How 2 former Morgan Stanley analysts transformed giving in India

Deval Sanghavi and Neera Nundy’s journey began at Morgan Stanley. It’s where they met. It’s where they fell in love. It is also where they learned the core skills that would enable them to permanently quit the private sector and found India’s largest strategic philanthropy organization, Dasra. Dasra’s model is simple: The organization aims to maximize impact by working closely with philanthropists on one hand, and social entrepreneurs and nonprofits on the other. Their work with philanthropists today is similar to the work Sanghavi did with wealthy investors when he was an analyst at Morgan Stanley: Helping them decide where to invest their money for maximum returns — except in this case, the “returns” are in terms of impact, rather than profit. “We try to help philanthropists invest strategically and intelligently, so their investments make the maximum difference,” Sanghavi explained. This might mean advising philanthropists to commit to donating funds to the same organization for five years, rather than one-time gifts. Or it might mean encouraging philanthropists to fund management costs so a nongovernmental organization can hire much-needed additional personnel, or introducing the “giving circle” model of philanthropy, in which philanthropists pool their resources to donate a larger amount to one organization in periodic injections, allowing the organization to grow. Dasra also works closely with India’s social entrepreneurs and nonprofits, giving them the tools they need to professionalize and grow. This might mean providing them with corporate mentors who help them identify weaknesses in their organizational models, or teaching them how to strengthen and train midlevel management, create realistic five- and 10-year growth plans or identify gaps in the organizational structure and brainstorm how to fill them. “I think that when you are sitting outside the sector, you perceive that one of the main issues is lack of financial capital,” Sanghavi said. “But later you realize that sometimes organizations aren’t able to absorb large amounts of capital, and that while of course money is required, the organizations have other needs — systems and process that can be improved on that could create greater impact — which in turn create better ways to market the organization to potential funders.” The results of this dual-system approach have been overwhelming: In just 15 years, Dasra has strengthened the growth plans of 900 successful nonprofits and social businesses, and helped raise and direct over $49 million to Indian nonprofits and social businesses. They introduced India’s first Giving Circle — a collaborative effort to channel large amounts of funding into high-impact nonprofits working in the sectors that need it most. Additionally, they have published 28 research reports on a host of subjects — employability, adolescent girls empowerment, child malnutrition, public education, sanitation, disaster relief — to best inform effective philanthropic funding. “Dasra’s ability to work with organizations, help them, deepen their impact and scale up is very unique,” said Lynne Smitham, co-founder of grant-making foundation Kiawah Trust. “There are other organizations that do that, but what they don’t do is bring funders to the party as well.” As a small family foundation run out of the United Kingdom, Smitham says that they have come to rely on Dasra’s guidance when giving grants to organizations in India — a country that has struggled with corruption issues within the NGO sector. “As a foundation, we have a lot of confidence in the organizations identified by Dasra — the processes Dasra uses to identify organizations that are impactful and trustworthy are very robust,” she said. “That really helps us to have confidence as funders that our money will go to the places where it will really make a difference.” Lessons from the private sector The Dasra model is part of a growing phenomenon across the international development sector, in which private-sector models and business strategies are increasingly incorporated into development practices. By carefully measuring impact, creating well-researched, in-depth reports on the strengths and weaknesses of various development sectors (sanitation, girl’s education, disaster relief), and aiming to fund organizations that have the capacity to scale, Dasra’s business model is the development equivalent of a smartly run investment firm. “Our experience at Morgan Stanley was fundamental to how we look at development,” Sanghavi said. “It gave us the core skills we needed to run an effective organization, and gave us a perspective and experience that allowed us to help other organizations run more effectively.” When the two young social entrepreneurs met at Morgan Stanley in their early 20s, Deval Sanghavi and Neera Nundy already had a lot in common. Sanghavi was a second-generation Indian born in Houstan, Texas. Nundy, also second-generation Indian, was born and raised in Canada. Both had spent time in India as adolescents, volunteering at nonprofits during their formative years. At Morgan Stanley, Nundy worked in mergers and acquisitions, while Sanghavi worked closely with investors to identify companies that, with an injection of growth capital and managerial support, could enhance or expand the scale of their operations. “The fact that we were able to connect over our experiences in India was an anomaly,” Sanghavi said. “We also gained tremendous amount of skills, and it was the first time that either one of us were exposed to real wealth. We started to talk about how, maybe, if these wealthy individuals trust our analysis, and trust us as individuals to advise their investment decisions, why can’t we do the exact same thing for nonprofit funding?” After working for a few more years, Sanghavi and Nundy quit Morgan Stanley to make their vision a reality. With the aid of family, friends and former colleagues, they were able to raise enough funds for Sanghavi to move to India to begin Dasra’s on-the-ground operations, while Nundy attended Harvard Business School. Sanghavi’s intention upon arriving in India was to work primarily as an adviser to philanthropists. But he soon realized that for Dasra’s mission to succeed, he would need to dedicate equal effort to mentoring NGOs. “It was soon apparent that many of the NGOs were not ready to absorb large amounts of capital,” he said. “They needed a lot of business help. We thought that finding funding would be our primary work, but in the first decade, we mainly focused on capacity building. The funding part was also there — but our real value-add was on building stronger organizations.” Unifying stakeholders for a common goal Looking back on the past 15 years, Sanghavi notes that much of Dasra’s success has come from their ability to bring together stakeholders from different sectors to share knowledge and work proactively toward a common goal. “Many people in the west have criticized our model, asking, ‘How can you work with donors and beneficiaries — isn’t that a conflict of interest?’” he said. “But the idea that the donor and NGOs have different interests is a problem. We all have the same goal — to help the beneficiary. Once you bring everyone on that platform and create that alignment, accelerated change happens.” This collaborative philosophy led them to create a nine-month “social impact” program for NGOs and social entrepreneurs, which brings together groups of entrepreneurs, who engage with each other and a network of advisers from different sectors. It also led them to pioneer India’s giving circle model, start India’s first workshop for philanthropists, and partner with Harvard Business School to launch the first CSR workshop in India. Now, Sanghavi and Nundy are looking to expand Dasra’s reach beyond India’s borders. “We see great opportunity globally, and now our new goal is to ask: How can we make what we do more accessible to the global market? How do we work more to educate philanthropists, the head of CSR, and forge more collaborations earlier on, on an international level?” Sanghavi said. “These are some of the questions we’re asking ourselves, and the direction we want to move toward in the next five-10 years.” Check out more insights and analysis for global development leaders like you, and sign up as an Executive Member to receive the information you need for your organization to thrive.