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First Givers Club – Signature Workshop with Rohini Nilekani & Nandan Nilekani

Everyday Giving | Strategic Philanthropy | Jan 21, 2015

This is an edited version of a panel discussion with Mr. Mahesh Krishnamurthy, Nandan and Rohini Nilekani, for GiveIndia.org, an online donation platform.

My journey in the nonprofit sector began with a serendipitous meeting with CV Madhukar. Towards the end of 1999, when my children were starting to become more independent, I was lucky enough to cross paths with Madhukar. He asked if I was interested in helping him make sure that every child in Bangalore, and then Karnataka, would be in school and learning well, and I said yes. I worked with the Akshara Foundation until 2009, however Arghyam’s work really began in 2001. We had finally come into some money with Infosys ADR, and that’s when I felt that I needed to put all of it into Arghyam and strategically focus on one area. Until then, I was a little scattered in my giving. So with the 100 crores that I put into Arghyam, we decided to start work on water and sanitation. It was the first Indian foundation that was committed to water and sanitation. A lot of the work done until then was packaged alongside rural development and funded by foreign philanthropy. We were, and continue to be, the first Indian foundation focused exclusively on lifeline water, a critical need all over India.

I was really searching for an area that would have high impact and was also a gap area where we could do some serious strategic work over a period of time. I was standing in the shower on April 5, 2005, when I was holding water in my hands and a light bulb went off. I realised it had to be water. My CEO and I started researching and we realised just how much potential there was for philanthropy, and partnering with government and other nonprofits. I am very glad we chose water because there is still a lot more work to do there.

For Nandan’s part, he began his philanthropy journey by going back to all the schools and colleges he studied at, and systematically giving them endowments. Since he was busy, first with Infosys and then with Aadhaar, he focused on funding different organisations. For example, one of the places we have funded is the Indian Institute of Human Settlements because we think that urbanisation is going to be a huge challenge for India. In the next 30 years, when a few hundred million people are going to move into cities, unless we have the capability to deal with that we can’t really adjust it. The logical thing was to have a university which produced quality people with interdisciplinary skills on urban issues, so that’s what led to the urban project and we set up India’s first university that focuses on sustainable urbanisation.

We have also been having many conversations about literacy issues, and how to leverage technology to problem solve, and have set up a foundation to address those issues. India has spent a huge amount of money on education in the last 15 years, from the Sarva Shiksha Abhiyan onwards. While there’s been great progress in getting kids into school, the learning outcomes are not up-to-date. The 10th ASER report shows that there is no particular improvement in learning outcomes. So we thought, maybe there is a way to use modern technology, smartphones, and game-based learning to change that.

Philanthropy often starts because some issue really affects a person and they feel passionately about it and want to play a role in solving it. We’ve seen this around the world, when people set up their own foundations and learn the ropes of giving in one focused area. However, both Nandan and I feel that if you give too much of your philanthropy within your own gate, you’re perhaps losing out on the opportunity to give forward to other people who have experience, passion, commitment, and who need financial resources. Therefore we have tried to diversify our philanthropy way beyond our own gates. We give widely, in very diverse areas, because in India you need to do everything. When I find committed leadership that is doing work in certain areas that I care about, I would like to fund that as well.

Tackling the Governance Deficit
Addressing governance issues is important because whichever silo you work in, be it education, microfinance, sanitation, food, or health, you will eventually hate the governance deficit. Take education for example — we can take the children to the schools, but we need them to be learning, for which we need teachers to be engaging; we need them to have the right training; we need the school administrators to be doing their job; we need the evaluation and monitoring systems to be in place to know that the children are learning, and so on. In addition, we need the budgeting to be transparent, whichever pipeline is coming through, we want to make sure the money is actually coming and that it is being used well. Sector by sector by sector, these are very real gaps. Even though there may be enabling public policy and a very high demand, in the end if things don’t come together because of the government’s deficit, then we’re hitting a brick wall.

Luckily, there are many people who are now coming up with very innovative ideas to enable governance. No matter which sector we are working in, any philanthropy that we do, we must put something aside to improve the governance of that sector. When you work in governance as I do, you do have to speak truth to power, you do have to stand up to government, or at least support people who stand up to government and say, “Well, things are just not working because there is corruption, there’s no transparency, and there’s no efficiency.” So that’s why sometimes it is tricky to fund initiatives in governance and there are many ways to do it. One way is to come together as a consortium. For example, if you are funding independent media but don’t want to be the first mover, you can pool resources and do it. I admire people like George Soros, who are able to clandestinely support democracy behind the Iron Curtain in many innovative ways, by funding a lot of groups. It’s important in India to be funding issues of governance. You can do it quite safely or you can take tremendous risks, but it’s very necessary because no matter which sector you work in, it won’t work unless you fix the pipelines.

The Challenges of Scaling
On one hand, India has a long philanthropic tradition. On the other hand, giving is still relatively small and it’s towards very traditional causes. It’s not necessarily to issues that are core to where India needs to be over the next 30 years. In the last five years however, there has been remarkable upsurge in giving and philanthropy in India. We are involved with various initiatives to encourage broad-based philanthropy and there’s tremendous uptick in that. It’s also related to the fact that we have first-generation wealth creation happening, and both professionals and entrepreneurs are getting there. So things are changing. As Nandan points out, we now have an issue of absorption capacity. Many big givers are having trouble finding enough good organisations to fund because the other side doesn’t have the infrastructure or governance to absorb the money.

We have a million nonprofits, but how many of them are scaled relative to the sited problem that they are pursuing or have? One of the reasons that nonprofits are not able to do that is because they are perpetually chasing after things that they need to function better, but perhaps many givers don’t really understand that. Surprisingly, people understand this perfectly well when building their own enterprises. But when they look at the nonprofit sector, somehow that knowledge does not get transferred. It’s a simple fact that nonprofits need accountants, HR, admin, finance people, and strong leadership. HR function is critically important in nonprofits and severely underestimated and underfunded. All those functions require people and resources, and we need philanthropists who understand that. In businesses, you can’t possibly be successful without giving attention to those department functions. We need the same kind of thinking in this sector. That’s why we have so many small nonprofits who are not able to scale.

In a way, philanthropy is a form of risk capital because philanthropists can do things that governments can’t do and markets won’t do. Governments can do some things well, like allocating billions of dollars to a problem, however ensuring that it is effective and transformational is often a challenge. Markets and market players have to ultimately make profit, so they can’t do some long-term things. Nonprofits can, but they don’t often have the scale to do it. So, the philanthropists can be somewhere in the intersection of all this, and look for things to do which the other players can’t because of the risk.

Ironically, philanthropists are often afraid to take risks with what should be their risk capital. Instead, they want to measure everything and make sure everything has impact. I think philanthropists should say, “Nine things failed. Oh, that’s wonderful.” That means you tried 10 things and one succeeded. But while Indians are giving more, I wish we would give more without fear of failure. This doesn’t mean that I don’t think we need to measure. For me, the critical question is what are you measuring? And are you only going to do what you can measure? If we’re talking about empowering people to build their own capacities, it’s very difficult to put a number to that. How would you measure empowering a whole community to become part of the solution instead of a problem? Often your oppressors are the ones closest to you. How are you going to measure when you’re able to stand up to your closest oppressor? There are many things like that which I think can’t be measured. With Pratham books, it was very easy to measure the number of books we were publishing, the people buying them, our reach, the number of authors and illustrators in the ecosystem, etc. But we can’t let ourselves be obsessed with those numbers and not look at the impact that cannot be measured.

In companies, you have to show your shareholders your bottom line. Here, we are accountable to society, where every rupee of philanthropy is a rupee that might have otherwise gone to the government as taxation. So, it is highly accountable to society, but I do think that we should take more risks when we do philanthropy. It’s okay to allow people who are committed to something and want to try something new to prove it.

Bridging the Ideological Divide
There is often an ideological or political mismatch between the givers and those who need resources. So many of our nonprofits, for very good reasons, have been on the left side or Gandhian side of the political spectrum. Activists like Medha Patkar stand with thousands of people, literally knee-deep in the Narmada river asking,“Where are we supposed to go? Our rehabilitation money promised by the government, promised by the law has not come to us.” I can’t think of too many philanthropists in India today who are going to stand up and say, “Yes this is a just cause, and we need to support it.” Issues that have to do with exclusion, human rights, political rights, or humanitarian issues are ones that many of us don’t like to think about or talk about.

Perhaps somewhere in the education system, a few generations got depoliticized. Politics is really just about the redistribution of power in society. What we read and the discourse that happens in public, shifts our sense of society. For a couple of generations, perhaps, that became less important than other things, but today we are seeing a re-politicization. Sometimes for the better, sometimes for the worse. But politicization is messy, it’s not a smooth, linear journey toward public good.

We hope that our government is actually following certain principles of justice, but there are too many people left out. In order for resources to reach everyone, we would need to scale a lot more and have a lot more ideological matchmaking as well. People who made wealth from markets are not keen on giving to Gandhian, Marxist-oriented or socialist-oriented organisations. Today we are seeing different kinds of nonprofits come up, dealing with service delivery or transparency or new issues that the rest of the world is also engaged in. So we’re beginning to see different players, both on the philanthropy side and the nonprofit side.

While people believe in justice and equity, they may not like a certain approach or a certain activism enough to feel comfortable funding it. Personally, I do fund organisations on both sides of the ideological spectrum. For example, I fund EPW, a left-leaning important weekly that addresses issues that the media often ignores, as well as Takshashila, a right-leaning think tank which also produces publications. Both of them come with high integrity and commitment. In India today, we need to deepen the political discourse. I don’t have to agree with everybody I fund, that would be impossible. Instead, I ask myself what the pillars of a good democracy are — good public platforms to discuss and help convince each other. That is why I believe in funding both Takshashila and EPW.

The Need for a Strong Samaaj
I believe that we need to build a very strong society or Samaaj. We need people’s institutions and citizens to be empowered to act so that we can keep the markets and the government accountable. If we don’t have that, governments and markets can become very oppressive. The whole of the last century is littered with fine examples of those kinds of oppression. So a lot of my philanthropy is centred around how we can create a citizenry that is aware of its own role, its own responsibility, and what the markets and the state can and should do, and what they should not do.

For example, the Avantika foundation came out of something that we were doing at Arghyam. We created an ASHWAS household survey of sanitation in Karnataka. It was quite a comprehensive report, and we found out that so many things were wrong, so we went back to GPs with that information. We gave the gram panchayats their own report saying, “In your GP, here’s what we found from you.” We reflected it back to them and said, “We’d like to help you with an action plan, to help make things better.” But when our teams went around, we found that the GPs didn’t have the capacity to state where they wanted to be in five years and how they could systematically make steps to get there.

One of my colleagues with a background in organisational behaviour saw an opportunity to work on this. Over the last five years, she came up with a very detailed process mapping and solutions platform for gram panchayats to understand that they can be autonomous institutions empowered to make all the line departments, where most of the money flows accountable to them horizontally. Right now what happens is the government flows money into the gram panchayats, but they are accountable upwards into their own programs. Nobody is really accountable to the GPs. So this organisation has come up with a wonderful solution that is working quite well. It’s a small organisation, but it has been selected by the government as a model for the Rajiv Gandhi Panchayat Sashaktikaran Abhiyan.

In my philanthropy, I think with both my head and my heart. When it comes to the heart, there are some visceral things that make you feel good, like a child opening one of our Pratham books for the first time. Sometimes children who had never seen a book would just clutch theirs and be happy. Those are the kinds of moments that really grip you. But others, like the fact that we are able to help build institutions, are incredibly gratifying as well. For example, through Arghyam we were able to impact public policy at different levels, and foster leadership on the ground. With the springs program, we helped people who depend on spring water to understand what their water resources were and how to create the kind of institutions that would protect those springs. It’s hugely satisfying work.

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