Thursday, May 8, 2008

On Wings of Social Entrepreneurship

On Wings of Social Entrepreneurship

Corporate Professionalism Is Spreading To The Social Sector, As Professionals Give Up Comfortable Corporate Careers To Work With The Masses

WHEN 24-year-old Anand Shah was flying out of India back to America, another Indian sitting next to him on the flight was complaining. “The taxi drivers, they fleece you. The food, the water… oh, I was sick for four days out of ten.” Born in the USA and trained at Harvard as a biologist, Shah thought to himself that criticising came easily to us, but not the initiative to change things.

Mr Shah, on his part, decided to do something for the country of his parents’ origin. He looked around and realised there was a huge need for talent to work at grassroots organisations in India. “What India needs is people time. Very rarely would you see very talented people getting their hands dirty,” he says. Thus was born IndiCorps, which works to bring the brightest and best people, often lost to the management consultancies and investment banks, to work in social development.

Mr Shah is not alone. An increasing crop of professionals are sacrificing lucrative corporate jobs to become social entrepreneurs. They blend the entrepreneurial skills of the business world with the social purpose of non-governmental organisations to create unique solutions to India’s problems. For decades, social work in India meant charity, but the economic changes of recent years have brought hardnosed business sense and professionalism to the social sector.

Like Mr Shah, Mumbai-based Venkat Krishnan quit a nice job to start a company that brings together donors and social organisations that need their money. His company, GiveIndia, works with about 100 organisations that have projects ranging from environmental protection to child welfare.

Social entrepreneurship is no different from starting a profit-motivated company-the challenges are perhaps only tougher. They grapple with problems of retaining people with motivation, scaling up viable business models and of course, raising resources. But the modern day social enterprise has one advantage compared with a conventional NGO-it is run by a professional who understands target setting, performance and accountability.

For instance, Mr Krishnan opted to set up his venture as a company rather than as a charitable trust. The company has on its board, strategy consultant Rama Bijapurkar, ICICI chairman N Vaghul, Tarun Das of CII and Kishore Chaukar of the Tata group-well-known people who brought credibility to a start-up and also a specific set of skills to the table. “To some extent, being from IIM-A helped to establish my seriousness and get them on board,” says Mr Krishnan. Like any corporate, GiveIndia also periodically works out the cost of raising funds and compares with other ways of raising funds. The goal being to raise funds in the most the cost efficient and effective manner.

Employee retention is the next challenge. Vineet Rai, whose organisation Intellecap acts as an advisor to firms with a social-focus feels human resources is the number one challenge most of them face. This is where organisations like Indicorps come in. The Indicorps fellowship programme is an intensive two-year programme that involves a selection process to identify the best talent-those selected work for 1-2 years on the project of their choice with grassroots organisations.

While volunteering for social work is not new, getting the brightest and best minds to do it and tapping their potential at a costs lower than consultant fees is the crucial differentiator for IndiCorps. “This is not volunteering. These are fellows,” says Mr Shah, who calls what his organisation does “service for the soul”. The basic requirement for the Indicorps fellowship, apart from being a person of Indian origin, is a university degree or five years of work experience. Interested candidates need to fill out a 20-page application form, pay their own way to India for the interview. So only serious candidates apply.

Initially, Mr Shah found NGOs were not very excited about the idea. “But once you give them (the NGOs) the basic management skills, you suddenly find they are very hungry for talent,” he says. Unlike traditional businesses, that can use compensation and stock options to employ good talent, social entrepreneurs have to rely on other incentives to retain people. “Usually, we find we lose people to other organisations in similar fields,” says CRY (Child Relief and You) CEO, Ingrid Srinath.

CRY, one of India’s better known organisations working for child welfare, commissioned Ernst & Young to do a study to reduce its employee turnover which had gone up to 25%. In response to the findings, it increased salaries by 40% across the board in 2006. “We were able to bring attrition down to 6%, and compared to before, when we had 46 vacancies, we have under 20 now,” says Ms Srinath.

CRY was a first mover in many ways. It was among the first entrepreneurial efforts in the social sector that was professionally managed and run. It was also among the few organisations that built a strong brand presence that was bigger and better known that its shy and retiring founder Rippan Kapur.

“Most organisations are board driven or CEO-driven. It is rare to find the ideal combination where the board is involved in the governance and the CEO in the management,” says Noshir Dadrawala, who advises charitable organisations, and who has authored a number of books to help them. Even today, CRY is among the most professionally run and managed organisations.

In 2000, it commissioned IMRB to study donor habits and found that the biggest block to making donations was inertia. The intent existed but few people translated it to action. Acting on this, CRY put in place mechanisms to make the payment process more convenient, and also put in place an online payment system. Confesses Ingrid, “When we outsourced our cards business to Archies, we also introduced a voluntary retirement scheme.”

Compared to 1979 when CRY was started, there are now many more resources for social entrepreneurs. There are courses run by management institutes such as NMIMS on social entrepreneurship, as well as hand-holding and consultancy that organisations such as Noshir’s Centre for Advancement of Philanthropy provide for free. Even venture funding is available if it is a for-profit socially focused venture, apart from organisations such as Ashoka that fund deserving individuals in social work. The time for social entrepreneurship has come.

Advice and help on how to go about it
Centre for Advancement of Philanthropy. Cap India
Intellecap. Intellecap
Networking, Funding Ashoka. Ashoka
Funding Accumen Acumen Fund
Aavishkar. Aavishkaar

Article Resource:
Author: N Shivapriya is the cheif editor in the Economic Times, Mumbai and the article appeared in one of their successful columns called "Starship Enterprise.

No comments: