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NGOs play a critical role in providing a check and balance to the government agency (Thomas, 2001;
Lux & Straussman, 2004; Collingwood, 2006; Forteza & Pereyra, 2017). For example, the
government has developed a system on learning disability policy. The NGO’s role is to promote
change or improve equality policies (Whitehead et al., 2008). Within this context, NGOs are the
separate entities to scrutinise the government agency’s policy and actions. As part of check and
balance, Lewis and Kanji (2009) claim that NGOs can act as a catalyst to a government agency by
inspiring, facilitating, or contributing to better ideas and action for sustainable system development.
For example, one of the government agency agendas is to address homelessness and poverty
eradication in Malaysia (Rusenko, 2014.) This agenda requires cooperation with NGOs like National
Welfare Foundation Malaysia to cater to the homeless people’s primary needs and address the issues
of poverty (Oria, 2015). This agenda is closely associated with the growth of societies and social
consciousness, of which it is the primary role for NGOs. Thus, NGOs roles as a catalyst are seen as
critical to the extent the government works and achieves their agendas.

There are two primary groups of NGOs in Malaysia which is (1) states and (2) autonomous NGOs
(Alatas, 2003). The state NGOs established by the state aim to implement and represent government
policies (Christie, 2012). National Council of Women’s Organisations, Malaysia (NCWO) is an
example of state NGOs established by the Ministry of Women, Family and Community Development,
which focuses on women’s welfare and promoting equality to women working in the states. The states
NGOs commonly depend on the financial states, and some of them applied for corporate and
individual or public funds to support their operation. On the other hand, autonomous NGOs are
created by individuals or groups of people that primarily focus voluntarily to support the societies
development and demonstrate public interest (Schiavo-Campo & Sundaram, 2000; Jie, 2006). An
example of autonomous NGOs is the Muslim Youth Movement of Malaysia’s (ABIM – Angkatan
Belia Islam), aiming to enhance its religious legitimacy and promote Islamic religion through its
charity work. The primary funding sources for autonomous NGOs are the corporate fund, individual
or public fund. Nevertheless, the autonomous NGOs also applied for financial states to support their
operations. Although the primary funding sources for state and autonomous NGOs differ, they rely
substantially on the donors funding, including the governments, corporations, and individuals or the
public, to support their operations.

Donor Funding
The funding is typically used for the NGOs’ operations cost including administrative costs (staff’s
salaries, the cost of renting a building, and company’s vehicles) and the cost for programs conducted
by NGOs (Lewis, 2001; Weiss & Hassan, 2003; Silverman & Patterson, 2011; Soakell-Ho & Myers,
2011; Nga, 2015; Mutinda & Ngahu, 2016; Masdar, Kadir & Bahar, 2017). There are two funding
sources that the NGOs’ can acquire, which are internal and external. The internal funding sources
come from the NGOs’ initiative to acquire funding, whereas the external funding sources come from
other agencies, individuals or groups outside the NGOs. NGOs across countries, including Malaysia,
primarily rely on external sources for funding, called donors (e.g. government and corporation) to
support their operation (Hasnan et al., 2012; Lusardi & Mitchell, 2014; Nga, 2015; Kassim & Taib,
2016).

NGOs’ dependency on donor funding aligns with the resource dependency theory (RDT) by Pfeffer
and Salancik (1978). The basic assumption of RDT is that “dependence on critical and important
resources influences the actions of organisations and that organisational decisions and actions can be
explained depending on the particular dependency situation” (Pfeffer & Salancik, 1978). RDT
explains that the organisation has to minimise the dependency on the external source. For NGOs
context, NGOs largely depend on the donors funding to support their operation. The dependency on
donors (i.e., considered as the primary external sources of funding) would impact NGOs’ operation
and the possibility of dissolution. Considering this situation, it indirectly impacts the development of
government agencies and corporations in which the role of NGOs is vital to them. Thus, this paper

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