It also helps that this next generation will be the recipient of one of the most significant wealth transitions in history. As millennials and Gen Z inherit the fortunes of their baby boomer and Gen X parents, they will go from holding just 3 percent of the global wealth to approximately 60 percent.

These trends and their implications are drawn from a report titled Philanthropy Trends: A Look into the Future by Instituto Beja and Oxygen that attempts to offer a guide to the future of philanthropy and a map of trends and innovations. For this, the team at Oxygen interviewed 22 people from across the world including philanthropists, nonprofit leaders, journalists, and academics. They also delved into studies, articles, surveys, and analyses to provide a perspective on what the current zeitgeist reveals about the philanthropic sector, and the world we live in.

While the report covers a wide range of themes including trends in technology, measurement and evaluation, and communication, this article will focus on what young people think of philanthropy and how they give.

The young engage differently with nonprofits

Baby boomers usually engage with nonprofits because they care about the organisation and its mission. Millennials and Gen Z, on the other hand, are driven by their social conscience and desire for change—90 percent millennials donate because of their alignment with a cause or a mission, rather than due to the organisation itself.

Social media and peers play a significant role in who and what young people support.

However, this doesn’t necessarily mean that young people do not care about the nonprofit’s mission. In fact, they expect a stronger connection with the nonprofit and its cause despite having a smaller donation corpus than the older generation. They are also more vocal advocates of the causes they champion, and are three times more likely to defend a nonprofit they support compared to Gen X and baby boomers.

Social media and peers play a significant role in who and what young people support. They are four times more likely to learn about causes from influencers and celebrities, and 1.5 times more likely to learn from colleagues as compared to traditional donors. An astounding 69 percent prefer to engage with nonprofits over social media.

They want to do it their way

According to the Bank of America Private Bank Study of Wealthy Americans report from 2022, 76 percent of philanthropists from the younger generations want to carve their own path when it comes to giving. Women in particular were more inclined to this idea, with 88 percent wanting to do things differently from their predecessors as compared to 69 percent men.

For this younger set, priorities are defined by a range of factors such as personal identity, political opinion, and faith, much of which might not align with their families’ giving traditions. They also care a lot more about systemic issues such as race, gender, and the environment. For instance, they have been most active during movements for racial justice, political and economic unrest, and times of crisis.

Young givers also understand how their everyday actions and financial resources can aid in addressing some of these entrenched problems, and hence are keen on finding the best ways to use resources and make a bigger impact, whether it is through charities, investing in social businesses, or making traditional investments that consider environmental, social, and governance factors.

The young recognise power dynamics

Traditional donors often offer restrictive funding for specific projects to nonprofits, which leads to extensive reporting and bureaucracy and might not reflect the organisation’s real needs. Young people are more cognizant of supporting the recipient and their mission, thereby creating a more balanced relationship between the donor and the recipient.

They also recognise the power dynamics that exist between the donor and the nonprofit, and aim to dismantle it by allowing the recipient to have more control over their resources. Additionally, young donors are more transparent about their intentions and the expected results of their donation.

They want to focus on social justice

The younger generations acknowledge their privilege, and so they are more aware of their role in addressing social injustice.

A research study conducted by the Lilly Family School of Philanthropy (IUPUI) with donors between the ages of 18 and 35 with a net worth of USD 1 million or more revealed that many of them are looking to social justice philanthropy as a way of tackling this challenge.

Social justice donors try to redistribute power to more people, especially those who are marginalised.

The main idea behind social justice philanthropy is knowing that donation, especially by people with class privilege, is connected with unequal institutional systems and structures of capitalism, racism, sexism, and more. Recognising this, social justice donors try to redistribute power to more people, especially those who are marginalised.

The younger generations practise social justice philanthropy by focusing on four key objectives:

• Reducing harm by withdrawing investments from financial assets and stopping the process of accumulating more wealth.
• Providing resources to the marginalised by offering assistance or mutual aid and by supporting QTBIPOC initiatives or organisations.
• Shifting the power dynamics by ceding decision-making, reallocating wealth for more even distribution, taking actions to make amends for past wrongs, giving stolen or appropriated land back to indigenous communities, and practising advocacy.
• Dismantling oppressive systems by funding grassroots initiatives and organisations that work on community building, and using storytelling to raise awareness.

They look at giving beyond just money

According to a worldwide study by Edelman, 70 percent of Gen Z are engaged with social or political issues. Only one out of every five of them would work for a company that doesn’t share their values. For these younger generations, standing up for what they believe in means more than just giving money.

They might not call themselves activists, but they support the causes they care about with their earnings and expenses. They are most likely to boycott a product, company, or government if they disagree with its political, social, or environmental stances.  

Young people want to contribute not only through financial resources, but also through their time, energy, and influence. They vote for political representatives with similar views; sign petitions online; change how they make or purchase a product; and participate in rallies, marches, and protests. They also self-reflect and are willing to learn and question their own prejudices and privileges.

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Know more

• Read the full report here.
• Learn why key trends in philanthropy are at odds.
• Read more about how millennials and Gen Z are stepping into generosity.

Rekha Koita is the director and co-founder of Koita Foundation, an organisation that works on digitally transforming nonprofit operations to optimise processes and use data and analytics to drive performance and growth.

She was previously a management consultant at Accenture where she conducted corporate training for several Indian and multinational organisations and nonprofits. Since starting her philanthropic journey in 2016, Rekha has been focused on leveraging technology for positive change within the nonprofit sector.

In this interview, Rekha Koita reflects on the potential of the current philanthropic landscape in India and her role in it as a donor. She also talks about visionary founders, many of whom are young and driven, spearheading initiatives that promise to reshape communities for the better.

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Know More

• Read this article about how Indian philanthropies need to fill the funding gap.
• Read this article about Prashanth Prakash’s philanthropic journey.

Amit Chandra is the co-founder of ATE Chandra Foundation, one of India’s largest philanthropic foundations that focuses on social sector capacity building and sustainable rural development.

He has been a trustee of the Tata Trusts, a founder/board member of Ashoka University, a board member of Give India and The Akanksha Foundation. He also is the chairperson and founder of Bain Capital, India, and has served as a board member at Tata Sons, Genpact, L&T Finance, Emcure Pharmaceuticals, Piramal Enterprises, and Tata Investment Corporation.

In this wide-ranging conversation with India Development Review, Amit talks about the philanthropic values that matter to him, the challenges that donors face, the need for a community-centric approach to giving, and the lessons that failures teach.

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Know more

• Read this interview to learn more about the rise in strategic philanthropy.
• Read this article to find out more about philanthropy with an LGBTQIA+ lens.
• Read this article to understand why philanthropy must focus on systemic causes of exclusion.

In the last 18 months I’ve had the opportunity to engage with dozens of foundations and philanthropy support organisations of various stripes, most of whom are ambitious to transform how they work and the impact they can have. They don’t just want to collaborate and drive collaboration; they also want to be equitable and to shift power (even to ‘decolonize’ their giving); build trusted relationships with their grantees; enable systems change; increase their risk appetite and catalyse innovation; and to do all of this based on data and evidence. This is a lot to transform, so it’s no wonder that practice so often lags behind rhetoric.

But it’s not just that it’s a lot, it’s also that these practices or approaches can also be at odds with one another. There are tensions between the dominant trends in philanthropy, which means that the transformation agenda is much more complex and difficult to navigate than WINGS’ neat set of ten transformation principles implies. Let’s look across some of these key trends, taking as a starting point the calls to shift power, decolonize, and increase equity in philanthropy.

Challenges in addressing power dynamics while fostering collaboration for systems change

From localising philanthropic giving to adopting trust-based philanthropy, the philanthropic sector is increasingly grappling with how to transform the power imbalances and inequities that it has created and continues to perpetuate. The call to action lies at both a relationship level–in terms of how a funder relates to its individual grantees, and at a structural level–in terms of where in the world and to which type of organisations philanthropic capital tends to be deployed. In particular, there is a call for localised giving, to shift resources away from the origins of colonial exploitation and instead towards locally-led actors representing marginalized communities.

Several initiatives argue that long-term, flexible funding is the underpinning for an ‘equitable partnership’.

On the relationship level, several campaigns and initiatives argue that long-term, flexible funding–with generous coverage of operational support costs–is the underpinning for an ‘equitable partnership’ between funder and funded, especially when combined with minimal reporting requirements, strong feedback, communication mechanisms, and provision of complementary (non-financial) support. For many grantees, this indeed describes the gold-standard of funding practice. However, it is not without its complexities, especially when combined with other philanthropic ambitions.

For example, increasing numbers of funders (and the infrastructure that supports them) are aspiring to enable and catalyse systems change: to address underlying causes rather than symptoms, to thereby have a long-term, sustainable impact. Some argue that the funding practices outlined above are critical for enabling ‘systems change innovators’ (NGOs, social entrepreneurs, etc.) to drive change. However, systems change in any given issue area cannot happen without an aligned strategic approach among at least some key actors in a system–i.e. it requires collaboration and partnership.

If funder and grantee alike truly want to work together to enable systems change they need to form a trusted partnership: agreeing on shared objectives, with shared accountability for achieving those by combining and integrating complementary resources. This can be at odds with the implicit (or sometime explicit) idea in trust-based funding practices that the grantee knows what is best, and the funder should leave them alone to get on with it. Instead, it requires finding a way to work together that builds trust. Co-creation, for example, can help foster greater levels of trust between funders and implementers, but requires a good deal of interaction between them.

In fact, systems change also needs more than a collaborative approach between funder and grantee. It requires multiple stakeholders to be ready to work with others, across different societal sectors, combining and aligning their resources in pursuit of transformational change. This is why many funders are also recognising their important role in convening and encouraging collaboration between their grantee partners and other key stakeholders.

For those that are also serious about mitigating power imbalances and ensuring equitable partnerships with grantees, this can be a delicate matter as donor-driven collaboration can be another way in which funders embed an unhealthy power dynamic with and among their grantees. If funders want to avoid falling into this trap, they need to ensure that their partners can afford to invest time and resources into exploring collaboration and partnerships. This is something that happens outside of projects, and so requires sufficient operating costs on top of project budgets, as well as the luxury of time and space without the need to prove immediate results–i.e. all in line with the central tenets of a trust-based approach.

Finding equitable and inclusive approaches to evidence-based systems change

However, another challenge for those espousing ‘trust-based’ approaches to philanthropy while also aspiring to systems change is the call for minimal reporting requirements. For example, in a bid to reduce reporting burden on grantees, Thousand Currents, amended its reporting templates to just one question, ‘What would you like us to know about your work and what has happened in your organisation over the past year?’ Such an approach can make it difficult to know what progress is being made towards systems change, and certainly runs counter to calls for a more rigorous, evidence-based approach to philanthropy.

Many foundations are grappling with this challenge and finding ways around it by focussing on learning rather than proof and seeking to make this a collaborative effort with their partners. For example, Porticus develops ‘evaluation methodologies in close collaboration with our partners, supporting them and building capacity where needed. These evaluations also include assessing our own role.’

Some evidence-based approaches can risk placing an unrealistic burden of proof on grantees.

By contrast, some evidence-based approaches can risk placing an unrealistic burden of proof on grantees to demonstrate their individual contributions to impact, thereby undermining collaborative approaches required for systems change. The demand for evidence and ‘contribution to systems change’ can also prevent funders from achieving their ambitions to shift power at a structural level. In particular, community-based organisations may struggle to adhere to requests to use stringent indicators and methodologies in their proposals and reporting, making it challenging or even impossible to them to access international funding opportunities.

‘Systems change’ as an approach can itself exclude many organisations, as the concept is so often equated to ‘scale’, leading funders to favour larger organisations or those with potential to ‘scale up’. There is a lingering idea that small organizations have limited capacity to meet long-term end goals or provide direct services. Such arguments hinge on the idea that systems change work can only be accomplished by large organizations with sizeable budgets, particularly from the Global North.

But the fact is, systems change cannot only be achieved by a few big players; nor does it require that every single stakeholder in the system is working to transform the system. For example, those that are delivering essential services might not be focussed on systems change, yet their work could be an essential part of system transformation, especially when their knowledge and experience can be leveraged in wider initiatives for systems change.

Even if funders are clear about and open to the role of smaller, local, and more service-oriented organisations in systems change initiatives, the concept itself is infused with technical jargon, which can be exclusionary for potential grantees and prevent their access to ‘systems change’ funding calls.

Leveraging networks and influence to temper the pitfalls of top-down philanthropy and private investment

Another challenge for the drive to partner more equitably and ‘locally’ is the growing trend in philanthropy to take more risks while also reducing the risks of others, thereby driving innovation for transformational change. This is emphasized in relation to ‘Public-Private-Philanthropy Partnerships’, particularly those seeking to catalyse investment from the private sector, as championed by the World Economic Forum in its Giving to Amplify Earth Action initiative.

Such an approach can tend towards ‘big bet’ top-down philanthropy, which is built on strategies formulated by those without lived experiences of the issues at hand. It is typically based on the personal passions or interests of the funders, including private partners who are motivated by market-rate returns on their investment alongside, or even ahead of, social or environmental progress. At the same time, philanthropy has a unique role to play in such partnerships to avoid this dynamic: it can leverage its influence and networks to ensure more equitable, power-sensitive approaches while building critical bridges between the profit-driven motivations of the private sector, the social goals of governments, and the justice goals of civil society actors.

Transformation: a complex but unavoidable path

This is just a flavour of some of the complexities and sensitivities underlying the various intersecting trends in progressive philanthropy today. While they may not be fundamentally incompatible, there can be tensions between these approaches. Thinking these through together with peer foundations and partners (as happened at a recent event hosted by Co-Impact and Spring Impact) can help to navigate the ambitious transformation agenda, as we ask ourselves and our organisations key questions such as:

• Are we truly committed to systems change, and what do we understand that to mean?
• How do we work with others to achieve systems change, while also seeking to transform power and use our own power responsibly?
• What level of evidence do we need to be sure that we–together with our partners–are achieving our goals? What’s the best and most equitable way to seek that evidence?
• When making big bets or taking risks with or on behalf of others, how can we also ensure that we are being inclusive and equitable, while promoting justice?

In the same way that society adapts to changes in social norms, technology, and unfolding crises, so too must philanthropy. This is why we see an ever-changing set of trends in the philanthropic sector, and with it, a host of buzzwords and bandwagons. Grappling with these trends and their jargon can take us away from our daily work, but it is also a necessary part of navigating the perpetual, complex, and essential journey of transformation.

This article was originally published on Alliance magazine.

Note: Districts of West Bengal decided not to join the program. Currently only 112 districts are part of ADP. However, in our analysis we cover the CSR spend across all the 115 districts that were identified at the launch of ADP in 2018.

NITI AAYOG identified 115 districts across 28 states based upon composite indicators from Health and Nutrition, Education, Agriculture & Water Resources, Financial Inclusion & Skill development and Basic Infrastructure which have an impact on HDI. In the five years of ADP implementation, the overall composite score has improved by over 72%. Maximum change has been in the areas of Education, Agriculture & Water Resources, and Healthcare.

The broad outlines of ADP are Convergence (of Central & State Schemes), Collaboration (of Central, State level Officers & District Collectors), and Competition among the districts driven by a spirit of mass movement. Districts in the ADP are prodded and encouraged to first catch up with the best district within their state (districts in the frontier), and subsequently aspire to become one of the best in the country, by competing with, and learning from others in the spirit of competitive & cooperative federalism.As of August 2023, the overall composite scores of the Aspirational Districts (ADs) in the north-eastern states and a large number of ADs in the states of Bihar, Jharkhand and Chhattisgarh had an overall composite score of less than or equal to 50, they are now working towards closing the distance with districts that are in the frontier. These states also have a higher share of ADs.

Despite the government advocating CSR investment in ADs, only about 2.15%* of the total CSR during 2014-22 has been invested in these districts, which houses more than 15% of India’s population. In FY 2021-22, CSR spend in ADs increased by more than 50% from the previous year.

More than half (53%) of the total CSR funds are spent on ADs in these five states—Madhya Pradesh (448 Cr.), Andhra Pradesh (387 Cr.), Jharkhand (328 Cr.), Chhattisgarh (301 Cr.) and Gujarat (291 Cr.).

Also, over 3/4th (78%) of the CSR spend in ADs has been across these four top sectors (Education, Healthcare, Rural Development, and Environment Sustainability). During the COVID-19 years, CSR spend in Education and Healthcare increased by more than 70%. A five-fold increase in CSR spend was seen in Environment Sustainability projects between 2020-21 and 2021-22.

In Jan 2023, five years after the launch of ADP, the government of India launched ‘The Aspirational Blocks Programme (ABP)’. This Programme focuses on improving governance to enhance the quality of life of citizens in the most difficult and underdeveloped blocks of India.500 blocks from across 27 states and 4 Union Territories of India were identified to steer and drive the change in aspirational blocks by monitoring key socio-economic indicators categorised under major sectors such as Health and Nutrition, Education, Agriculture and Allied Services, Drinking Water and Sanitation, Financial Inclusion, Basic Infrastructure, and overall Social Development. With the launch of ABP, more than 45% of districts in India (~350 districts) are now either part of ADP and/or districts of ABP.

How have the 115 ADs transformed across various thematic areas in the last five years? Which districts have been consistently improving across all thematic areas? How much CSR funding have they received? Which companies are funding these ADs? How do we strengthen investments at the bottom of our pyramid and help these districts reach their transformation goals? Does a 2% allocation of the total CSR investment suffice to facilitate the transformation of aspirational districts?

To know more about ADP & ABP and CSR Spend in ADs and districts of ABP, explore our data assets on Aspirational Districts.

*According to the direct attribution to districts available on MCA CSR portal—a large chunk of CSR remains unattributed to any particular district.

This article was originally published on India Data Insights.

This article was updated on 17th January, 2024 to include a note on the districts that were considered for the analysis.

Our commitment to this cause has helped us realise that there needs to be a more robust funding ecosystem for WLR in India. As a result, we sought to understand the challenges that prevent funders from entering the space. Here’s what we learned:

1. A lack of established models of intervention

The funding ecosystem for WLR has been so vacant that there is a dearth of imitable models and approaches that potential funders can adopt. A lack of structured intervention by nonprofits around WLR has resulted in limited evidence on the positive impact of relevant programmes. By extension, there is limited India-based evidence regarding how work on women and land can/should be funded. Funders thus don’t have the confidence that their funds will be effectively utilised given the contextual heterogeneity of land and communities across the country—resulting in an apprehension towards engaging with WLR. 

2. Potential sociopolitical backlash

Social norms have a profound impact on access to and control over land in India. One of the most common land disputes we’ve come across through our work in rural regions involves women (and men) from caste-marginalised communities. This can present unique challenges, as enabling their access to land may draw the ire of those that wield greater power within the community, if such work is perceived to be disrupting the existing social fabric and hierarchy. As a result, there is apprehension among funders about the potential backlash that could be directed at an organisation working on WLR.

3. Perceived complexity

There is a common narrative that interventions on land are ‘complex’ and ‘long drawn’. This, coupled with a lack of gender disaggregated data on women’s land ownership, has resulted in a variety of understandings regarding the extent of the problem and how it plays out on the ground.

The reporting parameters for WLR differ across various databases; states seem to have different mechanisms for recording gender disaggregated data, with some of them not including a gender column in their land records. For example, the fifth National Family Health Survey indicated women’s land ownership to be 22.7 percent, whereas a women’s land rights index constructed by the Center for Land Governance estimated the national average to be 12.9 percent.

Besides failing to convey the extent of the problem, the lack of data also makes funders perceive land as a technically complex issue. Funders view it as a subject that requires extensive knowledge of a variety of laws and thus steer clear from it, instead opting to fund causes they are more familiar with—such as education, health, or livelihoods. 

This perception also places rights-based interventions in opposition to the existing system of governance. A number of existing interventions primarily aim to fill gaps in implementation rather than seeking a complete overhaul of the system itself.

Land-related interventions are often also long-term projects. For instance, interventions related to inheritance or agricultural land may not have a significant impact to display in two or three years. This serves as a deterrent for funders who want interventions to bear favourable outcomes within a relatively shorter time frame.

The role that land can play in the progress towards achieving the sustainable development goals cannot be underplayed.

Lastly, the existing ecosystem for work on WLR is fragmented, as a lot of the efforts on the ground are by community-based women’s rights organisations that do not have access to land as a primary focus. They are often pulled into the realm of WLR work when the women they engage with experience land-related issues. The absence of a strong and evolving ecosystem ensures that the capacities of community-based organisations and other stakeholders (such as government functionaries) to provide effective support remains limited.

Having said that, the role that land can play in the progress towards achieving the sustainable development goals (SDGs) cannot be underplayed. Land for women can have a multidimensional impact, serving as an underlying financial asset and a means of generating livelihoods. Ensuring land rights for women contributes towards 13 SDGs under the overarching umbrella of SDG 5: Gender Equality and its intersections with SDG 2: Zero Hunger, SDG 08: Decent Work and Economic Growth, SDG 13: Climate Action, and SDG 17: Partnerships.

Therefore, it becomes imperative for all of us to evaluate the work we are doing from a lens of women’s access to and ownership over land.

How can funders integrate WLR into their work?

1. Get a lay of the land

When we started our work on WLR, it took us six months to make sense of the problem in the Indian context given the diversity of land, the issues related to it, and how it applies to women belonging to different social and cultural contexts. Therefore, we encourage interested funders to take some time to look at what they already fund and gauge whether they can extend the ambit of their programmes to include one or two land-related issues.

This is especially helpful for funders who are already working with rural women, given that the lives and livelihoods of these women are strongly intertwined with land. Similarly, a variety of commonly funded issues—organic farming, nature-based livelihoods, migration, and climate—are linked to land.

The fragmented nature of the existing ecosystem of stakeholders is a genuine problem, as there is minimal communication between the numerous organisations that are working on WLR and funders. This is why we are always happy to get on the phone with anyone interested in learning more about the landscape, as we believe that sharing the knowledge and expertise we have obtained through our experiences in this field can contribute positively.

2. Generate indicators

We understand and accept that there simply aren’t enough evidence-based models that can be emulated. Therefore, the question we  ask those who fund related causes such as agriculture, ecological restoration, food security, and housing is, “Can you incorporate the collection of baseline data on women’s land ownership or access or control into any of your existing programmes?”

This data collection doesn’t need to be a part of or a precursor to a larger WLR intervention. For example, if your organisation is working with self-help groups (SHGs) and is having conversations with members about bolstering their livelihoods, you can ask them questions about land ownership as land constitutes a critical element of the assets they may or may not have. The information obtained through these conversations can serve as key indicators that may inspire your organisation and others to undertake more structured interventions on WLR. At the very least, it will contribute to filling the significant gaps in information about the status of women’s land ownership in India.

3. Sidestep backlash

Most land laws in India are gender equitable on paper, but their implementation is often lacking. Designing or engaging in programmes that enable effective implementation are thus not in opposition to governance. Prima facie, nobody should have a problem with this. The opposition that may still emerge as a result of community dynamics is to be expected in the case of any intervention that shifts the status quo.

Funding organisations that have strong community presence in a particular region can also leverage their support. By mapping relevant stakeholders, they can work to identify an effective intervention model that elicits minimal pushback.

Funders could also look at ways to support land-related initiatives that are promoted by state governments. For example, the Odisha government is seeking to complete its implementation of the Forest Rights Act by 2024. This serves as a perfect avenue for funding organisations to step in and provide support, such as training women from tribal communities in the region to help their communities file forest rights claims.

4. Consider an alternate view of land

Historically, access to and control over land has equalled agency and power, and this still holds true. Thus, at The Womanity Foundation, we view land as a pathway to women’s empowerment—both social and economic. If empowering women is a key aim of the initiatives you choose to fund, we recommend looking at land as an avenue to achieve that. In fact, land is the most sustainable pathway to fulfil this aim as it is an asset that grants women financial security, shelter, social status, income, and livelihood opportunities. Therefore, funders aiming for the long-term sustainability of their work on women’s empowerment should strongly consider investing in WLR. It can help ensure that women have more agency, long after a programme or project ends.

A myopic view of land as an asset to be monetised can be a dangerous one. 

When we first started funding WLR, we stressed on women’s economic empowerment as our primary goal. But soon we learned that a myopic view of land as an asset to be monetised can be a dangerous one. Through conversations with the women we work with, we realised that the social security accorded by land is often far more important in their eyes, and this is something all funders should keep in mind. 

Although the mindset shift required by funders is substantial, the steps they can take could be incremental. Engaging at conferences and events with organisations that work on this issue is also a useful step in deciding whether it’s worth adding to the agenda.

Lastly, there is significant space for innovation in this field. It is conducive for funders looking at innovations relating to climate and alternative funding instruments. Given that a number of outcomes on land and its economics are measurable and verifiable, we believe there is a case for investments in the form of development bonds with stringent evaluation studies. This will not only create credible evidence, but can also potentially open alternate funding options for this resource-crunched issue.

We would thus encourage everyone to take a step back, understand the sustainable impact land can have for women, their families, their communities, as well as the planet.

—

Know more

• Learn more about the importance of securing land rights for women.
• Learn about the need for equipping community-based organisations to work on land rights.

Philanthropy in India is not keeping pace with the need for funds among nonprofits. CSR funding is being directed towards causes and organisations considered ‘safe’, and an increasing number of FCRA licenses are being cancelled. The result is twofold—there is less money allocated to causes that are not urban-centric, or that engage with ‘intangible’ issues such as justice, equity, and well-being. And the supply-side market for philanthropy is reducing.

The cancellation of licenses for foreign funding would not have made much of a difference if enough wealthy Indians had stepped in to plug that gap. However, since that is not the case, it is now up to nonprofits to become better fundraisers at a time when there aren’t enough funders in the first place.

The onus of expanding the philanthropy market should be on funders

There are several examples of this. Stanley Levinson, a businessman and lawyer, was an ardent supporter of the civil rights movement in the US. He used his influence to build the fundraising strategy for the Southern Christian Leadership Conference, Martin Luther King’s organisation that helmed the civil rights protests. Closer home, business leaders like G D Birla, Jamnalal Bajaj, and Purshuttamdas Thakurdas were instrumental in supporting the Independence movement and seeding the roots of several Gandhian institutions. And in the more recent past, the late Dutch businessman Ferd Van Koolwijk created Partnership Foundation in the Netherlands to raise money from Dutch businesses to support the work of Rainbow Homes in India. We’ve also seen how Azim Premji has single-handedly bolstered domestic funding through his contributions.  

What can funders do?

Philanthropists have the power of privilege—something that gives them the wherewithal to negotiate the most intractable issues. The current social and political environment must therefore be seen by domestic funders as an opportunity to leverage this power and fill in important gaps.

Listed below are some pointers on what philanthropists can do to help and support civil society organisations (CSOs) in these testing times.  

1. Expand the common ground for funding 

The number of millionaires in India has been on the rise for the last decade and is expected to almost double by 2026. While many of them share their wealth via community platforms (temples, schools, hospitals, and clinics), hardly ever does this money translate into long-term funding for civil society.

Philanthropists can build common ground and negotiate for greater social participation from those who have benefitted from the economies of scale.

Existing philanthropists and business persons have the capacity to engage with those who have newly acquired wealth and help them expand their horizons. This engagement needs to increase given the fast pace at which wealth creation is happening with new-generation founders. One lesson we universally learned during COVID-19 is that one person’s problem is everybody’s problem. In a post-COVID world, there is scope for greater sensitivity to recognising that if we let something fester, it will inevitably land on our doors.

With power, connections, and influence, philanthropists can build this common ground and negotiate for greater social participation from those who have benefitted from the economies of scale. It needs unique approaches and methods, including one-on-one engagement, building intermediary structures, and highlighting the value that civil society provides to their businesses and the country at large.  

2. Build social protection mechanisms

In a survey by GuideStar India, 64 percent of nonprofits revealed that their employees are the primary breadwinners in their families. Funders can collaborate to create safety nets, such as pooled insurance and emergency support, to help social workers navigate times of distress. With funding and advocacy for the sector shrinking, it faces a significant loss of talent, accumulated wisdom, and invaluable years of experience.

Large funding organisations have an opportunity to appoint experienced social workers as CSR or philanthropy coordinators, thereby recognising their expertise in the field. This would be far better than frontline teams having to work as mechanics, labourers, or marketing agents, in the absence of jobs that use their accumulated knowledge and networks in the community.  

3. Leverage their government access to speak for the sector 

Many philanthropists have access to government officials and ministers by virtue of the businesses they run. This access is leveraged for collaborating on public–private partnerships, introducing easier regulations, or making it easier to do business. However, this privilege is not available to nonprofits, particularly since there is no collective or industry body for the sector. While nonprofit leaders may be able to form connections with state leaders for their programmes, they struggle to be part of conversations with, say, a union minister or national-level bureaucrats.   

Philanthropists who have this access can act as spokespeople for the sector. Given their experience working with nonprofits and seeing the benefits to communities first-hand, they can sensitise government officials to the challenges faced by CSOs and which norms need to change to create a more enabling environment for them to do their work.  

4. Create new streams of funding  

If donors would like their nonprofit partners to become financially sustainable, they must also start considering how new and innovative funding streams can be created. The Social Stock Exchange is one potential experiment—there is a need to reduce barriers so that it becomes widely accessible to nonprofits. There have been some experiments with instruments such as development impact bonds and mutual funds focused on charity causes as well. It is a good time to learn from these approaches and find better ways to channelise funding.

We need to come up with solutions that will enable trust, promote market participation, and make it easier for people to give. For all of this to happen, these experiments will have to be backed by companies that already have strong, trust-based relationships with people.   

5. Build greater sensitivity and engaging in field visits  

When founders start a company, they usually conduct market research to understand customers’ needs, constraints, and aspirations. Similarly, one needs to speak to communities and fieldworkers to understand the problems and pain points that a nonprofit is working on. In many cases, funders are at least five degrees removed from the on-ground realities they seek to change, which impacts the quality of any CSR and philanthropy decisions that they take.

For example, Zerodha has a programme where it allocates funding to any employee who is willing to work towards solving a local issue related to climate change and livelihoods. Rainmatter Foundation, Zerodha’s philanthropic arm, lends technical and advisory support to such initiatives. This brings employees closer to the problems in their neighbourhood and helps them understand the complexities of social change directly. Additionally, it acts as a feedback loop for the foundation and helps them remain in touch with ground realities.   

6. Use social networks to drive long-term philanthropic capital

The challenge with funding through business is that much of the giving process is measured on a quarterly, or sometimes even monthly, basis. However, social change is not a monthly, quarterly, or annually measurable process. In addition, reporting on fixed metrics trivialises the hard work of CSOs. Furthermore, social funding is sometimes equated with social marketing. Unless some of these attitudes change and philanthropists see themselves as part of the changemaking process, it is likely that problems around funding will persist.  

Funders need to commit to at least five to 10 years of funds to the organisations they support. If this seems hard to do individually, they can partner with fellow philanthropists and take turns to fund an entity. This means that one needs to be able to share credit with many other philanthropists. Initiatives such as LivingMyPromise and Social Venture Partners—both of which are networks of philanthropists who interact with and learn from each other—can be leveraged to identify ways to provide nonprofits with long-term funding. 

7. Collaborate to build knowledge and learning commons

Shared insights from programmes and organisations are invaluable in guiding philanthropists away from potential risks and pitfalls. This hinges on two key factors: firstly, a culture of openness among philanthropists and their teams so that they can candidly share both successful and challenging experiences; secondly, the establishment of a trustworthy, inclusive ecosystem that transcends varying ideologies and approaches, and where learnings can be shared and documented.  

To continue and build on years of good work, philanthropy must fully show up for civil society.

At the very least, a database that categorises philanthropic endeavours by donor profiles, geographic focus, target communities, and thematic areas would prove invaluable. Such a resource holds potential for fostering collaborations, preventing redundancy, and facilitating supplementary work. 

Moreover, this database could serve as a forum for evaluating the merits of diverse strategies, co-creating standards, and analysing the risks inherent in different philanthropic models. A platform developed with the help of experts working across social development domains could offer informed, evidence-based guidance. It would also help counter potential echo chambers within philanthropic teams. 

India has propelled itself to becoming the world’s fifth largest economy, but this progress has only touched a few pockets in the country. Those who need development are the last ones to have access to it. And while the social sector has seen a significant annual increase in expenditure, a lot more needs to be done moving forward. CSOs play a critical role in driving innovation, highlighting success stories, and engaging with very difficult problems that sometimes even governments are not able to address. To continue and build on years of good work, philanthropy—especially from domestic sources—must fully show up for civil society. Otherwise, we are all culpable in reversing the tide of development.  

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Know more

• Read this report to learn more about the philanthropy landscape in India.
• Read this article to learn about the impact of nonprofits losing their FCRA licenses.  

The DPDP Act applies to the processing of digital personal data within India, and to data collected outside India if one is offering goods or services to Indian residents. The act encapsulates various principles of data protection, such as purpose limitation, data minimisation, storage limitation, and accountability. It also provides multiple data subject¹ rights (rights of individuals whose data is being collected), including access, data correction, deletion, and grievance redressal.

Beyond its legal ramifications, however, the passage of the DPDP Act calls for a moment of introspection for the philanthropic community. The act’s emphasis on data protection and privacy rights is a timely reminder of the evolving responsibilities and challenges faced by philanthropic organisations and their grantees.

While the DPDP Act covers a broad spectrum of data concerns, this article focuses on exploring its implications on impact measurement within the philanthropic realm. As we delve into this facet, it’s worth noting that the act, like any evolving legislation, will invite further interpretations.

CSR’s focus on data-driven impact measurement

India’s CSR regulations have historically pushed companies towards a data-driven approach to demonstrate their social and environmental impact, insisting on detailed tracking of both user data and impact measurement. This is regardless of the model adopted by CSRs, that is, whether they run their own social and environmental projects or allocate grants to nonprofits to execute initiatives on their behalf.

The rigorous demand for data and impact evidence is now at odds with the stringent provisions of the DPDP Act.

For instance, if a company undertakes an education initiative directly, it might require detailed student profiles to demonstrate the tangible outcomes of its interventions. In a similar vein, nonprofits being funded by companies are often asked to furnish comprehensive reports showcasing impact—this necessitates the collection of data such as medical histories, personal narratives, or academic progress, depending on the project.

This rigorous demand for data and impact evidence (in both approaches) is now at odds with the stringent provisions of the DPDP Act, especially those pertaining to user data collection, storage, and reporting.² Such a clash has significant implications for funders and civil society organisations that engage in impact measurement and evaluation, and raises important questions about user data collection and reporting and compliance.

What will change?

Collecting personal details without informed consent was an ethical conundrum even before the introduction of the DPDP Act.³ The act merely crystallises these ethical concerns into tangible legal mandates. For example, under Sections 3 and 4 of the new legislation, gathering intimate personal information such as health records or financial data without explicit consent could pose legal risks.

Moreover, the act’s emphasis on data security, minimisation, and explicit consent complicates the previously straightforward reporting processes integral to CSR. Complying with data security and minimisation requirements in Sections 8 and 11 may add substantial administrative burdens for resource-strapped organisations.

In addition, if nonprofits are to comply, they will be confronted with increased legal liabilities and administrative overheads. This cost is more than just financial; it takes away from resources that could be channelled into doing transformative work.

Going beyond numbers

Given the stringent requirements of the DPDP Act, there’s a pressing need for revisiting and potentially revising the CSR guidelines. Striking a balance between accountability and privacy becomes crucial in ensuring compliance with both CSR and data protection mandates.

While accountability remains paramount, it’s time to transition from rigid metrics to narratives of change. By fostering relationships built on mutual respect and shared learning, practices followed by donor organisations can resonate with the ethos of the DPDP Act and nurture a more collaborative philanthropic ecosystem.

This necessitates a fundamental rethinking of how social impact can be measured, and shifting the focus from data collection to storytelling and community empowerment. By upholding privacy and agency, as per Sections 6 and 12, the law provides an opening to develop more participatory and human-centred evaluation frameworks. Funders are pivotal in enabling this evolution by modifying expectations, building capacity, and championing new trust-based and collaborative models of assessing progress.

While the philanthropic sector, especially CSR, has traditionally leaned heavily on quantitative metrics to measure impact, it’s becoming increasingly evident that numbers alone don’t capture the full spectrum of change. Trust-based philanthropy does not seek to abandon these metrics but to complement them. It suggests that, alongside traditional measurements, there’s room for more qualitative, human-centric indicators.

Drawing from the experiences of pioneering funders and nonprofits, here are our learnings on implementing trust-based philanthropy in the context of the DPDP Act.

1. Have conversations with your grantees

Funders have an obligation to understand impact, but the understanding becomes more profound when it’s rooted in both data as well as human experiences. Strict numerical metrics sometimes miss the nuanced changes and adaptations taking place in communities.

Instead of solely focusing on end results, trust-based philanthropy encourages funders to appreciate the journey—the collaborative learning processes, the stories of resilience, and the community-led innovations that are responsible for those results. This doesn’t mean throwing away the numbers, but instead adding layers of narratives and community feedback to them.

Rooted in values such as equity, community, and opportunity, trust-based philanthropy aims to build stronger relationships with grantees, cultivate mutual learning, centre trust with nonprofits, and redistribute power in the philanthropic sector.

Funders can start by initiating conversations with grantees about their experiences and stories on the ground. Impact assessment can become a richer, more holistic process by incorporating tools such as participatory storytelling and feedback loops. The idea is to strive for a balance between quantitative outcomes and qualitative process learnings.

Trust-based philanthropy envisions a future where impact measurement is not only about hitting targets but also about understanding the depth and breadth of change—change that is driven by people and their stories, and supported by numbers, not dictated by them.

2. Streamline data demands

By streamlining data demands, trust-based philanthropy liberates grantee partners from the complexities of data management and aligns seamlessly with the DPDP Act. The implications of excessive data collection extend beyond administrative burdens. Constant monitoring can feel invasive to communities and reduce their rich life experiences to mere data points. Such scrutiny can be emotionally taxing and may alienate the very individuals we aim to uplift.

Trust-based philanthropy inherently champions data minimisation and privacy—both of which the DPDP Act emphasises—by valuing qualitative insights over exhaustive quantitative data.

From an economic perspective, trust-based philanthropy offers undeniable benefits. By minimising costs related to data collection and compliance, funds can be redirected to more impactful initiatives, optimising the societal value of every rupee invested.

A compass for CSR and philanthropy

Recent research provides mounting evidence that trust-based practices are taking hold in philanthropy. A 2023 CEP study found that more than half of the nonprofit leaders surveyed reported increased trust from funders compared to the previous year. Many nonprofits also experienced shifts towards alignment with trust-based tenets, including 48 percent seeing reduced grant restrictions, 40 percent receiving more multi-year funding, and more than 50 percent facing streamlined applications and reporting. Nonprofit leaders specifically cited unrestricted and multi-year funding as the most helpful changes. This demonstrates the growing embrace of flexibility, responsiveness, and mutual understanding.

The DPDP Act should serve as a compass for CSRs and the philanthropic community. By moderating our data demands, we uphold the privacy and agency of the people we serve and alleviate the burdens on our grantee partners.

As we stand at this crossroads, we envision a future where Indian philanthropy is celebrated for both its generosity as well as its trustworthiness. This is an opportunity to champion philanthropy that’s not just compliant with the law but also resonates with the communities

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Footnotes:

1. The terminology used in the DPDP Act is ‘data principal’ for the person to whom the data relates and ‘data fiduciary’ for the processor of the data. This is intended to recast the provider as the primary owner and rights holder (as the principal) and implies fiduciary duties on the data processor (to ensure that processing remains in the interest of the data principal).
2. It should be noted that Section 7(d) of the DPDP Act allows for the processing of personal information used in reporting required by the State.
3. The requirement of active and affirmative consent for sensitive personal data (health records and financial data) was already a feature of the IT Rules. With the DPDP Act, there has been some easing of norms—while informed consent is the norm, Section 7 allows a data fiduciary to proceed with processing personal information that the user provides voluntarily and for a specific purpose. This is in the spirit of opting out rather than in. However, providing notice and opportunity to exercise rights (access, correction, and erasure) are required even in non-consensual processing, and so there will be administrative overheads to ensure compliance.

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Know more

• Read this analysis to learn more about the development of data protection legislation in India.
• Read this article to learn more about the role of technology and real-time data in nonprofit programming.

1. North–South philanthropic partnership

As adaptation measures are generally concentrated at a local level, there is a lack of visibility of suitable options for investment in climate adaptation strategies in developing countries. Due to the highly localised nature of adaptation efforts, international donors are also often unfamiliar with state actors and implementing stakeholders. To overcome these barriers, the G20 members can create an adjacent ‘Philanthropy 20’ platform, through which they can help global financers connect with local actors as per their requirements. The common needs for climate action can be discovered through dialogue and funds can be diverted accordingly.

2. Joint research

Non-availability of data regarding impacts of climate change is a big concern in the Global South. The ratio of research on climate change in the Global North to that in the Global South is 3:1. This lack of data hinders planning for climate action in the Global south, especially on international platforms.
This disparity is largely due to lack of finance and technology to execute micro-level research. However, philanthropy can fill the gap by funding collaborative research projects that focus on mutual learning between the G20 members. This research can contribute to building a repository of best practices for effective climate action. The studies can also include civil society organisations and practitioners to ensure that local experiences and voices are taken into account.

3. Mainstream local terminology

It is crucial to develop a climate narrative based on local languages and terminologies. This can also help philanthropists better understand local contexts for climate action and also empower communities to contextualise the impacts of climate change in their lives. Local media can be an effective tool in mainstreaming such local climate lexicons, especially in a diverse country like India that has multiple languages and cultures. G20 countries can then share best practices with one another on developing standardised classifications for climate change.

4. Mass behavioural change campaign

In order to promote sustainable lifestyles for mindful consumption—as put forth by India during COP27 through its LiFE initiative—G20 can step up efforts to drive a mass behavioural change campaign. It can mainstream modifications to lifestyle such as turning off electronics when not in use, using water mindfully, and restricting the use of plastic. These recommendations, which are part of the LiFE initiative, have the potential to save USD 440 billion globally by 2030. Philanthropists across G20 countries could help build the narrative around sustainability through the adoption of common pledges and by leveraging the strength of social networks.

Recommendations to the G20

Here are some key focus area recommendations mentioned in the brief for G20 to direct philanthropic funding towards:

1. Climate-smart agriculture (CSA)

CSA incorporates sustainable practices into agriculture and aims to make it more climate-resilient. For instance, it looks at using crop varieties that are more resistant to extreme temperatures and erratic rainfall patterns. If adopted, it helps increase efficiency of agricultural systems, ensure food security, and prepare for current and future consequences of climate change.

While governments need to bolster institutional infrastructure to promote and adopt CSA, philanthropy can provide the much-needed support, specifically for small and marginal landholders to help them access credit as well as technical assistance. For G20 specifically, the recommendations highlight:

a) Combining philanthropic capital to implement and scale CSA in the Global South: Focusing on research and development of indigenous varieties that are climate-smart and building a market and supply chain infrastructure for such crops.
b) Supporting community-based organisations to leverage the strengths of small and marginal farmers: Along with CSR funding, philanthropic grants can help farmer producer organisations (FPOs) with technical know-how, establishing market linkages, and developing business plans so that they can become sustainable sources of income for small and marginal farmers.

2. Credit for small entrepreneurs through blended finance

For low-income regions and marginalised groups, accessing sufficient funding for adaptation is a major hurdle. However, blended finance offers a solution. It can be used to experiment with different financial tools to support impact-driven projects, such as those focused on climate change.  For one, philanthropic funding can be leveraged to cushion certain risks that banks and private investors might face when it comes to giving loans or providing capital to micro-entrepreneurs who may not have a credit trail.

Philanthropic funding instruments such as flexible returnable grants and first loss default guarantees, for example, can be used to support such climate-focused micro-businesses. Private foundations can also use catalytic financing to encourage impact investing and partner with the private sector. Additionally, philanthropic funding can aid the public sector in mitigating the risk associated with innovation in the field. This will further encourage investment by the private sector while simultaneously promoting the development of new solutions.

3. Climate-resilient infrastructure

With the increase in climate-change-induced disasters, it is crucial to focus on rehabilitation of climate-sensitive zones and development of climate-resilient infrastructure. This can be done by integrating social security measures and philanthropic capital with government schemes. In India, MGNREGA provides one such collaborative pathway. The scheme has been offering unskilled manual work to rural households in India since 2006 and is a major source of relief for communities in times of distress such as droughts. It also has several environmental benefits as several activities under the scheme are related to restoration of natural resources such as water, land, and trees. The preservation of these assets by communities can further help them enhance their income in the long term. Philanthropic investment in such climate-resilient infrastructure is critical and can be adapted and replicated in other regions by governments as well as the private sector.

4. Digital climate-risk-informed toolkit

To be better prepared for any climate-related scenario, a climate toolkit that can anticipate risks could prove crucial, especially for the Global South countries that are disproportionately impacted. G20 members can support the development of a digital database for this toolkit that helps capture granular data and accurately predict micro-level changes and the impacts of climate change in a particular region. Philanthropists can fund projects for this research to be carried out so that the database enables real-time information exchange and provides farmers with the latest information. Such a digital toolkit can also highlight the most climate-vulnerable areas so that donors can allocate funding to these regions.

5. Social innovation hackathons

Social innovation hackathons create the opportunity for philanthropists, civil society organisations, policymakers, and other stakeholders to come together and maximise their impact through sharing of knowledge. Such platforms can be extremely beneficial for nonprofits to forefront local innovations and connect with global funders who they may not have access to otherwise. Social innovation hackathons can further provide mentorship to different innovators across all G20 countries and help scale these innovations at the G20 level. 

6. Sustainability in urban centres

As cities face worsening heat conditions, it’s crucial to incorporate sustainable practices while planning to increase their adaptive capacities. Urban planning initiatives, therefore, should prioritise nature-based solutions such as green and blue spaces. Public–private entities and philanthropists can partner to develop such resources in urban centres, especially in low-income areas that may need energy solutions.

This article is based on the Harnessing Philanthropy for Climate Action policy brief by Sukhreet Bajwa and Deepa Gopalakrishnan.

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Know more

• Read this interview with MacArthur Foundation’s deputy director, India, on why climate philanthropy in India must adopt an equity lens.
• Read this article to understand why philanthropy needs to step up the fight against climate change.
• Learn how G20 has addressed climate change over the years.

Foundational literacy and numeracy (FLN) forms the basis of all future learning, and affects life outcomes. High rates of FLN are directly correlated to increased workforce participation and higher per capita gross domestic product (GDP). Both the public and private sectors have invested in improving the quality of foundational learning in schools, and India has emerged as a sandbox for innovations in financing models for education with grants, debt-based models, impact bonds, and other instruments. Three impact bonds have been trialled: the Educate Girls Development Impact Bond (DIB) launched in 2015, the Quality Education India (QEI) DIB launched in 2018, and the Haryana Early Literacy DIB launched in 2019.

With all three impact bonds now completed, it is an opportune time to reflect on them and distil early lessons for the primary education sector in India. We at the British Asian Trust draw on our experience with various education initiatives, including the QEI DIB, to share five learnings with funders and donors within the education sector. These learnings offer an insight into how programmes can be designed and delivered more effectively to improve the quality of learning for India’s children.

Learning #1: Donors can link funding to improvements in learning outcomes, rather than only to inputs or activities

The focus of the three education impact bonds was on improving learning among children. Accordingly, they measured and tied funding to learning outcomes as key success metrics. All three surpassed their learning outcome targets, even though two of these—the QEI DIB and Haryana Early Literacy DIB—were being run during prolonged COVID-19 school closures.

To illustrate, the Educate Girls DIB achieved 116 percent of the enrolment target and 160 percent of the learning target by its final year. The QEI DIB improved literacy and numeracy skills among its students by 2.5x in comparison to their peers in other schools. And, students in the Haryana Early Literacy DIB could fluently read 42.4 words per minute while children in non-intervention schools could read only 30.3 words per minute.

We are often asked if outcomes under impact bonds are better or higher than grant-funded programmes. There is very little robust research on this in India or globally, partly because it is still an evolving area of practice and partly due to the difficulties in conducting such research—it requires running a parallel model that is similar to the impact bond model in all respects, except that it is funded via grants. However, some implementation partners in the QEI DIB told us that learning outcomes under the DIB exceeded those in their grant programmes by 50 percent or more.

Factors that make impact bonds work can also be applied to other types of financing mechanisms, including grants. These are:

• Clearly defined outcomes, along with rigorous and independent evaluation and verification of these outcomes.
• Payments and incentives that are linked to the achievement of outcomes. 
• Appropriate transfer of risk from implementation partners to investors when needed. This provides freedom and flexibility to nonprofits to innovate with interventions and delivery processes.
• Robust performance management and data-driven decision-making.
• Strong governance, transparency, and accountability.

Learning #2: Both direct and indirect interventions can improve learning among children, with varying implications on depth and scale of impact

Education interventions can be broadly categorised as direct or indirect. In direct interventions, implementation partners work directly with children to deliver their inputs. In indirect interventions, they build the capacities of key stakeholders such as teachers, principals, and government officials to enable them to perform well, and therefore improve quality of learning.

The QEI DIB included both direct and indirect interventions, with a common end outcome—improvements in literacy and numeracy skills. At the end of the programme, students under both direct and indirect interventions achieved learnings gains in comparison to their peers. Students under direct interventions showed greater improvement in learning when compared to indirect interventions. However, the indirect model was found to be 1.5x more cost-effective (in terms of producing a unit of outcome).

The selection of an intervention should therefore be based on programme objectives and learning contexts, such as the level at which students are. Where students lag more or where rapid gains are the objective, direct interventions have a higher impact and show better results. Indirect interventions are well suited where large-scale change or systems strengthening is the goal, as they are easier to mainstream and are cost-effective but may need more time to yield measurable learning improvements.

Learning #3: Targeted and structured collaboration between implementation partners can improve learning outcomes

The QEI DIB brought together the complementary expertise of two vastly different social organisations—an EdTech partner and a nonprofit—to deliver better learning outcomes for a common group of children. The EdTech partner provided the digital solution, closely monitored the data from the solution, and adapted it to the needs of the students. The nonprofit partner led engagement with students, teachers, parents, and community leaders to improve uptake and usage of this application, especially in rural areas where digital learning was limited or absent.

The collaboration between the two organisations was enabled by the clear set of roles and responsibilities laid out to achieve a shared goal and dedicated performance management support to aid integration. Both organisations agreed to joint duties to deliver combined targets, which were measured annually to assess their performance. They devised strategies together to leverage each other’s strengths and navigate challenges.

Taking joint accountability and responsibility can create a blueprint for achieving better learning outcomes.

For instance, EdTech labs generated data on students each day; this data was collected and stored in a central database. The EdTech partner conducted workshops to train the nonprofit team on understanding and reading the system-generated data. Based on the data, the five best and worst performing schools were identified, and an executive committee at the programme level deliberated on solutions to mitigate challenges encountered by the five worst performing schools. At the end of the QEI DIB programme, students under the intervention improved their literacy and numeracy skills by 5x compared to other students.

While collaboration between two social organisations for delivering an intervention is not uncommon in the social sector, taking joint accountability and responsibility for targets and outcomes in a structured manner can create a blueprint for achieving better learning outcomes.

Learning #4: Providing flexibility to nonprofits to adapt, adopt, and innovate can yield high outcomes

A common learning for all three impact bonds has been around providing flexibility to implementation partners to adapt their interventions based on on-ground needs and realities. Along with the implementation partner’s expertise, intervention adaptations are guided by strong performance management systems and data-based decision-making.

For example, Educate Girls pointed out that the DIB gave them financial as well as operational flexibility to achieve outcomes, which spurred innovative and creative classroom solutions. At the community level, their field workers were given the freedom to test different approaches and adapt strategies for enrolment and learning outcomes specific to a child’s unique challenges. Educate Girls was also able to hire and move resources freely through the course of the DIB.

Implementation partners from the QEI DIB and Haryana Early Literacy DIB also highlighted how the flexibility provided during COVID-19 allowed them to pivot their interventions to include components such as home and community classes and/or e-learning tools via WhatsApp and more. These pivots were made with a continued focus on achieving learning outcome targets at the end of the programme.

Learning #5: Building and sharing evidence on learning can lead to improved programme and evaluation design

Assessing learning outcomes remains a complex and nuanced process. It starts with defining the right metrics to capture learning skills and competencies across different age and grade groups, determining the period needed to realise these changes, and developing appropriate methodologies that allow for this testing.

All three impact bonds developed customised evaluation frameworks in line with programmatic needs and shared resources explaining the final evaluation results and approach in detail. Most education programmes commission their own assessments, as national databases typically do not offer benchmarks at the right level of geography or do not address the needs of programmes.

While this is unlikely to change in the short term, donors are highly encouraged to share their evaluation methodologies, data, and results on programme completion with the sector as it helps set a standard for similar interventions, reduces the need for duplication, and informs evaluation design for future programmes.

These lessons from impact bonds in education stand to offer invaluable insights to donors who aim to improve the quality of learning among children. While it may not be possible, or even desirable, to replicate impact bonds to achieve these goals again, the learnings can be incorporated into grant-based or other financing mechanisms to ensure that development funds are able to achieve the outcomes they seek in an efficient and effective manner.

Note: The authors would like to acknowledge Dalberg Advisors’ contribution in culling out some of the insights mentioned in this article. 

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Know more

• Read this review of education impact bonds in low- and middle-income countries.
• Read this article to learn how a more robust ecosystem around social finance can be built in India.
• Learn more about areas in which development impact bonds are more effective.