Title of session: Members day India session

Summary of the content of the session:

The session provided an overview of the changing trends and issues pertaining to Indias
philanthropy landscape. Each speaker provided a succinct overview of their approach to
philanthropy in India and how that relates to the current aforementioned trends and issues.
Deval Sanghavi, Partner & Founder, Dasra
The biggest challenge for intermediaries to address when channeling funds from donors to non-forprofit organisations, is not convincing the donors (whether corporate, individual, etc.) to invest in
non-profits, but is actually convincing the recipient non-profits to accept the funds themselves. Nonprofits are too scared to deal with the funds and manage donor support; they are often
overwhelmed by dealing with Indias tedious bureaucratic legalities, which they feel complicates the
process of receiving funding from donors. Intermediaries such as Dasra are becoming crucial entities
in assisting non-profits in dealing with funding processes more confidently and competently.
Vidya Shah, CEO, EdelGive Foundation
Historically, the main form of CSR practice entailed corporates writing up cheques to be submitted
towards small-scale charity work such as painting a school for lower income children or providing
them with textbooks. The Edelweiss Group has been an exception to this. In 2006, the firms senior
management realised that holistically there was a drastic lack of systems and processes for
management, strategy and capacity building amongst non-profits. In 2008, the Edelweiss Group
decided to set up the EdelGive Foundation in order to rectify this problem, along with providing
financial support. In fact, many of Edelweiss Groups mainstream employees, provide pro bono
support to non-profits in these areas. Their assistance is incorporated through on a voluntary basis
pursued outside their work schedule.
Eric Savage, CEO & Co-Founder, Unitus Capital
Unitus Capital was set up to address a specific problem prevalent in the India impact investment
space - the gap between investors and competent SEs. In too many cases, corporate and
philanthropic investors/donors have invested in unreliable, poorly managed SEs, which have not
achieved the desired social impact, despite the ample funding at their disposal. This has been
frequently due to poor due diligence screening of investee SEs by investors/donors, a byproduct of
their usually inadequate knowledge of the SEs and the development space in India. IIFs, such as
Unitus Capital, are designed to bridge this gap; IIFs have the necessary expertise in raising capital
from donors/investors, channeling it through transparent procedures to competent SEs after being
screened by thorough due diligence. Not only does this lead to an effective social impact through
impact investment and SE practices, particularly at the BoP level, if IIFs invest in SEs with excellent
business models, the successful rate of return on investments enables them and the SEs to
simultaneously scale up.

Milind Antani, Head- Social Sector Practice, Nishith Desai Associates

The legal and practice implications of the New Companies Act 2015 law for the Indian philanthropy
space. Section 135 of this law makes it legally mandatory for Indian companies or foreign ones
operating in India, comprising of a net worth of INRs 500 crore or more; turnover of INRs 1000 crore
or more; and net profit of INRs 5 crore or more, to channel at least 2% of their profits (or at least
those generated in India by foreign firms) into CSR initiatives. The enforcement of this law will
gradually alter the CSR element of the Indian philanthropy landscape. CSR activity and investments
by corporates will exacerbate. However, what comes into question is the extent of the sincerity,
accountability and management of CSR undertakings by corporates.
Major Conclusion of the Session:
Indian philanthropy space is a particularly vibrant one; it will get more interesting with the
implementation of the New Companies Act 2015.
Question and Answers:
Question 1: Does the New Companies Act 2015 permit or inhibit foreign funding of human rights
organisations in Indias conflict-ridden Kashmir and Northeast, considering that much funding into
such organisations has been channeled into local militant guerrilla groups? Does this highlighted
issue lead to greater scrutiny of foreign funds into CSR initiatives and non-profits?
Milind Antani
By Indian law, the Foreign Contributions Act does not inhibit foreign funding into HROs in those
regions. Yet such funding will be of great concern for the Indian Government.
Dr Arun Chatterjee
This aforementioned issue, alongside widespread poor due diligence screening of non-profits and
funding misuse by non-profits throughout India, has made the Government tighten laws increasingly
on foreign funding, including highly regarded international non profits such as the Ford Foundation
and Greenpeace.
Vidya Shah
Indeed, there will be greater scrutiny, as highlighted by Dr. Chatterjee. But this will be a positive
development. Such scrutiny forces corporates rethink their CSR strategy by making them report their
CSR activities to the Government and the Indian public. This will lead to greater transparency of the
space in India.
Deval Sanghavi
The transparency procedures mentioned by Vidya Shah will help to channel US$3.5billion estimated
to be invested in the space with the advent of the New Companies Act 2015, especially as there is
currently confusion among many corporates on who within their management is going to manage
their CSR activities.

Question 2: How strong is current funding from domestic sources into SEs?
Eric Savage:
Domestic sources tend to finance debt of investee SEs of IIFs. It is otherwise weak. Most funding of
local SEs tends to be from foreign donors/investors in Europe and North America.