Re-engineering philanthropy the Deshpande way

Although he’s now known for being a visionary entrepreneur and investor, Desh Deshpande’s journey into entrepreneurship wasn’t a planned one. The IIT-Madras graduate assumed he’d spend his career working in academia after completing his PhD at New Brunswick, Canada. He even spent a year teaching before taking up an offer to work for the engineering unit of a company owned by Motorola. (The company went on to do over $100 million in revenue in 1991). The success of his work led to him to strike off on his own, and he dove into entrepreneurship. His second venture, Cascade Communications, was so successful that at one point 70% of all internet traffic was flowing through switches produced by the company. Cascade’s $3.2 billion sale to another company earned him his first big money as an investor. He’s been widely recognised for his entrepreneurial acumen, most recently co-chairing US President Obama’s National Advisory Council on Innovation and Entrepreneurship in 2010.

Desh and his wife Jaishree were looking for a way to share the fruits of their success. They set up The Deshpande Foundation as the philanthropic vehicle for their charitable activities. But the Foundation’s work in India is not charity as many of us know it. Their idea is to create a culture of entrepreneurship and back entrepreneurs who will solve society’s most pressing problems.

Teach a man to fish

Desh’s philanthropy reflects the learnings of his career. A self-made man, Desh achieved his successes on the strength of his technical training, drive and innovative solutions. The sunrise years of the computing and information technology sectors saw his products succeed in one of the most competitive markets in the world, proving the importance of the market in building world-class products. At the same time, it illustrated the importance of creating a culture of excellence for employees and organisations to deliver ground-breaking results.

Indirect, Intangible- The DF looks to build (1)

Much of Desh and his wife Jaishree’s philanthropy bears the characteristics of his work in the for-profit sector. They place long bets on the future, invest in systems rather than processes, and aim for scale to achieve big results. Desh felt that innovation in the world of engineering “had a bad supply chain”. This drove the idea of the Deshpande Centre for Technological Innovation (DCTI) at MIT in 2002. The Centre was set up to facilitate research and development of products that had viable commercial potential. It wedded the technical acumen of MIT engineers to the business savvy required to sell their products in competitive markets. The Centre has been instrumental in the creation of 28 ‘spinout companies’ that have since attracted $500 million in capital.

They were then struck by the idea of bringing the same model to the non-profit sector. They chose Hubli, Desh’s hometown as the spot to build their incubator of social enterprises and entrepreneurs. Hubli now houses the Deshpande Foundation’s flagship offering. The Sandbox is an institution geared to provide social entrepreneurs and innovators with funding, leadership support, market linkage and other handholding they need for their organisation to succeed.

Lab to Market: Creating an innovation supply chain for the social sector

Desh’s philosophy seems focused on helping entrepreneurs succeed, and creating a pipline of entrepreneurs who will tackle solutions to developmental issues. His philanthropy doesn’t consist merely of grants (though that is a part of their work), but in creating leaders who can solve problems of the future. Desh believes strongly in entrepreneurs, and backing to succeed in realising their goals.

The Sandbox and its institutions act as an incubator and multiplier for organisations in their care. They are publicly asking what none would dare to ask NGOs. At the Deshpande Dialogue, their annual conference, it’s common to be asked ‘what’s your business model?’ and ‘what’s your revenue model’, unusual for non-profit conferences!

There are other features that they bring in from their work in the technology space. Desh has mentioned that work in the ‘for- profit’ contains a strong feedback loop – “either you get to a place where you’re useful to the world or you die”, some of which they want to bring to the social sector. This ruthless efficiency isn’t to turn NGO workers into a bunch of suits. Rather, it’s to ensure that they achieve the best results possible for as many people as they can.

The most striking feature is his willingness to place bets on the intangible. The conservativeness of the philanthropy sector makes the work of the Hubli Sandbox seem like the work of a maverick. However, it indicates that he’s operating from a different risk threshold than others in the fray. To quote DCTI Director Leon Sandler, they’re “not growing lettuce, we’re growing oak trees”.

Nonprofits can be run like for-profits

Another key feature of his vision, and one that is not articulated as much by others, is that non-profits can be managed and run like for-profit businesses. The Deshpande Foundation helps an organisation in developing a proof-of-concept (evidence that the ideas can work on the ground). They believe in the discipline required to have the non-profit deliver the best possible services.

Navodyami- Market support to entrepreneursThe Foundation’s grantmaking programmes have evolved over the years. They do not want to be perceived as a resource for money to support NGO operations. Earlier, they funded programmes of established nonprofits like Habitat for Humanity, India, Mann Deshi Mahila Saharika Bank, The Energy and Resources Institute (TERI). Their current partners are smaller in size and reach. However, they’re being groomed to provide high-impact programmes that fulfil community needs, keeping in mind the possibilities of scale and self-sustenance.

Desh has mentioned that in the initial years of the Hubli Sandbox the plan was to invite prominent American  NGOs to work in India. When they realised this approach was not working, they changed track and focused on  building local leadership. The impact delivered by the Hubli Sandbox led to sharing this model to be replicated  by entrepreneurs in Nizamabad and Varanasi. The Foundation now runs an accelerator helping businesses and  entrepreneurs in Merrimack, Boston, another Sandbox in New Brunswick, Canada and the Deshpande  Innovation Network aimed at connecting universities who encourage innovation and entrepreneurship. They’ve  achieved a significant amount of reach in the twenty years they’ve been operational!


The oak trees that will grow from the seeds that the Deshpandes have planted will be seen in the future. It seems evident that they have set up a strong and nurturing environment to help social entrepreneurs and organisations flourish.

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!