NGOs told to publish financial reports

The Jakarta Post, Jakarta

Non-governmental organizations and other fund-receiving bodies should increase their accountability by publishing financial reports, which will in turn earn the public's trust, NGOs themselves are saying.

Darwina Sri Widjajanti, executive director at the Sustainable Development Foundation, said the accountability of NGOs is often brought under question and that many in the general public are unaware what an NGO is.

"Therefore, NGOs should make themselves credible. If we want other people to be transparent, we should start with ourselves," Darwina said at the launching of the Indonesian Philanthropy Association on Friday.

She said NGOs and other fund-recipient organizations should undergo both program and financial auditing to gain the public's trust. A program audit would be used to determine the impact of a program on a community, while a financial audit would check the usage and flow of money in the organization.

"The operational cost should not exceed 20 percent of the program cost. If this happens, the activity of an organization could be construed as an attempt to enrich itself," she said.

A researcher from the Public Interest Research and Advocacy Center, Hamid Abidin, said people often prefer to donate directly to those needing assistance rather than through charitable bodies due to mistrust.

"There's a fear that donations will not reach the needy people if donated through an organization. Giving through an organized body means you may have to wait a few years to see the results," he said.

He added that in America, several organizations had launched a donor's bill of rights to provide clear guidelines on their responsibilities and rights in donation matters.

"It has something to do with public trust building and the relationship between donors and social organizations. Once that is understood, organizations would make financial reports because people demand accountability. We will have to have donor training to get people to realize that it's better to give in an organized way," he said.

Chief executive of the Robin Hood Foundation of New Zealand Jude Mannion said that in her country the accreditation was given through a tax exemption. She added that a simple accreditation process that is not burdensome for NGOs would be ideal.

Indonesia currently has no such accreditation system.

"An NGO in New Zealand can get a tax exemption just by applying to the tax department, showing its books, accounts and being transparent. It's not arduous, it's a very simple process. A company can give NGOs up to five percent of its net revenue as a donation and that's tax deductible. It works really well," she said.