A true philosophy of giving – Part II

In our earlier piece we mentioned being struck by the fact that Mr. Mohandas Pai’s philosophy of giving was also a ‘philosophy of living’. It wasn’t a statement of how much money he gives to charity each year. It’s not about which NGOs he supports. It’s an expression of the values that govern his work and influence his actions towards others. Curious? Read on!

The principles of philanthropy:

  • Duty: One got the sense that Mr. Pai believed that doing good towards others is a duty that he has to perform. Rather than CSR, he felt that individuals taking up responsibility would drive social change. He mentioned that one should consider donating 10-20% of one’s income to charity. There is a caveat – donations should not be made with the intention of seeing one’s name on a plaque somewhere, or cleaning off sins. A duty-bound donor is driven by a desire to pay off one’s debts to society and see everyone around him or her prosper. Mr. Pai expresses gratitude to the receiver who has provided Mr. Pai with an opportunity to give back to society. He never fails to he join his hands in front of the receiver and believes that ensuring that the recipient’s dignity is respected in the act of giving is paramount.
  • Accountability: Pai mentioned that he, like millions of Indians went to a low-cost government school. Subsidised fees made it possible for him to get a good education and access to a job market. As he said ‘Somebody paid for me.’ This country has given a lot to many of us. It is therefore up to us in turn to pay for other people. Imagine if all of us operated with such a strong sense of accountability towards others! Many of our social problems would reduce immediately. He also mentioned that for every student who received a subsidised IIT education, a hundred have probably died of hunger. If we are part of this society and enjoy these privileges, we should also give back to our society. Mr. Pai even took this one step further. Our time on Earth is one thing, but what happens when we meet our maker? Should we not be able to answer the question – What did you do with your life? Did you leave the world better than what you found it?
  • Giving back to one’s community (ies): Mr. Pai mentioned his personal philosophy of giving – first to the country you belong to, then the state, city and finally your own community. He mentioned various initiatives that he is part of that reflect this focus:
  • Country: Founding team member of Akshaya Patra which currently works in 7 states
  • State: Supports scholarships for deserving students through the Manipal group of colleges and a scholarships NGO in Karnataka
  • City: Mr. Pai, Kiran Mazumdar Shaw and other prominent citizens have spearheaded the Bengaluru Political Action Committee (BPAC). Political Action Committees are popular outside India. They work as a vehicle through which citizens come together and advocate with governments and elected representatives for their common interests. The BPAC hopes to improve governance of the city of Bengaluru, create infrastructure of global standards and improve the image of the city.
  • Community: Mr. Pai, a member of the Konkani community pointed out that his community numbers only 2.5 million in India’s population of 1.2 billion. He supports the provision of scholarships for students from the Konkani community.

This is a wonderful principle to follow indeed, as most of us have an identity of being citizens of India, live and work in a particular state and may belong to a community that is not part of that state. Each of these groups have different priorities, and it would be necessary to direct time, money and efforts towards each in a different way to achieve results. In this manner, we can work for the welfare of all the groups we are part of without neglecting a single one.

  • Ownership: Yes, we may belong to different states and communities. Yet Mr. Pai emphasised that every time he sees a child in need on the street, he feels for him as if it were his own child. As he said, many of us are well-off because our parents took good care of us, and we in turn take good care of our children. This should not result in a world view where we are only concerned with the welfare of people who are related to us. As Indian citizens and members of society, it is upon us to look out for all those in need.
  • How to choose a cause: There is an old quote that states, ‘a society grows great when old men plant trees whose shade they know they shall never sit in’. This philosophical sentiment was also echoed by Mr. Pai when he spoke of his choice of causes: ‘Pick a problem that is so big that you cannot achieve it in a lifetime’. Wouldn’t it be easy to say ‘I donated at Diwali time, I have done my part’, or ‘I gave away all my old clothes, there’s nothing more I can do?’ Real generosity lies in taking a long-term view of a problem you cannot solve alone, and making a start anyway. At Akshaya Patra Foundation, they took the view that they would not shut down the programme if even one child was hungry. There were a lot of times when the organisation was short of money, or did not know how it would meet its expenses. They soldiered on anyway.

Having such a value-based philosophy ensures that you bring about the maximum good towards others and the most peace towards yourself. It is an approach well worth emulating!

Sandboxed at the Deshpande Dialogue 2015!

We have to agree with Gururaj (‘Desh’) Deshpande when he refers to the Deshpande Foundation organized Development Dialogue as the ‘Woodstock for social entrepreneurs’. The annual Development Dialogue is a confluence of NGO staff, academics, grant-makers, social entrepreneurs, folks from the business world and lots of people with big ideas to change the world. The Dialogue is organised by The Deshpande Foundation which was set up by Jaishree and Gururaj Deshpande. This year’s attendees were addressed by the likes of Kailash Satyarthi, Narayan Murthy, Ramji Raghavan, Jeffrey Bradach and others from various walks of life.

Teach a man (or woman!) to fish

The founders of the Deshpande Foundation don’t believe in handouts or charity as we know it. The Foundation funds ideas that can change the world, but refuses to be a one-off donor or create a culture of dependency. The ‘Sandbox’ concept is an ecosystem for entrepreneurs and innovators to test their ideas, develop working models and scale them for maximum social and business impact.

This year’s theme, ‘Scaling by Proving’ describes the Foundation’s work in a nutshell. At the conference, it’s not uncommon to be asked what your business plan is, even if you’re an NGO! Madhua Pandit Dasa, Chairman of the Akshaya Patra Foundation (APF) spoke about how technology proved to be the differentiator that led Akshaya Patra to implement the world’s largest NGO-run feeding programme. APF’s industrial-grade kitchens fed 1.4 million children in 2014. APF embodies scale like few NGOs do – each of their dal cauldrons cooks between 1,200 – 3,000 litres of sambar at a time. They plan to now extend their services to less accessible rural areas with a goal to feed 5 million children by 2020.

Give me a place to stand and I will move the world

“Begin from where you are” was a sentiment raised by Desh and echoed by many at the conference. The innovators the Foundation hopes to fund aren’t armed with degrees from elite universities. They work with farmers, artisans, technicians, students – anyone with an idea to solve a social problem. Neelam Maheshwari, who heads Grant Making at the Foundation described themselves as the “McKinsey of nonprofits.” The success of the Hubli Sandbox is spreading to other regions – RedBus co-founder Phanindra Sama has committed to setting up a Sandbox in Kakatiya in association with Raju Reddy, Founder of Sierra Atlantic Corporation. Another Sandbox is coming up in Uttar Pradesh. The Foundation has Sandboxes in the US and Canada.

Ideas looking to scale – soon!


Big idea

FUEL Professional career guidance ecosystem for India’s youth
Karadi Path Literacy without relying on the written word
Arohana Dairy Making dairy farming and farmers profitable
Gram Vikas Providing sustainable, socially inclusive and gender equitable services to the poor
Swayam Shikshan Sansthan Bringing poor women to the mainstream of development
Sevamob Mobile clinics providing primary healthcare to low-income groups

Sustainability is linked to accountability of people running the organisation

Narayan Murthy said this, but the proof of the above statement was evident in the keynote speech delivered by Kailash Satyarthi. The Nobel Prize winner held the audience spellbound with stories of his work rescuing children from bondage. Jailed for a night by an irate railway policeman for trying to save some enslaved children, he started thinking about how he could redirect his anger to tackle the demand for child labour. His quest to stop child trafficking in the carpet trade led him to Europe where he convinced Indian carpet importers to insist on a sticker that certified the product was not made using child labour. Buyers in European markets soon began looking for the GoodWeave label on carpets they bought from India, and this led to a decline in demand of non-certified products. GoodWeave has resulted in 75% less children being employed in the carpet industry since 1994.

The Development Dialogue is filled with an infectious energy that participants cannot help but imbibe. The Hubli Sandbox also drives home the point that change begins at home. Post-session discussions are abuzz with words like innovation, business model and revenue generation plans. There is a belief in bottom-up practices and frugal innovation that can change inequality of access and income in the world. We wish all the participants the very best for their endeavours, and look forward to new ideas at the next Dialogue!

A piggy-bank no NGO should break!

Human beings are biased towards action. When we are approached by a hungry child or a request to leave our change in a charity box, we (naturally) assume that our contribution will make a difference to the beneficiary’s situation in life. When faced with uncertainty, we prefer to act with the belief that we made an impact.

This bias towards action happens with decisions related to financial investments, impulse purchases, food and even giving to charity! Most of us give one-off donations to NGOs and don’t reflect about it later. Yet most would be surprised to know how minimal the impact our money has had. More importantly, we do not release that if given strategically, the same sum could create a larger impact.

Donating to an organisation’s corpus fund is a great way to help an NGO sustain itself in the future. A corpus fund is like a permanent fund that an organisation cannot dip into except in emergencies. The corpus fund and the interest on it act as an internal source of funds, as opposed to grants or donations that are one-offs received by an organisation. Additionally, a corpus fund can be created out of internal accruals and surpluses as well.

A healthy corpus fund can be a good indicator of an organisation’s sustainability. In 2013, The Akshaya Patra FoundationThe Leprosy Mission Trust IndiaHelpAge IndiaSri Chaitanya Seva TrustISKCON Food Relief Foundation had the largest corpuses of all 550 NGOs on our site. These organisations are well known, have been running impactful programmes for at least five years, and have among the highest spend on programme expenses in the latest available year.

Large Corpus = Long Term Sustainability
NGO Age Corpus Int to Corpus to Investment Int to
(All data pertains to FY13)   Rs mn Tot Inc (%) Tot Liab (%) to Tot Assets (%) Cash + Inv (%)
Akshaya Patra Foundation, The 15 756 1 55 10 4.9
Leprosy Mission Trust, The 146 346 1 62 5 4.3
HelpAge India 37 339 2 55 68 2.8
Sri Chaitanya Mission Trust 17 339 25 98 28 10.3
ISKCON Food Relief Foundation 11 303 1 79 14 5.5

You would be surprised to know that a number of ‘known’ NGOs are living a hand-to-mouth existence, overly reliant on the goodness of strangers to continue the work they are doing. Dependency on external donors makes it difficult for them to plan their activities in advance. A day-to-day existence also makes it hard for an NGO to innovate or scale programmes to benefit more people. Would Akshaya Patra be able to feed 1.3 million children if they were trying to cut corners at every step? HelpAge India provided 1.23 million free treatments through their mobile vans in 2013, the kind of scale that requires large investments.

NGOs tend to run their programmes as per the funding they receive. However, programme funding only covers the expenses of running that particular time-bound programme. An organisation with a healthy corpus fund is able to prioritise spending. As an example, interest income earned from the corpus could be a guaranteed source to finance the annual rent paid by an education NGO for the space they use to educate their beneficiaries.

A corpus fund in a legitimate organisation can go a long way towards supporting beneficiaries and programmes. Therefore, if you’re considering donating to an organisation you like, we’d urge you to reserve a part of your donation for the organisation’s corpus fund. What’s more, you’ll know your money won’t be misused. Here’s why:

  • A corpus fund is strongly regulated: Under the Indian Income Tax Act, an NGO cannot transfer more than 15% of a year’s voluntary donations towards the corpus fund. At least 85% is to be used for programme expenses which ensures that an NGO doesn’t forego programme activities to build up its own corpus[1].
  • Donations to a corpus fund are regulated: A donor has to include an explicit, written statement specifying that the donation is for the purposes of the corpus fund.

Watch out for:

  • NGOs that have built up large corpus funds and high interest income without corresponding spends on programme expenses, staff costs, overhead expenses or earmarked funds over two or three years. A donor should explore why an NGO is building up a corpus when no charitable work is evident.


Continue reading A piggy-bank no NGO should break!