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By Pushpa Sundar Now that victims of the devastating Indian Ocean tsunami have been provided immediate relief, governments and voluntary organisations must do some out-of-the-box thinking to create a permanent source of funding for development efforts. In this connection, the community foundation model offers the greatest possibility for decentralised and long-term funding of local needs
Although the tsunami brought with it unprecedented death and destruction, the response to calls for assistance were equally unprecedented. Aid in cash and kind continues to pour in. The Prime Minister’s Relief Fund is said to have received Rs 4.42 billion, including Rs 20 million in online donations, in contrast to the mere Rs 50-100 million collected every year. Non-governmental organisations (NGOs) and private relief funds continue to receive donations. Over $ 5 billion has been pledged to the relief effort by governments and individuals around the world, although how much of it will actually materialise remains to be seen. No authoritative figure is available for the quantum of non-governmental contribution towards tsunami relief. Though it is likely to be substantial it may still fall short of requirements: many millions are needed to cover the immediate relief costs, while the cost of reconstruction will be even more staggering and may take years. But, every challenge is also an opportunity for out-of-the-box thinking, for trying the untried. Now that the immediate relief phase is over and government and non-government agencies have turned their attention to rehabilitation, and while private funds are still flowing in for the victims, the time has come to experiment with systemic changes in the way long-term development is funded and sustained. Too much cash flowing into short-term relief efforts can be a problem if it exceeds the capacity of individuals or even organisations working on the ground. It also leads to skewed distribution, with some getting too much and others not enough. Not infrequently it leads to wastage of resources, both in cash and kind. On the other hand, a balance can be struck between funds for immediate relief and long-term rehabilitation, with funds not immediately needed used to create a permanent alternative source of funds for development efforts. In this connection, the community foundation model offers the greatest possibility for decentralised funding of local needs over the long-term. Typically, a community foundation is a tax-exempt, independent, philanthropic organisation supported by the public. It is established and operated as a permanent collection of endowed funds for the long-term benefit of a defined geographical area such as a city, village or district, the ‘community’ comprising all those who live in the area. It is a means to build, over time, substantial funds for the benefit of the residents of that area, through large and small contributions of money and assets that are not spent but invested to secure a steady stream of income to help meet the community’s development needs, as articulated by them. In a sense, the community foundation serves as a savings account for the community, governed and managed by a volunteer board of citizens broadly representative of various sections of the ‘community’, and professional managers. In general, a community foundation plays three roles and serves three constituencies: - It pools gifts/donations/grants from donors to create a permanent income-earning endowment, which will always be there for the benefit of the community of which it is a part. In the process it offers donors, small and big, a variety of means and services to meet their charitable goals. For instance, it offers the possibility of creating individual funds under the main community foundation, either named after a donor, or to support a particular field such as education or health. It also offers donors a variety of services and helps them make wise choices.
- It uses the income earned from invested funds to offer grants to a wide range of community groups working for the benefit of that community, according to defined priorities. The original investment is left to grow over time.
- It gives leadership to the community, bringing together people from all sectors of society to identify and address local issues.
Community foundations focus on local asset development and imply local control and local decision-making. Thus, the three main constituencies are donors, the community, and organisations that work in the community and who receive grants from the community foundation for their work. In the post-tsunami scenario, one can envisage a community foundation for each of the main affected districts. There could be a Nagapattinam Community Fund, a Cuddalore Community Fund, an Andaman Community Fund and so on. Charitable funds that have already flowed in to voluntary organisations, newspaper relief funds, religious organisations, etc, and have not been used up in the immediate relief effort, could provide the seed money for a corpus, matched by contributions from the government and official aid agencies. This corpus will continue growing over the years, with further inputs from a variety of different sources. Community funds offer a number of advantages for the development of affected areas. They can mobilise resources from companies, institutional donors and individuals, including NRIs, to meet community needs. Donors can opt to give directly to a community chest that provides a single and visible point of reference, specifying what their donations are for. Funding made available to community groups through a community foundation has the advantage of being timely, flexible and responsive to local needs, in contrast to government funding which is often rule-bound and delayed. Moreover, it puts resources in the hands of local communities for their disposal on community projects selected by them. If the management committee consists of marginalised people, including women, community foundations can offer them power and improve their status. It can also promote leadership from within poor communities. By making an alternative source of funds available for planned development it encourages self-reliance rather than exclusive dependence on the government or any other outside agency. It also promotes democratic decision-making, transparency and accountability. Since it is meant for the betterment of a defined area, not only a sectional grouping (around occupation, class, caste, gender), it can help build social cohesion. Not only does a community foundation create social capital, by strengthening the bonds of reciprocity it also enables communities to reach out to others who matter. It encourages group action for the common good, as grants are made to groups only, to meet community rather than individual needs. That it is a workable concept has been successfully proved by some voluntary organisations that have tried it. Gram Vikas (GV), a non-governmental organisation working towards improving living conditions in poor tribal villages in Orissa has, as part of its Rural Health and Environment Programme (RHEP), set up several village corpus funds. Each household in the village participates in the programme as an equal partner, contributing an agreed amount to the fund and taking decisions about its use through a village committee. Similarly, the voluntary organisation Sewa Mandir, which works in the districts of Udaipur and Rajsamand in Rajasthan, has promoted 500 Gram Vikas Koshs (GVK) or village development funds, one in each village, that are being used for projects such as the creation and maintenance of community assets (repair of boundary walls, deepening community wells) and meeting the emergency needs of the community for food, seeds, etc. The situation in areas affected by the tsunami requires innovative thinking. Hopefully the district administration and non-governmental organisation co-ordination committees now working on rehabilitation will not be averse to some useful experimentation. (Pushpa Sundar is Executive Director of Sampradaan Indian Centre for Philanthropy, New Delhi ) InfoChange News & Features, February 2005
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