By Winnie Dholakia, Director – HelpYourNGO
For India to be
a stable society where opportunities are created for millions to further their
lives, it is imperative that donors support the many good NGOs who help the
less fortunate of our country and provide them with opportunities to flourish. To
further this effort, HelpYourNGO built
the only Indian website featuring standardized financial information on 650+ Indian
NGOs. We know from our years of study of NGO financial information that a vast majority of these NGOs strive hard
to raise funds for their programs. As is the case with many NGOs globally, they
often do not have the bandwidth, expertise or access to manage fund raising
efforts and end up wasting valuable resources in the process.
At the global level, 17
Sustainable Development Goals (SDGs) were adopted in September 2015 by 193
member states of the United Nations to end poverty, protect the planet, fight
inequality and injustice, and ensure prosperity for all as part of a new
sustainable development agenda.
India has played an integral role
in the formation and evolution of SDGs and is committed to its achievement. NITI
Aayog is the coordinating agency for implementation of SDGs in India. In fact,
the progress at a global level to achieve the SDGs largely depends on India
since India’s population is around 17% of the world population.
In 2014, India became the first
country to mandate Corporate Social Responsibility (CSR). Section 135 of The Companies Act,
2013 made it mandatory for every Indian company meeting minimum turnover/net-worth/net
profit criteria to spend at least 2% of their average net profits of the
preceding three financial years on CSR activities. With the recent rules and
amendments, the government has made companies even more accountable for CSR by adding
compliance requirements and disclosures on CSR activities – and introducing
penal provisions for non-compliance. This is a paradigm shift from the earlier
‘comply or explain’ regime.
Interestingly, SDGs and the Indian CSR law were formulated and
implemented around the same time. Companies in India could play a crucial role
in achieving the SDGs by efficiently planning and implementing CSR projects, focusing
on Environmental, Social, and Governance (ESG) principles and working towards the SDGs. This
of course needs to be supported by good policy implementation strategies
adopted by the government.
A way forward
India cannot achieve the SDGs by 2030 by government
initiatives alone and needs help from local and foreign sources of funding. There is a
need for a more collaborative approach between the government, private sector,
civil society and the citizens.
Though HelpYourNGO helps efforts across the 17 SDGs, HelpYourNGO itself is part of Goal 17 which calls for ‘Partnerships for the Goals’. Establishing strong partnerships between stakeholders can help move the SDGs from commitments to actions. Platforms like ours can leverage partnerships to unlock opportunities for stakeholders working towards social change and build a more equitable and just world.
The Securities and Exchange Board
of India (SEBI), which regulates the capital markets in India, is leading the
charge on ensuring that listed companies present their business responsibility
and sustainability reports. In 2020, SEBI announced the
creation of a Social Stock Exchange (SSE) which will increase access to capital
for NGOs and social enterprises via various funding structures. The SSE will
allow qualified investors and new social entrepreneurs to work towards the SDGs
and help NGOs reach those most in need. However, while SEBI has created a
pipeline for accredited new investors to fund SDGs, there is a gap in providing
the existing base of retail investors in mutual funds (with over 40 million
demat accounts) an opportunity to contribute towards the achievement of the 17 SDGs. HelpYourNGO
plugged that gap with its offering of the Systematic Giving Plan, which won
accolades and awards in 2018.
Response to SDGs: A Systematic Giving Plan
HelpYourNGO launched the Systematic
Giving Plan (SGP) in 2018
– a first of its kind initiative in the world – which enables investors to contribute 10% of the corpus value
of their investment with any Mutual Fund to be directed towards supporting
credible NGOs vetted by HelpYourNGO. The idea to create SGP was
born out of our desire to create a steady stream of fund flows for NGOs working
towards the SDGs. SGP allows NGOs to focus on implementing the great work that
they do, rather than wasting their resources on fund raising – which they may
not be good at.
endowments and foundations invest their corpus for long term capital
appreciation. Eg. Harvard University’s endowment has built a corpus of over $40
billion (2020), Bill & Melinda Gates Foundation Trust endowment was $49.8
billion (2019). Typically, the earnings/capital distributions from these
endowments tend to fund 30% to 50% of their annual operating budgets. Imagine
if NGOs in India could rely on a similar pool of capital to implement their
SGP by the Mutual Fund houses
by the regulator, SEBI have already revolutionized the Indian mutual fund
industry. Collectively, there is approximately
Rs 15 trillion (GBP 150 billion) of Assets Under Management (AUM) in the equity
funds. Even if 1% of this corpus would move to SGP units for distribution to
NGOs for furthering the SDGs, that would be Rs 150 billion (GBP 1.5 billion) of
AUM.And if 10% of this was disbursed each year to hundreds of NGOs,
that would be Rs 15 billion (GBP 150 million) crore every year! That’s the
potential cascading impact of SGP!
Fund was the first fund house which plugged its systems and investor base into
the SDG framework and branded their product as the SMILE
facility. The power of small (or large) pooled donations via the SMILE units
has the potential to systematically support NGOs selected by individual
investors. Like the Harvard University, these NGOs can then focus on improving
the impact of their great work.
Quantum investors have supported programs of 7 credible NGOs from diverse
sectors via SMILE – provided financial literacy to women, home-based palliative
care to underserved cancer patients, vocational & life skills training to
youth, maternal and new-born health care, helped meritorious students complete
their graduation, and others.
SGP is a simple, one-click solution available for adoption to all fund houses. NGOs eligible to receive the funds, the % to be contributed to SGP and the pay-out schedule – can be customised for each fund house. In an era where companies are meant to do more than just focus on profit, our ask of the owners of the mutual fund houses is very small: add this simple but powerful Systematic Giving Plan unit and help India achieve the SDGs. Indeed, a similar product can be built for the UK or for any country.
Systematic Investment Plan secures our future.
A Systematic Giving Plan could secure the future of millions. And of our Nation.