What Is an NGO (Non-Governmental Organization)?

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The non-governmental organization (NGO) has a long and storied tradition in the U.S. and abroad, making a difference for millions of people in the process.

In a word, an NGO is any non-government organization that acts as a non-profit, charitable or voluntary group that is created and operated in a local community, on a regional or nationwide basis, or on a global capacity.

While the charter of an NGO may broadly differ from the next one, all NGOs exist to support humanitarian issues and to connect everyday individuals and groups with public and private enterprise, in an effort to better the lives of those individuals or groups that an NGO represents.

NGOs operate on a wide spectrum of the social/humanitarian front, including health and human services and ecological, environmental and public policy advocacy, among other mainstay global issues.

Among the services NGOs provide on the humanitarian front are data analysis, capital funding, subject-matter expertise, and advocacy, as well as public policy follow-through on key political matters.

NGOs: Background

The history of non-governmental organizations dates back to 1945, when NGOs were officially recognized by Article 71 in the charter of the newly-minted United Nations, in New York City.

In that charter, the U.N. recognized the existence of NGOs, even though the formal definition of a non-government organization is other than what the title stated - NGOs would be created and operated without any government participation or interference, although any NGO could receive government backing in the form of funding and advisory aid.

NGO backers are quick to say that NGOs are not exactly nonprofit organizations, like The Red Cross (which is actually an NGO/non-profit hybrid), the YMCA or The American Legion. By and large, an NGO is deemed as a humanitarian agency that exists across national borders, operates internationally and doesn't have the same funding, tax, or operational status as a non-profit group.

As NGOs are constructed on a non-profit basis that acts outside of any government interference, they can and do work with non-profit groups to improve areas of interest on local, regional, national, or international levels.

Above all, the key term to keep in mind when defining a non-government organization is "cooperative" and not "commercial."

Income Sources for NGOs

Non-government organizations get their operating capital in a variety of ways, but the main chunk of funding comes from three sources of income:

Donor Funding

Funding from individual, corporate and government funding (more on that below) is common with NGOs, and may include direct donations, project funding, charitable events, and lately, crowd-funding campaigns. Donor funding is usually a short-term effort, with donations made either as a single, one-off donation, or for a period of one, two or three years.

Income-Generating Efforts 

Non-government organizations also rely on self-directed income generation efforts. Chief among them are membership dues, product sales, in-kind contributions, and subscription fees, among other revenue-generating devices. These income-generating campaigns are long-term in nature.

Capital Investments 

Just like any individual, corporation or non-profit, an NGO can also raise funds through investments in the capital markets, including investments made through endowments, trust funds, stock and bond market investments, and other capital markets. By and large, NGO investments are broadly-based (i.e., generic in nature) and aren't usually designed to be project-specific. They're also long-term in scope.

How Are NGOs Funded?

As NGOs have enough similarities with non-profits, at least on the financial front funding for non-government organizations is akin to funding for non-profit groups.

In that regard, NGOs rely on a network of funding groups to keep the lights on at night.

That's a vital component to the existence of any non-government group, as like any organization with staffing and operational costs, NGOs need cash to pay salaries, fund projects and public policy campaigns, pay for operational costs, and cover other costs that come part and parcel for any international organization with an ambitious charter.

In fact, many non-government organizations, like Habitat for Humanity, Americares, or Lutheran Services in America (which are among the largest NGOs in the U.S. in 2019), annual budgets can be in the hundreds of millions or even billions of dollars. (For example, as of 2018, Habitat for Humanity had an annual budget of almost $2 billion

How do Habitat for Humanity and legions of other NGOs get their funding? Through a variety of ways:

From Individual Donations

NGOs often receive donations from individual philanthropists and their foundations. For example, the United Nations received $1 billion from CNN founder Ted Turner and Bill and the Melinda Gates Foundation will ultimately receive over $30 billion from Berkshire Hathaway chief Warren Buffet. Other foundations rely on smaller donations from Main Street Americans, making individual donations a common and efficient way for NGOs to garner capital funding.

Government Funding

Even as advocates claim governments are supposed to be tied in any way to NGOs, local, state and federal governments actually provide funding to NGOs on a regular basis. Such funding is usually in-country and more often local (i.e., a local government providing funds to a local YMCA).

Local and National Companies

The private sector is also a big benefactor for NGOs, with companies donating to non-government organizations all the time. A larger company may do so primarily for the tax write-off while a smaller, local business may do so for branding reasons (i.e. having their name attached to a local NGO initiative.)

Local and Regional Foundations

Community foundations are also a regular source of funding to non-government organizations. Usually, if a local foundation shares the same passion for a cause or project that a local NGO is addressing, a donation makes a lot of sense for the foundation, who likely prefers to do business with a local non-government organization.

Types of NGOs

Since NGOs can come in different models (usually based on community, national, and international organizations involved in various humanitarian efforts), non-government organizations come in different types.

In a larger view, NGO types come in two modes - "operational" and "advocacy" NGOs. The former primarily targets development projects while the latter aims to promote and aid an individual cause, like AIDS or human trafficking.

Yet NGO types can be broken down deeper than that. That's how the World Bank views different types of NGOs, with the following designations for different non-government organizations:

BINGOs (Business-friendly International NGO)

This type of non-government organization is viewed as being business-friendly,  usually on a worldwide basis (for example, the Red Cross of Habitat for Humanity.)

ENGO (Environmental NGO)

This NGO model is environmental in scope and on a national or international level (for example, the World Wildlife Fund, which operates in a wide number of countries.)

GONGO (Government-Operated NGO)

The "GONGO" designation  is assigned to organizations formed largely through government efforts (for example, the International Union for Conservation of Nature.) While GONGOs are formed by governments, most worldwide advocacy groups still view them as NGOs, given their philosophical and charitable leanings.

INGO (International NGO)

Any global-based non-government group falls into this NGO category (for example, Oxfam International.)

QUANGO (Quasi-Autonomous NGO)

These hybrid, public/private NGOs are usually not overseen by a government body, but still are either financed or controlled by governments.

Examples of a Non-Government Organization

Good examples of a non-government organization are abundant, as there are plenty of NGOs out there doing good work on an international, national or community basis.

The following NGOs certainly fit the bill in that regard - each has a sterling reputation as an effective organization that has a track record of taking on tough issues and making a big difference.

Care

Care is a widely-known international NGO with an ambitious mission to end hunger and poverty and bring about social justice all over the world.

Doctors Without Borders

This NGO is staffed by an army of medical professionals who rush into areas of geopolitical distress and offer medical assistance to afflicted individuals who often have no access to quality health care and have nowhere else to go to avoid natural disasters or armed military conflict.

Oxfam International

This NGO is a good example of an international non-government organization that excels in going into troubled areas (like war zones or poverty-stricken countries) and provide direct humanitarian assistance in the form of medical, nutritional and educational assistance to individuals. Almost always, these individuals would otherwise have no access to much-needed help.

The General History Project

This NGO may be widespread in scope, but it's actually a fine example of a community-minded NGO. The GHP's aim is to go into global cities, towns and rural communities and record the life stories of the citizens who reside there. That process not only improves the historical record for a given community, it helps to enrich the culture and lifestyles of individuals, families and communities that otherwise may never have their stories told.

The Takeaway on NGOs

No matter the non-government organization and how it might differ from the next one, all NGOs do share a common theme - to serve a humanitarian purpose in a cooperative and non-commercial manner.

Make no mistake, they do so in every corner of the world.

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