New Delhi - 13 September:
NGOs in India often struggle with accurately computing and communicating their
“true costs”—the complete costs required to sustainably run organisations while
working towards their mission. To address this gap, Aria CFO Services,
led by CA Ravi Bagaria and CA Ritu Jain has launched the “True Cost Computation
and Communication Guidelines for NGOs in India,” in a bid to strengthen the
country’s social sector. The guidelines were unveiled in the presence of distinguished Chartered Accountant Ranjeet Kumar Agarwal,
which took place in New Delhi earlier this week.
These
guidelines arrive at a crucial juncture as India advances towards its vision of
Viksit Bharat (Developed India). NGOs, which contribute nearly 2% to India’s
GDP, play an indispensable role in fostering inclusive and equitable
development. However, these organisations face considerable challenges in
financial management and transparency. Hence, these guidelines serve the
purpose to alleviate these challenges.
Key Highlights of the Guidelines:
●
First-of-its-kind collaborative effort
involving funders, NGOs, and Chartered Accountants
●
Addresses a critical fundraising and
communication gap: 83% of NGOs struggle to recover indirect costs, while 68% of
funders have indicated their flexibility in funding these costs (Bridgespan Group survey, 2023)
●
Developed with input from 7 support partners
Center for Advancement of Philanthropy, Educate Girls, Guidestar India, Guru
and Jana Chartered Accountants, PKF Sridhar & Santhanam LLP, Tejas Merh and
The Bridgespan Group’s Pay-What-It-Takes India Initiative,
●
Developed under the aegis of Pay-What-It-Takes
India movement, a collaborative movement of Funders, NGOs, and support
organisations to achieve a robust & resilient social sector
●
Tested and refined through workshops with over
35 NGOs
The
comprehensive guidelines equip NGOs with essential tools to create accurate and
transparent budgets, standardise financial information presentation, and
enhance resource and funding management. This initiative is poised to foster
greater financial transparency, improve governance practices, and catalyse
stronger partnerships between NGOs and funders.
Appreciating
the effort, CA Ranjeet Agarwal, a prominent Chartered Accountant, said, “For
India to achieve the goal of Viksit Bharat, funders need to support NGOs
working for the most marginalised and disadvantaged communities. I hope these
guidelines will help such NGOs strengthen their financial capabilities and
operate with enhanced efficiency.”
“NGOs
and funders need to work as equal partners to contribute more effectively to
the nation’s social development. Pay-What-It-Takes India is a collaborative
movement to help develop such partnerships, and these guidelines mark an
important step in that direction.” Added Shashank Rastogi, Partner at The Bridgespan
Group.
The guidelines address several key areas,
including:
●
What truly constitutes true cost for an NGO
●
True cost calculation methodologies
●
Standardized presentation of financial
information
●
Incorporating compliances while computing true
cost
●
Strategies for communicating financial
information to stakeholders
By
promoting trust and transparency, these guidelines aim to unlock more funding
for NGOs, enabling them to tackle complex social problems more effectively and
contribute to sustained social change.
About Aria CFO Services:
Aria
CFO Services has been at the forefront of streamlining financial management for
NGOs since 2011, offering tailored insights through their deep expertise in the
development sector. Their commitment to transparency, accountability, fairness,
and collaboration has led to the creation of the True Cost Computation and
Communication Guidelines, in alignment with Bridgespan’s Pay-What-It-Takes
initiative. These guidelines address common challenges faced by non-profits, such
as budgeting and financial transparency, and aim to provide a valuable resource
for NGOs to manage resources and funding effectively, thereby enhancing their
sustainability and fostering stronger donor relationships.
For more information about the
True Cost Computation and Communication Guidelines please refer to the below
website: