MUMBAI: Management expertise and venture philanthropy are joining hands to give a boost to Prime Minister Narendra Modi’s Startup India campaign. The Indian Institute of Management Bangalore is launching a first-of-its-kind startup incubator with support from the Michael and SusanDell Foundation exclusively to nurture early-stage nonprofit organisations working primarily in education, financial inclusion, and jobs and livelihoods for the urban poor.
The Texas-based foundation has provided Rs 4.2 crore as a three-year grant for initial support to the incubator, which will be launched by September and will be housed inside IIM-B’s NS Raghavan Centre for Entrepreneurial Learning (NSRCEL).
People involved in the project said that over the next two years the incubator will select and nurture at least five early-stage non-profit organisations, aiming to help them become world-class non-profit organisations that deliver disproportionate impact and attract talent and funding.
This initiative ties in with the institute’s vision of developing leaders and entrepreneurs, NSRCEL chairperson (entrepreneurial ecosystem development) professor Suresh Bhagavatula said.
“Entrepreneurship inherently has high levels of uncertainties, which translates into greater tendency towards failure, especially during the early stages of the venture,” prof Bhagavatula said. “Sponsorship models such as incubation have been quite effective in helping for-profit startups navigate the turbulent early stages. However, not much work has been done on nurturing non-profit social ventures. This attempt of ours is one of the early attempts to do so,” he said.
Debasish Mitter, country director-India at Michael & Susan Dell Foundation, said, “We believe India needs more startups and we want to play an active role in making that happen.”
Mitter said the foundation is expanding its work to include incubating for-profit startups through three funds – Villgro, the United Seed Fund, and the India Education Investment Fund. “But we have found that India lacks similar non-profit incubators. That brought IIM Bangalore (IIM-B) and our foundation together,” he said.
IIM-B has been running one of India’s leading startup incubators via NSRCEL, where it has already incubated about 80 startups. Now it has decided to engage more actively in supporting social entrepreneurship as a matter of strategic priority.
“We chose to engage with a leading business school like IIM-B since we see such academic institutions globally to have often emerged as engines of social innovation,” Mitter said.
“With more IIMs being set up, this gives us an opportunity not just to develop the next generation of social change leaders but along with that to see a growing number of startup incubators help such leaders create best-in-class, non-profit entities in India,” he said.
Since 2006, the foundation has catalysed incubation of more than 24 forprofit social enterprises including Janalakshmi and Ujjivan in financial inclusion; LabourNet and iMerit in job-oriented skills market; and Edutel and Avanti in education. It is looking at this opportunity as a game changer in the non-profit sector.
“Based on the momentum and results achieved, our vision is to play a catalytic role to help establish a fullfledged Centre for Non-Profit Excellence at IIM Bangalore,” Mitter said.
The move comes at a time when India is witnessing a boom in entrepreneurship but the scenario for the non-profit entrepreneurship ecosystem is starkly different. There is a lack of effective incubators, early stage non-profit organisations find it difficult to secure funding under corporate social responsibility (CSR) from agencies and foundations, and the government and early stage non-profit entrepreneurs are offered little or no technical assistance with regard to fundraising, legal issues and operational challenges.
This scenario discourages aspiring and talented non-profit entrepreneurs looking to start new organisations from making the leap into the sector. On the flip side, with a growing pool of philanthropic and CSR money, funders are struggling to find and support well-run non-profit organisations that are creating meaningful impact.
The IIM-B initiative thus aims to create a working template for nonprofit incubation in India, developing a playbook for nurturing and scaling up early stage organisations.
The incubator plans to appoint an independent panel to select the nonprofit organisations while the Bschool will provide the selected organisations with tenancy and coworking space within its campuses for a period of two years. In addition, it will make available a set of wraparound services including mentoring support, consulting services and training programmes necessary to build strong institutions.
The institute will also help these organisations raise funds through philanthropic and CSR agencies. In terms of training and research, Bhagavatula said, it will help design and launch mid-career short courses for non-profit leaders and develop teachable case studies on leading non-profit organisations in the country. “We want to ensure that talented entrepreneurs in the nonprofit space get access to similar ecosystem to create institutions delivering measurable impact at scale,” Mitter said.
Such an ecosystem would require that the model that IIM-B is launching be replicated in many places across India, Mitter said. “We will focus on making the IIM-B initiative a major success while continuing to explore potential partnerships with other leading institutions,” he said.
