Nonprofit sector: government policy and future issues
The objective of this paper is to examine the role played by government policy in fostering this process of growth of the nonprofit sector of Pakistan and to review the key issues faced by the sector at this time.

The nonprofit sector remains relatively small and underdeveloped in Pakistan. During the decade of the 1990s, it has demonstrated some nascent growth resulting from a number of favourable factors like the return to democracy, the growing push towards deregulation and privatization, the process of globalization and the emergence of international coalitions of civil society and the deterioration in the financial position of governments which has limited the public provision of social services.

Of particular concern are, first, the overall posture of the government towards the nonprofit sector, the types of policies in place, and the underlying philosophy or principles that guide policy making. Second, the forms of support to the nonprofit sector by different levels of government. Third, the posture of international organizations and supranational governments towards local nonprofit organizations. Fourth, the role played by nonprofit organizations in introducing, shaping and implementing public policies and, fifth, the major issues facing the nonprofit sector at the present time.

The objective of this paper is to analyze government policy towards the nonprofit sector in Pakistan over the last two decades and review some major issues facing the sector at the present time. The methodology is primarily based on the review of available literature and government policy documents, and interviews with the experts of the field. The paper is organized in four parts. Section I describes the policy environment, including the posture of government and forms and extent of official support. Section II discusses the role of nonprofit organizations as vehicles of policy. Finally in Section III we identify some of the major issues facing the nonprofit sector.

 

Policy environment

Overall posture of government

A number of questions arise with regard to the overall posture of government, as follows: Is the national government generally supportive, hostile or neutral towards nonprofit organizations? Is there an explicit government policy towards nonprofit organizations (NPOs)? What are the philosophy and principles that lie behind this policy? Are there significant differences among major political parties or factions with respect to their posture towards the nonprofit sector?

By and large, government policy towards the nonprofit sector has lacked consistency. During the 1990s, there have been periods when the policy can be considered to have been broadly supportive. This is evidenced by increasing reference in recent five year plan documents which have emphasized the role of nonprofit organizations (see Box 1), as compared to previous plans. Other supportive acts include the granting of special fiscal incentives for philanthropic contributions by corporate entities or individuals to nonprofit organizations and the explicit recognition given to the role of nonprofit organizations in major programs of social development like the Social Action Program and the Family Planning Program. Perhaps as the ultimate symbol of recognition of the role of nonprofit organizations, well-known leaders of civil society representing different non-governmental entities were inducted into the federal cabinet in October 1999 following the military takeover. Important portfolios like information and broadcasting, education, environment, women, population planning and local government have been allocated to these representatives.

As opposed to this, a number of actions have indicated a hostile attitude, especially with regard to non-governmental organizations engaged in either social or political advocacy. This culminated in 1998 in intelligence enquiries, attacks and deregistration by provincial government of Punjab of advocacy groups. Since 1996, there has also been pending with the parliament, a NGO Bill which many see as an attempt by the government to bring the nonprofit sector directly under its control and regulation.

There are a number of factors that explain the dichotomy in government's posture towards the nonprofit sector. First, while government is supportive at the policy level, it is obstructionist at the operational level of line departments of federal, provincial and local governments who see non-governmental organizations as competitive with respect to funds and influence. Enhanced role of the latter is seen as cutting into the functions and responsibility of the former.

Second, government is generally supportive of the welfare and service providing role of the nonprofit sector, but openly hostile with regard to the role of nonprofit organizations in social and political advocacy. As highlighted earlier, the granting of tax exemption to charitable donations made primarily to social welfare nonprofit organizations like the Edhi Foundation and the explicit recognition of the role of nonprofit organizations in programs like SAP in social service delivery are demonstrative of the support. As opposed to this, governments, have felt increasingly threatened by the role played by nonprofit organizations in mobilizing support of civil society at large on issues like violence against women, honor killings, blasphemy law, freedom of the press, accountability and corruption, etc. The resulting hostility has been reflected in attempts at penetration of various nonprofit organizations and, in extreme cases, at attempts even for closure through deregistration.

Nonprofit organizations in five year plans

The sixth five year plan (1983-88) exhibited a strong orientation towards welfare but makes no mention of nonprofit organizations as service and welfare intermediaries. The seventh five year plan (1988-93) mentions nonprofit organizations for the first time and highlights their emergence due to the inept functioning of public agencies. The eighth five year plan (1993-98) recognizes the heightened contribution of nonprofit organizations but emphasizes the need for monitoring and regulating their role. Moreover, the entire chapter on social welfare echoes a parochial and conservative view of nonprofit organizations as largely social welfare agencies. There is no recognition yet of the nonprofit sector as an autonomous and vibrant sector of the economy.

The posture has also tended to vary among different parts of government. By and large, politicians from the ruling parties (like the Pakistan People's Party and Pakistan Muslim League) have been neutral in their attitude towards nonprofit organizations. This is based on the perception that in Pakistan such organizations have not yet become influential enough to impact significantly on the political agenda and the voting choices of the electorate. Bureaucracies, especially in the finance and planning ministries, are mostly supportive because of the realization that in the presence of severe fiscal constraints, enhanced role of nonprofit organizations in service delivery saves money for the government. Line ministries have an ambivalent attitude and prefer to use non-governmental organizations only when there is a well-defined gap in capacity or resources. Intelligence and security agencies are generally hostile and openly distrustful of nonprofit organizations, especially those performing an advocacy role.

There appears also to be another major dichotomy in government's posture depending upon the nature of the nonprofit organization. There is a greater tendency to support 'indigenous' nonprofit organizations, which mobilize resources locally and frequently operate at the grass roots level in order to mobilize communities and prepare them for organizing the provision of local services. Such support arises from the recognition that there are serious limitations in the outreach of government especially to pockets of poverty in far flung backward areas and this task has to be left to local NGOs. It is also predicated on the need to promote 'self-help' by communities so that the burden on government is minimized. The best example of this is the establishment of Rural Support Programs at the national and provincial levels to perform the task of social mobilization through establishment of CBOs at the village level. In the mid-1990s the government (of the Pakistan Muslim League) made a sizeable allocation of Rs 500 million to establish an endowment fund for the NRSP, which has been modelled on the AKRSP1, and has since played a major role in promoting the development of CBOs. It has also emerged as a major intermediary for channelizing microcredit.

As opposed to this, there is hostility to 'foreign-funded' nonprofit organizations, whose operations remain largely outside the regulatory control of government either because they are part of some large international umbrella nonprofit organization or because they receive funding directly from bilateral or multilateral donor agencies. However, the hostility arises not only because of the financial and functional autonomy but mainly because many of these nonprofit organizations have taken up causes like human and women's rights, environment, political freedom, nuclear disarmament, municipal building regulations, etc., which are considered politically sensitive or have security implications.

Given the lack of consistency in the government posture, no explicit comprehensive or cohesive policy has yet been articulated with respect to the nonprofit sector. This is also the consequence of the absence of an institutional mechanism to coordinate the role of different registration authorities (as highlighted in SPDC, 2002a). Nevertheless, some elements of the implicit policy towards nonprofit organizations can be adduced from behaviour and general policy statements.

First, the implicit policy appears to be that the nonprofit sector should preferably stay way from issues that impinge on national security or upon strategic interests and relations with other countries. Also, the advocacy role in the context of sensitive social, religious and political issues is to be discouraged.

Second, the implicit policy encourages non-governmental involvement in the areas of social welfare and social sector delivery. For this purpose, fiscal incentives have been provided, a system of partial grant funding and, more recently, a more liberal approach towards public-private partnerships have been put in place to enhance the role of nonprofit organizations.

Third, there is emphasis now on the need to develop an appropriate legal and regulatory framework within which institutions in the non-government sector can operate in a transparent and accountable manner. The revival in 1999 of the NGO Bill, pending in the Senate since 1996, highlighted the motivation for greater 'control' of nonprofit organizations. Present negotiations over the draft of the Bill (and a version of the Bill proposed by the Pakistan NGO Forum), which involve greater consultation, indicate a change away from control towards an approach of facilitation and developing an enabling environment. This positive change in the implicit policy is possibly a reflection of the influence of NGO representatives in the federal cabinet and the need to provide some space for nonprofit organizations to operate as a substitute for the ban on political activity under the military regime.

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