Monday, December 6, 2010

High time for Indian Political Parties to learn fundraising from NGOs

The recently unearthed rot in Indian politics, where a corporate lobbyist was heard on the tapes trying to fix cabinet berths, poses questions on how political parties raise funds. One big reason for politicians to be gullible to corporate pressures, apart from greed, is the amount of money that is needed to contest elections.

The fundraising by political parties has been downright unprofessional and lacks transparency. In fact bollywood flicks like Omkara and Ishqiya has goons proudly calling their extortion work as ‘fundraising’. Is this really fundraising?

If the Indian political parties want to learn they have President Obama as a role model. President Obama's victory in the general election was aided by his tremendous fundraising success. Since the start of 2007, his campaign relied on bigger donors and smaller donors nearly equally, pulling in successive donations mostly over the Internet. After becoming his party's nominee, Obama declined public financing and the spending limits that came with it, making him the first major-party candidate since the system was created to reject taxpayers' money for the general election. The level of success he achieved using techniques of fundraising- mailers, new media, direct response television was unprecedented. The campaign relied a lot on small individual donors, who poured their hearts and wallets out. This technically reduces the dependence on big donors who may later arm twist.

Political parties in countries like UK , USA , Australia are already banking on individual donations . As per figures from Federal Election Commission contributions to federal candidates and political committees by individuals have increased during the past 10 years, and collectively, they are consistently larger during presidential election years. In the 2008 election cycle, the lawyer community alone contributed a massive $234 million to federal political candidates and interests.

Close to home are the Indian NGOs to take leaf from. In India where fundraising itself is at a nascent stage, fundraising from individuals is limited primarily to NGOs. Slowly but steadily the number of NGOs that raise funds professionally has seen an increase. Till few years back you could count them on your fingers. Today the list is much longer and includes not only the international NGOs but also homegrown small and medium sized NGOs. Since they raise money from small individual donors their dependence on larger funding agencies decreases. This in turn makes them freer to run their programmes.

Few universities have also now realized the importance of individual funds and have started approaching their alumni for funds. Recently, the University of Mumbai got its biggest donation of INR 320 million from an old student of Poddar College.

It is high time Indian political parties and political candidates start doing the same. Introduction of professional fundraising would make politicians freer from arm twisting major financers. In fact the answer lies in having a more focused approach towards donations from individuals. After all retail is the key word everywhere, be it a FMCG product, a restaurant chain, a shopping complex or a clothing brand. World over individuals are the biggest contributors to social fundraising .They are the most bankable in terms of continuity and loyalty even in the most difficult of times. Even the great economic turmoil did not deter individual contributions in the US or other parts of the world.

Is any Indian political party or candidate willing to take this route? Time will only tell.

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