NGO Insights: Modern Educational Social & Cultural Organisation

Dated : 10 Oct 2013
  1. Sector and Positioning:

Modern Educational Social & Cultural Organisation (MESCO), ‘Helping people for a better tomorrow’, has evolved in the last 45 years into its present avatar. It is largely focused on Education but also involved in Medical Assistance and Women’s Empowerment.

It is a relatively large NGO which gets about two thirds of its income from Zakat. In its early days it started out by lending textbooks to students. Currently, it reaches out to around 450 needy students based on merit through various sponsorship/loan schemes and gives scholarships (some merit essential) to more than 2,000 students. Zakat inflows can only be distributed to Muslims so more than half of their beneficiaries tend to be Muslims. As the demand for aid exceeds the resources available, MESCO has taken a conscious decision to focus on existing students. This also helps reduce dropouts. Its sponsorship of the R. C. Mahim Municipal School has been a difficult journey due to limited support from the school management. Despite this, the pass rate of the school has soared from 11% to 80%!

MESCO has long been known as organization that collects old newspapers (raddi). The old newspapers collected from donors are sold and used for philanthropic purposes. While the sums collected are not large (4% of total income in FY13), the drive helps in increasing MESCO’s visibility and introduces donors to the organization who have later given in other ways as well.

  1. Financial Parameters:
  • Average income growth rate (CAGR) for the past four years (FY09-FY13) has been 9%. The rate would have been higher but has been impacted by the 20% fall in total income for FY10 (Refer FIG. 1)
  • Donations through Zakat (47 to 67% of income during FY09-FY13) have been steady/rising in past four years
  • Total income of Rs59m in line with average FY12 income (Rs55m) of education focused NGOs
  • Direct program expenses have been more than 80% of total expenses (sector average: 75%) for several years
  • It has a relatively strong balance sheet attributable to its steady income and its relatively long existence
  • However since it does not directly run a school the balance sheet size is small relative to an averaged education NGO as no school building required
  • Top donors include CAF America and Muslims Association in UK
  • During FY13, Education accounted to 51% of total expenses, whereas Medical & Relief accounted to 23% and 10% respectively and remaining was spent on establishment expenses (Refer FIG.2)

  1. Sustainability Parameters:
  • Sustained largely on account of individual donations which are increasing every year.  It has built up reasonable sized corpus which accounts for 80% of its general funds
  • Highly self-sufficient as indicated by its self-sufficiency ratio of 1.1x in FY12 and 1.4x in FY13 (ratio measures how much of expenses can be met from own income – individual donations/corpus income/fee income) because 95% of its total income comes through individual donations
  • Many of the students that MESCO has supported come back to become life members and patrons of MESCO. Some have joined various committees and are also sponsoring students.

During our visit to MESCO, we met five very impressive young women who had completed their medical and engineering education with help from MESCO.  

 

  1. Major Challenges:
  •  Recruitment and retention of good quality staff.

 

  1. Governance & Reporting Standards:

MESCO’s governing body is a group of professionals who manages this trust in an organized manner. The senior staff keeps track of daily activity, including the performance of the students. This helps them to take decisions as per current needs and requirements of the students. None of the board members take any remuneration and sitting fees. Records and reports have been maintained meticulously and information is presented on demand. It is quite a transparent organization and gives several key details in their annual report.

MESCO is listed with GuideStar, GiveIndia, Credibility Alliance, CAF America and also with Tata Institute of Social Sciences (TISS) Hub for Public Sector Undertakings (PSU) as a credible organization that could receive Corporate Social Responsibility (CSR) funds.

 

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