The pillars of interest, that is, impact, innovation, and governance, are crucial for the evaluation process of NGOs. In the United States and other developed countries, the grading of NGOs is conducted by third parties. However, in India, the development of a standard model for evaluation is suggested at various platforms.
The recent ‘FCRA (Foreign Contribution Regulation Act) rules’ for NGOs by the Government of India have mandated capping administrative expenses to 20% (earlier 50%) for FCRA funds along with many other regulations. In this context, NGOs are of the view that it would create problems for them, whereas the government believes that it would improve the governance and the overall functioning of NGOs.
In India, the scoring of NGOs is based on their performance in multiple criteria in the ‘scoring and ranking procedure’. Each criterion falls into one or more of these pillars of interest. The three main pillars of interest are weighted in the ranking process: impact, innovation, and governance. The decision to weigh impact and innovation more heavily is to recognize recent arrivals to the non-profit scene that are already having a significant impact on the landscape.