MUMBAI (India CSR): Leading global management consulting firm, Kearney along with Dasra, a strategic philanthropy organisation, today released a new report titled, “India Nonprofit Report – role, evolution and impact”. The report reveals that while NGOs are the backbone of India’s development efforts, a staggering 72% of them face a funding deficit, raising concerns about their long-term sustainability.
Understanding the Transformative Role of Nonprofits
Kearney, along with Dasra, has been working on this report which explores the transformative role of nonprofits in India’s growth story—from delivering last-mile services to driving innovation and community engagement. The report, based on 400 survey responses by NGOs working across India on varied thematic areas, insights from 30 in-depth NGO interviews, and official NGO Darpan data, offers a structured social impact taxonomy to unpack the operations, evolution, and impact of nonprofits. Building on these insights, the report identifies three key roles that define NGO work—ecosystem development, service delivery, and knowledge building.
NGOs’ Operational Flexibility and Financial Challenges
NGOs may operate across one or more of these roles and can shift their focus over time. It further examines how nonprofits evolve within this framework, shaped by both internal capabilities and external influences. An example of this examination highlights that 74% operate at the grassroots level, tackling urgent issues in underserved communities. Yet only 22% reported having a corpus fund for financial stability last year. This financial vulnerability threatens the sector’s ability to continue driving meaningful change.
Financial Fragility Poses a Major Hurdle
The India Nonprofit Report underscores that financial fragility is a major hurdle, with 92% of NGOs citing core funding as their biggest challenge. Erratic short-term funding and dependency on CSR or government grants have left many struggling to remain operational.
Three Approaches to NGO Growth and Success
The report introduces a new social impact taxonomy, offering a structured lens through which NGO success can be evaluated beyond traditional growth metrics.
The report offers three ways of looking at NGO success and scale: deep, up, and across.
- Scaling deep implies NGOs intensifying direct support or building new programs for a specific underserved community or geography over time,
- Scaling up implies expanding direct or indirect support via programs to more communities or geographies,
- Scaling across implies concentrating on decision-making institutions, systems, or the overarching development environment.
Here, systems refer to interconnected structures, institutions, networks, and relationships linked to shared behaviors, norms, and mindsets.
Experts Emphasize Collaboration for Long-Term Impact
“Through this report, we reimagine scale and evolution pathways using a new social impact taxonomy, offering fresh insights into the future of the sector. Further we aim to call all stakeholders to break silos, foster trust, and embrace a future where strategic action meets grassroots innovation to create lasting transformation,” says Neelesh Hundekari, Senior Partner at Kearney and co-author of the report.
India’s NGOs: A Global Model for Innovation
“Just like India Inc., which has positioned India as a leader in business, our NGOs are equally recognized globally for their frugal innovation, visionary leadership, and unrelenting commitment. Today, Indian NGOs are at the cusp of developing exceptional solutions that hold the potential to be replicated across the world,” says Deval Sanghavi, Co-Founder and Partner at Dasra and a co-author of the report.
Strengthening NGO Capacity for Sustainable Growth
Today, several Indian NGOs have matured, established, and built robust programs that can be replicated across developing countries. The report recommends NGOs to strengthen operational capacity, fostering greater collaboration, articulating impact effectively, and disseminating their models generously to catalyze transformative development for those who need it the most.
Recommendations for Government and Donors
Additionally, the report charts out a stakeholder specific way forward too. For the government, it emphasizes recognizing NGOs as innovation hubs and development partners on policy that can appreciably boost India’s global position in 2047 – the centenary of its Independence. For donors, the report recommends understanding different scaling dimensions and going beyond numbers to provide long-term, flexible funding.
(India CSR)
