By Winnie Dholakia, Director – HelpYourNGO
For India to be a stable society where opportunities are created for millions to further their lives, it is imperative that donors support the many good NGOs who help the less fortunate of our country and provide them with opportunities to flourish. To further this effort, HelpYourNGO built the only Indian website featuring standardized financial information on 650+ Indian NGOs. We know from our years of study of NGO financial information that a vast majority of these NGOs strive hard to raise funds for their programs. As is the case with many NGOs globally, they often do not have the bandwidth, expertise or access to manage fund raising efforts and end up wasting valuable resources in the process.
At the global level, 17 Sustainable Development Goals (SDGs) were adopted in September 2015 by 193 member states of the United Nations to end poverty, protect the planet, fight inequality and injustice, and ensure prosperity for all as part of a new sustainable development agenda.
India has played an integral role in the formation and evolution of SDGs and is committed to its achievement. NITI Aayog is the coordinating agency for implementation of SDGs in India. In fact, the progress at a global level to achieve the SDGs largely depends on India since India’s population is around 17% of the world population.
In 2014, India became the first country to mandate Corporate Social Responsibility (CSR). Section 135 of The Companies Act, 2013 made it mandatory for every Indian company meeting minimum turnover/net-worth/net profit criteria to spend at least 2% of their average net profits of the preceding three financial years on CSR activities. With the recent rules and amendments, the government has made companies even more accountable for CSR by adding compliance requirements and disclosures on CSR activities – and introducing penal provisions for non-compliance. This is a paradigm shift from the earlier ‘comply or explain’ regime.
Interestingly, SDGs and the Indian CSR law were formulated and implemented around the same time. Companies in India could play a crucial role in achieving the SDGs by efficiently planning and implementing CSR projects, focusing on Environmental, Social, and Governance (ESG) principles and working towards the SDGs. This of course needs to be supported by good policy implementation strategies adopted by the government.
A way forward
India cannot achieve the SDGs by 2030 by government initiatives alone and needs help from local and foreign sources of funding. There is a need for a more collaborative approach between the government, private sector, civil society and the citizens.
Though HelpYourNGO helps efforts across the 17 SDGs, HelpYourNGO itself is part of Goal 17 which calls for ‘Partnerships for the Goals’. Establishing strong partnerships between stakeholders can help move the SDGs from commitments to actions. Platforms like ours can leverage partnerships to unlock opportunities for stakeholders working towards social change and build a more equitable and just world.
The Securities and Exchange Board of India (SEBI), which regulates the capital markets in India, is leading the charge on ensuring that listed companies present their business responsibility and sustainability reports. In 2020, SEBI announced the creation of a Social Stock Exchange (SSE) which will increase access to capital for NGOs and social enterprises via various funding structures. The SSE will allow qualified investors and new social entrepreneurs to work towards the SDGs and help NGOs reach those most in need. However, while SEBI has created a pipeline for accredited new investors to fund SDGs, there is a gap in providing the existing base of retail investors in mutual funds (with over 40 million demat accounts) an opportunity to contribute towards the achievement of the 17 SDGs. HelpYourNGO plugged that gap with its offering of the Systematic Giving Plan, which won accolades and awards in 2018.
HelpYourNGO’s Response to SDGs: A Systematic Giving Plan
HelpYourNGO launched the Systematic Giving Plan (SGP) in 2018 – a first of its kind initiative in the world – which enables investors to contribute 10% of the corpus value of their investment with any Mutual Fund to be directed towards supporting credible NGOs vetted by HelpYourNGO. The idea to create SGP was born out of our desire to create a steady stream of fund flows for NGOs working towards the SDGs. SGP allows NGOs to focus on implementing the great work that they do, rather than wasting their resources on fund raising – which they may not be good at.
University endowments and foundations invest their corpus for long term capital appreciation. Eg. Harvard University’s endowment has built a corpus of over $40 billion (2020), Bill & Melinda Gates Foundation Trust endowment was $49.8 billion (2019). Typically, the earnings/capital distributions from these endowments tend to fund 30% to 50% of their annual operating budgets. Imagine if NGOs in India could rely on a similar pool of capital to implement their work!
Adoption of SGP by the Mutual Fund houses
Steps by the regulator, SEBI have already revolutionized the Indian mutual fund industry. Collectively, there is approximately Rs 15 trillion (GBP 150 billion) of Assets Under Management (AUM) in the equity funds. Even if 1% of this corpus would move to SGP units for distribution to NGOs for furthering the SDGs, that would be Rs 150 billion (GBP 1.5 billion) of AUM.And if 10% of this was disbursed each year to hundreds of NGOs, that would be Rs 15 billion (GBP 150 million) crore every year! That’s the potential cascading impact of SGP!
Quantum Mutual Fund was the first fund house which plugged its systems and investor base into the SDG framework and branded their product as the SMILE facility. The power of small (or large) pooled donations via the SMILE units has the potential to systematically support NGOs selected by individual investors. Like the Harvard University, these NGOs can then focus on improving the impact of their great work.
Since 2018, Quantum investors have supported programs of 7 credible NGOs from diverse sectors via SMILE – provided financial literacy to women, home-based palliative care to underserved cancer patients, vocational & life skills training to youth, maternal and new-born health care, helped meritorious students complete their graduation, and others.
SGP is a simple, one-click solution available for adoption to all fund houses. NGOs eligible to receive the funds, the % to be contributed to SGP and the pay-out schedule – can be customised for each fund house. In an era where companies are meant to do more than just focus on profit, our ask of the owners of the mutual fund houses is very small: add this simple but powerful Systematic Giving Plan unit and help India achieve the SDGs. Indeed, a similar product can be built for the UK or for any country.
A Systematic Investment Plan secures our future.
A Systematic Giving Plan could secure the future of millions. And of our Nation.