India’s lively startup scene may be teeming with “soonicorns”—soon to be unicorns (private billion-dollar startups)—but the non-profit sector has almost completely missed the boom.
Private social enterprises are stagnating, primarily due to irregular and unsustainable leadership. For long, the best minds in India have been put off by the dismal salaries, with the non-governmental organisations’ (NGOs) limited budgets leaving them with little time and money to groom talent.
Now, a non-profit incubator focused on poverty alleviation is trying to plug this talent gap.
This week, Bengaluru-based N/Core launched a six-month programme to churn out entrepreneurs in the social sector. Their startups will each receive an “innovation grant” of Rs10 lakh (around $15,600) and access to high-profile ”partners.” These partners include Sanjay Purohit, the former Infosys Consulting chairman; Maneesh Dhir, the former Apple India managing director; K R Lakshminarayan, the Azim Premji Foundation’s chief endowment officer; and Ujwal Thakar, ex-CEO of NGOs Pratham and GiveIndia.
A “collective” that includes CEOs of top foundations, leaders in the non-profit sector, founders of unicorns, and authors is also available for consultation. InMobi co-founder and chief technology officer Mohit Saxena and Goonj founder and CEO Anshu Gupta are part of this collective.
The goal is to lure individuals who would otherwise shun the sector owing to the “jholawala mindset,” the stereotype of NGO workers being spartan sons of the soil obsessed with cheap sling-bags, said Atul Satija, CEO of N/Core’s parent company, The/Nudge Foundation. Convincing the brightest minds to choose the social sector over going to Stanford, Harvard, and Berkeley, or a corporate career with a huge salary, is a big challenge, he admitted.
“The best journalists, doctors, lawyers, architects, (and) business-management graduates do not go into the sector,” Satija, a former chief business officer at mobile advertising firm InMobi, explained. That could explain why only a handful of the over three million NGOs in India succeed in scaling up, he added.
Till date, most NGOs have worked hand-in-hand with the government on last-mile delivery of services like healthcare and education. Their biggest share of sponsorship—68%—came from the state last year.
So, for private players, one big deterrent to entering the non-profit sector is a lack of precedent where entities have held on their own without governmental backing.
Now, by creating a supportive infrastructure in terms of funding and guidance, N/Core hopes to curb the uncertainties associated with the social sector and, thereby, attract more talent.
“To build nonprofits which solve large-scale issues, it is an imperative to build a similar ecosystem that our for-profit startups enjoy,” said Paytm CEO Vijay Shekhar Sharma, among N/Core’s founding patrons.
That’s just what this incubator is attempting.
Over 1,032 candidates from 19 countries applied to be part of its first official batch of incubatees. On Aug. 31, it selected the first cohort of 10 early-stage (up to three-years-old) ventures committed to poverty alleviation.
Accountability
This boost from N/Core could also bring much-needed stability in a sector otherwise mired in accountability issues. When the Narendra Modi government came into power in 2014, up to 10,343 NGOs were served notices for not filing annual returns over three consecutive financial years. Some 9,000 NGOs receiving donations from abroad had their licences revoked in 2015 for violating the Foreign Contribution Regulation Act. Just last month, Bloomberg Philanthropies, which funds local non-profits, came under the scanner for anti-tobacco lobbying.
In most of these cases, such crackdowns choke funds.
“It’s as if a foetus is told that once you are born, if you survive for three years, then we will give (a) vaccination,” said Satija. “But that’s when mortality is highest. That’s when you need incubators to support kids.”
N/Core believes it can be both the vaccination and nutrition that budding social-sector startups need. In the next five years, it aims to incubate around 100 non-profits—10 startups, twice a year.