Born to Indian parents in Texas, Deval Sanghavi lived the American dream. After graduating from college with two business administration degrees, he went to work at Morgan Stanley’s strategic finance department at its headquarters in New York City.
He learned about evaluating management teams, identifying gaps and picking successful companies to invest in. But his brief experience in India, as a volunteer with a community outreach programme prior to joining Morgan Stanley, never left him.
“(On Wall Street), I saw first hand the potential of combining growth capital and managerial assistance in order to make companies more effective,” Sanghavi recalls. “I kept thinking to myself why couldn’t a similar philosophy be used in the non-profit sector by providing funds and hands-on assistance to help improve, scale and sustain NGOs (non-governmental organisations)? ”
In 1999, he left Morgan Stanley and went back to India.
Founding of Dasra
There he volunteered to work with four NGOs in rural India, including a Grameen microfinance replication programme in Uttar Pradesh and a village development programme in West Bengal, spending a month at each organisation before deciding where he would spend the remaining two years.
His experience reinforced the fact that although funds were needed, his managerial skills proved valuable to these organisations. The experiences on the ground led to the creation of Dasra.
Ten years on, Dasra has worked with 100 NGOs, directing more than six million dollars of funding.
Its revenue consists of grant commitments which will amount to four million dollars this year. "Ninety-five per cent of the funding comes from overseas and we are hoping to change this to a 50:50 ratio over the next five years," says Sanghavi.The team of 12 is made up of a spectrum of professionals in human resources, accounting, private equity, management consultants who research and identify gaps, as well as those who have previously headed NGOs.
They monitor progress in the NGOs both in terms of measuring the impact they create, as well as organisational milestones allowing for better programme delivery.
Dasra’s goal in the next five years is to fund 50 organisations, channelling some $25 million to them, and encourage a high net worth individuals in India to provide at least half the funding needed.
Often NGOs are so busy in the field that they do not pay enough attention to their organisational development and capacity building, observes Sanghavi. Dasra’s aim is to fill this gap by providing human resources and so works with organisations, which are about five to 10 years old and are ready to scale up five to 10 times.
The Dasra model is to work with these organisations for three to five years, taking on seven to 10 NGOs annually.
“During the first 12 to 18 months, we spend an intensive 75 days with them working on their business plans and setting up systems to enable them to achieve their goals,” Sanghavi says.
Once they’ve got the framework in place and trained the staff, the NGO runs on its own while they act as “quasi” senior managers, spending about 50 days a year with them but available whenever they need advice. By the third to fifth year, Dasra spends only 25 days per year with the NGO, mostly monitoring them.
Dasra also incubates social enterprises by partnering them in their early stages and supporting them through in the start-up phase.
One social entrepreneur was Matthew Spacie of Magic Bus. His dream was using sports and recreation to mentor marginalised children, help them build self-esteem and pass on life skills. Dasra provided them with funding, legal and regulatory assistance, recruitment support and introduced Spacie to potential investors. Today, Magic Bus has touched the lives of some 150,000 children and young people in India and is a leading sport-for-development programme globally.
Servicing and educating donors
Dasra is also working with NGOs to help align them with donors who are looking for ‘ready-made’ solutions.
“What good is it if we have NGOs which have good organisational structures and are effective in what they do, but there are no donors?” argues Sanghavi. “Who is going to help them scale and create even more impact in society?”
So in addition to its work with the NGOs, Dasra also partners leading philanthropists, educating them on effective giving and helping them donate more effectively.
“We are building a community of donors and advising them how to go behind certain causes,” he says.
Changing mindsets to do better
One of the most difficult things for Dasra is to tell a social entrepreneur to spend less time in the field and set aside a couple of days a week to think about strategy.
“We have an uphill battle convincing NGOs the importance of organisational development and the need to spend money to bring on board a stronger team and equipment such as computers because NGOs feel they are not true to their beneficiary base if they do this,” Sanghavi says. “We tell them that in the long run it will be cheaper, more sustainable, effective and efficient, and show them the five-year plan.”
Likewise for the donors. They don’t want to fund human resources and office equipment even though these will have an impact in the long run.
“We tell them that someone has to fund them,” says Sanghavi, “and that they can actually create more leverage in the impact by funding this, than just project expenses.”
But Sanghavi also feels that Dasra has itself been too busy in the field in the last 10 years and should have been disseminating information more. “That’s something we are trying to do more of now – to start educating the broader base. The Dasra model is quite time-intensive and we are not going to work with 1,000 NGOs in the next 10 years, but we can create a platform for other people to work from and replicate our model and change the donors’ and NGOs’ ways of giving and receiving funds.”