|WHEN JEROO Billimoria quit as lecturer in the Tata Institute of Social Sciences to nurture Childline, a 24-hour tele-helpline for children in distress, she did it with the belief that sustenance wouldnt be an issue. After all, she had worked hard on perfecting her innovation. Trials were encouraging. |
Au contraire. Not only did most funding agencies deride her idea of franchising the helpline, some even wrote epitaphs to her dream: unworkable, far-fetched, doomed to fail! Some agencies, like CRY (Child Relief and You), did evince interest, but the processing rigours and disbursal of funds would take years. "I needed a stabilising factor immediately," recalls Billimoria, who had to bank on her family to see her through the rough patch.
Stability came in the form of US-based Ashoka: Innovators for the Public, pioneers in adopting venture capital principles to fund social entrepreneurs. Following a due diligence exercise, she was awarded an Ashoka fellowship, which included a monthly stipend, just enough for her to get by and focus on nurturing her infant. A new concept in philanthropy had come to the aid of a radical, unproven idea in social entrepreneurship.
Fruit of digital economy. Venture philanthropy and its variants, which deploy all tools in the domain of venture capitalism, are slowly gaining roots in India. A fall-out of the birth of the new economy, its largely driven by munificent techies from Silicon Valley (and some within the country), who not only invest some of their riches, but also expend time and expertise to administer such social venture funds.
Like a VC (venture capital) firm that invests in risky-yet-promising businesses, social venture outfits scour for pattern-breaking ideas, support and nurture fire-in-the-belly social entrepreneurs/teams, provide strategic management inputs, set measurable targets, and seek maximum returns. Only here, the return on investment (RoI) is not measured in monetary terms , but in terms of the impact that the NGO (non-governmental organisation) or the project has on society.
When the fund exits, there is no IPO or cash-out. Capacity-building of the NGO is the key. "The venture model is the most leveraged investment route," insists Manisha Gupta, director, Ashoka, which is currently mentoring 34 Indian social entrepreneurs.
New versus old. Venture philanthropy is increasingly being seen as an efficient replacement of the old system of grant-making. Traditionally, funding agencies merely wrote out a cheque, and were not overly concerned about the extent of compliance with the stated objectives of fund use and transparency of operations. Moreover, aid from traditional funding agencies or foundations seldom come without strings attached. They have their own agendas, and expect the social projects they fund to toe the line. Consequently, projects funded by these agencies often lose sight of their missions. "Every funder comes with an agenda... in the process, the entrepreneurial spirit withers over time," says Shankar Venkateswaran, CEO, Partners In Change.
Also, hand-holding is a rarity in conventional fundingan NGO merely reports on a projects progress to the funder. Seed capital for a rookie activist is the hardest to come by, however brilliant his idea. "Moreover, grants just dont work. They only create parasites," says Satish Jha, director, Digital Partners (DP), India, now engaged in raising a $50-million fund for IT-related causes.
Venture philanthropy, in contrast, is far more result-oriented. "Both funders and fundees need to be accountable for results," argues Deval Sanghvi of Impact Partners, an M&A expert who quit Morgan Stanley in New York to work with activists here.
Growing support. Recognising the inherent strengths of the venture model, individual donors and even corporates are increasingly favouring such funds, disillusioned as they sometimes are with high-profile NGOs. Cummins India, for instance, spends over Rs 50 lakh on charity every year. The company recently undertook an audit to examine whether this benevolence really made any difference. The answer: a shocking not really.
The companys attitude earlier was simply to write a cheque and walk away. Now, as Ravi Venkatesan, chairman, Cummins India, says, "We are making sure the goods are delivered and are moving away from charity to real partnerships." Cummins supports Ashoka.
Donors now realise that routing their money to causes through social venture funds makes far more sense than giving to charities that are not too focussed or are poor in implementation. "Donors who want their money to be a multiplier (that is, make a difference) should come to social venture funds. Charity is a very slow multiplier," advises Jha.
Now that the virtues are evident, funds have been mopping up money from donors briskly. "Raising is easy. Giving money is the difficult part," reveals Sanghvi, who has already raised $1 million. Jhas DP Social Venture Fund has raised $250,000 in a few months since its launch, while the much older Ashoka sits on $9 million for its annual global operations.
Venture money. DP, which seeks to bridge the digital divide, focusses on funding IT-centric poverty alleviation programmes. It has invested in Swayam Krishi Sangams smart card-based micro-credit project in the impoverished Medak district of Andhra Pradesh. DP invests between $50,000 and $150,000 in an NGO.
"We prefer to invest in start-ups, but we are not averse to funding mature outfits seeking to reinvent existing processes," explains Jha. That is how Ela Bhatts SEWA (or the Self-Employed Womens Association), which is establishing technology information centres in 11 districts in Gujarat to train its barefoot managers, qualified for DPs aid.
Sanghvi of Impact wants to fund no more than five organisations a year with an outlay of Rs 30-40 lakh each. Ashoka led him to one of its fellows, Ratnabali Ray, a mental health activist in Calcutta, who was seeking funds.
While DP and Impact provide sizeable funds, Ashoka has adopted the fellowship route by offering a monthly stipend of Rs 10,000 (which is under revision) to social entrepreneurs toying with a new idea. The money itself may not be much, but the fellowship comes with a host of collateral benefits.
Not just money. Money is just one component in a funds giving process. Social entrepreneurs are lining up at these funds to derive the benefit of intangibles like strategic management and technical inputs. Since these funds are managed by techies and Ivy-League grads with global exposure, social entrepreneurs have easy access to world-class expertise and networks.
Take the case of Javed Abidi, Ashoka fellow and executive director of the Delhi-based National Centre for Promotion of Employment for Disabled People. As a champion of the cause of the disabled, Abidis outfit, reach and mandate have been expanding over the years. "We are growing rapidly, and my systems, protocol and hierarchy are going haywire," says Abidi. He confesses he was unable to cope until Ashoka referred him to McKinsey and Co, under a joint programme.
McKinsey is now helping him re-engineer his entire organisation, with clear, step-by-step roadmaps for one, three and five years. "I couldnt have undertaken this level of micro planning without McKinsey." And, he points out, "all this is coming to me without cost."
Global and national reach. Being a fellow/fundee of a venture fund also enables one to exchange notes with other fundees, in much the same way that a VCs portfolio companies draw on the strengths of one another. The fraternity can actually be leveraged for phenomenal gains.
When Abidi wanted to kick-start a campaign to get disabled people ennumerated as part of the census 2001 operation, all he had to do was pump-prime the network. He reached out to scores of past and present Ashoka fellows, from human rights activists to educationists to water-shed development engineers. The consequent public outcry was so shrill that the government conceded readily.
And Billimorias Childline has transcended national borders. She now helps set up Childline clones with Ashoka fellows in Thailand and Argentina.
Unproven. Although venture philanthropy is gaining acceptance both in the US and in India, its practitioners are aware that they havent yet established clinching proof of concept. Sceptics also downplay the attempt by this new breed of do-gooders to catalyse complex social engineering. After all, bean-counting and maximising profits is one thing; taking on societal problems is quite another. And dealing with business entrepreneurs is not the same as working with social entrepreneurs: the attitudes, mindsets and value systems are vastly different.
The degree or extent of control is another minefield, and styles differ. Ashoka, for instance, does not believe in breathing down the necks of its fellows. "We value an individuals creative freedom. Mentoring can be undertaken without dictating," insists Gupta. Impact, on the other hand, prefers a hands-on approach, to the extent of having a presence on the board of the NGO.
"Its important for our investors to know that we have decision-making powers," explains Sanghvi. In fact, hes hired a CEO and a small management team to pilot the Chennai-based Rural Innovation Network (RIN). "Social entrepreneurs may be passion-driven leaders with great ideas, but that doesnt necessarily make them good implementers."
Only time will tell how well the venture philanthropy model works, but early experiences of some activists have been encouraging. Take Abidi, for instance: the generous doses of professionalism infused into his organisation by high-profile McKinsey consultants have primed him for the rigours ahead.
Armed with perspective plans and flowcharts, he is now more confident of achieving his dream, for funds wont be a problem. "I can now walk into any corporate office and make a businesslike presentation rather than just making an emotional pitch," says Abidi. Its, of course, good to have your heart in the right place; but it doesnt hurt to have your head screwed on straight and stay focussed. n
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