged with the expert in the sector. The analysis is done on the basis of secondary

information and base on the knowledge that was gathered through the course contents.


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Sector Profile

NGOs are usually defined as an association of persons organized on voluntary basis through the

initiative of one or more dedicated persons committed to the planning and implementation of

development projects at the grass root level. NGOs although work outside the government

structure but they are within the legal framework of the country.

Abdul Halim in his book Social Welfare Legislation in Bangladesh said, A broader definition

of NGO refers to associations voluntarily formed by individuals for the purpose of rendering

welfare and development services outside Government structures; drawing funds from national

or international sources; and functioning within the legal frame work of the country.

Non-Governmental Organizations or NGOs have become an extensively discussed theme in the

third world countries. Bangladesh is no exception. The NGOs are working on poverty

eradication by directly involving the poverty stricken population. Their target groups are

basically the poor and vulnerable ones with hardly any possessions. Their main tasks are to

organize these people, create awareness in them and make them development oriented.

In Bangladesh the term NGO is very well known and NGO activities are wide spread. There are

many publications, books and research on NGOs and their activities. Besides, this countrys state

administration has developed certain constitutions and laws to authorize the NGO activities.

Unfortunately these constitutions and laws do not give any clear and specific definition and

explanation of NGO. In Britain, USA and other English spoken country NGO refers to non-

profitable organizations.

History

Non-Government Organizations dedicated to Aid and Development were relatively unknown in

Bengal. There was however a range of voluntary associations through which charitable and


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voluntary activities took place in Bengal. For example the Muslim community has long used

institutions of zakat and chanda for both social welfare and cooperative development of public

infrastructure such as roads, madrassas and mosques. Village Welfare Societies were sometimes

organized by public figures.

Foreign organizations were involved in social welfare in Bengal from before the colonial era, the

Baptist Missionary Society active since1794. In addition to religious activities, mission

organizations provided medical services and general education to the rural poor.

In spite of its wealth of natural resources, the then East Pakistan also had its share of sufferings.

Ten tidal waves in the coastal area of Noahkali have been reported between 1960 and 1970.

Floods were common and the disparity between the poorest and those who benefited from the

natural wealth increased with each calamity.

One of the earliest institutions for rural development in the East Pakistan was the Academy for

Rural Development, based in Comilla, from which emerged the so-called 'Comilla Model' for

small farmer cooperatives. The success of cooperatives of farmers with relative small

landholding inspired a national scaling up or roll-out of the model through the Bangladesh Rural

Development Board with links to the Krishi (Agriculture) Bank after the emergence of

Bangladesh.

The non-government organization CARE initially distributed food parcels to survivors of World

War II, mostly in Europe but according to CARE Bangladesh, also East Pakistan in 1949. In the

1950's CARE distributed food aid more widely to newly emerging countries using American

agricultural surpluses. In East Pakistan this took the form of powdered milk for schools from

1955 and lunches for school children from 1962, the year CARE established an office in Dhaka.

In 1970 CARE sent relief to the victims of the cyclonic tidal wave which hit East Pakistan on 12-

13 November 1970.

The Catholic agency CARITAS Pakistan had a branch in East Pakistan from 1967, but following

the cyclone it was renamed Chittagong Organization for Relief and Rehabilitation (CORR) in

November 1970. It reorganized and became a national organization called Christian Organization

for Relief and Rehabilitation in January 1971 with several Cyclone rehabilitation projects.


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(http://www.caritasbd.org/about.html). Then with the outbreak of conflict in the liberation

struggle for Bangladesh on March 25 1971, CORR became heavily involved in sheltering

vulnerable displaced people, particularly Hindus. At the end of the war CORR undertook to

rehabilitate 200,000 families.

These early histories of CARE and CARITAS illustrate how the Cyclone of 1970, followed by

the collapse of the democratic process and the slide into the Liberation War of Bangladesh

changed the economic and social circumstances of Bangladesh and brought into the international

consciousness a picture of a nation in crisis. They are also indicative of the way NGOs adapted

to the changing environment in which they found themselves.

The suffering of the Bengali people due to a combination the cyclone of 1970 and the political

turmoil that lead to the emergence of Bangladesh as an independent nation following liberation

war from March to December 1971 prompted a massive response in multilateral, bilateral and

non-government aid. In addition to the outside humanitarian organizations which responded,

many local organizations were created to care for orphans and widows and assist the many

refugees returning from neighboring India after the war ended. BRAC, the largest NGO in

Bangladesh today, was formed in 1972 as the Bangladesh Rural Advancement Committee. Its

early objective was to deliver relief and rehabilitation programs for refugees returning from India

to resettle in Bangladesh. The Lutheran World Federation is typical of the many international

NGOs which provided assistance with relief and rehabilitation:

Rangpur Dinajpur Rehabilitation Service (RDRS), then a field program of the Lutheran World

Federation, India, began providing relief and rehabilitation to some of the one million refugees

returning home from India after the nine-month War of Independence. Food, shelter and health-

care were the priorities; later, there was rehabilitation of the farms, the schools, the hospitals.

With one disaster following quickly after another, RDRS also found itself providing emergency

relief to those caught up in the famines and droughts that devastated the young country into the

next decade.

During the first years of Bangladesh's independence in December 1971, humanitarian agencies

and media coverage were focused on the apparently overwhelming needs of a mainly rural


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population living on the edge of subsistence in a 'disaster prone' environment while the national

infrastructure was still being reconstructed from the destruction of guerrilla warfare during the

struggle for independence.

In spite of working in an extended emergency environment, the organizations involved in relief

and rehabilitation soon saw their mission in terms of development. After only one year working

with returning refugees in the Sulla area of North-East Bangladesh, BRAC commenced a

'program of integrated community development' seeking to develop 'agriculture and horticulture,

fisheries, adult education, health and family planning, vocational and other training programs.

RDRS also describes itself as shifting 'from relief-and-rehabilitation to Sectoral Development

Program. RDRS grew from a small, somewhat slapdash charitable body working in the remotest

corner of Bangladesh into a major player in the country's development. It became known for itsinnovative spirit, its readiness to improvise according to the resources available and to the needs

of the poor.

Integrated Rural Development had become the 'dominant methodology' for community

development, so it was natural that the NGO sector would adopt this approach, especially in the

context of multi-sectoral needs of Bangladesh. An organizations credibility became tied to the

comprehensive reach or 'holism' of its program.

Alongside the increased focus on development, organizations also began to consolidate their

Bangladeshi identity. For example Gono Unnayan Prochesta formed from a partnership between

some Bangladeshis and the international Quaker Peace and Service organization, whose

representatives suggested that the Bangladeshi partners form their own organization which the

Quakers would fund. The organizations created directly by international NGOs and the great

many more that have emerged endogenously following their example have diversified their

funding sources and the role of those international NGOs is now much reduced.

In 1977 BRAC adopted a 'targeted approach' to development. Its target was the poor and

landless and the main vehicle through which BRAC sought to address their needs was the

establishment of village organizations (VO). The basic groups or Samity were comprised of 20-

25 poor people, their homogeneity based on land-ownership class. The Samity were to


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eventually be linked 'into a federation of the poor' which would act as a buffer between the poor

and the village power structure, which BRAC had shown was the most immediate constraint on

mobilizing the poor. Subsequently the BRAC approach was adopted by other NGOs working in

rural community development. That these ideas were widely adopted within the NGO sector is

shown by Gono Unnayan Prochesta (GUP or 'People's Development Efforts') which itself claims

to be the first non-governmental organization in Bangladesh to build associations of the poor as a

core poverty alleviation strategy'.

The next major innovation in NGO philosophy and strategy was the extension of the community

group structure by incorporating them into secondary associations and even tertiary federations

in 'community based people's organizations in the early 1990s. This formulation of Community

Based Organizations (CBO) shows its antecedents in the 'federation of the poor'.

Some NGOs are now the largest providers of a range of services in Bangladesh, and their role

with respect to the poor, business and government has become increasingly subject to debate.

Sector Size

The NGO sector in Bangladesh is one of the largest and most influential in the world. The size ofthe NGO sector in Bangladesh is remarkable. Bangladesh is a country where approximately

22,000 NGOs (Devine 2003) operate with different objectives and activities. Their activities

may be put into two broad categories - NGOs with advocacy roles, to promote human rights,

and those working with the socio-economic development of the people of Bangladesh.

Development NGOs are flexible in nature, nearer to the poor and innovative in problem

solving. This sector consists of the following organizations:

206,000 not-for-profits, 189,000 of which are religious (1999 Statistics Bureau);

45,536 organizations registered with the Social Welfare Minis-try and

1,925 NGOs registered with the NGO Affairs Bureau (2004 statistics from

NGOAB)


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However, according to a list published in April, 2013 by NGO Affairs Bureau, there are 2227

NGOs in Bangladesh. The List is available on this link

http://www.ngoab.gov.bd/Files/NGO_LIST.pdf.

Major players in the sector

A number of factors contribute to the success of scaling up in Bangladesh. Strong institutions are

built on a foundation of effective leadership and appropriate human resource management

systems, and practices of experimentation and institutional learning fed continuous

improvements. Constructive donor-client relations play a role, including appropriately timed

financial and other support. The presence of an enabling macroeconomic environment and aliberal regulatory regime allow the NGOs room to grow. Population density, ethnic

homogeneity, and religious tolerance all contribute to the ease and rapidity with which new

practices could spread, especially with respect to rural women taking loans from NGOs. Finally,

the presence of a professional autonomous apex body (PKSF) is important. There are both local

and international NGOs in the sector. BRAC, CARE, UNDP, ActionAid are some big names

operating in the sector.

Beneficiary profile

NGOs in Bangladesh serve different kinds of with having different kinds of problem and

background. The types of people served by different NGOs are described below:

Rural Poor Requiring Humanitarian Progress and Structural

Development

Despite the fact that poor people have vast experience about life, still they are incapable of

developing exact ways to scientifically analyze and fix their problems and whatever possessions

they have. In this case, efforts of the NGOs are worth mentioning to help these people analyze

the society and problems in the backdrop of old, superstitious, anti life perspectives. For

example: primary training, improved training, organizing exchange of views program among
http://www.ngoab.gov.bd/Files/NGO_LIST.pdfhttp://www.ngoab.gov.bd/Files/NGO_LIST.pdf


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different groups or areas, regular adult education activities, weekly analytical discussion etc.

Different NGOs are playing essential role for humanitarian development through joint analysis

and seeking solution through different seminars and workshop, joint social activities, and

application of socio-economic projects. Besides, they have introduced certain essential concepts

like developing small groups, credit based cooperatives, mother welfare society and cooperatives

etc. for homeless/ landless etc. and thus have strengthened the root of organizational structure for

rural poverty.

People in Need of Employment

In order to encourage the rural poor to participate in different economic activities and to increase

their income through employment generation, several policies, methods and strategies of the

NGOs have attracted the attention of some foreign development experts. NGOs usually create

employment in two ways. First of all, they provide employment in their own organization since

they also need human resource to operate. Secondly, they provide loans and management

assistance to individuals, which create new employment opportunity. Currently the projects that

are being conducted under the supervision and assistance of NGOs are: Irrigation project for

landless, fishery in ponds (khash), Fishing in the coastal area, weaving, equipment supplies for

landless share cropper, bee keeping, small business, rice and popcorn production, sericulture,

handicrafts i.e. earthen wares, wood and cane works, developing nursery.

Besides, they are providing training to hundreds of men and women on vaccination and

treatment of domestic livestock and poultry, construction of sanitary laboratory and slabs; to be

mechanics of pump machine or rice/paddy mills etc. Thus they are significantly contributing in

eradication of poverty by providing the above-mentioned essentials.

People in Need of Micro Finance

Overall economic development is essential for poverty eradication at the rural level. Besides

employment generation, per head income and scheme to increase savings is required so that asustainable development and poverty reduction can be seen for the poor. The identification of

loan as a significant necessity for sustainable economic development for the poor as well as

developing an effective method for meeting the demand for loan is a competent model of poverty

eradication. The micro credit scheme launched by Grameen Bank is now established worldwide

for its success in poverty eradication. This model has been accepted even at the government


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level. The government has established Palli Karma Sahayak Foundation (Rural Activities

Assistance Foundation) or PKSF and till December 2001, has provided loans to several eligible

NGOs 1,04,089 crore taka for micro credit scheme. Different NGOs so far have given (June

2001) 1, 04,089 crore taka micro-credit loans. The number of people enjoying such benefits is

116.05 lakh. Almost 23.50% of these loans are collected from PKSF and 9.15% from local

Banks.

Poor Rural Women

Although half the population of Bangladesh is women still they are leading a much backward

life. The NGOs of Bangladesh have consciously targeted the fallen behind poor women folks as

their beneficiaries. The NGOs, which are enlisted under the Bureau of NGOs, have more than

fifty- percent women clientele (population). In 1995 with financial aids from ADAB and BRAC

almost 549 NGOs worked for only women. Almost 96% of the credit facility holders are women.

Swanirvar Bangladesh has 71% women as credit holder. Till the year 2001 BRAC has provided

loan to 41.38lakh beneficiaries worth 6953.78 crore taka throughout 64 districts and 460 sub-

districts of Bangladesh. Statistics shows that 99% of these beneficiaries were women. Palli

Karma Shahayak Foundation (PKSF) has 86.43% Women credit holders. Besides till 1998 ASA

distributed 13,183,46 million taka to 7,34,684 women which is about 93.41% of total credit

holders. Till 1998 Grameen Bank provided loan of 1,06,14,242 million taka to its total member

of 23,64,755 out of which 22,40,139 were women and 1,24,616 were male. The importance that

NGOs have placed on women to eradicate rural poverty has truly improvised the economic and

health status of rural women. This has brought in the possibility of representing women as a

media to change the socio-economic standing of the country. Changes can be seen in the way our

society regards its women folk now a days. Empowerment of rural women and their participation

in development process has brought in a long-term positive effect, which is a direct contribution

by the NGOs in Bangladesh.

People beyond the reach of Health, Nutrition and Hygiene

Facilities

In Bangladesh, Health and nutrition status of the rural populace is very poor. Majority is

deprived from even minimal health and nutrition facilities. For this reason, a significant part of

the active NGOs of Bangladesh are providing training and education service in the field of health


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and nutrition. An independent organization named Voluntary Health Services Society (VHSS) is

supervising the NGOs that are working on the health and nutrition sector. Health and nutrition is

one very important indicator of poverty measurement. In some specific area of primary health

care sector like diarrhoea control, vaccination against six hazardous diseases, campaigning for

health consciousness, expansion of water and sanitation services, reproductive health care and

family planing services etc. the NGOs have achieved extensive success. World Vision has spent

in heath sector taka 65,841,474.45 which consist of 20.20% of their budget. In order to develop

the health and nutrition situation, around 350 NGOs have brought in sanitary toilets for 14 lakh

people and safe water for 1.5 crore people through establishment of 1.5 lakh tube-well, 186 rural

sanitation centers and 2.5 lakh latrine. Till 1990, 85% children were vaccinated and 90%

families women were given training on how to make oral saline under the EPI project. In one

research it was found that, in terms of food intake, knowledge on nutrition, mother and child

care, tendency to take purified water etc. those poor people under Grameen bank projects had

daily intake of 2,171 calorie where as those not included in the projects took only 1,982 calorie.

50% children under Grameen Bank project have normal nutrition and those not included under

Grameen Bank, only 30% children aged nine years have normal nutrition. In other words, NGOs

are playing notable role in changing poverty state by bringing in primary and other health and

nutrition care services within the reach of poor people.

Natural Disaster Affected People

One major cause of poverty rate increase in Bangladesh is natural disaster. The NGOs are

working for the poor people in time of regular need as well as emergencies. Whenever there is a

natural disaster like flood, drought, famine, storm, contaminated diseases, tidal waves etc. they

would extend their hands and conduct relief works. Besides after disasters are over, then they

would also undertake different rehabilitation activities for the betterment of the disaster affected

people. In 1991 Cyclone, World Vision gave taka 110,788,560 in aid and rehabilitation

assistance. They also built 11 disaster time shelters and one multipurpose center, which was

worth taka 60,441,713. Moreover in 1998 they also gave taka 378,292 as relief for the flood

affected people and health care service for 3,00,000 people. Till 1999 Mid June, ASA

rehabilitated around 450 families in Saturia and Manikgang and built 2,171 houses. Thus,

through management of different relief and rehabilitation programs also the NGOs are playing


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crucial role in helping out the unfortunate people from problems encountered during any

calamity.

People without Informal and Non-formal Education

The NGOs are highly active in the sector of informal and non-formal education. The best way to

develop human resource is through appropriate education. Illiterates created due to lack of

education is one major obstacle for socio economic development hence also for poverty

eradication. The Bangladesh Government and UNICEF are trying at their utmost level to

eradicate illiteracy. The low rate of admission in the primary schools, failure to attract the

children to schools, unlikable education method and syllabus for etc. reason the rate of primary

education in the rural area are not at all hopeful. The largest NGO in our country and also

worldwide, BRAC have started satellite school system based on informal education policy. As a

result the poor children at the rural area are now being given special importance. More emphasis

is given on the participation of parents as well as community in this regard. This program has

turned into a vital accompaniment for the primary education system by the government. In 1998,

World Vision spent taka 13, 06, 87,996.58 which amounted to 40.10% of their total expenditure.

So far the NGOs have been successful in providing education to 23 lakh people in the last five

years through establishment of 30 thousands primary schools and 44 thousands adult-education

centers. At present almost 9 lakh men and women are studying in these schools.

Small and Seasonal Farmers

In Bangladesh during the 70s the government agencies initiated irrigation in agriculture. But it

was not that successful in small farmland. In small size farming land, deep and shallow tube-well

was not that suitable when growing vegetables and spices. On demand from the small and

seasonal farmers the NGOs have developed bamboo/cane tube-well, oar pump, star pump, dheki

pump etc. type of irrigation technology. As this can be produced with little cost, the small and

marginal farmers can now easily afford these. Right now in Bangladesh 400 irrigation projects

are running with loans from NGOs.

The NGOs arrange to teach appropriate technology for fruits, vegetables, fish and cooking

through transfer of suitable technology for family agriculture. The NGOs also use newer

communication and transportation technology to play significant role in poverty eradication.


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Sector Life Cycle Analysis

Nature of the NGO sector

Is there an NGO life cycle?

The simple answer is no, not a predictable one, but organizations of all types go through lifecycles: they are born, learn, mature, reproduce and, in some cases, enter a period of senility

before they die or fall into a coma. So what can we say about NGO life cycles? The first thing is

that there are flushes of NGOs, just as flowers bloom in the desert after rain, NGOs thrive on

upwellings of issues and there are periodswhen a new generation wakes up to a new set of

issues and decides to take action.

Focusing on international NGOs, most have emerged in response to a specific set of needs and

issues, but often these needs and issues have evolved over the years. In the case of groups likeCARE, they have shifted from delivering aid packets to Europe to helping to address the root

causes of poverty in communities around the world, predominantly in third world countries such

as Bangladesh.

Lifecycle of NGOs can be explained by two theories:

1. More traditional business life-cycle theory

2. M, N and O form theory

Business life-cycle theory

According to this theory, NGOs also go through life cycles that are predictable. It is at these

points where the balance between leadership and management changes, the focus on mission


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versus money shifts, and the leadership style differs. Frequently the people who we need leading

our organizations at one stage are not appropriate at the next stage of development.

Stages of lifecycles of nonprofit/no are described here:

STAGE ONE | Idea Stage

Nonprofit organizations, or NGOs, start when someone has an idea to make a difference in their

community or to change the world. Usually this idea comes from someones vision or passion

and reflects a desire to fill a vacuum or create a program, project or issue to do something about

it. The life cycle analysis assumes that all organizations begin with an idea and then many of

them never come to fruition --while others can develop into a start-up organization. Sometimes

the ideas can incubate for months or even years and then the visionary takes steps to grow the

idea into a fledgling organization. During this stage there is no organization per se and, if money

is needed, the visionary of the idea contributes the resources necessary.

STAGE TWO | Start Up Phase

If the idea stage incubates well and the founder (or a small group of people) of the idea begins to

involve other people an organization can begin to grow.

During this phase, people come together and work to solve the issue or develop a program

around the reason they came together. Decision-making is by consensus, and almost everybody

is a leader with a different role. If the group needs money, it passes around the hat, has a bake

sale, or uses other simple fund raising techniques. The entire focus of the organization is on the

mission that first brought people together. People enjoy meeting each other, tasks are simple and

results are tangible.

Many informal organizations never get past this stage. Many neighborhood associations, crime

watch groups, or small theatre and cultural arts groups operate exclusively with volunteers.

STAGE THREE | Growth Stage

Organizations enter the growth stage of their development when money comes into the picture

(some people say the money gets in the way). This stage begin when people realize that their

expectations exceed their resources of time, people, talent, and money, and they write a proposal

or receive a grant or funding. This starts the growth process and the organization begins to


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fertilize itself. During this stage the informal steering committee or leadership team generally

turns into a board of directors and they file for their incorporation with their respective state or

country.

There is now a need for the organization to become organized because there is staff to manage

and lead systems to set up, reporting to donors to be provided, etc. At this stage the focus of the

organization is almost exclusively on mission. This stage is a very exciting stage in the life cycle

that is exemplified by lots of energy, passion and compassion. One characteristic of this stage is

that almost all ofthe focus is on mission and not establishing the infrastructure so the

organization is out of balance. The programs are way ahead of the ability of the organization to

manage, evaluate and set up the systems that create effectiveness and efficiency. In our own

lives, when we are out of balance we get sick. When an organization gets out of balance it suffers

much the same way and begins to experience a great amount of stress. The organization is so

focused on mission that anytime new dollars come in they go to build the programs rather than

the organizational foundation. Frequently their financial, fundraising, marketing, evaluation and

other systems are either thin or nonexistent. The growth during this stage is horizontal with good

program growth, but not vertical where the organization is deepening its organizational roots.

During this phase, the board of directors becomes formalized and passes by-laws, elects officers

and may set up a committee structure. The organization hires its first executive director that

usually is the founder or visionary of the group. Most of the people on the board are still the

founding members who bring a lot of passion and are rooted in both the personality of the

founder and the mission.

STAGE FOUR | Governance / Maturity Stage

If the organization continues to grow and is succeeding in terms of gaining credibility, raising

new funds, and increasing the number of staff it may enter governance or a maturity stage in its

life-cycle. In this stage the staff does not have to worry about whether they will get paid next

week or not. The board meetings are very structured and well organized. There are standing and

ad hoc committees. On the staff level, the executive director may have an assistant director and

there is probably a program director to supervise other staff.


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The financial needs of the organization are now great and larger amounts of time are being spent

on raising money. The organization begins to risk "mission drift" because it is starting to follow

the money rather than just the mission.

During this phase, there is starting to be a reversal of means and ends. During the start-up and

growth stages, the entire focus of the group was grounded on values, mission and principles--

these are the ends. At the end of growth stage, because of the great need for money and the high

expectations of the external community (funders, media, general public, etc.), the NPO/NGO

starts to reverse the means and ends and begins looking at making decisions based on "how can

we maintain the organization" rather than "how can we fulfill our mission."

The board of directors increases its numbers yet again with people who can raise new money or

bring new money to the table. The prominent people on the board of directors during this stage

are the wisdom and wealth--and the workers are no longer as visible or not even on the board.

At some point during the governance/maturity stage, there is invariably a crisis of leadership.

The founder who began the organization adjusts to the changes, fights them, or does not

recognize that changes are taking place. At this stage, the founding executive director (often the

original visionary and founder) is often fired or resigns from the organization. What used to be a

small group operating on consensus is now an organization with rules, structure and a developing

"organizational culture." The organization has outgrown the ability of the founder to manage and

lead the organization. The founder syndrome is present and the board of directors realizes that

it has to change the executive director in order to survive. In some cases, an enlightened founder

realizes his or her inadequacies and brings on a COO to manage the people, programs and

systems.

During this stage the balance between leadership and management changes. The organization

begins to look more to management of people and systems rather than leading a vision. The

organization begins to hire a development director and other staff responsible for raising the

money necessary to sustain itself.


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STAGE FIVE | Institutional Phase

Most organizations never get to this point and many organizations never even try to. At this

stage, the NPO is established in the community, has a prestigious board made up of people who

principally can bring money into the organization. The workers (original founders) are long

gone; the wisdom side of the board (technical experts) is not needed because the organization

can buy whatever expertise it needs. The majority of board discussions whether public policy,

mission, etc. is discussed through the filter of money. At this stage, the means and ends are

reversed, and the end goal becomes one of "maintaining the institution, because without the

institution there would be no services."

The leadership on the board tends to be very strong in this phase because both the board

members and the organization itself are very visible in the community. Board service hasprestige, and members take their roles seriously--even though their main roles are fund raising,

public relations, damage control and institutional maintenance. The most common leadership

style is READY-AIM- maybe fire. A lot of the decisions are made to minimize risk and to study,

evaluate and make measured movements toward the mission and institutional support.

In this phase, the CEO is frequently more of a manager operating in a much decentralized

system. Many times organizations that are sidetracked by a scandal get this way because the

board is totally out of touch with the ultimate constituency of the organization's programs andservices. Once again, the organization is at great risk for mission drift because its energies and

time are directed almost solely to raising money--and focusing more on the question How do

we maintain this institution in its current form? rather than How do we best fulfill the

mission?

Turnaround stage

Another phase that sometimes happens in the organizational life cycle is when an agency in the

governance or maturity stage goes into an organizational crisis. When these circumstances

happen, the organization may shrink, lose supporters/sponsors/staff, and needs to be turned

around into a growth phase organization before the crisis proves fatal.

During this critical time, the organization needs to find a turnaround champion to lead the

organization into a new growth phase. Frequently the person who is acting as CEO or executive


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director of the governance phase is a manager type and not a leaderand thus does not have the

skills or personality to make the tough decisions that turnarounds usually require. The leader that

can turn around the organization needs to be very strong and possess an ability to make hard

decisions, reduce staff, and build trust and confidence. This type of leader must be secure enough

to have very honest communications with the board and staff of the organization. Usually the

entrepreneurial person is the correct personality and leadership style that has steered the

organization during its growth phase and is the right type to lead the organization from the turn-

around stage back to the growth phase of the life cycle.

M, N and O form theory

Before diving any deeper, we need to learn a few terminologies which are used to classify

NGOs.

Helmut Anheier of the London School of Economics (LSE) Centre for Civil Society 43 has

suggested that there are three basic organizational forms: the unitary (or U-form),

multidivisional (M-form) and network (N-form) varieties.

U-form organizations include traditional unions, the Red Cross and Red Crescent Societies.

These organizations are hierarchical, stable, predictable and centralized. They also tend to be

somewhat conservative.

M-form organizations include NGOs like CARE and Human Rights Watch. Some may incline to

conservatism over time, but they can also be extremely challenging. In some ways, perhaps, they

have had less time to be tamed and co-opted by the system.

N-form organizations are different again; their primary characteristic is network structure. Global

public policy networks like the World Commission on Dams, the International Action Network

on Small Arms and the Coalition for an International Criminal Court would be considered N-

form NGOs as would Climate Action Network, Friends of the Earth International, the World

Social Forum and many other anti-globalization movements.

For example, established groups like Environmental Defense, or World Vision International

have adopted the campaigning techniques of the hugely effective internet campaigns or dot-

causes which are often no more than loose networks of activists.


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Wise heads might argue that N-form organizations will eventually grow up and adopt many

M- and even U-form characteristics. Certainly, such networks are likely to crystallize out into a

cluster of new, semi-permanent or permanent organizations. The largely N-form World Social

Forum, for example, may need to become more institutional over the years if it is to translate the

energy that it has rallied into effective change.

But there is no inevitable migratory path from N- to U-forms, and many U- and M- form

organizations may well adopt aspects of the N-form business model to ensure success in their

changing environments.

Bangladeshs position in the lifecycle

When considering the overall expansion rate of the NGO industry, we can assume that NGOs in

Bangladesh are now in the third stage of their growth. In the late 1970s, there occurred a gradual

shift from the first generation strategies that is, relief and welfare services to the second-

generation strategies characterized by small-scale, self-reliant local development initiatives for

building people's capacity. Throughout the 1980s, this thrust continued. Pursing the third

generation strategies that focus on the policy changes at different levels is recent phenomenon

visible since the early 1990s.


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PESTEL Analysis

PESTEL analysis stands for "Political, Economic, Social, Technological, Environmental and

Legal analysis". It is a part of the external environment analysis if conducting a strategic analysis

of any organization. Political factors are basically to what degree the government intervenes in

the economy. Economic factors have major impacts on how businesses operate and make

decisions. Social factors include the cultural aspects and include health consciousness,

population growth rate, age distribution, career attitudes and emphasis on safety. Technological

factors include technological aspects and its effect on the organization. Environmental factors

include ecological and environmental aspects and Legal factors include different laws and

regulations which can affect how a company operates.

The effect of the six individual factors on NGO sector in short term (1-2 years) and long term (5

years) period are as following:

Political factors

The impact of political factors on Sector in short term period is High on a three point scale. It is

so the election year and due to chaos created from Islamic and anti-state activities may hamper

the activities of many foreign funded non-islamic and missionary NGOs. registration of some

6,000 NGOs have already been cancelled because of links to anti-state activities and is in the

process of examining the registration certificates of an additional 4,000. In long term, we can say

there would be Medium impact on three point scale; depending on the fact that probable

changing government might change the regulations and those can affect the NGO sector. There

might be more new entrants based on political reluctance and thus competition will be increased

within the sector.

Economic factors

On a three point scale for both short term and long term the impact of economic factors on NGO

sector is High. The economy is recently recovering from a recession, that is a positive fact but if


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it fall under another recession that will certainly have negative impact. NGOs in Bangladesh

have played a very significant role in opening up access to credit for the poor and people in

distant areas. The NGOs of Bangladesh and Grameen bank has established a new approach to

banking which has gained global recognition and its efficacy in addressing needs of the poor is

widely acknowledged. NGOs in Bangladesh work under many economic constraints and

challenges. Some of these challenges are lack of financial sustainability; lengthy fund release

process; Unfavorable tax regime etc. Most NGOs rely upon funds received from foreign sources.

International NGOs, development partners, foreign private organizations, and multinational

organizations provide such fund. A World Bank Report (2003-04) informs that 34.10% of the

foreign aid (US$ 379.4 million) received by Bangladesh was allocated for the NGO sector. There

are no estimates of funds from other sources that are involved in this ever growing sector.

Social factors

In this country, NGOs are socially acceptable. Though there are some religious concerns

activities of missionary NGOs. However both in short term and long term period the impact of

social factors on NGO sector will be Low in the three point scale. The NGOs are also accepted

and has a reach to rural level, helping rural women, farmers and SME business owners with no

capital base.

Technological factors

In the short term the impact of technology is medium as the NGO sector is implementing the

latest technological aspects to provide different services currently and the effect can be seen in

the long run. Many NGOs are providing modern tools to farmers and using GIS and SMS based

services to rural people to solve their problems. In future, the implementation of these

technologies will increase. So the long term impact of these technological aspects will be High

on a three point scale.


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Environmental factors

The NGOs are not demeaning any environmental aspects and there are no restricting factors from

environment to hamper the NGO services. So, though the impact in short term and long term will

be Low on a three point scale.

Legal factors

The impact of these factors is relatively High for the sector in both short term and long term.

New regulations and policies will certainly change the course of the sector in this country. Every

sector in the country is highly abide by the regulations from government and thus impact of legal

factors are very important for this sector also.


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Factors driving the changes

The sectoral changes come time to time due to various factors. These changes come from

different sides and affect different stakeholders. These change driving factors can be as

following,

The nature of donor agencies is one of the change agents in the sector. Though most of the

NGOs in Bangladesh are assisted by foreign donors, but shift toward domestic donors are

also seen. Here, operating framework is not very focused for this shift toward local funding.

Government policies and regulations are another change driver for this sector. Any new

reform in policy and law bring a significant change in operation and governance of the

NGOs. The incident of establishment of NGOAB can be cited here as example.

Economic aspect of the country also acts as the driver of change for this sector. NGOs

basically work to improve the life of the poor people of the country. If the economic

condition of these people change in any direction that will ultimately change the course of

action for the whole sector. Improvement in lifestyle or economic condition will certainly

reduce the importance of NGOs in society of Bangladesh.

Technology improvement also improves the aids that are provided by this sector to the poor

people. Better condition can be ensured to the remote area of Bangladesh with enhanced

technical support.

The affiliation and alliances of the sector members with different supporting organizations

also serves as changing agent as this support help the organization modify their work process

in a significant way.


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Key activities and impact

NGOs provide a strikingly homogeneous set of services, with credit dominating. A survey of 300

NGO branches carried out by the World Bank in 2003 showed that while the total range of NGO

interventions is wide, the typical NGO branch offices provide credit services, followed by health

(56 per cent), sanitation (52 per cent), and education (45 per cent). A parallel community survey

conducted as part of the 2003 NGO survey shows that the service delivery priorities identified by

communities closely match the services that NGOs provide. Public awareness and advocacy are

also common areas of NGO work: 93 per cent of NGO branches reported awareness-raising

activities, usually relating to sanitation, health, and social issues, while 42 per cent reportedhaving lobbied local or national government during the previous year. We now turn to the

assessment of the three key services of micro-credit, health/sanitation, and education, as well as

advocacy activities.

Microcredit

One of the main reasons for the growing presence of NGO programs is the expansion in

microfinance. Micro-credit now reaches as many as 43 per cent of all Bangladeshi householdsand about 70 per cent of poor households. The sector is dominated by the Grameen Bank,

BRAC, ASA, and Proshika, which between them lend to almost 87 per cent of all borrowers

from non-government microfinance institutions.

The impact of micro-credit on smoothing incomes and reducing household vulnerability to

seasonal and other shocks is of critical importance to the rural poor. Improvements in key social

indicators of well-being are also associated with micro-credit borrowing, most notably measures

of female empowerment, children's schooling, and health status. These social gains in part reflect

the complementary social mobilization, training, and awareness-raising activities that typically

go hand in hand with micro-credit. While micro-credit has brought benefits to borrowing

households, these have not been large enough to have had a significant impact on community

level employment creation and growth. The strong emphasis on financial sustainability, vital to


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the sector's success, has led to controversy about purportedly high interest rates. The comparative

under regulation of microfinance also poses clear risks.

Health & sanitation

NGOs use village-based community health workers to provide door-to-door health services,

focusing mainly on preventive care and simple curative care for women and children. While a

nationwide network of these NGO para-professionals is successfully extending health care to

large numbers of poor households, NGO facility-based care is relatively sparse. Hence, while

expenditures by NGOs on health have grown significantly since the mid-1990s, they constitute

only about one-third of public sector expenditures and less than 10 per cent of total expenditures

on health (the latter include household spending on private care). NGOs also contribute to health

outcomes by providing water and sanitation services, with notable successes in community-based

programs promoting behavioral change. Achievements in health include programs on child

nutrition and tuberculosis treatment in partnership with the government.

The impact of NGO interventions on a range of health and nutritional indicators is striking. Cure

rates averaged 85 per cent in the tuberculosis program. Malnutrition rate dropped by about 20 per

cent among the poor due to the presence of NGOs in the community, after controlling other

factors. Neo-natal mortality has been found to be significantly lower among NGO clients than ina control group of households.

Education

About 1.5 million children, approximately 8.0 per cent of primary enrollment, are in schools run

by NGOs, most in non-formal primary schools for which the NGO sectors is best known. The

NGO education sector is highly skewed, with one large organization, BRAC, receiving about

three-fourths of donor resources and accounting for a similar share of primary enrollment inNGO schools. BRAC also franchises its model by subcontracting 200 small NGOs to deliver

non-formal education programs.

Incidence analysis comparing different providers of primary schooling show that NGO education

programs are effectively targeted to the poor, and to poor girls in particular. NGO schools have a


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positive impact on school enrollment, particularly of girls, and record higher attendance and

completion rates than formal schools. Educational achievements tell a more mixed story: NGO

school students perform considerably better than their counterparts in government schools on

reading and writing skills, but only slightly better on other basic competencies.

A key concern is that the coordination between government and NGO education programs is

weak. There is little official recognition of NGO education programs, which continue to depend

largely on external grants. One obstacle in increasing NGO-government collaboration in

education is that contracting arrangements have had a long history of being problematic, as

discussed below. The recent diversification into pre-primary education by the market leader,

BRAC, could lead other NGOs to follow suit. This diversification is being actively encouraged

by the government and presents an opportunity for improvement NGO collaboration in future.

Advocacy

Most NGO advocacy focuses on issues affecting the poor (e.g., violence against women, dowry,

land rights, access to justice, housing, education) and is seen as fully legitimate. However, in

2000-1 the government accused a few NGOs of stretching their advocacy work into partisan

political activity and electioneering, and funding for their service delivery programs was

sequestered as a result. As government funding for NGO services grows in importance, NGOshave become more reluctant to antagonize the government. Hence, the more prominent

advocacy-oriented NGOs tend to be involved only slightly in direct service delivery activities,

while large NGOs with many activities and services tend to avoid issues that could seriously

antagonize the authorities. Nevertheless, even without taking on contentious issues such as

human rights and electoral reform, multi-activity NGOs engage in a range of low-key advocacy

activities that are of significant benefit to the poor (for example, campaigns to reduce violence

against women and to promote poor people's access to resources).

Advocacy fulfils and essential function in a democracy such as Bangladesh, and must be given

space. Therefore, NGOs' scope to do advocacy should be entirely unconstrained, except for

activities that promote one political party, or election candidate, over another. Returning to the

analytical framework, we find that the role of NGOs in strengthening relations of accountability


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between policymakers and poor service users has been mixed, as NGO advocacy efforts are to an

extent constrained by their dependence on government. NGOs have had more success in bridging

the gap between service users and providers in Bangladesh through their own services and by

facilitating government, community, and private sector provision.

Growing opportunities and threats

Growing opportunities

NGOs have been playing an important role for the socioeconomic development of the country

especially for the disadvantaged group- women, children and the poor. NGOs have been working

in all areas of social sector and thus successfully contributed to reduce human poverty. At the


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same time NGOs have created employments remarkably in Bangladesh. Still the challenges

remain. Still large shares of population live below the poverty line.

For resolution of crisis and a prosperous future, the government envisions a Bangladesh which

by 2021 will be a middle income country where poverty will be drastically reduced; citizens will

be able to meet every basic need and development will be on fast track with ever-increasing rates

of growth. The milestones of Vision-2021 have been incorporated in the NSAPR II(reused) and

became the core target of all development programs. NGO Affairs Bureau hereby, draws kind

attention of the NGOs both national and foreign and the donor community supporting them to

undertake and support suitable program in the light of the Vision-2021. Some of the milestones

of Vision 2021 where NGOs have scope to contribute endless are as follows:

2013: Each house brought under hygienic sanitation.

2014: Bangladesh attains full literacy.

2015: Living accommodation for the entire population.

2021: Unemployment reduced to 15 percent from the present rate of 40 percent.

2021: Poverty rate comes down to 15% from 45% at present.

2021: Bangladesh known as a country of educated people with skills in information technology.

2021: 85% of the population have standard nutritional food.

2021: Poor people ensured a minimum of 2122 kilo calories of food.

2021: All kinds of contagious diseases eliminated.

2021: Infant mortality comes down to 15 from 54 per thousand at present.

2021: Maternal death rate reduced to 1.5% from 3.8%.

2021: Use of birth control methods increased to 80%


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NGOs will have to undertake the very most suitable activities to contribute achieving Vision-

2021.They need to undertake more income & employment generating activities. NGOs are called

for prioritizing activities; focusing on disaster-poverty-monga prone areas, avoiding overlapping

of areas and duplication of interventions through coordination among themselves and with the

government and thus ensure maximum resource is directed and used at the grassroots levels.

Growing Threats:

NGOs operating in Bangladesh already face an overly cumbersome and intrusive regulatory

process, including needing multiple approvals to register and to implement projects. On August

25, 2012, the Bangladeshi government stated it was going to launch a commission to look intothe operations of NGOs, claiming that many were involved in terror-financing and other anti-

state activities. The government announced at the same time that it had cancelled the

registration of some 6,000 NGOs because of links to anti-state activities and is in the process

of examining the registration certificates of an additional 4,000. The Bangladeshi governments

recently announced commission to regulate nongovernmental organizations (NGOs) adds

burdensome procedures that will hinder important watchdog functions.

Diversification Analysis

One of the great strengths of the NGO world is its very diversity, which in turn opens up a

multitude of opportunities. This diversification has generally been a natural phenomenon,

though in some cases it has been managed. In the environmental field, for example, much of the

conservation agenda in the US was once carved up between WWF (focusing on parks)


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Others, though, suggest that powerful NGObrands can even should house multipleactivities

side by side. Whatever strategy they adopt, NGOs will need to recognize the business wisdom of

sticking to their knitting. Diversification can lead to over- stretch and loss of focus. Given the

widely differing roles now possible for NGOs, any single organization would be hard pressed to

maintain credibility in every sphere. Dont be all things to all people, cautioned one

interviewee. Select a niche and go for it.

An interesting question, whichever route a given NGO takes in tackling markets, is whether,

very much as Intel has developed the concept of Intel-inside, it could build truly value-added

NGO-inside types of co- branding and relationships with business and other market actors.

Bangladesh has made remarkable progress on a range of social indicators over the last 15 years,

an achievement widely credited to the country's pluralist service provision regime.

NGOs have significantly expanded their services during this period and have shown that it is

possible to scale up innovative anti-poverty experiments into nationwide programs. Notable

innovations that were expanded include delivering credit to the previously "unbendable" poor,

developing a non-formal education programmer for poor children, particularly girls, and using

thousands of village-based community health workers to provide doorstep services.

The fact that poor women constitute a large proportion of the beneficiaries of the socio-economic

activities of NGOs, despite the persistence of strong patriarchal norms, also testifies to

institutional innovation. The unique role of Bangladesh's NGOs is not confined to the delivery of

social services and pro-poor advocacy; NGOs have developed commercial ventures in order to

link poor producers with input and output markets, as well as to develop a source of internally

generated revenue for the organizations.

One of the most notable diversification attempts has been taken by Brac. The recent

diversification into pre-primary education by BRAC, could lead other NGOs to follow suit. Thisdiversification is being actively encouraged by the government and presents an opportunity for

improved collaboration in the future.

However, the rapid growth and diversification of the NGO sector has also given rise to questions

and concerns. These include the viability of a regulatory framework developed when the size and


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scope of the NGOs was far more limited, the appropriate political and commercial spaces for

NGO activities, trade-offs between NGO sustainability and pro-poor orientation, and the

implications of different government-NGO partnerships. There has been little systematic review

of the public policy implications of the changing character of NGOs in Bangladesh.

Finally, many development NGOs have gained further power by expanding the scope of their

financial transactions and taking over various profit-making economic enterprises.5 this growing

economic power of NGOs makes them relatively autonomous and independent of financial

controls exercised by the government. By 1995, the cumulative disbursement of rural credit by

NGOs reached nearly 65 percent of the total rural credit disbursed per year (including credit

disbursed by the public sector and national banks) in Bangladesh (World Bank, 1996b: 12). By

1999, the annual budget of BRAC reached US$106 million, and the total loans made by

Grameen Bank amounted to US$380 million (Barber, 1999; GBSG, 2000). Moreover, in line

with the global trend of NGOs working as contractors for private firms and international

organizations (Robinson, 1997: 59), many Bangladeshi NGOs are now involved in such business

contracts and profitmaking enterprises. For example, BRAC has ventured into printing presses,

cold storage, garment manufacturing, retail outlets, and milk products (Daily Star, 1999; World

Bank, 1996a). Similarly, Grameen Bank and Proshika are now into businesses such as banking,

garments, shopping complexes, telephone systems, transport services, cold storage, fisheries

projects, fertilizers, deep-tube wells, and biotechnology (GBSG, 2000; Islam, 1999). Such

extensive business ventures undertaken by these NGOs not only make them financially

independent of the government, but also enable them to influence government policies in the

relevant economic sectors.

Complementary Strategic Analysis

Strategic Alliances

In order to achieve their social missions, NGOs are increasingly thinking more strategically

about partnering with businesses to create shared value.


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It used to be that a typical meeting between a business and NGO resulted in one of two

outcomes: confrontation or a donation.

But times are changing. Riding the wave of public-private partnerships and the idea of shared

value, NGOs are rethinking their relationship with the private sector to better meet their social

missions. For example, CARE has helped Unilever and six other companies increase the reach of

their products in Bangladesh through a rural sales network. In the process, almost 3,000 women

now have jobs. Save the Children has helped Proctor & Gamble develop new markets for its

sanitary products in developing countries. While Proctor & Gamble benefits from Save the

Children's awareness-building and demand generation, Save the Children views the partnership

as a way to stop dropout rates among young girls in resource constrained settings.

Increasingly, NGOs recognize that the people they are trying to serve are also companies'

customers and suppliers or live in the communities where businesses operate. This mutual

interest, fueled by the private sector's assets, skills, and investment potential, can help scale NGO

impact in sustainable ways.

Some of the major partnership types in Bangladesh are laid out below:

Alliances with the government

A key concern is that the coordination between the government and NGO in most programs isweak. There is little official recognition of NGO programs (such as education programs), which

continue to depend largely on external grants. One obstacle in increasing NGO-government

collaboration is that contracting arrangements have had a long history of being problematic.

Alliances with donors

There are a number of ways in which donors provide direct financing to NGOs in Bangladesh.

The most common is funding for specific projects. Where financing needs are large, donor funds

may be pooled and a donor-liaison function introduced to coordinate support and reduce

transaction costs for the NGOs. In some instances, donors have financed the whole range of

NGO activities, and in a few of these cases the institution develops into a different legal entity by

the end of the funding period. In recent years, the recognition that partnerships with smaller


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NGOs carry high transaction costs has increased reliance on wholesale vehicles, in which an

agency manages a pool of money for which smaller NGOs compete.

Alliances with bilateral agencies

Many bilateral agencies from developed nationsincluding the British Overseas Development

Administration, Canadian International Development Agency, and Norwegian Agency for

Development Cooperation, Swedish International Development Agency, Netherlands

Organization for International Development Corporation, and Danish Agency for Development

Assistanceare increasingly in favor of working with local NGOs in developing countries. In

Bangladesh, many of these influential bilateral agencies, which used to have direct relationships

with the government, are now in favor of pursuing their objectives through local NGOs in sectors

such as primary education, adult literacy, health care, rural banking, family planning, capacitybuilding, gender issues, human rights, and the environment (CIDA, 1999; USAID, 1997; Wood,

1994).

Alliances with IT businesses

A good example could be the partnership between Cisco and Grameen Solution. Cisco partnered

with Grameen Solutions to establish business centers in rural Bangladesh that serve as

distribution points for a variety of services, such as birth and death certificates, healthcare,

distance learning, and retail sales of such necessities as hybrid seeds.

In its endeavor to promote ICT entrepreneurship and innovation in emerging markets, Cisco

pledged help to launch a rural business center pilot program and provide funding for three pilot

business centers in Bangladesh. Grameen determines the mix of services and recruits qualified

entrepreneurs to run the centers, while a Cisco grant supports a project team and helps establish

test centers for a pilot. Because there are many thousands of rural communities in Bangladesh,

this program has vast potential for improving livelihoods throughout the country. The initiative

helps finance and train qualified entrepreneurs to set up and run business centers in rural

Bangladesh. It is part of the ICT related micro-financing initiatives within the global ICT

Empowerment Network.

In the future, NGOs will need to think more strategically about their partnerships with business.

NGOs can be much more proactive and analyses their operational assets against the needs of


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corporations and market their offerings for mutual gain. Organizations that are committed to

shared value have undertaken a top-to-bottom review of their capabilities and focused in on a

few areas such as financial inclusion for smallholder farmers. Such dedication may not usher in

the sums of funds from government donors but do offer an alternate and powerful pathway to

sustained impact at scale. NGOs will have to balance their resources when confronted with

bilateral contracts and grants to ensure sufficient resources and management attention are

allocated to share value initiatives and indeed to explore ways through which to create a

confluence between these sectors.

Outsourcing non-core activities

Bangladesh is still an evolving market in the IT/BPO sector and has tremendous potential

especially with competitive lower wage rates, higher supply of labor, also knowledge transfer for

skilled workers with training and development is relatively cheaper. In today's cost-conscious,

results-driven business world, NGOs, like most companies are staying agile by turning to BPO as

a tool to save time and costs, while assuring revenue growth.

A few of the major BPO operators working with NGOs in Bangladesh are listed below:

Xplorer Bangladesh

Imagine BD

Graphic People Limited

Therap (BD) Limited

Costs AND Quality/expertise advantages demonstrated by BPOs

In this area there have a number of technical procedures in place to safe guard their clients data

read only capability of the operators serves, paper less floors, quality monitoring, recording of

all calls, on demand walk in site visits for the clients etc.

BPO operators look for opportunity to raise their profile as they seek to attract additional

funding. Outsourcing functions like customer care, supply management, contributions


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management to an operator who will provide them with a world class solution raise their

profile.

Factors that should be included in a service level agreement in this area of activity.

In this area NGOs often raise concerns that in many cases the way BPO handles the resources

lent by NGOs can breach confidentiality.

So a number of mitigating factors should be in place in the SLA as well as their basic operations

to prevent a breach of confidentiality. As mentioned previously the area of costs and quality. The

areas of concern to NGOs that can be included in the SLA and in some cases are specified in

SLAs in other markets and industries are:

Staff turnover & compensation

Investment in & incentives for staff

Electronic & physical security of the account

Software systems utilized for the account

Network security

Equipment assigned specifically to the account

Structured exposure of staff to sensitive client data

Creating an enabling environment for account staff

Penalties and clients recourse when breach of contract occurs

Services outsourcing operators are offering in the Financial Sector

Operators in the financial sector provide one or more of the following services:

Contact Centre services

Data Entry for banks and insurance companies

Image Processing


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Credit Reference bureau

Participants also noted that there was a need for

Misplaced Asset Registry

Aggregator of Insurance Services

Cost and quality/expertise advantages that can be demonstrated employing BPO agents

Efficiency

Allowing companies to focus on core competencies

Lower personnel costs

Provide employees with a vertical career paths

Distribution of Funds A number of global NGOs have funds available but have

difficulty in the disbursement due to the multitude of reporting conditions given by the

donors.

Financial Management Smaller NGOs quickly out grow their capacity to track funds

and provide proper accounts. These NGOs would benefit from an organization providing

on demand/web based accounting services.


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Legal Issues in NGO Sector

The legal framework for NGOs in Bangladesh set the code for operation for all the organizations.

These standards can be divided into two distinctive parts,

Regulatory framework

Fiscal framework

Regulatory framework

Previous situation:

The regulatory framework for NGOs in Bangladesh was old-fashioned and in need of complete

revision. Previously foreign NGOs and NGOs receiving foreign funds, working in Bangladesh

had to apply to different government agencies for registration and various approval and

permissions. Clearance from committees at various stages and inter-ministerial bureaucratic

procedures not only increased paper work for the NGOs, but also resulted in the loss of

substantial funds due to delays in the process. The 1980s witnessed a huge accumulation of

projects pending government approval (World Bank, 1996). Due to insufficient manpower and

lack of a central body, government could not monitor the NGO activities properly which resulted

in wastage of resources and brought the NGO activity under criticism in general.

There was significant lacking on setting high standards for accountability and transparency on

the vast majority of NGOs that receive no foreign funds but that do affect the public interest. The

frame work was attentive toward relatively unimportant issues more prominently. Until 1990,


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NGOs had to follow a complex set of rules and procedures. They had to apply to different

government ministries and departments for registration, project approval and permission to

obtain foreign funds. Every NGO needed to follow different legal acts for different purposes.

Establishment: NGOs in Bangladesh formed or established under the following pieces of

legislation:

1. Societies Registration Act of 1860

2. Trusts Act of 1882

3. Companies Act of 1913 (amended 1994)

Registration: In addition, NGOs must have been registered under the following laws, in

certain circumstances:

1. The Voluntary Social Welfare Agencies (Registration and Control Ordinance), 1961

(SWO)

2. Foreign Donations (Voluntary Activities) Regulation Ordinance of 1977 (amended

1982)(known as FDR)

Internal Governance and External Accountability: The rules for internal governance andexternal accountability for NGOs in Bangladesh are fairly basic, unless they are registered

with NGOAB. The laws for establishment do very little to impose a workable internal

governance regime or external accountability standards.

1. Societies Act requirement of annual meeting but no requirement of annual accounts

2. Trusts Act clear accounts must be maintained; beneficiary may obtain on request

(charitable trusts rules unclear)

Creation of NGO Affairs Bureau (NGOAB):

In 1990, the government created the NGOAB within the Ministry of Establishment to co-

ordinate and regulates the activities of NGOs operating with foreign funding. NGOs of foreign


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origin also come under the preview of the NGOAB. The necessary approval for working with

foreign donations, known as the FD Registration, is obtained from the NGOAB by the NGOs

concerned. Separate approval for all projects is required from the NGOAB. The NGOAB was

therefore created to serve its primary objective of providing a one-stop service for the NGOs. It

is now located within the prime Ministers office and is responsible for all contact with NGOs

under the Foreign Donations (Voluntary Activities) Regulation Ordinance, 1978. The NGOAB`s

establishment has positively changed the enabling environment for NGOs. It helps them obtain

registration, approval and permission with respect to program implementation and receiving

money from abroad, with a short period.

The NGO Affairs Bureau (NGOAB) is headed by a Director General (DG) and assisted by three

Directors. The bureau has 67 employees including 18 officers and 48 staffs. (See appendix: A1

for the Organogram of NGOAB)

The NGO Affairs Bureau has the following responsibilities:

Providing one stop service to NGOs in respect of registration & processing of project

proposals.

Approval of NGO projects, fund releases, permission for appointment of foreign

expatriate consultants and fixation of their tenure.

Examination and evaluation of reports/returns submitted by the NGOs.

Coordination, monitoring, evaluation and inspection of NGO activities.

Collection of fees/service charges levied by the government.

Inspection of field level NGO activities and examining their accounts.

Liaison with the donors and the NGOs.

Formulation of reports on NGO activities and take appropriate measures.

Enlistment of Chartered Accounting Firms for auditing of Accounts of the NGO.

Approval of proposals for one-time grants.
http://www.ngoab.gov.bd/Files/The_FDR_Rules_1978.pdfhttp://www.ngoab.gov.bd/Files/The_FDR_Rules_1978.pdf


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Other matters relating to NGO Affairs.

Since the establishment of the NGOAB, bureaucratic requirements have slowly reduced and

some unnecessary paper work has been eliminated. But the prevailing problems still remain to

some extent as NGOAB does not have enough expertise to successfully carry out this long list of

responsibility and also at present the funding is shifting toward domestic funds but all the frame

work is still focused on foreign and foreign assisted NGOs which seems improper at this point in

time.

Establishment of the government NGO consultative council

In order to provide a forum for open dialogue between the Government and the NGOs,

government has established the Government NGO Consultative Council (GNCC) by a Gazette

notification, dated 17th October, 1996.The objectives of the establishing the GNCC are:

1. To increase mutual understanding and cooperation between GOB and the NGOs for the

overall development of the country.

2. To identify and discuss issues which impede GO-NGO cooperation and develop an improved

policy and institutional environment for GO-NGO Cooperation.

3. To suggest modalities for greater involvement of NGOs in national development.

4. To propose measure to simplify and improve the regulatory system for creating an enabling

environment for governing NGO activities.

5. To suggest measure to strengthen the monitoring and evaluation capacity of the NGOAB

partner NGOs

NGO Compilation

Documents

Transcript of NGO Compilation