By Amit Chandra
Over the past decade, our country has undoubtedly made progress in addressing complex social challenges, but the harsh truth is that we are still in the bottom third of 166 countries ranked in the SDG index. While Government spending is the lion’s share of social spending, philanthropy has an important place in both accelerating the pace of social change and making citizens more connected and vested in social progress. To take India forward more quickly and equitably, the role philanthropy plays needs to possibly evolve on a few key dimensions.
First, let’s review the current situation in the Not for Profit (NPO) sector. As per the Government’s Darpan database, the country has around 2 lakh registered NPOs. A recent report by Sattva Consulting tracks the top 200 by budget and has laid bare how fragmented and poorly resourced the sector is. The total budget of the top 200 NPOs (Top 0.1%) for FY22 was less than Rs 9,000 crore, the median being around Rs 32 crore, and the 200th NPO had a budget of just Rs 10 crore. Let us put this in perspective: The Central Government allocates Rs 12,467 crores for the Mid-day Meals nutrition program. As against this, Akshay Patra Foundation, the largest such organisation in the country in this space, perhaps one of the largest NPOs in the country, working in partnership with state and local governments, has an annual budget of about Rs 755 crores!
The point we want to make is that if we believe that NPOs have an important role to play as partners in social change, we cannot “take a kukri to the battlefield.” We will need to be mindful in building better-resourced and more capable NPOs. Often, we hear even sophisticated donors, both CSR and Philanthropists, mention that they are seeking NPOs who “no one else wants to fund,” or “that are finding it hard to access funding.” There is nothing wrong is finding underserved causes, but we will need to think harder about doing so at the expense of ultimately addressing issues that need to be solved with urgency.
To do so, we argue that our country will need a dozen or so well-resourced & capable organizations, in each sector (such as Agriculture, Health, Climate etc), ideally focused on multiple geographies, with at least one focused on a major region each. These are what we call “Champion NPOs”, in their desire and capability to bring transformative impact at scale. To achieve this, they will often inform better government policy and/or societal behaviour. They will have differential ability to raise resources, which they will use to deeply invest in organizational capacity, experiment without fear of failure where success could be disruptive, build robust monitoring and evaluation processes, produce credible research / data and build and leverage technology tools to drive change. Importantly, they will often collaborate aggressively with key stakeholders, especially governments to demonstrate scale effect. Not for a moment are we arguing that smaller NPOs are irrelevant, for we believe that they are often key to fill gaps not reached by Governments or larger NPOs.
Take for example an NPO like Savelife Foundation (SLF), who was able to make systemic changes with the introduction of the Good Samaritan Law and implementation of the Zero Fatality Corridor (ZFC) model. This model brought fatal road crashes on the Mumbai-Pune Expressway down by 58% between 2016 and 2023. The model’s success also led to a partnership with India’s Ministry of Road to scale the ZFC model to the top 100 most dangerous highways in the country across 16 states. Patient capital, having a solid theory of change and collaboration with government has resulted in SLF scaling their impact over a short period of time.
For champion NPOs to emerge, how philanthropists and CSR give will also need to be reimagined, and there are two major changes that we think are important. First is how much we give because nothing is possible without more resources. Fortunately, CSR budgets are growing at a healthy pace, and now represent the largest share of resources for the sector. However, it is important to recognize that they do not represent individual giving and dwarf it, in a country where there is extra-ordinary wealth creation and opportunity for those benefiting to give back.
Last year, as per the Hurun India wealth list, we had 1,319 Indian families with over Rs 1,000 crores of wealth, the median family having wealth over Rs 2,500 crores. The number of families is robustly growing at 20% in number with their wealth also growing close to double digit as a group. However, the same agency’s Philanthropy list of those donating more than Rs 5 crores a year had only around 135 families on it. Importantly, the total amount donated by this group was under Rs 8,000 crores, dominated by a handful of names, with the median amount given being about Rs 12 crores. We clearly need more of our wealthy to participate directly in addressing social issues and for those who do, we need to encourage them to materially deepen the scale of their engagement. Pulling these two levers will also significantly raise the consciousness of this influential group on social issues.
Second, we need to reimagine, how we give. Sanjay Purohit, Chief Curator at Societal Thinking encourages all to think about building solutions that ”work at scale” instead of ”scaling what works”. This requires risk and patient capital to fail, learn, and implement. Our philanthropists need to think about funding the sector, the way we often fund business – be more open to providing for investment in organizational capacity, including leadership, and room for NPOs to breathe, innovate, and build systems that can impact at scale. Our contribution towards nation-building provides us an opportunity to go beyond simply paying our taxes and help build and partner exceptional NPOs that can deliver on the shared vision of Viksit Bharat. We must not lose the opportunity.
(The author is Chairperson of Bain Capital India and Co-founder of the ATE Chandra Foundation. Views are the author’s own and not necessarily those of financialexpress.com.)