Impact India
Impact India
Impact India online is presented in collaboration with The Bridgespan Group and offers continual coverage of social innovation in India.

In Western countries, the accepted wisdom for would-be innovators is to “think outside the box.” Many of India’s large nonprofits, however, seek to innovate within the existing system. They view government organizations at the national, state, and local levels as a powerful means to extend their reach. Often, they go out of their way to make elected officials and government bureaucrats their allies. The reason: Government agencies can supply critical funding, infrastructure, and the heft to overcome even the biggest barriers to growth.

“For a nonprofit to scale in a country like India, partnering with the government is absolutely non-negotiable,” says Raj Gilda, a former Citigroup executive and the co-founder of Lend-A-Hand India (LAHI), which provides vocational training and career development opportunities to young boys and girls. “No nonprofit can match the government’s resources. Contributing to the policymaking—and being part of its execution—should be an imperative for any nonprofit.”

It behooves nonprofits to build strong, foundational relationships with government staff, which increases the likelihood of maintaining the government’s support as the program scales. However, much depends on the program’s implementation. For example, even as they align with policymakers, experienced nonprofits say it is essential to remain politically neutral, lest they encounter blowback when the government changes hands.

Indeed, collaborating with any government or civil agency comes with a caveat: Every nonprofit must coldly calculate the trade-offs of partnering. Is government backing worth the glacial pace of decision-making, the tangled layers of bureaucratic guidelines and policies, and the chronic threat of corrupt officials pushing for bribes in return for their cooperation? For organizations ready to take the plunge, two approaches to working effectively with the government stand out.

Approach One: Map the nonprofit’s organizational structure to the government’s structure.

Leaders of collaborative nonprofits ensure that their organizations’ roles and functions align with the government’s roles and functions. Teams build relationships with government agencies at all levels—block, district, and state—to improve communication pathways, strengthen buy-in, and smooth program rollouts. Their logic: The more they mirror the government’s organizational design, the easier it will be to build productive partnerships.

LAHI, which works at the intersection of education and career development, offers a good example. In 2006, it launched Project Swadheen (meaning “self-motivated”), which weaves career guidance and hands-on skills training (in vocations such as welding, carpentry, landscaping, and health care) into the mainstream curricula of government secondary schools. According to an impact assessment conducted with support from Sir Dorabji Tata Trust Mumbai, students who completed LAHI’s two-year, vocational training program were three times as likely to become self-employed or manage a family business, compared with a control group. These results helped fuel Project Swadheen’s expansion to 150 schools.

Given that LAHI operates within schools, it is essential that it works hand-in-glove with school administrators. Thus, the nonprofit takes an inside-out approach to deepening its partnerships with state governments, by installing its staff within the education system itself. Such was the case with Project Catalyst, which LAHI launched in partnership with the state of Maharashtra in 2014.

LAHI embedded its staff within the state department of education, so as to provide technical and project management support to Maharashtra’s efforts to offer vocational education opportunities to its students. LAHI staff worked side by side with government staff (at the district, division, and state levels), to prepare a long-term strategic roadmap, draft funding proposals, and launch the initiative. Their close collaboration paid off; Project Catalyst has expanded, with support from the MacArthur Foundation and the JPMorgan Chase Foundation, to 3,000 schools in 12 additional states. This is a three-way, public-private partnership, where the nonprofit delivers technical and domain expertise, funded by private capital and backed by the central and state governments’ policymaking power.

“Our core philosophy is not to replace the government staff,” says Gilda. “It is to help [staff] build their capacity to execute the policy on their own, within three-to-five years.” Put another way, LAHI’s initiative is built to win, but not to last.

Approach Two: Build an asset-light business model.

An asset-light model frees firms to move fast, since they carry fewer capital expenses compared to their operations, and quickly scale. Such organizations often keep their assets slim through outsourcing. In the private sector, for example, Airbnb keeps its balance sheet asset-light by outsourcing the cost maintaining lodging to its globe-spanning network of hosts. Since Airbnb’s launch in 2008, the platform’s listings have climbed to more than four million.

Similarly, in the social sector, nonprofits with lighter cost structures can increase the odds that they will gain sufficient scale to take on looming social challenges. In India, the Professional Assistance for Development Action (PRADAN) helps mobilize public support (principally through government development agencies) for economic and social development. Those government funds, which typically flow directly to the community, support 90 percent of the cost of PRADAN’s direct-service programs. In part by staying asset-light and “outsourcing” much of its financial burden to the government, PRADAN has scaled its reach to three million individuals across seven states.

As its name implies, PRADAN dispatches groups of well-educated professionals—from management, engineering, agriculture, and other fields—to some of the country’s most marginalized communities. These professionals help community collectives, often comprised of women farmers; exchange knowledge and gain access to credit; mobilize resources from the government for land and water resource development; plant crops with improved seeds and fertilizers; and build direct links to markets.

Above all, by championing “grassroots governance,” PRADAN works to help women act on their own behalf and “drive the change they need.” With PRADAN’s support, women participate in their village councils and hold them accountable, and exercise their rights as citizens to access government entitlement programs. Case in point: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a labor law that guarantees the “right to work,” in the form of at least 100 days of wage employment for every rural household per year.

PRADAN helps educate community collectives about the different types of government programs, most of which are implemented under MGNREGA, that can support their development efforts. PRADAN’s professionals help communities prepare village development plans while optimizing the use of natural resources and considering the well-being of every family. Staffers then show the collectives how to harness resources from the departments of agriculture, tribal welfare, and other government agencies. (The collectives also tap into working capital in the form of loans, largely from banks.) Across seven states, communities led by women’s collectives have thus far used MGNREGA to mobilize more than $6.4 million for labor- intensive tasks like creating infrastructure for drought relief and flood control.

PRADAN has a guiding principle for working successfully with the government: Bring transparency to funding by helping the community act as a custodian of the funds, a policy that builds confidence among government officials and locals, alike. For example, with watershed development projects, PRADAN encourages the government to provide program funds directly to the community and at the same time builds the community’s capacity to utilize the funds effectively. Under MGNREGA’s programs, wages are transferred straight to the individuals’ accounts, while the government procures the materials and supplies them to the community.

“The government is for the people,” says Manas Satpathy, PRADAN’s executive director. “Then, why should we bring in outside resources to do similar things? We understand the different government schemes and identify the ones under which people’s priorities can be supported. This has helped us scale, as we didn’t have to depend on donors for the program funds.”

As with nearly every other country, corruption is often a concern in India. Nonprofit leaders say the most effective way to deal with the threat of graft from unscrupulous government officials is to never, ever submit to it. “Paying even a single bribe was one of our non-negotiables,” says the founder of a nonprofit that works extensively with the government.

The CEO of another nonprofit offers an insight on how to handle requests for bribes: “We have not paid a single penny in bribes and still we're able to get [most] of the funding from the government. So our thesis is there are good people everywhere, get connected with the good people.”