By Nimesh Sumati
Most of the time when I used to accompany the founders of nonprofits to meet different funders, especially corporates, nobody was interested in the story and journey of the founders–the struggles they had gone through, the sacrifices they had made, the challenges they faced; all they cared for was sustainability, replicability and scalability.
But without understanding the founder’s journey, background and mindset, it’s hard to understand the nonprofit and what it will achieve over time. Once you understand the journey, of say, Dr Sunil and Jenny—a couple in Assam who founded The Ant, and understand what they are up against, your expectations will become more realistic. For instance, in the border areas where they work, there are three very different communities that co-exist, and natural floods and riots are frequent. They, therefore, cannot scale as a normal mainland organisation would.
People who do not understand the context will look at their balance sheet and say, “they have been working for 12 years and don’t seem to have done much”. Donors don’t always understand the local situation and its complexities and will judge the nonprofit by parameters that are applied in the mainland; they must realise that a worm’s eye view is as important as a bird’s eye view.
At Caring Friends–the giving network Ramesh Kacholiaji founded and I joined about 13 years ago–we are not focused on any one sector. We invest in people and their passion, and we encourage our network of associates – smaller philanthropists, many of whom are first time givers—to also apply the same lens. In the past 13 years, we have enabled more than 500 people to give upwards of a few hundred crores to more than 100 small and medium nonprofits in our country.
The work of identifying the organisations, understanding their work and impact, conducting the due diligence and then engaging with them on an ongoing basis, is done by us at Caring Friends (CF). And in the process of doing this, we have learnt and unlearnt many lessons along the way.
The Caring Friends relationship with a nonprofit typically starts with a token donation from either Rameshji or me and a few of our friends. We don’t believe in signing MoUs because MoUs don’t protect you from anything. If they are violated, what can you really do? Instead, it makes more sense to spend time with the organisation, see the strength and potential of the staff, the quality of work, the region and circumstances the nonprofit works in.
Once these organisations become part of the CF family, we conduct regular visits. We also receive reports periodically, though they are not a condition for future donations.
We understand where the nonprofits are coming from: if they spend their time doing paperwork, when will they do the actual work? Their passion is to work on the field, with the communities. The paperwork is therefore kept to the minimum.
Projects can get delayed, costs can increase by, say, 10%; but integrity and honesty cannot be measured in percentages. A person is either honest or not. Trust cannot be conditional. I cannot say that I can only trust a nonprofit up to ₹20 lakh. If I don’t trust them, then even one lakh is too much to give. If I trust them, then even ₹10 crore isn’t too much.
We have seen that everything else falls into place when we carry out the due diligence process with a spirit of trust. If, however, it is based predominantly on documents – checking if the 12A and 80G are in place, whether the last three years’ balance sheets are there, if the bills are in place and the funds used – the process can be manipulated, and even the auditors won’t be able to detect it. Figuring out whether you trust the nonprofit or not relieves you from having to worry about the day-to-day.
Once you’ve spent time with a nonprofit, you might see gaps that are invisible to them. Funding both what they ask for and what helps fill these gaps is important. As donors, we might not have the experience that founders have, but we might be able to develop the understanding of what is required; experience and understanding are two different things, and it’s possible to have one without the other.
Auditing nonprofit partners is important, but it should be done with a view to improve rather than investigate. The objective should be to look at their programmes and organisations and see if there are suggestions that can help them.
A donor’s decision to invest in a nonprofit is driven a great deal by the ability, quality and mindset of the founder. In a similar vein, the areas of support must also focus heavily on people.
At Caring Friends, for instance, we have created staff welfare funds at several of our partner nonprofits. At one organisation the second-in-command—working there for the past 25 years—draws a salary of just ₹15,000. Where will he go if he needs ₹2 lakh for his children’s college fees? At another nonprofit we support, the staff are heavily indebted–with some of them borrowing at rates of interest as high as 36%.
So, we created a staff welfare fund for employees who have worked for three years or more at the organisation. This can be in the form of a grant or loan. The nonprofit founder and an internal committee—which must have at least two women–run this fund and allocate money as they deem fit.
Likewise, we also have an informal founders’ trust. We can’t give the money directly to a founder because then they will be indebted to us, they will feel compelled to listen to whatever we have to say. There is no balance in such a relationship. It, therefore, has to be a trust so that the founders don’t know who is giving to them. The relationship is then not one of indebtedness.
This doesn’t cost much. So far, in the five years since setting it up, we’ve spent ₹15 lakh. Most founders—even those working on grassroots issues and drawing a modest salary—just don’t ask for their personal needs; but the idea is that if they do need this money, it’s available to them. I believe that we need more founders’ trusts in the country; it is a tribute to their work and their sacrifices and not an obligation.
Funders rarely look at the staff and founder welfare; they look at the capacity building and encourage people to attend workshops, but sometimes fail to look at people’s needs. This is particularly needed in older, more traditional nonprofits who do great work on the ground but are not necessarily able to present their work in a way that today’s funders expect.
About the author:
Nimesh Sumati has spearheaded the growth of Caring Friends since 2005. His main focus is on quality and to strengthen the organisational fundamentals. A keen social entrepreneur, he recognises a social problem and undertakes painstaking research and background checks to identify credible and efficient social organisations in that space for ‘Caring Friends’ to support, nurture and grow. He is very passionate about visiting all CF associated organisations in different states in India on a regular basis, many times with new potential donors and supporters.