Pre-engagement processes include sourcing, screening (including due diligence) and structuring social investment deals. Social investors need to be creative about how to locate suitable deals and make the pre-engagement process effective. Often, there is even a stage before spotting deals, wherein many social investors build the pipeline by raising awareness of social entrepreneurship. Once funders have located suitable organisations, understanding the organisations and its goals, also known as conducting due diligence, can be a lengthy and expensive process. Practices can be proprietary depending on the funding organisations’ aims, but almost all investing organisations do have a process in place and use a number of documents and interactions to determine whether the engagement is fruitful for both sides. The last stage of the process includes structuring the engagement. This structure ranges in complexity depending on whether resources are shared such as consulting and/or expertise, equity is bought by the investor, debt is accumulated by the organisation or grants are given.
The case of Dasra Giving Circles (DGC) highlights pre-engagement processes driven strongly by extensive sector expertise to guide the funding by philanthropists and corporate funders. Providing grants, Dasra also channels the information they gather back to the sector to assist other philanthropists find suitable organisations. Dasra shares research and due-diligence in the form of research reports on their website to enable philanthropists and other donors to fund high impact, credible organizations.
Organisational portrait – history, theory of change and key focus
Founded by Neera Nundy and Deval Sanghavi in 1999, Dasra has evolved from providing one-on-one guidance and support to funders and social entrepreneurs into a more mature, intermediary organization that is strengthening the entire Indian ecosystem for funding. Dasra works with a range of stakeholders, from individual philanthropists to foundations, companies and the government, facilitating collaborations and funding. At the same time, they create and disseminate knowledge to direct attention and funding to key issues and work closely with nonprofit organizations and social business, providing capacity-building support and leadership training. Over the past 16 years, Dasra has channeled $50 million to the social sector in India, published 46 research reports and white papers to enable more effective philanthropy and trained and scaled 660 organizations. Through such efforts, Dasra’s activities have improved the lives of 18 million Indians living in poverty.
Most of Dasra’s organizational growth seems to have occurred in the past five years, since 2010[i]. In 2012, Dasra embarked on a large- scale partnership with USAID, Piramal Foundation (a leading corporate foundation in India) and the Kiawah Trust (a UK-based family foundation) to empower adolescent girls in India through directing funding, promoting awareness and scaling organizations working to improve the lives of the demographic. The Dasra Girl Alliance aims to change the lives of five million children, adolescent girls and mothers by 2018[ii].
Dasra, which means ‘enlightened giving’ in Sanskrit[iii], strives to equip “philanthropists and social entrepreneurs with the knowledge, funding opportunities and people to make their work more strategic” in order to transform the social sector in India[iv]. Dasra’s model can be summarised in 3Cs: Creating knowledge; providing Capacity – Building support and facilitating funding; and Collaboration (diagram below). The 3Cs are instrumental in building the eco-system. This case will look in particular at how Knowledge Creation and Funding and Collaboration are integrated in the Giving Circle approach.
Building the ecosystem by building demand and supply
In various Dasra initiatives, building the ecosystem of funders and social entrepreneurship through the 3Cs is critical to solving social issues; hence, creation of knowledge, capacity building and collaboration are key[v]. Dasra builds the funder eco-system as well as the social entrepreneurship landscape, thus effectively building supply and demand.
One example of building the funder eco-system is the Dasra Girl Alliance (DGA). Through the DGA, Dasra leverages on its core expertise of the 3C model to build the sector for adolescent girl empowerment and improve the lives of adolescent girls, mothers and children in India. In 2011, the UK-based Kiawah Trust partnered with Dasra to analyse the sector of empowering adolescent girls in India and identify the highest-impact interventions and leading non-profit organizations. The partnership culminated in the research report “Owning her Future: Empowering Adolescent girls in Urban India”[vii], which led to a Dasra Giving Circle, a collaborative giving initiative of philanthropists that pooled funds to support one featured non-profit organization over three years. This partnership grew into the Dasra Girl Alliance. In 2013 the Kiawah Trust, USAID, and Dasra entered into a five – year strategic alliance to improve the lives of adolescent girls, mothers and children. In 2014, the Piramal Foundation, one of the largest corporate foundations in India, joined the Alliance.
Dasra is also focusing on strengthening the Water, Sanitation and Hygiene (WASH) sector in India. Dasra is working with Results for Development Institute (R4D), a Washington DC based think-tank, to identify innovative and impactful programs in the WASH space in India to feature on a web-based platform (link: http://washinnovations.r4d.org/). This platform is intended to be a knowledge hub for researchers and funders to make strategic decisions and will be online by September 2015.
Further, Dasra will be conducting capacity-building workshops for a subset of the organizations profiled on the platform. The workshops will use a peer-learning approach and focus on monitoring and evaluation, fundraising and organizational development. The first of two workshops will be conducted from September 21st to 24th 2015.
To build the capacities of social entrepreneurs and strengthen their organizations, Dasra has developed the Dasra Social Impact programs. Dasra Social Impact is a peer-learning based initiative targeted at leaders of social organizations to enable them to grow strategically and achieve scale. The programs bring together leading social organizations working on a range of social challenges with funders to discuss current trends, opportunities and future direction for the sector. Additionally, the program focuses on key aspects of institution building, such as business strategy, fundraising, impact assessment and talent management. These programs enable organizations to advance their work not only through sessions with Dasra staff and other experts, but more importantly by encouraging organizations to learn from and collaborate with each other. According to Milaap, an online crowd funding platform that channels short-term microloans to India’s poor at rates 50% cheaper than existing microcredit institutions in India: “One of the biggest strengths of the program was the peer learning aspect where you get to interact and learn from fellow entrepreneurs with vast amounts of experience. The program really helped us take our learning from the pilot…culminating in Milaap winning its first institutional investment from Village Capital. Even after that, we’ve been able to tap into the program’s resources and alumni network on an on-going basis.”[viii]
In partnership with Harvard Business School, Dasra launched the Dasra Social Impact Leadership program in 2014 to offer leadership training based on the HBS case study method to a select group of 30-40 leaders annually. As Anurag Chaturvedi[ix] summarises: “Through the Dasra Social Impact programs it’s not our objective to work with one organisation, but the purpose is to build the capacities of several organisations to build the ecosystem”.
Creating demand – channelling money to Dasra Giving Circles
In 2013-2014[x], Dasra raised a total of INR 72 crore (~USD 12 million) from 41 funders. The largest portion (INR 35 crore) came from 6 foundations, followed by INR 28 crore from 15 corporate funders and INR 9 crore from individual funders[xi]. Geographically, more than 50% of funding (INR 40 crore) originates from 24 funders in India. In addition to India, 11 US funders contributed INR 16 crore and 6 UK funders contributed INR 16 crore.
Dasra brings funders together in a number of ways. Firstly, the Indian Philanthropy Forum which evolved into the Dasra Philanthropy Week in 2013[xii] has deployed “INR 264 crore worth of funding to the social sector and has successfully engaged with over 500 philanthropists, multi-lateral agencies, and corporate foundations to discuss, debate, and address urgent societal challenges”[xiii] since its inception in 2010. These platforms introduce funders to thoughtful and collaborative ways of giving such as the Dasra Giving Circle (DGC).
The DGC, named one of the top 10 innovations in global philanthropy in 2014 by UK –based non-profit consultancy New Philanthropy Capital, is a research-based platform that invites philanthropists in India and globally to collaboratively scale a non-profit organization.[xiv] The DGC brings together 10 members to pool funding of INR 3 crores. Each member contributes INR 30 lakhs over three years. The group collectively selects the non-profit organization, from a shortlist of two or three, to receive funding and Dasra’s capacity-building support. Dasra provides the selected organization with hands-on assistance throughout the funding period. Giving circles have funded a range of topics related to the areas of research, such as Girls’ Education, Malnutrition, Healthcare, Sports and Anti-Trafficking[xv] [for a complete list, see Appendix 3].
Running through the DGCs is the underlying theme of empowering girls and women. In addition to the Giving Circles, the dedicated Girl Alliance funded by USAID and Piramal Foundation aims to change the lives of 5 Million girls until 2018 and has been in action since 2013[xvi]. DGC topics to date have included education, water, sanitation and hygiene and sports for development.[xvii]
Finally, based on the 2013 CSR and Companies Act Section 135[xviii], large and medium-sized Indian companies are mandated to spend “in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years” effective from April 2014. To address Section 135, Dasra offers numerous services to companies[xix] including conducting research and due-diligence on organizations, providing capacity-building support to organizations, and impact assessment of organizations’ progress.
Creating supply – from sector research over funding decisions to creating a pipeline
Funders (foundations, multilaterals and companies) collaborate with Dasra to sponsor a research report on a particular social challenge. The reports analyse a selected issue in-depth and profile 10-12 successful non-profits working on the particular challenge, forming the basis for the DGC.
Dasra’s research department evaluates 100-200 organizations in a particular sector and “engages an expert advisory committee to assess high impact interventions, and shortlist organizations with trusted management teams and sound operational plans.”[xx]
The results not only produce reports but are fundamental to fundraising[xxi] and inform the Giving Circles. The research reports enable a more informed shortlisting of the non-profits. The report publication fees also cover the due-diligence costs.
The process of Due Diligence for the DGC overlap with the research department’s production of reports. The Dasra research team[xxii] develops sectorial expertise in understanding the organisations in one area. This process takes six months and includes six steps[xxiii]:
- Month 0 – Starting with a concept notes
- Month 1 and 2 – Secondary Research and Sector Mapping
- Month 3 and 4 – Interviews with experts, calls and site visits
- Month 5 – Sector workshop with 25 selected non-profits to understand scalability of impact; advisory committee and initial assessments
- Month 6 – Report launch
- Post-launch – Comprehensive assessments of 2-3 shortlisted organisations
Parallel to the research department’s report launch, the Due Diligence team conducts a more in-depth assessment of organisations using three steps[xxiv]: initial shortlisting, detailed assessment of organisations (including site visits) and the final shortlisting.
The due-diligence takes 3-4 months and is conducted alongside the activities of the research department. For instance, the Due Diligence team visits 10-12 organisations and speaks to at least 50 organisations on the phone. Also, 8-10 organisations are invited to meet with Dasra and participate in a workshop to highlight their work as innovative. The workshops are a 3-day capacity building process for the organisations co-organised with the research department, allowing the organisations to meet Neera Nundy and Deval Sanghavi in person and provide Dasra with insights for their Due Diligence[xxv]. So the process of Steps I to III of the research team covers Phase I and II of the Due Diligence process for the DGCs:
Phase I: Initial Shortlisting
- Sector mapping and list compilation of non-profit organizations in particular sector
- Based on quantitative and qualitative secondary research, references, inputs from sector experts, and organizational research
- Organizations with most scalable and impactful interventions are screened based on criteria like program focus, outreach, team budget, scale and impact, and growth plan
Phase II: Detailed Assessment of Organizations
- 1-2 day site visit to understand work being done
- Spend time with leadership and management of organization
- Initial Assessment Reports prepared to assess current work and get a sense of future directions
- Program overview
- Scalable model, growth plan, management team, monitoring and evaluation, financial budget, Dasra’s assessment
- Dasra partners with GuideStar India to conduct statutory and financial due diligence on organizations
- NOTE: in this phase the due diligence usually is expanded into research reports in the research department.
Phase III: Final Shortlisting
- Diligence and portfolio teams, senior management and visiting external experts participate in shortlisting
- Initial Assessment Reports used to discuss program strength, organization potential, areas where Dasra can add value through capacity building support
- Organizations rated using Dasra Capacity Assessment Framework
- Leadership potential, organization potential, program
For Phase III, the giving circles structuring of the terms differs from other organisations. Beyond creating the foundation for funding decisions for the DGC, Dasra’s research creates a deal flow for the sector.
DGC deal structuring processes[xxvi]
Following the internal process between the teams in Diligence, Portfolio and senior management plus external experts, the shortlist of two to three organisations is shared with the DGC.
On a pre-selected date, Dasra will facilitate a ‘voting day’ for the members of the DGC. Members will come together (or dial in, if they are based outside of Mumbai) after having received all of Dasra’s due diligence on the final three or four organizations that are under consideration.
The heads of the organizations will present to the members of the DGC, explaining their mission, history, and plans for the next three years. DGC members will have an opportunity for Q&A with each of the organizations, after which there will be an exclusive round of debate and discussion among the members of the DGC. Members will then cast their ballots anonymously. Dasra will tally the votes, and the organization that receives the majority of the votes will become part of Dasra’s portfolio and receive the DGC funding for the next three years.
Once the DGC has voted for the organisation they want to support over three years, the Dasra portfolio team structures the private philanthropy memorandum (PPM) in collaboration with the organisation. The PPM is similar to a term sheet and outlines the organisation’s needs, its plan for growth over the next three years, measures of success and impact to track its progress, and the capacity-building support Dasra will provide.
According to the PPM, the progress of the organisation is tracked on a quarterly basis. Each quarter, Dasra circulates a Quarterly Balanced Scorecard (QBS) to the Dasra Giving Circle that addresses key developments of the organization for that quarter. Members can thus ensure that the organization is on track with its plans and targets as outlined in the PPM. While changes to the PPM are rare, according to Anurag Chaturvedi, if over the period of 1-2 years the organisational needs change, revisions can be made to the PPM following consultation with DGC members.
Members have the opportunity to participate in quarterly calls with the senior leadership of the organization and Dasra staff to review the QBS. With Dasra’s guidance, the organization’s leadership provides updates on progress, developments, and any potential changes in its scaling plan. Members can pose questions to the Dasra team and the organization for clarity. Beyond the call, DGC members meet at the annual Dasra Philanthropy Week in Mumbai and at other gatherings that Dasra organizes in India, the UK, the US and Singapore.
The advantages: saving money and time while creating deal flow
This process has a number of advantages. For one it saves costs for both the organisation and the funder. Secondly, it saves time. Finally, it ‘recycles’ information about organisations and hence assists in creating deal flow.
The costs for Due Diligence are mainly covered by the report production for the entire report. This also means that there is no cost for the organisations that are being assessed for the report. Even for the third party assessment with Guide Star, the work done by Dasra by the research and the DD teams as well as Dasra’s workshops are paid for the report production funds.[xxvii]
Often Dasra is approached by international funders with the mandate to help advance their efforts in India. In that case, Dasra, for example, may conduct due-diligence, and select two to three organizations that these organizations can fund.[xxviii]
The DGC is an outcome of the research report. 15% of the total amount from the DGC goes towards Dasra’s capacity building and hands-on assistance to the selected non-profit. Dasra spends an average of 100 days a year on intensive capacity building support to the non-profit. The 15% goes towards staff salaries, travel and other resources that Dasra invests in strengthening the non-profit organization.
For instance, for the DGC on Adolescent Girl Empowerment “15% of the total funding amount will go to Dasra, who will be giving 250 days of management assistance to the selected organization over the next three years.”[xxix]
Dasra’s processes have been honed in the 16 years since its inception. According to Anurag Chaturvedi, especially in the last few years they have been able to accelerate. While the DD usually takes 3-4 months, the team can now run two processes at the same time. Usually what takes most time are the site visits: “If I am visiting 15 organisations then I need 30 days just for site visits.” Despite time consuming site visits, the DD team can now produce two reports in six months and work with a variety of funders and organisations. This is mainly due to the close interaction between the research and due diligence team and the thorough processes.
For the organisations, it is also often a nuisance to fill out similar due diligence requests by funders. Dasra avoids this by making their staff do most of the work in the site visit. Next to saving time, organizations also value the multiplier effect this has, as Dasra includes the organisation in their deal flow for the future[xxx].
Creating deal flow
When organisations are shortlisted and finally selected for a DGC, it does not mean that the non-selected organisations are not good at what they are doing. The funnel is fairly narrow, as from an initial sector analysis of 100-200 organisations only 2-3 are put to the DGC. Hence the organisations that are not being shortlisted receive other growth opportunities according to Anurag Chaturvedi[xxxi]. Organizations can become a part of the Dasra Portfolio through the Dasra Giving Circles or the Dasra Social-Impact program.[xxxii] In the current initiatives such as Dasra Girl Alliance and the WASH web platform (see Organisational Portrait above), organisations are being listed even though they have not been part of a DGC before.
Reports aside, these organisations are continuously being invited to the Accelerator programme or invited to workshops and their name is being shared if Dasra is approached by other funders. Many of the organizations that Dasra works with through the due-diligence process appreciate the opportunity and claim that the process has helped them reflect, learn about key organizational and management issues, and better plan for the years ahead. In this way, even non-shortlisted organisations benefit from the process.
Fundamentally unique is Dasra’s approach in two ways of sharing results and driving the sector towards standardisation in Due Diligence. If parties are interested, Dasra shares not only their processes but also their findings with donors and partners.
More concretely, Anurag Chaturvedi sees that Non-profits often tire of frequent Due Diligence requests from donors, as every donor funder or corporate CSR head attempts to evaluate non-profit programs in their own respective frameworks. Often, organisations have to go through different due diligence processes 12 or more times. This drives the transaction costs for due diligence up but also takes time on the side of the organisation. Instead, Dasra is advocating for a standardised due diligence process and pooling of information.
Given Dasra’s track record[xxxiii] of publishing more than 46 research reports and white papers on various social challenges in the last 16 years and hence enabling USD 50 million to non-profits and social businesses in India, this proposal may be worth considering.
Appendix 1 – Research Report Production Process
Appendix 2 – Due Diligence
Dasra Due Diligence Process
Dasra’s expertise lies in recognizing and working with non-profits that are most impactful and scalable in their fields. Dasra strongly believes that the biggest strength of any organization comes from its people, and has ingrained this philosophy in its due diligence process whereby an organization is assessed not just on the basis of its program strength but also on the potential of its team, leadership, and management.
In order to identify successful organizations that have the potential to create impact at scale Dasra follows a comprehensive 3 stage due diligence process.
Phase I – Initial Shortlisting
- The process involves doing an exhaustive sector mapping and compiling a list of all the non-profit organizations working in the sector
- Based on quantitative and qualitative secondary research, references from previous experience, and inputs from sector experts, the work carried out by the organizations is categorized under specific interventions
- Organizations having programs with the most scalable and impactful interventions are screened from this universe against criteria such as – program focus, outreach, team, budget, scale and impact, and growth plan
Phase II – Detailed Assessment of Organizations
- Dasra conducts a detailed assessment on the screened organizations by making a 1-2 days site visit to understand the work being done on the ground and spend time with the leadership and management of the organization
- Initial Assessment Reports are prepared to assess the current work and get a sense of the future growth of the organization as a whole
- Key areas covered in the report are program overview, scalable model, growth plan, management team, monitoring and evaluation, financial budgets, and Dasra assessment
- Dasra partners with GuideStar India to conduct statutory and financial due diligence on the organizations
Phase III – Final Shortlisting
- Members from the diligence and portfolio teams, senior management and visiting external experts participate in the shortlisting process
- Initial Assessment Reports are used to discuss the program strength, organization potential, and areas where Dasra can add value through its capacity building support
- Organizations are rated using the Dasra Capacity Assessment Framework (DCAF), a tool that Dasra uses to evaluate organizations against 3 key areas – leadership potential, organization potential, and program
Dasra re-engages with the final shortlisted organizations to create robust growth plans, and works with the organizations to explore funding, peer learning through Dasra’s flagship workshops, and capacity building opportunities.
Source: shared by Dasra
Appendix 3 – DGC to date [status: July 2015]
- Girl Power[xxxiv]
- Evaluated over 200 organizations to identify five with potential for scale and impact;
- DGC Winner: Educate Girls
- Start and End Date: 1st January 2010 until 1st January 2013
- This DGC is funded by the DGC, BACI, Vodafone Foundation and LGT Venture Philanthropy
- Urban education [xxxv]
- Dasra evaluated over 117 organizations all listed with the MCGM to identify nine high-potential non-profits with innovative models and partnerships with the MCGM, for scale and impact.
- DGC Winner: Muktangan
- Start and End Date: 1st January 2011 until 1st January 2014
- Malnutrition in Urban Slums [xxxvi]
- Dasra evaluated over 100 organizations to identify ten high-potential, innovative non-profits that can further leverage their model in urban slums.
- DGC Winner: SNEHA
- Start and End Date: 1st November 2011 until 31st December 2015 (extended after this for more 2 yrs) à post- three years, 2 years
- This DGC is funded by the DGC, Comic Relief, Maitri Trust and Azim Premji Philanthropic Initiative.
- Empowering Adolescent Girls [xxxvii]
- Dasra evaluated 100 non-profits to identify ten promising and innovative organizations which have the most potential for scale and impact.
- DGC Winner: Sarathi
- Start and End Date: 1st October 2012 until 30th September 2015
- Toilets and Sanitation in Urban India [xxxviii]
- Dasra evaluated 160 non-profits to identify nine promising and innovative organizations which have the most potential for scale and impact.
- DGC Winner: Shelter Associates
- Start and End Date: 1st May 2013 until 1st May 2016
- This DGC is funded by the DGC, Google and HT Parekh Foundation.
- Empowering Girls Through Sport [xxxix]
- Power of Play evaluates over 70 non-profit organizations across India, to highlight 10 high-potential organizations within this report, which with philanthropic funding can significantly increase the impact and scale of their programs.
- DGC Winner: Naz Foundation
- Start and End Date: 1st January 2014 – 1st January 2017
- This DGC is funded by the DGC, Comic Relief, BACI and Vodafone Foundation
- Anti-sex trafficking[xl]
- Dasra has evaluated over 80 non-profits that work towards eliminating sex trafficking in India and highlighted 13 high-potential organizations.
- DGC Winner: Aangan Trust
- Start and End Date: 1st July 2014 – 1st July March 2017
- This DGC is funded by the DGC , Comic Relief, LGT Venture Philanthropy and The Kiawah Trust
- Domestic Violence[xli]
- Dasra has evaluated over 120 non-profits that work towards confronting domestic violence across India, and highlights 13 innovative organizations
- DGC Winner: TISS RCI-VAW
- Start and End Date: 1st April 2014 until 31st March 2017
- Child marriage[xlii]
- Marry Me Later evaluates more than 300 non-profits working on the issue of child marriage, to highlight 10-12 high potential non-profits
- DGC Winner: IHMP (Integrated Health Management, Pachod)
- Start and End Date: 31st January 2015 until 31st January 2018
- Keeping Girls in Secondary School (KGISS)[xliii].
- DGC Winner: Going to School
- Start and End Date: 1st July 2015 until 1st July 2018
Some reports did not lead to DGC funders, but identified potential winners publically:
- DGC Winner: ARMANN
- Employability/skills education[xlv]
- Dasra evaluated 100 non-profits to identify ten high-scale and impact organizations which have the most potential for scale and impact.
- DGC Winner: Lend a Hand India
Upcoming giving circles may centre on Nutrition for adolescent girls[xlvi].
[v] Conversation with Anurag Chaturvedi on 16 June 2015
[vii] Owning her Future: Empowering Adolescent girls in Urban India available on: http://www.dasra.org/pdf/Dasra-Empowering-Adolescent-Girls-OHF.pdf
[ix] Conversation with Anurag Chaturvedi on 16 June 2015
- Workshops for CSR professionals (4/year).
- 1 session per year with management teams.
Access to vetted NGOs
- Access to due diligence on 2 sectors per year.
- NGO marketplace with organizational pitches.
- Access to Dasra shortlisting sessions.
- Guaranteed participation at Dasra Philanthropy Week at the Bombay Stock Exchange.
- Invitations to Dasra events.
- Research report launches.
- Dasra Giving Circle events.
- Dasra Social Impact workshops.
[xxiv] See Appendix 2
[xxv] Conversation with Anurag Chaturvedi on 16 June 2015
[xxvi] Conversation with Anurag Chaturvedi on 16 June 2015
[xxvii] Conversation with Anurag Chaturvedi on 16 June 2015
[xxviii] Conversation with Anurag Chaturvedi on 16 June 2015
[xxx] Conversation with Anurag Chaturvedi on 16 June 2015
[xxxi] Conversation with Anurag Chaturvedi on 16 June 2015
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