India's economy has grown stupendously since the early 1990s and we saw tech startups boom starting 2010. The time has come for hockey-stick growth in the impact of non-profits on the lives of people.
And they are much needed considering that 12% of India's population is still living in poverty, 45-50% children do not achieve adequate learning levels; only 51% of Indian graduates are employable with unemployment itself standing at 7-8%, exports deficit standing at $78 billion; India being the third most polluted country in the world, women workforce participation at 32%, only 20% of the parliamentarians are self-made politicians, and so on.
The good news is that many of these parameters have been improving over the last three decades, but certainly not all of them and not fast enough. India needs to become rich before it ages, create jobs, and have proper wealth disruption. While this is necessary, it is not a sufficient condition for our progress. We mustn't think that wealth creation will automatically solve all our social ills. Parallel efforts in social upliftment are indispensable.
Non-profits will play a pivotal role in India’s next few decades in all areas: economic development, governance, social justice and more. Do not get it wrong – non-profits aren't only charities distributing food, clothes, medicine (for which I have deep respect), but work with the state on reforms, augment state capacity, build long-term social conscience and unlock innovation where markets fail.
They make systemic impact! These are what we call Non-profit Unicorns. While defining Non-Profit Unicorns is hard and not the purpose of this article, here is a working definition:
“Non-profits that directly or indirectly positively impact lives of either a million people or at least 5% of the people afflicted by a said problem.”
Many may argue against this definition or frown on its non-objectivity, but I think it is a good starting point, a simple benchmark for organizations to measure themselves, assert if they qualify or estimate the gap. It will be a good debate!
India is ready for such non-profits. There are five reasons for it:
1. A New Talent Pipeline for Non-profits
In 2006 when Muhammad Yunus got the Nobel Peace Prize, I was at MIT. The term social enterprise was starting to become popular and some of us were seeing them as vehicles of change. I recall Prof. Tarun Khanna of Harvard Business School mentioning that for the first time students from a HBS MBA class are talking about impact rather than just Wall Street. Two decades over, today we have a large community of socially conscious youngsters coming out of technology, business and social science institutes and universities. These are among the most meritorious students in the country and are determined to do something for the society and country. They are closer to the new trends, digital media and tools, and bring a fresh perspective to social issues than people like I do. They are the new-age entrepreneurs, founding team members, which will fire up the non-profit ecosystem.
A second class is the ex-CXOs of large corporations which got built post the 90’s economic liberalization. They have worked 20-30 years operating large companies, setting targets, measuring performance, working with the state/businesses, and executing with high efficiency. They have made decent wealth, and are now looking to give back and use their learnings to help non-profits make an impact. They will form the higher-management cadre for non-profits (specially late stage) in form of CXOs, advisors and board members, bringing in new efficiencies and scale.
These talent pools, offering new-age ideas and professional experience are catalyzing the non-profit ecosystem as we speak.
2. Philanthropic capital and champions
The number of billionaires in India is anyone’s envy. Further, there is a cadre of UHNIs with a net worth upwards of $30M+ coming from consulting, industry, startups and technology companies. Further still, there is a growing middle class, which has a significant number of socially conscious individuals. And there is CSR money. India Philanthropy Report by Bain & Company report shows that last year the total philanthropic money given in India was $15 billion and it is growing by 10%. A critical mass of non-profits in India now run on budgets north of a million dollars, for example Teach For India, and Pratham Education Foundation.
Not only is philanthropic money available, many of the donors take personal interest in non-profits, working closely with them, using their skills, networks, and influence to ensure their success. Examples include Rohini and Nandan Nilekani work through their foundations, Kris Gopalakrishnan support for research and entrepreneurship, Ashish Dhawan work at The Convergence Foundation to accelerate economic growth and most recently, Nikhil Kamath of Zerodha efforts to combat climate change.
There have been recent issues with foreign capital infusion due to tighter norms, but this might as well help in the longer-term, creating a stronger local philanthropic community. (This is no different from how sanctions at different times have helped India than pushing us back)
This solves the capital and influence problem.
3. Willing State
Solution to many problems needs a participative state. No one has the power to scale solutions, like the state does. The good news is that the state, both at central and state level, has shown willingness to work with non-profits. The work spans policy intervention, program design, capacity building, execution and technology intervention. Notable examples include the work of Michael & Susan Dell Foundation in education, Samagra | Transforming Governance in capacity building, EkStep Foundation and ProductNation/iSPIRT in Digital Public Goods, The Infravision Foundation in infrastructure development. There are also fellowship programs which place people within the government including The/Nudge Institute India Administrative Fellowship, Haryana Government and Ashoka University CMGGA and University of Chicago’s International Innovation Corps.
Today, the state understands and acknowledges that non-profits can help them with governing efficiency and serving the citizens better. It is a win-win. With several examples of the state working with non-profits, it is much easier for serious entrepreneurs get an entry to work with the state.
4. Technology penetration
Much of the non-profit work is in reaching the bottom of the pyramid, the most underserved communities in the country. On-ground approaches for reach and intervention have high transaction cost reducing scalability. The good news is that technology has penetrated and reached the last mile in the decade gone by. India now has over 700M active internet users including 425 million in rural India. The COVID lock-down has taught people to use audio, video and transact on the mobile platform. Because of UPI, financial payments have become easier. The Aadhar ecosystem allows for easy targeting, monitoring, transactions and impact assessment.
This access and lowering of transaction cost makes it possible to solve many problems which would have looked very hard just a decade back. Now, non-profits can reach their target users much more easily and efficiently.
5. Non-profit Unicorn Exemplars and the emerging non-profit playbook
There are enough non-profits today which have impacted over a million people. EkStep Foundation and ProductNation/iSPIRT made an impact on the entire country's digital ecosystem through their work on DPI and DPGs. ADR India & MyNeta have created a nation wide impact through their work on transparency of political processes. Pratham Education Foundation with its annual ASER surveys has surfaced the data on learning outcomes and shaped educational policies. SEARCH, Gadchiroli has informed the government's work in rural health care.
We now have a decent understanding of the non-profit playbook. The various methods include data-based narrative building (like Pratham Education Foundation), using state capacity, using technology innovation (Narayana Hrudayalaya Foundations and Rocket Learning), using the power of community (SEWA Foundation) and others. Going in full detail of these is a matter of another article, but it suffices to say, we are not far from developing a playbook to build non-profit unicorns in India. The principles will become sharper and deeper over the next decade, as many more experiments take shape.
These five factors together will have an exponential impact on the development of the non-profit ecosystem. We will see 100s of non-profits come up and speed up India’s development.
Have you decided to build a non profit unicorn yet?
Do it now!
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