Neera Nundy and Manas Ratha talk about being strategic philanthropists, Dasra and the social sector in India
Neera Nundy and Manas Ratha
Neera Nundy and Manas Ratha talk about being strategic philanthropists, Dasra and the social sector in India
Thank you so much for inviting us and we’re sorry that Deval Sanghvi couldn’t make it. Deval and I landed in New York, not to do any of the Broadway shows but to work at Morgan Stanley. This is where we learnt a lot of hard skills and also began to think of where we could use our skills towards making a difference. We started to feel like in such a big city we were making more than we had ever imagined.
We came from middle-class families and the amount that we made in the very first year—which was about a hundred thousand dollars (around sixty lakh rupees), was more than we could have imagined, more than my father made at that point in time as well. Suddenly, we were coming into money— although New York was much like Bombay — no matter how much you make, you’re still poor. While we were busy at Morgan Stanley, making deals, we thought playing the role between where funding is and where funding is going, could potentially be transformational for the sector.
And that is where we started thinking, why don’t we raise a little money, for a few NGOs and see how this works. We basically went to the top floor. At Morgan Stanley, the top floor is where the head honchos are — nice carpets, beautiful paintings. We went to ask the former chairman if he would support some of the NGOs we had put down; and these were the NGOs that were based in Bombay and Kharagpur.We were so excited that we raised ten thousand dollars; which doesn’t sound like a whole lot but for us at the time felt like it was going to transform the world.
We took that money and said, “Let’s go out and try to make a difference.” And this is how we started to work a lot more in the field — actually romanticised about being in the field, doing work at the grass-root level — I’m sure some of your kids romanticise about this as well. This is when we began to realise the reality of how people live, what are the difficulties that they experience. This is where we realised that being on the ground was not suited to my skills and that there were actually activists and social workers, far more talented than myself, who should really be the ones in the field.
After spending a few months there, I went off to Harvard Business School. At this point, I wasn’t convinced that it made sense to leave everything—as dramatic as it sounds— and spend time in the sector. So going to Harvard was transformational for me. I was one of those few folks who went into banking, spent some time in the field and was now at business school. I was someone who actually wanted to use the business skills, the power and resources that the institution potentially had or that I could learn from, and really bring it to the development sector.
And that brings us to what Dasra really is. Dasra means enlightened giving. We are basically at the bridge where there are givers and strong NGOs who have impact and the potential for change. The reason it was important for us to bring this business perspective is because for us the impact needs to be scalable. We think small NGOs who have an impact are great, but the real challenge for our country is to think about scale and how we can increase the outreach. How do we make it cost-effective? And how do we make these organisations more cost-effective.
If you look at the sector in India, there are numbers that float around. There are approximately 3.3 to 4 million NGOs in the sector, of which in all honesty, as you know, there are many which are not legitimate. But you are still left with a big universe of organisations. How do you work through or manoeuvre these to be able to select the ones that have a higher impact and for us are very scalable? It’s now been 14 years that Dasra has been in Bombay, (we’ve specifically only focused on India, we’ve only looked at organisations all over India) and these we have started funding very early on in their development, ones that we’ve helped scale.
So that’s on one side. On the other side we have growing wealth in the country. And we’ve found that over the past five years, there are a number of people who want to give more strategically, growing at 25%. So for us, this is a market that can connect to organisations.
And over the years there are a number of companies, foundations that we’ve tried help think through, how to think strategically or have partnered with them directly. We have been around for 14 years and our first few years were a lot about trying to set a track record. Only in the last two years, both Deval and I realised that we didn’t create Dasra to look beautiful.
What I want to walk you through is a particular issue. What we’re very focused on are issues that really help us dive into organisations, help us match with philanthropists and those who are giving, who are interested in that sector, and we use this model called a ‘Giving Circle’.
About one in a hundred girls actually make it to secondary education in the country, so in one of our first Giving Circles we focused on Girl Power by trying to get girls to school, and then trying to keep them there. So Girl Power was our first research report. There are a few research reports out there, but basically each of the issues that we look at, we look through research. Some of it is the investment banking influence, but a lot of it is being able to frame an issue for the average person, for the average giver, to really think about key issues in the sector.
However, we spend a lot of time actually looking at the NGOs before we select them. For Girl Power, we brought a group of philanthropists together, and we selected Educate Girls. We started funding them when they were at 33,000 girls and over the years with our investment, and of course the support of others—where we invest is actually not only funding, that’s a small part of the impact that we’re looking for. We spend a lot of time on the capacity building. Helping them with professional systems and processes, hiring people, thinking about leadership— everything that all of you do in your businesses, but sometimes forget to bring to the philanthropy side— we try and bring that to these organisations, and this is the kind of impact and the kind of growth that’s really possible. In the next few years, they will reach about a million girls.
We’ve realised with time that one of the biggest impediments to keeping girls in school is child marriage and so part of our focus this year is also child marriage.
I think, more importantly, we track impact. We don’t spend too much time and money on it, but we do think it’s important to have a sense of where your money might be going or what the
potential impact is.
Things that have increased phenomenally are enrolment, attendance, drinking water and toilets— one of the key reasons why girls often stop going to school.
We’re now in about six Giving Circles. This year we’re launching into some more challenging Circles around domestic violence, child marriage, anti-sex trafficking, crafts as a livelihood as well as sports for development. So there are lots of different opportunities to participate in.
Snippets from a Q&A session with Rtn. Manoj Murarka.
Manoj: What are the challenges in the social sector in India, which most of these NGOs face?
Manas: I think the biggest problem actually comes from the funding side. People say the incentive, the talent should be there, but look at philanthropy from the perspective of charity.
When we deal with issues like education and health-care, where you need to support somebody through their life, or make a service available through their whole life, I think people often tend to focus on how inexpensively, or at what low cost you can provide the service. However, when you look at developing human talent or unlocking human talent, it’s not just about doing it at the lowest cost, and I think donors, therefore, often focus on the cost of doing things and not necessarily focus on the quality. Until and unless you focus on quality, you cannot build a strong team, a pool of resources and, therefore, the investment in quality is highly important.
Manoj: So what you’re trying to say is that donors have to look at philanthropy as a business?
Manas: Absolutely. The model we follow, comes exactly out of the private equity— the venture capital model. First understand the problem. Once you understand the problem, don’t part your money with the first person you meet. Go out there, do your due diligence and then remain involved. Just like you don’t invest in a company, then walk away and come back after three years to see what happened, stay involved, know what’s happening, be there to support it, and then be willing to take risks.
Manoj: We see Indian families have their own foundations and most Indians are individual as they come to philanthropy. What are the biggest mistakes that we make in India as philanthropists?
Neera: I think it goes back to the same sort of things, really thinking strategically and long term, and so you can’t just fund the programme, write the books, or the food or the health-care. It’s about the entire infrastructure that supports it. It’s also not always about land and buildings. Everything that you fill it with also needs to be funded, so a bit of more of a long term approach is definitely needed. What’s the business model of that NGO? How are you going to think about sustainability for this organisation, what’s their strategic positioning in that particular sector? It’s really about everything that you do for the business side, apply the exact same way of thinking on the NGO side.
Also, just like in business, learn to take risks when it comes to philanthropy. Education is the number one sector for funders to want to donate to— which is great if education is your priority— but try other sectors. Arts and culture gets very limited funding. Our Sports for Development, Craft Circles, Circles around adolescent girls, youth — these are really tough issues for which it is not so easy to raise funds. Try and experiment with different sectors.
Manas: I want to add one more point. I think while a lot of people give money, they fail in giving projects their time and resources.
I think not enough people are active enough. People need to bring in their resources and network apart from their wealth to make a scalable difference. Also, try bringing in other funders and broaden the donor base, so that if you need to exit at some point,
the organisation is not struggling after that.