During the COVID-19 pandemic, the country faced lockdowns for months, severely impacting daily life. A survey by the South Asian Network for Economic Modeling (SANEM) revealed that the poverty rate increased from 21.60 percent to 42 percent. During this period, questions were raised about the role of Non-Governmental Organizations (NGOs) or private development organizations, as many remained relatively inactive. These organizations began their journey in war-torn Bangladesh through relief and rehabilitation efforts, and their number and scope have since increased. However, analysts believe that with the expansion of their activities, NGOs are gradually moving away from the core areas of social development. They argue that instead of focusing on the socioeconomic development of marginalized communities, many more prominent NGOs are now shifting toward a corporate culture.

Bangladesh is referred to as the "land of NGOs." According to the Ministry of Social Welfare, the country has approximately 45 thousand NGOs. The latest data from the NGO Affairs Bureau mentions 2,636 registered NGOs. Notable among the large local NGOs are BRAC, Grameen, Proshika, TMSS, Asha, Caritas, RDRS Bangladesh, and Bureau Bangladesh, among others. These private development organizations now conduct various activities. However, beyond social initiatives, NGOs also engage in economic activities, particularly microcredit or small loan programs, as these allow easier access to the poor, especially women.

Additionally, being directly involved in income generation helps NGOs to become sustainable and long-lasting. Other significant sectors include education, health, human rights, family planning, environment, and the welfare of women and children. In recent years, the focus of NGOs has shifted towards national development, leading them to be presented as partners in development.

Khushi Kabir, a coordinator and rights activist of the ‘Nijera Kori,’ said to Bonik Barta, "There are very small NGOs as well as large ones. Therefore, the institutions in the NGO sector cannot be categorized into a single type. Most NGOs, whether small or large, work in microfinance. There are authorities for those who provide microcredit, and there is the NGO Bureau for those who bring in funds from outside. Money cannot be brought in without their permission. Certain regulations are in place, but we need to assess whether these systems function properly. I believe that accountability is essential for NGOs. It should be present for everyone, not just those who provide funds or the government; the transparency and accountability of NGOs should be maintained for everyone, especially those they work with."

Emphasizing the need for reforms, Khushi Kabir said, "The requirement for accountability and transparency in governance applies to every organization and individual. The reform of the NGO sector will depend on two aspects: first, whether those in the sector believe reform is necessary, and second, what do those who work with NGOs think? Most NGOs now provide microcredit services, which leaves many opportunities for ambiguity."

Sharmeen S Murshid, an advisor at the Ministry of Social Welfare, echoed sentiments similar to Bonik Barta's, stating, "There is a practice of misgovernance in the country. We strongly assert that reforms are needed within the state, and the same reforms are also necessary for NGOs. Within NGOs, there are multiple scopes where transparency can be improved. Although the transparency of NGOs is comparatively higher than that of the government, they play a crucial role in addressing the government's shortcomings."

Sharmeen S Murshid added, "We have a deficit in good governance and should move towards more efficient management. Large NGOs have somewhat adopted corporate management practices, but smaller ones have not been able to do so. There are gaps in internal management, efficiency, and good governance within NGOs, which must be made more efficient. An important issue is what the state wants to do with NGOs and how NGOs want to collaborate with the state. This is an area that needs to be re-evaluated."

The largest economic activity of NGOs is microcredit. Data from Bangladesh Bank reveals the extent of microcredit operations by the country's major NGOs. By the end of the 2023-24 fiscal year, distributed loans reached BDT 1.6077 trillion. Of this, BRAC distributed 43 percent, Asha distributed 31.47 percent, and Grameen Bank accounted for 15.35 percent. TMSS, Proshika, RDRS Bangladesh, and Caritas distributed 5.90 percent, 1.49 percent, 1.42 percent, and 0.55 percent of microcredit, respectively.

Muhammad Majedul, the Executive Director of the Microcredit Regulatory Authority, told Bonik Barta that recommendations have been sought regarding the changes needed from the authority's perspective. "We have submitted those recommendations. After verification, the government will take steps towards reforms. We also hold quarterly discussions with the institutions. They have some legal recommendations that will be considered for action by the government."

In 1972, Fazle Hasan Abed founded a private development organization called BRAC (Bangladesh Rural Advancement Committee). Within a couple of decades, the organization established a strong position by focusing on various socioeconomic activities, including the education of rural children and the socioeconomic advancement of rural poor, particularly women from ultra-poor households, to alleviate poverty. Over time, BRAC began to market products produced by rural people themselves. As time progressed, the business expanded. The organization distributed BDT 704.50 billion in microcredit in the last fiscal year.

BRAC operates a crafts business under the brand Aarong. In addition, the NGO has a university and a dairy farm. To connect poor producers in rural areas with expanding markets, BRAC has established various ventures, including printing and packaging, cold storage, seed production, shrimp and fish hatcheries, and a bull and buck station (for producing, processing, and distributing frozen semen). It also operates cattle breeding centers in 1,859 unions across 60 districts. Furthermore, BRAC has a tissue culture research laboratory and four seed research and production centers to promote crop diversification and develop new farming methods. Although the profits from these commercial initiatives are claimed to be spent on various activities such as education, health, and training, the organization notes this in its statements.

When contacted regarding this, BRAC's Chairman, Dr. Hossain Zillur Rahman, declined to comment immediately.

TMSS, a microcredit-based NGO, was established in the 1980s by Professor Dr. Hosne-Ara Begum. The organization's primary goals include poverty alleviation, women's empowerment, and the development of socioeconomic infrastructure. The institution has elevated its business aspects to a new level. TMSS is involved in primary and higher education, operating 36 educational institutions, including Pundra University of Science and Technology, TMSS Medical College, and the TMSS Medical College Dental Unit. In addition, under its social initiatives, TMSS has numerous enterprises. Notable among these are TMSS Handicrafts, TMSS Printing Press, TMSS Agro-Based Industries Limited, TMSS Dairy Farm, TMSS Domestic Employment Agency, TMSS Security Agency Limited, TMSS Mom-in Entertainment Park, and TMSS Travels and Tourism Limited, among others. The organization also conducts agriculture-related activities, training, skill development, and human rights.

In 1983, Nobel laureate Professor Muhammad Yunus established Grameen Bank to provide loan facilities to landless people in rural areas. To spread this social initiative nationally and internationally, he has founded nearly fifty institutions. According to the report of a review committee formed by the government regarding Grameen Bank, there are 48 institutions in which Dr. Muhammad Yunus and Grameen Bank officials serve as board directors and chairs.

In 1994, Grameen Bank established a nonprofit limited liability company called Grameen Fund. During establishing the Social Venture Capital Fund (SVCF), funded by Norad, CIDA, SIDA, US AID, and the Ford Foundation, BDT 490.1 million was transferred to the Grameen Fund. Subsequently, another nonprofit limited liability company named Grameen Kallyan was formed in 1996 through a transfer of BDT 442.5 million from the SVCF fund initiated by Grameen Bank.

Subsequently, through the individual and joint initiatives of Grameen Fund and Grameen Kalyan, 34 institutions were established with equity and loan assistance. In addition, under Dr. Muhammad Yunus's leadership, 11 other institutions were founded domestically and internationally. Grameen Fund finances 15 institutions, while Grameen Kalyan funds 13. Additionally, Grameen Telecom, established with funding from Grameen Kalyan, is financing another 12 institutions.

The Association for Social Advancement (ASA) began its journey in the late 1970s. Initially, it provided legal assistance, conducted awareness campaigns, organized journalist training, and worked on poverty alleviation. From there, it expanded into several sectors: education, lending, and small-scale agriculture. The organization works to improve the lives of poor women in rural and urban areas through its microcredit programs. Additionally, ASA has established a university.

Similarly, Proshika was founded around the same time to create an economically productive, socially just, environmentally sustainable, and truly democratic society. It has 14 projects focused on agricultural development, 10 in the fisheries sector, nine in forestry and fisheries, eight in irrigation, and one for ration improvement, totaling 42 projects. From 2014 to 2022, this organization provided loans of BDT 87.14 billion. In addition, it conducts various financial activities, including savings schemes.

Professor Dr. Hosne-Ara Begum, Executive Director of Thengamara Mohila Sabuj Sangha (TMSS), told Bonik Barta, "Overall, the journey of the NGO sector complements and supplements the government's development activities. The government lacks the personnel to intervene deeply and broadly at the grassroots level. NGOs have a greater capacity to ensure connections at the grassroots level for the people. As a result, positive outcomes, including development and productivity, emerge. This impact rises to the corporate or elite levels, becoming economically popular. If the grassroots level cannot purchase sandals or toothpaste, there will be no buyers for such products. Therefore, we increase the purchasing power of grassroots people, encourage them, and help them thrive. Overall, we prepare society for the purchase of various goods. In doing so, we observe significant profits for non-NGO corporates. Then, with the concept of social business, we establish various industries and factories in a corporate model. Labor dealings and selling prices are fair and low, which increases people's purchasing capacity."

She stated, "We were never part of the corporate sector, but we are being drawn into it. Other corporations and companies have sometimes engaged in extensive propaganda that NGOs are tax-free, which creates an uneven playing field. In reality, NGOs are not tax-free. We pay taxes like corporations do; only our microcredit activities are tax-free. We have to pay taxes everywhere else. What NGOs are doing now is good. However, we have not strayed from the core mission of NGOs. Instead, we have expanded our goals even further. Those who are maximizing profits are also urged not to focus solely on profit maximization, but to use their resources for social work."

Economist Professor Anu Muhammad noted that NGOs were initially established for social work, including addressing inequality, poverty alleviation, education, and healthcare. He told Bonik Barta in this context, "Our research has identified three trends among NGOs since the 1980s. One is regression, where they have moved away from their original commitments or declarations and shifted into financial activities. The second is integration, where they have become integrated with the state or government, thus becoming part of state programs. Initially, there was a dialogue based on exploitation and oppression, but due to their incorporation into the state framework, organizations are now choosing safer activities within a specific system. The third trend is corporatization, which can be seen as monopolization. Some NGOs have expanded significantly through commercial success, while others have become subcontractors. Through these three trends, we are now witnessing the rise of corporate NGOs."

The economist pointed out that BRAC primarily operates as a corporate NGO, saying, "They serve as a significant model for the corporate world. When an NGO becomes corporatized, it can remain exempt from taxes and VAT. Moreover, there is a visible form of private ownership in NGOs. By private ownership, I mean that an individual owns it, and then their heirs inherit that ownership. They can sell it or trade it. While there is no buying and selling in NGOs, we can see aspects of control, such as the roles or authority of heirs and family control. Although there are theoretical concepts about poor people's participation and participatory approaches, we often see control by a single family in practice. It becomes evident that one individual has control, followed by their heirs. The profits generated from this ultimately contribute to corporate expansion. This has emerged as an important trend in the development of capitalism in marginal capitalist countries."

The economist highlighted BRAC as a leading corporate NGO, "They are a significant model for the corporate world. When an NGO becomes corporatized, it can remain exempt from taxes and VAT. Moreover, there's a type of private ownership within NGOs. By private ownership, I mean one person will own it, and then heirs will inherit that ownership. They can buy and sell. While there isn't a buying and selling aspect in NGOs, we can see control or the role of heirs, authority, or familial control. Although there are theoretical aspects of participation for poor people's involvement, it is often controlled by a single family. It often results in one person's control followed by that of their heirs. The profits generated from this typically contribute to corporate expansion. This has emerged as an important trend in the development of capitalism in marginalized capitalist countries."

Shamsul Huda, Executive Director of ALRD, told Bonik Barta, "There is a significant crisis regarding job security. The NGO sector does not refer to a uniform model, as various types of work are carried out here—some focus on the environment, some on microcredit, and others on education. We work on land, agriculture, water, and the environment. NGOs that focus on rights-based work typically do not have projects for self-financing. As a result, job security for those working in these areas is not like that of government jobs. In specific projects, funding from donor agencies is utilized to provide as much job security as possible, but there are no resources beyond that to ensure security. NGOs working under the Microcredit Regulatory Authority can generate income. The number of such NGOs is high, and many have significant investments. They can take loans from banks and invest with that funding. Those working for many years have considerable financial resources due to the margins they maintain at the end of the year. Such NGOs can provide job security and other benefits if they choose to, but there are doubts about how much they provide." He emphasized the need for reform in the NGO sector.

Transparency International Bangladesh (TIB) conducted an inquiry into the governance of NGOs in 2018. According to their published report, there are significant shortcomings in NGOs' internal systems and processes. In most cases, local-level board members are friends or relatives of the Chief Executive Officer (CEO). In some instances, the CEO makes decisions without convening board meetings.

Regarding the accountability of NGOs, the TIB report states that reports are not prepared based on accurate information. These reports are then submitted to funding agencies. There is also a crisis in collecting field data, as most NGOs do not gather information from their beneficiaries. As a result, the report does not reflect how much these NGOs serve the public interest. Training policies for NGO staff are often not beneficial, and very few NGOs mention salary details in their job advertisements. Additionally, most NGOs do not have mechanisms to assess employee performance.

The report highlights that funding agencies, the NGO Affairs Bureau, and local influential individuals impact hiring within NGOs. Most NGOs are required to pay bribes to the NGO Affairs Bureau for fund disbursement. Some NGOs must also bribe local individuals, while local and national NGOs have to bribe officials from the NGO Affairs Bureau. There are also serious allegations of embezzlement against many NGOs.

In this regard, TIB's Executive Director, Dr. Iftekharuzzaman, told Bonik Barta, “NGOs have played a crucial role in economic change, governance, and corruption prevention, which is officially recognized. However, there are two main challenges: internal governance and bureaucratic complexities. From registration to fund disbursement, they face bureaucratic hurdles at various stages, which impact their operations and internal governance. Moreover, those involved in governance, human rights, and anti-corruption work face different kinds of pressure. Within the sector, many NGOs exhibit familial or individual-centered governance, where founders or executive heads run the organizations with their chosen or family members. However, this cannot be generalized. The practice of democracy and the lack of good governance often stem from this. The accountability of executive management lies with the board. If the board comprises their preferred individuals, then there is a risk of power misuse, and accountability is not ensured.”

SANEM's Executive Director, Dr. Selim Raihan, stated, “The activities of NGOs present a mixed picture. In some areas, NGOs have played a positive role at various times, especially in rural poverty alleviation. However, there have been instances where some NGOs did not use funds properly, and significant allegations regarding their governance have arisen over time. Larger NGOs tend to have stronger accountability mechanisms, whereas smaller ones often lack this strength, leading to allegations of irregularities. Overall, the picture is mixed.”

A study titled “NGO Governance in Bangladesh: An Empirical Inquiry” by Mohammad Selim and Md. Ruhul Amin highlights the challenges faced by NGOs. According to the research paper, decision-making processes are often dominated by a single individual, typically the executive director, who does not always consult with staff during decision-making. Moreover, this individual enjoys unlimited advantages in financial decisions. Control over donor communication, project budgeting, the organization’s common fund, and other related matters rests entirely with the executive director.

Additionally, there is no specific policy for personnel recruitment. The managing director predominantly makes such decisions. In this context, nepotism and favoritism significantly influence promotions and appointments, leading to instances of autocracy, favoritism, and corruption within NGOs.

Nasiruddin Patwari, the convener of the Nagorik Committee, told Bonik Barta, “There has been a significant crisis of trust in our NGO sector. Some NGOs have been run in a corporate style, resulting in some reaching the people, while many have fallen short. We are also witnessing destabilization in this sector. There have been major discrepancies in the financing of microcredit NGOs. Many say that 40 or 60 percent of NGO funds go towards administrative costs. Donor agencies are concerned about this issue as well. There is also a lack of transparency in how funds are utilized. Overall, the NGO sector needs reform. Many marginalized people united during the popular uprising. The country's NGOs work for marginalized communities but need to engage more closely with them. It would be better if NGOs could operate independently rather than being subservient to political parties. We must ensure that no foreign agenda is implemented. Reforming the NGO sector is necessary to work in conjunction with the culture of the people of Bengal. There is still a significant gap in trust between the public and NGOs. Large NGOs like BRAC, ASA, and Grameen are struggling. If we can work with transparency and integrity instead of being subservient to the government, we can achieve much for Bangladesh.”

Md. Saidur Rahman, the Director General of the NGO Bureau, told Bonik Barta, “The organizations under our purview operate according to their laws. We continue to monitor them. All regulations are in place and are being followed. However, changes and improvements can happen everywhere.”