Stay connected with IIX to receive the latest impact investing news and information on upcoming courses and events.
My journey at Shades of Happiness Foundation (SoH) taught me the true meaning of the Latin phrase, ‘Per Aspera Ad Astra’ – ‘Through Hardship to the Stars’. SoH is a Non-Governmental Organization (NGO) in India, with the mission to promote social inclusion by empowering underprivileged children with the knowledge and skills to pull themselves, and their families, out of poverty. The initial years taught me three key lessons. First, talent retention is extremely challenging when you’re working with unpaid volunteers and interns – which affects the organization’s ability to deepen impact. Second, not only is fundraising mystifying (and often terrifying) for NGOs, but relying on donations or grant funding is a highly unsustainable approach to scale impact. Third, without measuring your outcomes, it is virtually impossible to sustain the organization’s impact trajectory. SoH’s overarching vision to change the world to act as a level playing ground for children of all backgrounds seemed remote and unattainable.
SoH was not the only NGO facing these inherent constraints. Having worked with +20 other organizations across India as a part of the CSR department of a Hedge Fund, I saw identical issues cropping up repeatedly. India is witnessing an NGO boom – but despite a staggering one NGO for every 600 people, this figure must not be misinterpreted to convey holistic progress. Our incredible economic growth seems almost uncorrelated with sustainable development and the country finds itself at rank 102 on the Social Progress Index – outperformed by neighbours Sri Lanka (85), China (90), Bangladesh (99) and Nepal (101). Economic Growth has also been highly inequitable; the country scraps in ranked 114 on the Gender Inequality Index (2014) and has a staggering wealth gap with India’s richest ten percent holding 370 times the share of wealth that it’s poorest ten percent. India has not escaped the youth unemployment crisis either, leaving one in every three graduates without a job.
There is a need for a third way…
My SoH journey allowed me to use limitations as a stepping stone for success – providing clarity that good intentions alone were not sufficient to deepen or scale impact on our direct beneficiaries, let alone change the world. Our progress was meaningful, but constrained. The logical next step for me was to transition to a Social Enterprise (SE) model, which achieves optimum impact while balancing financial stability with social returns. SEs are an emerging paradigm across the globe. However, in India there is a critical gap that needs to be addressed – comprehensive support services that enable NGOs to make this transformation and effectively attract investment capital.
In my opinion, there is much to be learned by reflecting on the experience of the technology sector. One approach is to mirror Silicon Valley’s accelerator phenomenon that helps innovative ideas develop into lucrative businesses. Accelerators like Y Combinator and TechStars have to come play a pivotal role in the global tech landscape, capturing the imagination of entrepreneurs and seed investors alike. Replicating this would allow mission-oriented organizations in India to articulate their theory of change and identify potential income streams to achieve financial stability. The second approach is effectively mobilizing private sector capital – the key reason why the technology sector is both, attracting the country’s top talent and growing at 30 percent, a faster rate than any other industry in India. Traditional players – donor agencies, INGOs, governments – have limited resources to address India’s escalating social challenges compared to the country’s banking sector, with assets over 1.8 trillion (2013). To unlock new sources of private sector capital and effectively deploy the existing supply of Impact Investing capital, it is imperative to transform mission-oriented organizations into attractive investment opportunities, providing both financial and social return on investment.
Today, as a part of IIX and Shujog, I have the opportunity to develop a Financial Sustainability Program that will enable NGOs to transition to more sustainable SE models. Providing tailored mentorship and end-to-end services – from identifying potential revenue streams and designing a financial model with growth projections, to creating a marketing strategy and providing a framework to measure impact – IIX’s Financial Sustainability Program aims to transform NGOs into scalable businesses that attract top talent, deliver financial returns and create demonstrable impact. This will enable organizations to deepen their impact on existing beneficiaries, scale operations by attracting private capital and sustain their operations to impact more lives. India has a dire need for more of such programs that will effectively maximize the potential of its over two million NGOs, creating new parallels between the nation’s social progress with its economic progress and catalyzing their own journeys ‘per aspera ad astra’.
If you want to find out more about IIX’s Financial Sustainability Program please send me a note at firstname.lastname@example.org.
By Natasha Garcha
Business Development & Partnerships, IIX & Shujog