Donation dilemma

LAHORE: Nonprofit organisations are a major source of relief for the poor in the developing economies; however, social or philanthropic work here in Pakistan is generally performed by the rich in an unorganised manner.

The nonprofit organisations registered with the government operate under certain rules. They are accountable to their donors as well as the state. They mostly provide goods and services to the poor on a day to day basis. The resources available with them are always much less than the needs of the poor. The rich also serve the poor from their own resources that are just enough to help a limited number of individuals, while the majority remains un-served. We see the majority of the poor unable to avail the services provided by rich or NGOs in schools, hospitals, and clinics. While the rich manage to spare minimum resources for their charity institutions, the NGOs cannot set up stable institutions as they depend on regular donations from public or the private sector donors which might not be available every year.

Nonprofit organisations the world over face this dilemma of spending their resources on service delivery only which leaves them with nothing to invest on infrastructure that could generate sustained incomes for the poor. Both the donors and the state expect immediate results from the money they donate. The nonprofit entities usually have no access to debt or equity markets which makes them fully dependent on private and corporate donations, and government grants.

We have seen that Shaukat Khanum Cancer Hospital has served poor cancer patients in large numbers. They make no distinction between paid and free patients. Still they are forced to turn away a large number of poor cancer patients because the treatment is highly expensive and even the huge donations they get are not enough to cover the treatment expenses of all. As far as other charitable hospitals are concerned they are much smaller in size. The administrative expenses of 30 small hospitals together are much higher than Shaukat Khanum but the number of patients they treat is much less. It would be wiser to construct a big facility through corporate cooperation that would serve more patients at fewer expenses. Besides saving on administrative expenses the hospital would save money on purchase of medicines as well.

This concept has been given a try by the corporate sector in Karachi that has taken over the responsibility managing most of the children emergency wards in many government hospitals of Karachi. Some corporate sector institutions have pooled resources and have transformed the concept of children's emergency. All taken over wards are fully air conditioned, no child is refused treatment, all medicines are provided free of cost, if some medicine is not available in the stock the donor buys it from the open market and provides it to the child. Besides, they hire an equal number of doctors and paramedics already deputed by the government in each child's emergency. The child mortality rate has declined by 90 percent in these wards that are monitored electronically at a central office. Still the average cost of treatment per child is much lower than what other government children emergency (though dysfunctional) bills to state. The same group is extending its reach to government hospitals and children's emergencies in Lahore. We need such a planned and effective philanthropic spirit.

The high operating expenses of small NGOs reduce the resources for welfare. In developed economies volunteers fill in the need of human resource in nonprofit concerns but volunteers are hard to find in Pakistan. Moreover these organisations lack the skills needed for best managerial practices, which increases the cost of delivery.

These drawbacks limit the ability of the nonprofit organisation to innovate, plan, and grow. The economic problems of the past two decades have reduced the corporate sector donations at a time when the demand for social services is rising due to increase in poverty.

International welfare foundations are the main source of funding for the nonprofit organisations in Pakistan. The gloomy economic scenario since 2007 has decreased their activities. It has brought hardships to the most vulnerable population of our country. At the same time the government is unfortunately under pressure to reduce expenses. Moreover the government has started its own social welfare programme, the Benazir Income Support Programme or Ehsaas as it is called now. This programme like all other public sector plans is wrought with corruption and inefficiencies. The nonprofit organisations would have delivered ten times more than what have been achieved through the public sector.

The social service organisations also need to put their house in order. Donors must distinguish between a sham NGO and a genuine one. This could be done by evaluating the impact of every rupee donated to different organisations performing the same social work in poor localities.