Transformations in the social sector in India during COVID-19 pandemic

The COVID-19 pandemic changed the dynamics and trajectory of global economies. The organisations in the social sector in India also faced serious challenges, affecting their key areas like donor-, programme-, and funds management. Concurrently, the Foreign Contribution Regulation Act (FCRA), 1976 was amended, which ensured these organisations’ compliance to the required provisions as amended in the Act. This article showcases the challenges faced by social sector organisations in India during the pandemic, and the strategic roadmap that they adopted for their long-term growth perspective.

The COVID-19 pandemic took its toll across the globe and reshaped life as we know it. As the global economy was seriously impacted, organisations across the globe were forced to adapt to the new climate. Considering this impact, the social sector in India also took the plunge into transformation.

Why did the sector need to change?

The pandemic impacted several key areas in the social sector: programmes, funds, donor management and human resources. The organisations in this sector had to adapt to the changes to survive and grow. They did so for the wellbeing of the beneficiaries who are dependent on them, as well as wider society, which was also affected by the pandemic. Almost every time a disaster strikes, especially natural or man-made, the civil society/social sector/development sector, rise to the occasion, therefore playing a pivotal role in a variety of ways (Aldrich, 2008; Wagle & Warghade, 2006; Jalali, 2002; Mondal et al, 2015).

At the same time, there were amendments to the Foreign Contribution Regulation Act, 1976 (FCRA), effected on 29th September 2020. As a result of the FCRA amendments, these organisations had to change their strategies to comply with the amended act. Although human resources were affected during the pandemic, the predominant focus in the research is the core functions in the social sector. These are: donor management, programme management, and funds management.

Switching strategies

Organisations in the social sector usually receive donations from various sources which include the government, private agencies, and high net worth individuals. However, during the pandemic, the donations were often put on hold. Additionally, it was more challenging to raise donations through marketing and promotional challenges. Despite these hurdles, organisations continued to work and outline strategies for effectively managing the donors. This was done by eliciting feedback on programmes from their partner NGOs (strategic alliance partners/NGOs) and keeping the donors updated. Organisations further changed their promotional strategy to use technology, by introducing webinars, online marketing campaigns etc.

A number of programmes in the social sector suffered, again due to the pandemic. After the first lockdown, many programmes did not resume on a full scale and for those that did, the work on such programmes continued at a snail’s pace. Consequently, non-priority programmes were postponed, camps for beneficiaries were put on hold, and hospitals and staff were seconded to support COVID-19 patients, impacting the programme targets in the process. Surveying of programme operations as a process was halted. This reduced the confidence of the partner NGOs in the social organisations.

Large changes

In order to manage the programmes effectively, strategies were outlined that made use of technology. Online platforms were used so that partner NGOs could monitor programme operation, and videos were sent to the partner NGOs of the ongoing fieldwork. Hospitalisation of beneficiaries was reduced from three days to a single day, and social distancing was observed.

Similarly, funding was severely affected by COVID-10, leading to an increase in costs and a reduction in funding. Simultaneously, funds needed to be set aside for COVID precautions as requested by the government. Various strategies were outlined for effective fund management, which included defining whether the requested funds were urgent or priority. NGOs who had received funds were made accountable for their operation, and organisation staff took on additional duties as resources were reallocated. As a result of this strategy shift, NGOs were able to become self-sufficient by raising funds online and other new methods.

FCRA guidelines

Donor management:

For donors, the guidelines stated that grants from donor agencies cannot be transferred to partner organisations.

Hence the social organisations drew up strategies to adhere to the FCRA guidelines. In the case of donors, it was decided to hire researchers who would get paid directly from donor agency funding, permissible under the new guidelines.

Programme management:

The guidelines required the entire programme structure to be reengineered, affecting programme quality, sustainability, and smaller field level NGOs dependent on funding partners.

For programmes, the fundraising department decided on direct implementation, thus adopting scenario planning as a strategy.

Funds management:

The changes here regulated the use and transfer of funding. For example, surplus funds cannot be transferred; funding from foreign parties would be reviewed; transfer from one FCRA account to another was prohibited; and only 20% of received funding is allowed for administration expenses.

Hence, it was decided to direct funds either to the beneficiaries, or by signing a Memorandum of Understanding (MOU) between partner NGOs and donor agencies for work of these organisations to continue as it is.

However, some funds needed to be transferred to various partners. ‘Locked up’ money was used for payments such as purchase of equipment, because such organisations cannot fund partners who also have an FCRA account. Hence, it was decided that, until the existing funds are exhausted, this practice would be adopted, after which MOUs with donor agencies would be signed.

Donor agencies would directly transfer funds to the overseas account and not Indian accounts in case of organisational units registered overseas. These units would transfer funds to partner NGOs in India.

Concerning FCRA it can be said that separate research would have to be undertaken to understand the situation as it stands as of today.

Thus, it is evident that, in line with other sectors of the Indian economy, the social sector also had to face its set of challenges due to the pandemic, but, as always, this sector has stood tall and without faltering, has laid out strategies to ensure not only their own survival but long-term sustainability of those dependent upon them.


Mondal, D, Chowdhury, S, Dasu, D (2015), Role of Non-Governmental Organization in Disaster Management, Research Journal of Agricultural Sciences 6(Special), pp.1485- 1489, Disaster_Management
Aldrich, D, P, Crook, K (2008), Strong civil society as a double-edged sword: Siting trailers in post-Katrina New Orleans, Department of Political Science Faculty Publications. Paper 1, p. 380
Wagle, S,M, Warghade, S, (2006), Disaster Management: New Role for Civil Society Organizations in Changing Macro-Reality, pp.1-2
Jalali, R (2002), Chapter 4. Civil Society Organizations for Disaster Management, pp. 2-3

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