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Industry/Sector Analysis



Professor Dr. A. K. M. Saiful Majid
Course Instructor W650: Business Strategy


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


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-NGOs’ as 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 a practical 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 information analysis regarding the strategic aspects are revealed and discussed in this report. We also have cited some recommendation for the sector improvement as per the analysis. We are hoping that you 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.


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

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

Tahmina Tamanna (Roll :153, MBA 46D)

Acknowledgement “We would like to express our heartiest gratitude to our course instructor Dr. 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.”

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 secondary information 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 sector’s 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.

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

Complementary strategy analysis 11. Bibliography 16. Appendix . Ethical issues in the sector 13. Conclusion 14. Recommendation 15.10. Legal issues in the sector 12.

This particular report is on NGOs of Bangladesh. This report contains detail strategic analysis on various aspects of NGO sector in Bangladesh. This report can help to have a picture how NGOs are operating their strategic thinking behind every decision they make. Saiful Majid as a fulfillment of the Business Strategy course (W650) requirement. which is one of the dominant sectors in Bangladesh. Specific Components →To attain the broad objective.Introduction Origin of the report This report on Industry/Sector Strategic Analysis: NGO sector has been authorized by Professor Dr. M. A. 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. K. 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. • To analyze the legal and ethical issues related to the sector . 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.

• Primary Sources: Data was collected through interview from one expert in the relevant sector.• 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. Due to time constraint the group could manage to get appointment of one expert and collect information. 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 in the paper. The expert gave valuable insights on the sector and shared her experience regarding several issues.: Conference papers. Due to time constraint and busyness on respondents’ part. The analysis is done on the basis of secondary information and base on the knowledge that was gathered through the course contents. journals. only one appointment could be arranged with the expert in the sector. .g. • 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.

Sector Profile NGO’s 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. “A broader definition of NGO refers to associations voluntarily formed by individuals for the purpose of rendering welfare and development services outside Government structures. There was however a range of voluntary associations through which charitable and . and functioning within the legal frame work of the country. Unfortunately these constitutions and laws do not give any clear and specific definition and explanation of NGO. Bangladesh is no exception. History Non-Government Organizations dedicated to Aid and Development were relatively unknown in Bengal. create awareness in them and make them development oriented. books and research on NGOs and their activities. In Britain. In Bangladesh the term NGO is very well known and NGO activities are wide spread. Their target groups are basically the poor and vulnerable ones with hardly any possessions. this country’s state administration has developed certain constitutions and laws to authorize the NGO activities. Their main tasks are to organize these people.” Non-Governmental Organizations or NGOs have become an extensively discussed theme in the third world countries. drawing funds from national or international sources. There are many publications. Abdul Halim in his book “Social Welfare Legislation in Bangladesh” said. Besides. USA and other English spoken country NGO refers to nonprofitable organizations. The NGOs are working on poverty eradication by directly involving the poverty stricken population. NGO’s although work outside the government structure but they are within the legal framework of the country.

. the year CARE established an office in Dhaka. The Catholic agency CARITAS Pakistan had a branch in East Pakistan from 1967. based in Comilla. madrassas and mosques. In spite of its wealth of natural resources. the Baptist Missionary Society active since1794. but following the cyclone it was renamed Chittagong Organization for Relief and Rehabilitation (CORR) in November 1970. the then East Pakistan also had its share of sufferings. The non-government organization CARE initially distributed food parcels to survivors of World War II. Ten tidal waves in the coastal area of Noahkali have been reported between 1960 and 1970. In 1970 CARE sent relief to the victims of the cyclonic tidal wave which hit East Pakistan on 1213 November 1970. 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. Floods were common and the disparity between the poorest and those who benefited from the natural wealth increased with each calamity. In the 1950's CARE distributed food aid more widely to newly emerging countries using American agricultural surpluses.voluntary activities took place in Bengal. from which emerged the so-called 'Comilla Model' for small farmer cooperatives. One of the earliest institutions for rural development in the East Pakistan was the Academy for Rural Development. It reorganized and became a national organization called Christian Organization for Relief and Rehabilitation in January 1971 with several Cyclone rehabilitation projects. In addition to religious activities. In East Pakistan this took the form of powdered milk for schools from 1955 and lunches for school children from 1962. 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. also East Pakistan in 1949. Foreign organizations were involved in social welfare in Bengal from before the colonial era. mission organizations provided medical services and general education to the rural poor. mostly in Europe but according to CARE Bangladesh. Village Welfare Societies were sometimes organized by public figures.

With one disaster following quickly after another. the schools. During the first years of Bangladesh's independence in December 1971. India. shelter and healthcare were the priorities. They are also indicative of the way NGOs adapted to the changing environment in which they found themselves. many local organizations were created to care for orphans and widows and assist the many refugees returning from neighboring India after the war ended. These early histories of CARE and CARITAS illustrate how the Cyclone of 1970. In addition to the outside humanitarian organizations which responded.caritasbd. Its early objective was to deliver relief and rehabilitation programs for refugees returning from India to resettle in Bangladesh. there was rehabilitation of the farms. At the end of the war CORR undertook to rehabilitate 200.(http://www. The Lutheran World Federation is typical of the many international NGOs which provided assistance with relief and rehabilitation: Rangpur Dinajpur Rehabilitation Service (RDRS). bilateral and non-government aid.000 families. CORR became heavily involved in sheltering vulnerable displaced people. the hospitals. the largest NGO in Bangladesh today. Food. particularly Hindus. began providing relief and rehabilitation to some of the one million refugees returning home from India after the nine-month War of Independence. humanitarian agencies and media coverage were focused on the apparently overwhelming needs of a mainly rural .org/about. 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. 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.html). was formed in 1972 as the Bangladesh Rural Advancement Committee. BRAC. Then with the outbreak of conflict in the liberation struggle for Bangladesh on March 25 1971. later. 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. then a field program of the Lutheran World Federation.

their homogeneity based on land-ownership class. An organization’s credibility became tied to the comprehensive reach or 'holism' of its program. The Samity were to . organizations also began to consolidate their Bangladeshi identity. RDRS grew from a small. especially in the context of multi-sectoral needs of Bangladesh. adult education. 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. so it was natural that the NGO sector would adopt this approach. health and family planning. vocational and other training programs. 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). Integrated Rural Development had become the 'dominant methodology' for community development. BRAC commenced a 'program of integrated community development' seeking to develop 'agriculture and horticulture. Alongside the increased focus on development. In 1977 BRAC adopted a 'targeted approach' to development. its readiness to improvise according to the resources available and to the needs of the poor. The basic groups or Samity were comprised of 2025 poor people. 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.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. It became known for its innovative spirit. somewhat slapdash charitable body working in the remotest corner of Bangladesh into a major player in the country's development. fisheries. whose representatives suggested that the Bangladeshi partners form their own organization which the Quakers would fund. RDRS also describes itself as shifting 'from relief-and-rehabilitation to Sectoral Development Program. For example Gono Unnayan Prochesta formed from a partnership between some Bangladeshis and the international Quaker Peace and Service organization.

business and government has become increasingly subject to debate.000 NGOs (Devine 2003) operate with different objectives and activities. The size of the NGO sector in Bangladesh is remarkable. and those working with the socio-economic development of the people of Bangladesh. Their activities may be put into two broad categories .925 NGOs registered with the NGO Affairs Bureau (2004 statistics from NGOAB) . 189. Sector Size The NGO sector in Bangladesh is one of the largest and most influential in the world. This formulation of Community Based Organizations (CBO) shows its antecedents in the 'federation of the poor'. which BRAC had shown was the most immediate constraint on mobilizing the poor.000 not-for-profits. Subsequently the BRAC approach was adopted by other NGOs working in rural community development. and their role with respect to the poor. Some NGOs are now the largest providers of a range of services in Bangladesh. 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. Bangladesh is a country where approximately 22.eventually be linked 'into a federation of the poor' which would act as a buffer between the poor and the village power structure. 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'.536 organizations registered with the Social Welfare Minis-try and • 1. nearer to the poor and innovative in problem solving. to promote human rights. • 45. Development NGOs are flexible in nature.000 of which are religious (1999 Statistics Bureau). This sector consists of the following organizations: • 206.NGOs with advocacy roles.

However. ethnic homogeneity.pdf. efforts of the NGOs are worth mentioning to help these people analyze the society and problems in the backdrop of old. UNDP. ActionAid are some big names operating in the sector. 2013 by NGO Affairs Bureau. 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. For example: primary training. Population density. according to a list published in April. superstitious. organizing exchange of views program among .ngoab. still they are incapable of developing exact ways to scientifically analyze and fix their problems and whatever possessions they have. Constructive donor-client relations play a role. The presence of an enabling macroeconomic environment and a liberal regulatory regime allow the NGOs room to grow. especially with respect to rural women taking loans from NGOs. improved training. including appropriately timed financial and other support. Beneficiary profile NGOs in Bangladesh serve different kinds of with having different kinds of problem and background. anti life perspectives. There are both local and international NGOs in the sector. 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. there are 2227 NGOs in In this the presence of a professional autonomous apex body (PKSF) is important. and practices of experimentation and institutional learning fed continuous improvements. Finally. The List is available on this link http://www. and religious tolerance all contribute to the ease and rapidity with which new practices could spread. CARE. BRAC.

Fishing in the coastal area. credit based cooperatives. 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. which create new employment opportunity. equipment supplies for landless share cropper. Besides.different groups or areas. Besides employment generation. they provide loans and management assistance to individuals. rice and popcorn production. small business. fishery in ponds (khash). earthen wares. to be mechanics of pump machine or rice/paddy mills etc. joint social activities. regular adult education activities. 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. Thus they are significantly contributing in eradication of poverty by providing the above-mentioned essentials. several policies. for homeless/ landless etc.e. weekly analytical discussion etc. wood and cane works. The micro credit scheme launched by Grameen Bank is now established worldwide for its success in poverty eradication. Besides. per head income and scheme to increase savings is required so that a sustainable development and poverty reduction can be seen for the poor. methods and strategies of the NGOs have attracted the attention of some foreign development experts. they have introduced certain essential concepts like developing small groups. Different NGOs are playing essential role for humanitarian development through joint analysis and seeking solution through different seminars and workshop. construction of sanitary laboratory and slabs. Currently the projects that are being conducted under the supervision and assistance of NGOs are: Irrigation project for landless. they are providing training to hundreds of men and women on vaccination and treatment of domestic livestock and poultry. This model has been accepted even at the government . weaving. Secondly. sericulture. First of all. handicrafts i. and thus have strengthened the root of organizational structure for rural poverty. and application of socio-economic projects. NGOs usually create employment in two ways. People in Need of Micro Finance Overall economic development is essential for poverty eradication at the rural level. developing nursery. mother welfare society and cooperatives etc. they provide employment in their own organization since they also need human resource to operate. bee keeping.

41% of total credit holders.684 women which is about 93. The government has established Palli Karma Sahayak Foundation (Rural Activities Assistance Foundation) or PKSF and till December 2001. Majority is deprived from even minimal health and nutrition facilities.percent women clientele (population). Statistics shows that 99% of these beneficiaries were women. The NGOs. Till 1998 Grameen Bank provided loan of 1.43% Women credit holders. Changes can be seen in the way our society regards its women folk now a days. Nutrition and Hygiene Facilities In Bangladesh. 04. For this reason. Empowerment of rural women and their participation in development process has brought in a long-term positive effect.755 out of which 22.139 were women and 1. Almost 23. which are enlisted under the Bureau of NGOs.38lakh beneficiaries worth 6953. The NGOs of Bangladesh have consciously targeted the fallen behind poor women folks as their beneficiaries.05 lakh. Almost 96% of the credit facility holders are women.15% from local Banks. has provided loans to several eligible NGOs 1.40.04. have more than fifty.78 crore taka throughout 64 districts and 460 subdistricts of Bangladesh.50% of these loans are collected from PKSF and 9. The importance that NGOs have placed on women to eradicate rural poverty has truly improvised the economic and health status of rural women. Till the year 2001 BRAC has provided loan to 41. Swanirvar Bangladesh has 71% women as credit holder.64.06. Besides till 1998 ASA distributed 13.089 crore taka for micro credit scheme.level. Health and nutrition status of the rural populace is very poor.242 million taka to its total member of 23.616 were male.089 crore taka micro-credit loans.46 million taka to 7. Different NGOs so far have given (June 2001) 1.14. Palli Karma Shahayak Foundation (PKSF) has 86. People beyond the reach of Health. In 1995 with financial aids from ADAB and BRAC almost 549 NGOs worked for only women.183. Poor Rural Women Although half the population of Bangladesh is women still they are leading a much backward life. which is a direct contribution by the NGOs in Bangladesh. The number of people enjoying such benefits is 116. This has brought in the possibility of representing women as a media to change the socio-economic standing of the country.24. a significant part of the active NGOs of Bangladesh are providing training and education service in the field of health .34.

knowledge on nutrition. Thus. reproductive health care and family planing services etc.171 houses. tendency to take purified water etc. storm. World Vision gave taka 110. famine. The NGOs are working for the poor people in time of regular need as well as emergencies.5 lakh latrine. mother and child care. then they would also undertake different rehabilitation activities for the betterment of the disaster affected people. Till 1999 Mid June. 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. they would extend their hands and conduct relief works. An independent organization named Voluntary Health Services Society (VHSS) is supervising the NGOs that are working on the health and nutrition sector. only 30% children aged nine years have normal nutrition.000 people. Besides after disasters are over.713. World Vision has spent in heath sector taka 65. Moreover in 1998 they also gave taka 378. through management of different relief and rehabilitation programs also the NGOs are playing . which was worth taka 60. Till 1990. Natural Disaster Affected People One major cause of poverty rate increase in Bangladesh is natural disaster. 85% children were vaccinated and 90% families’ women were given training on how to make oral saline under the EPI project.788. Health and nutrition is one very important indicator of poverty measurement.171 calorie where as those not included in the projects took only 1. ASA rehabilitated around 450 families in Saturia and Manikgang and built 2.5 lakh tube-well.292 as relief for the flood affected people and health care service for 3.841. in terms of food intake. contaminated diseases.441. drought. In some specific area of primary health care sector like diarrhoea control. campaigning for health consciousness. around 350 NGOs have brought in sanitary toilets for 14 lakh people and safe water for 1.45 which consist of 20. expansion of water and sanitation services. 186 rural sanitation centers and 2.474. In 1991 Cyclone.00.20% of their budget. In other words. those poor people under Grameen bank projects had daily intake of 2. In order to develop the health and nutrition situation. the NGOs have achieved extensive success.982 calorie. tidal waves etc.and nutrition. They also built 11 disaster time shelters and one multipurpose center.5 crore people through establishment of 1.560 in aid and rehabilitation assistance. vaccination against six hazardous diseases. In one research it was found that. Whenever there is a natural disaster like flood. 50% children under Grameen Bank project have normal nutrition and those not included under Grameen Bank.

This program has turned into a vital accompaniment for the primary education system by the government. star pump. In 1998. deep and shallow tube-well was not that suitable when growing vegetables and spices. 06. In small size farming land.crucial role in helping out the unfortunate people from problems encountered during any calamity. oar pump. Illiterates created due to lack of education is one major obstacle for socio economic development hence also for poverty eradication. Right now in Bangladesh 400 irrigation projects are running with loans from NGOs. As this can be produced with little cost. The NGOs also use newer communication and transportation technology to play significant role in poverty eradication. 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. Small and Seasonal Farmers In Bangladesh during the 70’s the government agencies initiated irrigation in agriculture. But it was not that successful in small farmland. dheki pump etc. 87. vegetables. The NGOs arrange to teach appropriate technology for fruits. At present almost 9 lakh men and women are studying in these schools. The Bangladesh Government and UNICEF are trying at their utmost level to eradicate illiteracy. . The low rate of admission in the primary schools. type of irrigation technology. People without Informal and Non-formal Education The NGOs are highly active in the sector of informal and non-formal education. BRAC have started satellite school system based on informal education policy.996. On demand from the small and seasonal farmers the NGOs have developed bamboo/cane tube-well. fish and cooking through transfer of suitable technology for family agriculture.58 which amounted to 40. World Vision spent taka 13.10% of their total expenditure. the small and marginal farmers can now easily afford these. 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. failure to attract the children to schools. The best way to develop human resource is through appropriate education. reason the rate of primary education in the rural area are not at all hopeful. unlikable education method and syllabus for etc. The largest NGO in our country and also worldwide.

but organizations of all types go through life cycles: they are born. predominantly in third world countries such as Bangladesh. NGO’s also go through life cycles that are predictable. just as flowers bloom in the desert after rain. learn. In the case of groups like CARE. enter a period of senility before they die or fall into a coma. More traditional business life-cycle theory 2. M. mature. not a predictable one. N and O – form theory Business life-cycle theory According to this theory. Lifecycle of NGOs can be explained by two theories: 1. So what can we say about NGO life cycles? The first thing is that there are ‘flushes’ of NGOs. but often these needs and issues have evolved over the years. It is at these points where the balance between leadership and management changes. Focusing on international NGOs.Sector Life Cycle Analysis Nature of the NGO sector Is there an NGO life cycle? The simple answer is no. the focus on mission . most have emerged in response to a specific set of needs and issues. reproduce and. NGOs thrive on upwelling’s of issues and there are periodswhen a new generation wakes up to a new set of issues and decides to take action. they have shifted from delivering aid packets to Europe to helping to address the root causes of poverty in communities around the world. in some cases.

The entire focus of the organization is on the mission that first brought people together.versus money shifts. or small theatre and cultural arts groups operate exclusively with volunteers. During this phase. tasks are simple and results are tangible. or uses other simple fund raising techniques. This starts the growth process and the organization begins to . start when someone has an idea to make a difference in their community or to change the world. If the group needs money. This stage begin when people realize that their expectations exceed their resources of time. and almost everybody is a leader with a different role. talent. 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). and the leadership style differs. people. Usually this idea comes from someone’s vision or passion and reflects a desire to fill a vacuum or create a program. Frequently the people who we need leading our organizations at one stage are not appropriate at the next stage of development. crime watch groups. Decision-making is by consensus. the visionary of the idea contributes the resources necessary. Stages of lifecycles of nonprofit/no are described here: STAGE ONE | Idea Stage Nonprofit organizations. has a bake sale. project or issue to do something about it. and they write a proposal or receive a grant or funding. Many informal organizations never get past this stage. and money. 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. 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 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. Many neighborhood associations. or NGO’s. it passes around the hat. People enjoy meeting each other. people come together and work to solve the issue or develop a program around the reason they came together.

reporting to donors to be provided. passion and compassion.fertilize itself. and increasing the number of staff it may enter governance or a maturity stage in its life-cycle. elects officers and may set up a committee structure. During this phase. the board of directors becomes formalized and passes by-laws. raising new funds. At this stage the focus of the organization is almost exclusively on mission. evaluation and other systems are either thin or nonexistent. STAGE FOUR | Governance / Maturity Stage If the organization continues to grow and is succeeding in terms of gaining credibility. fundraising. On the staff level. There is now a need for the organization to become organized because there is staff to manage and lead systems to set up. The programs are way ahead of the ability of the organization to manage. evaluate and set up the systems that create effectiveness and efficiency. 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. In this stage the staff does not have to worry about whether they will get paid next week or not. 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. etc. Frequently their financial. The organization hires its first executive director that usually is the founder or visionary of the group. marketing. the executive director may have an assistant director and there is probably a program director to supervise other staff. In our own lives. . There are standing and ad hoc committees. The growth during this stage is horizontal with good program growth. but not vertical where the organization is deepening its organizational roots. 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. 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 organization is so focused on mission that anytime new dollars come in they go to build the programs rather than the organizational foundation. The board meetings are very structured and well organized. This stage is a very exciting stage in the life cycle that is exemplified by lots of energy.

During the start-up and growth stages. because of the great need for money and the high expectations of the external community (funders. The organization begins to hire a development director and other staff responsible for raising the money necessary to sustain itself. etc. At the end of growth stage. programs and systems. general public. At some point during the governance/maturity stage. there is invariably a crisis of leadership. 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. What used to be a small group operating on consensus is now an organization with rules. The “founder syndrome” is present and the board of directors realizes that it has to change the executive director in order to survive. During this phase." The board of directors increases its numbers yet again with people who can raise new money or bring new money to the table.). During this stage the balance between leadership and management changes. 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 founder who began the organization adjusts to the changes. there is starting to be a reversal of means and ends. an enlightened founder realizes his or her inadequacies and brings on a COO to manage the people. the founding executive director (often the original visionary and founder) is often fired or resigns from the organization." The organization has outgrown the ability of the founder to manage and lead the organization. At this stage. The organization begins to look more to management of people and systems rather than leading a vision. fights them. mission and principles-these are the ends. media. structure and a developing "organizational culture. In some cases. or does not recognize that changes are taking place. .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. the entire focus of the group was grounded on values.

The majority of board discussions – whether public policy. lose supporters/sponsors/staff. has a prestigious board made up of people who principally can bring money into the organization. At this stage. The workers (original founders) are long gone. During this critical time. and members take their roles seriously--even though their main roles are fund raising. evaluate and make measured movements toward the mission and institutional support. damage control and institutional maintenance. public relations. because without the institution there would be no services. the means and ends are reversed. Board service has prestige. In this phase. etc. and the end goal becomes one of "maintaining the institution. – is discussed through the filter of money.STAGE FIVE | Institutional Phase Most organizations never get to this point and many organizations never even try to." 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. Once again. When these circumstances happen. and needs to be turned around into a growth phase organization before the crisis proves fatal. the NPO is established in the community.maybe fire. the organization may shrink. the CEO is frequently more of a manager operating in a much decentralized system. the organization needs to find a turnaround champion to lead the organization into a new growth phase. mission. the wisdom side of the board (technical experts) is not needed because the organization can buy whatever expertise it needs. 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 and services. Frequently the person who is acting as CEO or executive . At this stage. 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. The most common leadership style is READY-AIM. A lot of the decisions are made to minimize risk and to study.

established groups like Environmental Defense. N-form organizations are different again. stable. perhaps. the International Action Network on Small Arms and the Coalition for an International Criminal Court would be considered Nform NGOs as would Climate Action Network. the World Social Forum and many other anti-globalization movements. Global public policy networks like the World Commission on Dams. predictable and centralized. reduce staff. This type of leader must be secure enough to have very honest communications with the board and staff of the organization. Friends of the Earth International. M. . N and O – form theory Before diving any deeper. Some may incline to conservatism over time. For example. 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 turnaround stage back to the growth phase of the life cycle. the Red Cross and Red Crescent Societies. they have had less time to be tamed and co-opted by the system. In some ways. The leader that can turn around the organization needs to be very strong and possess an ability to make hard decisions. we need to learn a few terminologies which are used to classify NGOs. but they can also be extremely challenging. and build trust and confidence. their primary characteristic is network structure. or World Vision International have adopted the campaigning techniques of the hugely effective internet campaigns or ‘dotcauses’ which are often no more than loose networks of ‘activists’. M-form organizations include NGOs like CARE and Human Rights Watch. ‘multidivisional’ (M-form) and ‘network’ (N-form) varieties. These organizations are hierarchical.director of the governance phase is a manager type and not a leader—and thus does not have the skills or personality to make the tough decisions that turnarounds usually require. They also tend to be somewhat conservative. 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). U-form organizations include traditional unions.

and many U. such networks are likely to crystallize out into a cluster of new. 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. we can assume that NGOs in Bangladesh are now in the third stage of their growth. semi-permanent or permanent organizations.‘Wise heads’ might argue that N-form organizations will eventually ‘grow up’ and adopt many M. there occurred a gradual shift from the first generation strategies that is.and M.and even U-form characteristics. Certainly. self-reliant local development initiatives for building people's capacity. The largely N-form World Social Forum. Bangladesh’s position in the lifecycle When considering the overall expansion rate of the NGO industry. for example. But there is no inevitable migratory path from U-forms.form organizations may well adopt aspects of the N-form ‘business model’ to ensure success in their changing environments. In the late 1970s. Throughout the 1980s. may need to become more institutional over the years if it is to translate the energy that it has rallied into effective change. relief and welfare services to the secondgeneration strategies characterized by small-scale. .

000. 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. Technological. that is a positive fact but if . age distribution. depending on the fact that probable changing government might change the regulations and those can affect the NGO sector. population growth rate. we can say there would be Medium impact on three point scale. There might be more new entrants based on political reluctance and thus competition will be increased within the sector. Technological factors include technological aspects and its effect on the organization. Social. Environmental and Legal analysis". Economic. Environmental factors include ecological and environmental aspects and Legal factors include different laws and regulations which can affect how a company operates. It is a part of the external environment analysis if conducting a strategic analysis of any organization.PESTEL Analysis PESTEL analysis stands for "Political. Social factors include the cultural aspects and include health consciousness. registration of some 6. career attitudes and emphasis on safety. Economic factors have major impacts on how businesses operate and make decisions. The economy is recently recovering from a recession. In long term. Political factors are basically to what degree the government intervenes in the economy.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. 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. Economic factors On a three point scale for both short term and long term the impact of economic factors on NGO sector is High.

Many NGOs are providing modern tools to farmers and using GIS and SMS based services to rural people to solve their problems. The NGO’s 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. the implementation of these technologies will increase. Unfavorable tax regime etc. A World Bank Report (2003-04) informs that 34. NGO’s in Bangladesh have played a very significant role in opening up access to credit for the poor and people in distant areas. and multinational organizations provide such fund. Though there are some religious concerns activities of missionary NGOs. Some of these challenges are lack of financial sustainability. In future.4 million) received by Bangladesh was allocated for the NGO sector. lengthy fund release process. helping rural women. International 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. Most NGOs rely upon funds received from foreign sources. farmers and SME business owners with no capital base. . Social factors In this country. NGOs are socially acceptable. The NGOs are also accepted and has a reach to rural level. foreign private organizations. So the long term impact of these technological aspects will be High on a three point scale. development partners.10% of the foreign aid (US$ fall under another recession that will certainly have negative impact. NGOs in Bangladesh work under many economic constraints and challenges. 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. There are no estimates of funds from other sources that are involved in this ever growing sector.

though the impact in short term and long term will be Low on a three point scale. . 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. New regulations and policies will certainly change the course of the sector in this country. So. Legal factors The impact of these factors is relatively High for the sector in both short term and long term.Environmental factors The NGOs are not demeaning any environmental aspects and there are no restricting factors from environment to hamper the NGO services.

 Technology improvement also improves the aids that are provided by this sector to the poor people.  Economic aspect of the country also acts as the driver of change for this sector.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. The incident of establishment of NGOAB can be cited here as example. operating framework is not very focused for this shift toward local funding. Here. Any new reform in policy and law bring a significant change in operation and governance of the NGOs. . Improvement in lifestyle or economic condition will certainly reduce the importance of NGOs in society of Bangladesh. 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.  Government policies and regulations are another change driver for this sector. but shift toward domestic donors are also seen. Better condition can be ensured to the remote area of Bangladesh with enhanced technical support. These change driving factors can be as following.  The nature of donor agencies is one of the change agents in the sector.  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. Though most of the NGOs in Bangladesh are assisted by foreign donors.

BRAC. the typical NGO branch offices provide credit services. and awareness-raising activities that typically go hand in hand with micro-credit. which between them lend to almost 87 per cent of all borrowers from non-government microfinance institutions. training. children's schooling. 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. with credit dominating. and education. health/sanitation. these have not been large enough to have had a significant impact on community level employment creation and growth. while 42 per cent reported having lobbied local or national government during the previous year. vital to . most notably measures of female empowerment. Micro-credit now reaches as many as 43 per cent of all Bangladeshi households and about 70 per cent of poor households. and Proshika. We now turn to the assessment of the three key services of micro-credit. These social gains in part reflect the complementary social mobilization. and social issues. Microcredit One of the main reasons for the growing presence of NGO programs is the expansion in microfinance. The sector is dominated by the Grameen Bank. ASA. While micro-credit has brought benefits to borrowing households. and education (45 per cent).Key activities and impact NGOs provide a strikingly homogeneous set of services. as well as advocacy activities. The strong emphasis on financial sustainability. and health status. Improvements in key social indicators of well-being are also associated with micro-credit borrowing. Public awareness and advocacy are also common areas of NGO work: 93 per cent of NGO branches reported awareness-raising activities. 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. followed by health (56 per cent). health. 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. usually relating to sanitation. sanitation (52 per cent).

Achievements in health include programs on child nutrition and tuberculosis treatment in partnership with the government.5 million children. Health & sanitation NGOs use village-based community health workers to provide door-to-door health services.0 per cent of primary enrollment. BRAC also franchises its model by subcontracting 200 small NGOs to deliver non-formal education programs. most in non-formal primary schools for which the NGO sectors is best known. Cure rates averaged 85 per cent in the tuberculosis program. Education About 1. focusing mainly on preventive care and simple curative care for women and children. BRAC. approximately 8. with notable successes in community-based programs promoting behavioral change. NGO facility-based care is relatively sparse. with one large organization. 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). The impact of NGO interventions on a range of health and nutritional indicators is striking.the sector's success. has led to controversy about purportedly high interest rates. NGOs also contribute to health outcomes by providing water and sanitation services. Malnutrition rate dropped by about 20 per cent among the poor due to the presence of NGOs in the community. The comparative under regulation of microfinance also poses clear risks. and to poor girls in particular. are in schools run by NGOs. NGO schools have a . Hence. receiving about three-fourths of donor resources and accounting for a similar share of primary enrollment in NGO schools. after controlling other factors. While a nationwide network of these NGO para-professionals is successfully extending health care to large numbers of poor households. The NGO education sector is highly skewed. Incidence analysis comparing different providers of primary schooling show that NGO education programs are effectively targeted to the poor. while expenditures by NGOs on health have grown significantly since the mid-1990s. Neo-natal mortality has been found to be significantly lower among NGO clients than in a control group of households.

we find that the role of NGOs in strengthening relations of accountability . Therefore. Returning to the analytical framework. but only slightly better on other basic competencies. This diversification is being actively encouraged by the government and presents an opportunity for improvement NGO collaboration in future.positive impact on school enrollment. Advocacy fulfils and essential function in a democracy such as Bangladesh. There is little official recognition of NGO education programs. violence against women. multi-activity NGOs engage in a range of low-key advocacy activities that are of significant benefit to the poor (for example. the more prominent advocacy-oriented NGOs tend to be involved only slightly in direct service delivery activities. which continue to depend largely on external grants. in 2000-1 the government accused a few NGOs of stretching their advocacy work into partisan political activity and electioneering. BRAC. campaigns to reduce violence against women and to promote poor people's access to resources). Nevertheless. land rights. over another. A key concern is that the coordination between government and NGO education programs is weak. even without taking on contentious issues such as human rights and electoral reform. One obstacle in increasing NGO-government collaboration in education is that contracting arrangements have had a long history of being problematic. As government funding for NGO services grows in importance. Hence. education) and is seen as fully legitimate. or election candidate. Advocacy Most NGO advocacy focuses on issues affecting the poor (e. and must be given space. However.. while large NGOs with many activities and services tend to avoid issues that could seriously antagonize the authorities. NGOs have become more reluctant to antagonize the government.g. could lead other NGOs to follow suit. housing. and record higher attendance and completion rates than formal schools. access to justice. and funding for their service delivery programs was sequestered as a result. NGOs' scope to do advocacy should be entirely unconstrained. except for activities that promote one political party. particularly of girls. dowry. as discussed below. The recent diversification into pre-primary education by the market leader. Educational achievements tell a more mixed story: NGO school students perform considerably better than their counterparts in government schools on reading and writing skills.

NGOs have been working in all areas of social sector and thus successfully contributed to reduce human poverty. as NGO advocacy efforts are to an extent constrained by their dependence on government. children and the poor. At the . 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.between policymakers and poor service users has been mixed.women. NGOs have had more success in bridging the gap between service users and providers in Bangladesh through their own services and by facilitating government. and private sector provision. community.

2021: 85% of the population have standard nutritional food. 2014: Bangladesh attains full literacy. 2021: Infant mortality comes down to 15 from 54 per thousand at present. NGO Affairs Bureau hereby. 2021: Use of birth control methods increased to 80% . Some of the milestones of Vision 2021 where NGOs have scope to contribute endless are as follows: 2013: Each house brought under hygienic sanitation. 2021: Maternal death rate reduced to 1.8%. Still the challenges remain. Still large shares of population live below the poverty line. 2021: Unemployment reduced to 15 percent from the present rate of 40 percent. For resolution of crisis and a prosperous future. citizens will be able to meet every basic need and development will be on fast track with ever-increasing rates of growth. 2021: Poor people ensured a minimum of 2122 kilo calories of food. 2021: Poverty rate comes down to 15% from 45% at present. 2021: All kinds of contagious diseases eliminated.5% from 3. 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. 2021: Bangladesh known as a country of educated people with skills in information technology.same time NGOs have created employments remarkably in Bangladesh. 2015: Living accommodation for the entire population. the government envisions a Bangladesh which by 2021 will be a middle income country where poverty will be drastically reduced. The milestones of Vision-2021 have been incorporated in the NSAPR II(reused) and became the core target of all development programs.

for example. 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. NGOs are called for prioritizing activities. 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. 2012. The Bangladeshi government’s 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. claiming that many were involved in “terror-financing and other antistate activities”. The government announced at the same time that it had cancelled the registration of some 6. In the environmental field.They need to undertake more income & employment generating activities. much of the conservation agenda in the US was once carved up between WWF (focusing on parks) . though in some cases it has been managed.NGOs will have to undertake the very most suitable activities to contribute achieving Vision2021.000 NGOs because of links to “anti-state” activities and is in the process of examining the registration certificates of an additional 4. On August 25. the Bangladeshi government stated it was going to launch a commission to look into the operations of NGOs. focusing on disaster-poverty-monga prone areas.000. This diversification has generally been a natural phenomenon. which in turn opens up a multitude of opportunities.

Diversification can lead to over. could lead other NGOs to follow suit. The recent diversification into pre-primary education by BRAC. These include the viability of a regulatory framework developed when the size and . The fact that poor women constitute a large proportion of the beneficiaries of the socio-economic activities of NGOs. One of the most notable diversification attempts has been taken by Brac. it could build truly value-added ‘NGO-inside’ types of co. also testifies to institutional innovation. 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. ‘Select a niche and go for it. The unique role of Bangladesh's NGOs is not confined to the delivery of social services and pro-poor advocacy. Given the widely differing roles now possible for NGOs. as well as to develop a source of internally generated revenue for the organizations. is whether.Others. Notable innovations that were expanded include delivering credit to the previously "unbendable" poor. This diversification is being actively encouraged by the government and presents an opportunity for improved collaboration in the future. Whatever strategy they adopt. developing a non-formal education programmer for poor children. and using thousands of village-based community health workers to provide doorstep services.’ cautioned one interviewee.’ An interesting question. though. whichever route a given NGO takes in tackling markets. suggest that powerful NGObrands can — even should —house multipleactivities side by side.branding and relationships with business and other market actors.stretch and loss of focus. ‘Don’t be all things to all people. any single organization would be hard pressed to maintain credibility in every sphere. particularly girls. the rapid growth and diversification of the NGO sector has also given rise to questions and concerns. an achievement widely credited to the country's pluralist service provision regime. NGOs will need to recognize the business wisdom of ‘sticking to their knitting’. very much as Intel has developed the concept of ‘Intel-inside’. Bangladesh has made remarkable progress on a range of social indicators over the last 15 years. despite the persistence of strong patriarchal norms. NGOs have developed commercial ventures in order to link poor producers with input and output markets. However.

Moreover. 1999. in line with the global trend of NGOs working as contractors for private firms and international organizations (Robinson. Such extensive business ventures undertaken by these NGOs not only make them financially independent of the government. and milk products (Daily Star. By 1995. the annual budget of BRAC reached US$106 million. Similarly. Complementary Strategic Analysis Strategic Alliances In order to achieve their social missions. many development NGOs have gained further power by expanding the scope of their financial transactions and taking over various profit-making economic enterprises.scope of the NGOs was far more limited. Grameen Bank and Proshika are now into businesses such as banking. BRAC has ventured into printing presses. telephone systems. By 1999. and the total loans made by Grameen Bank amounted to US$380 million (Barber. garment manufacturing.5 this growing economic power of NGOs makes them relatively autonomous and independent of financial controls exercised by the government. and the implications of different government-NGO partnerships. cold storage. and biotechnology (GBSG. many Bangladeshi NGOs are now involved in such business contracts and profitmaking enterprises. deep-tube wells. fisheries projects. 1999. retail outlets. transport services. GBSG. fertilizers. the appropriate political and commercial spaces for NGO activities. trade-offs between NGO sustainability and pro-poor orientation. There has been little systematic review of the public policy implications of the changing character of NGOs in Bangladesh. garments. 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. Islam. 1996a). . 1999). NGOs are increasingly thinking more strategically about partnering with businesses to create shared value. shopping complexes. For example. 2000. Finally. 1997: 59). but also enable them to influence government policies in the relevant economic sectors. 1996b: 12). World Bank. 2000). cold storage.

This mutual interest. NGOs are rethinking their relationship with the private sector to better meet their social missions. fueled by the private sector's assets. There is little official recognition of NGO programs (such as education programs). NGOs recognize that the people they are trying to serve are also companies' customers and suppliers or live in the communities where businesses operate. Save the Children has helped Proctor & Gamble develop new markets for its sanitary products in developing countries. Alliances with donors There are a number of ways in which donors provide direct financing to NGOs in Bangladesh. and investment potential. In the process. Riding the wave of public-private partnerships and the idea of shared value. donors have financed the whole range of NGO activities. 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 is weak. While Proctor & Gamble benefits from Save the Children's awareness-building and demand generation. can help scale NGO impact in sustainable ways.000 women now have jobs. donor funds may be pooled and a donor-liaison function introduced to coordinate support and reduce transaction costs for the NGOs.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. In recent years. the recognition that partnerships with smaller . and in a few of these cases the institution develops into a different legal entity by the end of the funding period. For example. One obstacle in increasing NGO-government collaboration is that contracting arrangements have had a long history of being problematic. CARE has helped Unilever and six other companies increase the reach of their products in Bangladesh through a rural sales network. skills. Save the Children views the partnership as a way to stop dropout rates among young girls in resource constrained settings. In some instances. The most common is funding for specific projects. Where financing needs are large. which continue to depend largely on external grants. almost 3. Increasingly.

USAID. It is part of the ICT related micro-financing initiatives within the global “ICT Empowerment Network”. Cisco partnered with Grameen Solutions to establish business centers in rural Bangladesh that serve as distribution points for a variety of services. healthcare.NGOs carry high transaction costs has increased reliance on wholesale vehicles. health care. while a Cisco grant supports a project team and helps establish test centers for a pilot. such as birth and death certificates. Grameen determines the mix of services and recruits qualified entrepreneurs to run the centers. 1999. adult literacy. 1997. 1994). and Norwegian Agency for Development Cooperation. The initiative helps finance and train qualified entrepreneurs to set up and run business centers in rural Bangladesh. Wood. Because there are many thousands of rural communities in Bangladesh. many of these influential bilateral agencies. are now in favor of pursuing their objectives through local NGOs in sectors such as primary education. in which an agency manages a pool of money for which smaller NGOs compete. In its endeavor to promote ICT entrepreneurship and innovation in emerging markets. gender issues. human rights. distance learning. this program has vast potential for improving livelihoods throughout the country. In the future. Cisco pledged help to launch a rural business center pilot program and provide funding for three pilot business centers in Bangladesh. Netherlands Organization for International Development Corporation. Swedish International Development Agency. and Danish Agency for Development Assistance—are increasingly in favor of working with local NGOs in developing countries. rural banking. family planning. Alliances with IT businesses A good example could be the partnership between Cisco and Grameen Solution. which used to have direct relationships with the government. and retail sales of such necessities as hybrid seeds. capacity building. Alliances with bilateral agencies Many bilateral agencies from developed nations—including the British Overseas Development Administration. and the environment (CIDA. 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 . Canadian International Development Agency. In Bangladesh.

while assuring revenue growth. BPO operators look for opportunity to raise their profile as they seek to attract additional funding. In today's cost-conscious. Outsourcing functions like customer care. 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. results-driven business world.corporations and market their offerings for mutual gain. 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. 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. supply management. recording of all calls. also knowledge transfer for skilled workers with training and development is relatively cheaper. on demand walk in site visits for the clients etc. like most companies are staying agile by turning to BPO as a tool to save time and costs. contributions . quality monitoring. paper less floors. NGOs. 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. higher supply of labor. 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.

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. Factors that should be included in a service level agreement in this area of to an operator who will provide them with a world class solution –raise their profile. In this area NGOs often raise concerns that in many cases the way BPO handles the resources lent by NGOs can breach confidentiality. The areas of concern to NGO’s that can be included in the SLA and in some cases are specified in SLA’s 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 . As mentioned previously the area of costs and quality.

These NGO’s would benefit from an organization providing on demand/web based accounting services. • Financial Management – Smaller NGOs quickly out grow their capacity to track funds and provide proper accounts.• • • • • • • • • • 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. .

1996). . The frame work was attentive toward relatively unimportant issues more prominently. Previously foreign NGOs and NGOs receiving foreign funds. Clearance from committees at various stages and inter-ministerial bureaucratic procedures not only increased paper work for the NGOs. government could not monitor the NGO activities properly which resulted in wastage of resources and brought the NGO activity under criticism in general. 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. The 1980s witnessed a huge accumulation of projects pending government approval (World Bank. Due to insufficient manpower and lack of a central body.Legal Issues in NGO Sector The legal framework for NGOs in Bangladesh set the code for operation for all the organizations. working in Bangladesh had to apply to different government agencies for registration and various approval and permissions. Until 1990. but also resulted in the loss of substantial funds due to delays in the process. 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.

NGOs of foreign .NGOs had to follow a complex set of rules and procedures. Societies Registration Act of 1860 2. They had to apply to different government ministries and departments for registration. 1. The laws for establishment do very little to impose a workable internal governance regime or external accountability standards. project approval and permission to obtain foreign funds. • Establishment: NGOs in Bangladesh formed or established under the following pieces of legislation: 1. Companies Act of 1913 (amended 1994) • Registration: In addition. Foreign Donations (Voluntary Activities) Regulation Ordinance of 1977 (amended 1982)(known as FDR) • Internal Governance and External Accountability: The rules for internal governance and external accountability for NGOs in Bangladesh are fairly basic. Trusts Act – clear accounts must be maintained. unless they are registered with NGOAB. in certain circumstances: 1. Societies Act – requirement of annual meeting but no requirement of annual accounts 2. NGOs must have been registered under the following laws. The Voluntary Social Welfare Agencies (Registration and Control Ordinance). the government created the NGOAB within the Ministry of Establishment to coordinate and regulates the activities of NGOs operating with foreign funding. Every NGO needed to follow different legal acts for different purposes. 1961 (SWO) 2. Trusts Act of 1882 3. beneficiary may obtain on request (charitable trusts rules unclear) Creation of NGO Affairs Bureau (NGOAB): In 1990.

The bureau has 67 employees including 18 officers and 48 staffs. It helps them obtain registration. Formulation of reports on NGO activities and take appropriate measures. Liaison with the donors and the NGOs. (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. is obtained from the NGOAB by the NGOs concerned. The NGOAB`s establishment has positively changed the enabling environment for NGOs. evaluation and inspection of NGO activities. The necessary approval for working with foreign donations. • • • • • • • • Examination and evaluation of reports/returns submitted by the NGOs. Approval of proposals for one-time grants. with a short period. Separate approval for all projects is required from the NGOAB. It is now located within the prime Minister’s office and is responsible for all contact with NGOs under the Foreign Donations (Voluntary Activities) Regulation Ordinance. Coordination. known as the FD Registration. Enlistment of Chartered Accounting Firms for auditing of Accounts of the NGO. monitoring. The NGOAB was therefore created to serve its primary objective of providing a one-stop service for the NGOs. . 1978. approval and permission with respect to program implementation and receiving money from abroad. Collection of fees/service charges levied by the government.origin also come under the preview of the NGOAB. fund releases. • Approval of NGO projects. permission for appointment of foreign expatriate consultants and fixation of their tenure. Inspection of field level NGO activities and examining their accounts. The NGO Affairs Bureau (NGOAB) is headed by a Director General (DG) and assisted by three Directors.

government has established the Government NGO Consultative Council (GNCC) by a Gazette notification. dated 17th October. bureaucratic requirements have slowly reduced and some unnecessary paper work has been eliminated. To increase mutual understanding and cooperation between GOB and the NGOs for the overall development of the country.The objectives of the establishing the GNCC are: 1. The remaining seven positions are to be filled in according to the advice of the council. To identify and discuss issues which impede GO-NGO cooperation and develop an improved policy and institutional environment for GO-NGO Cooperation.• Other matters relating to NGO Affairs. Establishment of the government NGO consultative council In order to provide a forum for open dialogue between the Government and the NGOs. 3. The Director-General of the NGOAB is the ex-offico member-secretary to this council. 4. To propose measure to simplify and improve the regulatory system for creating an enabling environment for governing NGO activities. To suggest modalities for greater involvement of NGOs in national development. 1996. . The chairman of the council is appointed by the government. 5. The council has a maximum of 23 members. 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. To suggest measure to strengthen the monitoring and evaluation capacity of the NGOAB partner NGOs with a view to ensuring accountability and transparency for development assistance funds. 2. which include six representatives nominated by the government from concerned Ministry/Division and eight highest level appropriate NGO representatives nominated by the ADAB. Since the establishment of the NGOAB.

Fiscal framework The fiscal framework for NGOs in Bangladesh is not supportive enough of the sector.Representatives are appointed for two years and no individual can serve more than two consecutive terms. there are virtually no provisions for deduction of corporate or individual contributions to NGOs. including income from “income-generating” activities. NGOs in Bangladesh should not be called upon to pay tax on any income. In this context Federation of NGOs in . even if the Income Tax Manual does not reflect these changes. and the law should then be consistently applied to all NGOs. There are also clear indications that the Finance Acts of 1998 and 1999 made NGOs subject to tax on their income.850 NGOs from across the country. the taxability of income generating activities needs clarification. Disruption of the core body from its core objective of protection of the interests of the NGO sector and harassments on the NGOs by different Government agencies caused an acute sense of uncertainty and concern among the NGOs. NGOs and the Government are both subject to VAT on their purchases. Supporting institution Important institutional body which facilitate the regulatory framework and also operation of NGOs in Bangladesh in a significant way. According to the way the law is written. Some NGOs are exempt from import VAT and customs duties on imports of goods used for relief and rehabilitation purposes. Emergence of FNB Federation of NGOs in Bangladesh (FNB) was formed replacing the “National NGO Coordination Committee” through holding the 2nd National Convention of the NGOs on 23 February 2003 in presence of officials/executives representing 1. This is inconsistent with good international practice. In addition. While income tax exemption is available.

. The objectives of the Federation are: • • Protect and secure the lawful interests of the NGO community at all levels. • Collect and disseminate statistical and other information and make efforts for the spread of technical. ensure effective coordination among its members and stakeholders inspiring the practices of democratic and secular values in programs and activities. • Promote friendly relationship and broad consensus of purpose amongst all NGOs at all levels. overall socio economic development of the country as well as building a just. • Initiate and lead direct and indirect organized action in the best interest of the NGO community in the country. In order to achieve this. FNB’s vision is to facilitate and contribute in organizing the processes of poverty alleviation. and programs in the best interest of the poor. Inculcate amongst members the spirit of development free from partisan politics and sectarianism of all kinds. the ethnic minority and various marginalized groups including the aged and the disabled. uphold.Bangladesh was established and registered on 4 May 2003 from the Registrar of Joint Stock Companies under the Societies Registration Act. • • Enhance the capacity of small member organizations through training. equitable and enlightened society free from all sorts of deprivations particularly for the disadvantaged and marginalized sections. economic and management knowledge to strengthen NGO activities in the country. XXI of 1860. Promote and support the programs of member NGOs in Bangladesh by creating an enabling environment for them. • Encourage gender proactive policies and programs. protect and promote the interests of the NGO sector.

Ethical issues in NGO sectors can be divided into three important sub parts. • Establish a Human Resources Development Center for staff development of the NGOs Ethical Issues in NGO Sector Ethics is a very important issue in any business industry or sector in any country. Organizations need to be accountable to many different sets of stakeholders.• Promote good practices. and NGO sector in Bangladesh in no exception. equity. • • • • Institutional donors provide funding. good governance. Supporters provide their money and time. Beneficiaries provide the basis for an organization's purpose and moral legitimacy. human rights and gender pro-activity amongst members. Significant ethical standard give the sector an edge and trustworthiness to some extent among the stakeholders. • Promote and establish a Code of Conduct based on honor. Governments provide legal and regulatory frameworks. secular values and ethical standards amongst member NGOs to ensure transparency and fairness in the NGO sector. o Accountability o Transparency o Intention Accountability NGO accountability is a complex issue. . such as.

there is less opportunity for check and balance. The board of directors or committees is often a sort of syndicate and often compromise with the unethical activities of the chief executives. the strength and clarity of their different accountability relationships vary greatly. Effectively balancing the needs of these different stakeholders is the bottom line of being accountable. The main problem is that as this sector is outside the government sphere and has a system of its own. Achieving accountability to beneficiaries is crucial both to fulfilling an organization’s mission and to maintaining its legitimacy. The problem for most self-regulation initiatives is that the standards they set are not strengthening and clarifying the relationships with these different sets of stakeholders equally. Transparency Transparency in the sector is essential as the NGO sector is certainly a most important sector in the country. the matter of their transparency is certainly an important question. hold all the power. with exceptions of course. An organization asking good governance must support transparency in every step to find the moral footing in the sector. For this reason the issue of beneficiary accountability needs to have a more central position in the standards set through self-regulation initiatives. and provide a more detailed description of what increased downward accountability should mean in practice. They play a supportive role to the government in almost every area. With the NGOs playing such a significant role. This many times create situation of inequity in the organization and the sector overall. Some selfregulation initiatives do address this concern. The programs of some NGOs of Bangladesh have even been recognized as international models today.Each of these sets of stakeholders has a very different level of leverage and power over an NGO. As a result. Many of the inherent problems of the government sector and private sector in Bangladesh also exist in the NGO sector. The failure to define the relationship between the board and the management has result in a scenario in which no one takes responsibility of any corruption or misdeed and as a result general . Those in the top management of the NGO sector.

In several articles a lack of transparency in the management. in recent times we have seen an unfortunate outcome in several large organizations of the sector. NGOs must work with Transparency International and other institutional partners and private donors in order to fight corruption effectively. Good governance and transparency are at the heart of NGO legitimacy. Intention . who allegedly use their connections for undue advantage. New position is often created for appointing people on the basis of personal relationship or recommendation. The concerned government official is often bribed for getting different works done. Examples of financial transaction were also evident in some recruitment. misuse of funds. budget. In many cases retired government officials are employed. general fund. Bribes to the Bureau and other Government Offices are also very common event in this sector. Several unwanted activities are in run which are actually hampering the transparency of the sector. Information on accounts is not often documented properly.people and beneficiaries suffer. evaluation report. Samata and Jubok but still chief executives of these organizations are not significantly penalized and also got ample shelter from civil society. Corruption has also entered in this sector. There is no strong initiative from donors to make the NGOs disclose their documents. Project proposals. Employees and service recipients are not informed about the policies. NGOs are often reluctant to disclose information especially those on finance and human resource management. In recent times the country has seen the disaster of Proshika. and misappropriation of resources were found out as significant issues in this sector. Selection process often lacks transparency. audit report. Many NGOs offer bribe or gift in order to get government projects. Many NGOs provide speed money in order to get the fund released. financial irregularities. selection board takes place to recruit a pre-selected candidate. Recruitment and promotion are found to take place on the basis of nepotism and personal relationship with the chief executive. accounts of the organization are often treated as highly confidential. Because of this shortcoming.

To set ethical standard in the sector intentions of all relevant parties play a significant role. .  Board members should take more responsibility and accountability toward other stake holder so that they have answers to every controversial issue.  Donors should encourage the NGOs to disclose their documents and be transparent about financial transactions.  Participatory decision making should be part of the NGO culture so that sole decision making habit is changed and transparency is ensured. Every member of the sector should have moral intentions to avoid corruption and increase accountability and transparency.

NGOs have transformed themselves by changing or incorporating new goals in order to face the challenges which they faced from the environment in which they operate. geographic. the untended population of the society. Active presences of NGOs are essential for the overall and social development of Bangladesh in every aspect. health etc. education. .Conclusion This paper has attempted to analyze overall scenario of sector of NGOs in Bangladesh. family planning. cultural. NGOs are much acknowledged. nonprofit organization but they make themselves essential in every necessary circumstance. The NGOs started in a war stricken Bangladesh with relief and rehabilitation program but now they are present in Bangladesh’s socio-economic. In Bangladesh. For the betterment of the destitute and the helpless. NGOs started their activities as voluntary. NGOs are more successful in some aspects of development where the government is playing a secondary role and government and NGOs work hand in hand to develop the society and country.

If NGOs can overcome these limitations then it can surely be hoped that they continue playing the role of savior of poverty eradication and social development in Bangladesh and lead the country to sustainable economic growth and development. differentiating outside target people and weak relationship. such as voter education. 4.e. participating in commercial activities. This needs to be addressed in any legal reform effort. partial and sub-divided working periphery. It is extremely important for NGOs to be required to use good accounting rules developed especially . . 2.Recommendation 1. There are currently no provisions in law clearly dealing with the issue of political activities by NGOs. leaving out the ultra poor. Some limitations was observed in the NGO effort to poverty eradication for i. grass roots lobbying. the rules on political activities should also clearly permit NGOs to engage in a wide range of democratic development activities. etc. 3. which deals with internal governance and external accountability for NGOs. Also modified regulatory framework is needed to address the issue of domestic funding and to properly assist the NGOs which are collecting funds from Bangladeshi donors. There is very little in the principal registration laws (apart from the Companies Act). On the other hand. This needs to be rectified by adopting rules that clearly forbid public benefit NGOs from engaging in devotee political activities. area based differences in activities/projects. supporting political parties etc.

For approval of projects. In most cases it is found that every field officer has to cover too much beneficiaries groups and supervision and demonstration cannot satisfy the beneficiaries group members. NGOs should be required to submit the names of its Board Members and/or Executive Committee and the number of staff positions in each category. The Government should involve NGOs in the design and formation of project through facilitation by ADAB and others NGO network. Development NGOs should attempt to spread their work more evenly across the country and avoid overlaps resulting from concentration in only a few geographical areas and definition of target groups should reflect local realities and be adaptable to changing circumstances. 7. 9. 8. 6. Thus the number of competent field workers should be increased. should not be required. Staff names. especially in case of new groups. . NGOs working with micro cost effective program should continue to build on lessons learnt. however. The critical importance of credit discipline and peer responsibilities is two examples. NGOs should invest in action research to identify better and most cost effective means to reach the poor.5. Government and development NGOs should on successful practices collaboration as achieved in poverty alleviation programs.

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thefinancialexpress-bd.    (accessed May 30.odihpn. 2013) http://www.php/component/content/article?id=677:transparency-inthe-ngo-sector-is-essential (accessed May 30.ti-bangladesh. Anu. NGOs’ socio-economic impact in Bangladesh.php?news_id=96732&date=2012-02-02 (accessed May 30. 2013)  http://www.php?page=40 (accessed May February 2. 2013). 2013) Appendix A1: Organogram of NGOAB .ngofederationbd. 2012.