Strategic philanthropy and the need to improve institutional resilience
Disadvantaged communities are facing a disproportionate burden of the impact of COVID-19, especially economically, and many nonprofits that work with these communities are struggling. Indian philanthropy can help improve the resilience of these organizations, but the task will not be easy and several steps will be required. In addition to increasing investment, it is important to prioritize the capacity of nonprofit organizations and foster peer learning efforts in the social sector space. If there’s one lesson to be learned from the past few years, it’s that collaborative, community-led efforts will be crucial in the years to come.
A survey of 55 nonprofit organizations revealed disturbing results. 71% of associations had enough cash to barely cover 9 months of operation, while only 40% of associations could cover more than 80% of their staff costs. More than half of the organizations had a very tight funding base with little flexibility to reallocate funds. According to the Center for Social Impact and Philanthropy in May 2020, 54% of nonprofits surveyed could cover fixed costs for one year, while an incredible 30% could only cover six months or less. Several of these organizations said they have considered drastic measures, including suspending core programs and downsizing if funding for indirect costs is not available.
There are some recommendations for key stakeholder groups that would strengthen the philanthropy ecosystem and build a more inclusive and equitable India.
Open the way
With philanthropists largely redirecting funds to COVID relief programs, the pool of accessible CSR funds is expected to shrink significantly. This will seriously threaten the institutional and financial health of nonprofits and hamper their ability to impact vulnerable communities. This underscores the need for funders to urgently support nonprofits with flexible capital to build their institutional resilience. Providing non-financial assets in the form of capacity-building opportunities, resilience-building tools and advisory support is also an important way for funders to help non-profit organizations. long-term non-profit.
COVID has exposed deep fault lines around inequalities that seep into India’s development sector. Whether it’s the millions of migrant workers who have fled to their hometowns, the thousands of families going hungry, or the children dropping out of school, there has never been a more important time for philanthropic community to help provide care for India’s most vulnerable communities. Philanthropists must make an intentional shift to foster more equality and inclusiveness – which includes funding more organizations that work with the most marginalized communities, especially at the intersection of caste, class , gender and poverty, as well as incorporating a GEDI (Gender, Equality, Diversity and Inclusion) into the culture and principles of their philanthropic initiatives. The pandemic has also re-emphasized the value of rural, localized and community-led efforts. Grassroots organizations closest to vulnerable communities have a critical role to play in engaging and supporting these communities during the pandemic.
There is also a growing need for philanthropists to broaden their reach beyond large, well-established nonprofits based in cities to also support more grassroots organizations in rural areas. Such organizations can enable last-mile efforts in remote areas where government services are unable to reach those in need.
COVID-19 has endangered the long-term viability of nonprofit organizations. There is an urgent need to invest significantly in building their institutional resilience so that they can withstand external shocks such as pandemics or recessions, where their interventions will be most needed. This includes undertaking targeted fundraising efforts for flexible capital and participating in capacity building opportunities such as webinars, workshops, mentorship and one-on-one advisory support. Establishing a community that facilitates peer learning would allow organizations to grow collectively.
Along the same lines, committing to increasing their collaborative efforts by joining forces with multiple stakeholders will allow nonprofits to generate collective impact. The situation is dire for many communities and there is a need for nonprofit organizations to move away from siled efforts and join in multi-stakeholder collaborative efforts. Collaborative platforms offer nonprofits the opportunity to achieve deeper and faster impact by tapping into greater resources, a wider network, and more diverse skills.
Nonprofits should seek to extend this sense of collaboration to the communities they work with as well. Models, where nonprofit organizations or external stakeholders assess community needs, design and implement solutions, are common. While these can be effective in providing immediate relief, they have proven to be disempowering for communities and less sustainable over time. Approaching communities as partners or owners (rather than just beneficiaries) and actively involving them in the creation and implementation of programs is a more effective model for building sustainable community resilience.
A philanthropy ecosystem
While philanthropy in India has grown and matured considerably over the past decade, there is still a lot to do in relation to the needs of the country. Intermediaries must play a crucial role in filling critical gaps in India’s philanthropic infrastructure by enabling the creation of commons and platforms that the sector as a whole can tap into. This includes creating and facilitating multi-stakeholder collaborations to generate collective impact at scale, thought leadership and peer learning by increasing data collection and research initiatives.
Data and research on strategic giving is fragmented and efforts occur in silos. In the short term, this limits the innovation of concrete investment-ready vehicles and, in the long term, reinforces the existing lack of a cohesive overarching narrative around philanthropy in India.
Intermediaries should seek to build the overall resilience of nonprofit organizations by investing in capacity building, especially at the local level. Building leadership capacity among grassroots organizations will be particularly important given the growing importance of grassroots and community organizations during the pandemic. While there are several initiatives focused on the economic empowerment of local leaders, there are few initiatives focused on leadership training and development. Many of them miss out on opportunities due to language and technology barriers and a lack of contextualized offers that specifically address their needs.
Building a future together
As Omicron continues to run rampant across the country, it is vital that Indian philanthropy continues to adapt and evolve according to the needs of the situation. Given the challenges faced by disadvantaged communities due to the pandemic, it is incumbent on all stakeholders – philanthropists, nonprofits and intermediaries – to make collaborative efforts to improve realities on the ground. Increasing the resilience of nonprofits and improving their capacities will ensure that India’s COVID recovery is fair and leaves no one behind.
The opinions expressed above are those of the author.
END OF ARTICLE