Philanthropy needs more risk-taking, ET commentary argues

Indian founders should use their personal wealth to back early experiments, capable teams and longer-term social change rather than reproduce the caution of compliance-led corporate giving, a commentary published on October 20 argues.

The Economic Times article, whose writer is identified as a former CRISIL chief executive, makes the case that philanthropic capital’s freedom from financial-return obligations should allow it to take risks other funding cannot. Its central argument is that donors often surrender that advantage through short grants, restrictive conditions and a preference for already-proven interventions.

The piece is a prescription for funding practice, rather than an empirical assessment of the sector. Its criticism of India’s corporate social responsibility framework—that it has reinforced annual, audit-oriented giving—is the writer’s interpretation, not a demonstrated finding about every CSR programme.

Match the evidence requirement to the decision

The commentary challenges the practice of demanding substantial proof before financing exploratory work. Identifying overlooked problems, supporting research and testing an initial pilot can require philanthropic funding precisely because convincing evidence does not yet exist.

That does not mean dispensing with scrutiny. The writer distinguishes a modest experimental grant from a large expansion: the evidence needed should rise with the scale and maturity of the proposed commitment.

Funding duration matters too. The article contrasts annual grants with structural problems that may take a decade to address, arguing that repeated short commitments favour visible activity over institutional capability, innovation and sustained advocacy. It also acknowledges that a lengthy grant is no guarantee of meaningful change.

Fund the organisation, not just its programmes

Another target is donors’ reluctance to pay for salaries, organisational systems and overheads. The writer argues that supporting programmes while withholding the resources needed to run them weakens the very institutions expected to deliver results.

Detailed instructions from funders can create a separate problem. Organisations working daily with communities may understand local needs better than their financial backers, yet prescriptive milestones can prevent them from adapting as they learn.

The commentary argues that accountability can consequently become an exercise in satisfying donor checks rather than serving beneficiaries. It also warns that demands for individual recognition can obstruct work requiring several funders to cooperate over many years.

Together, these practices may favour organisations skilled at meeting grant requirements over those closest to unmet needs, the writer contends.

Founder experience helps—but has limits

Founders are presented as potential exceptions because they understand what it means to back an unproven proposition, recruit a strong team before a model is established and accept that some investments will fail. Their personal giving, the commentary argues, need not follow the compliance timetable associated with CSR.

But entrepreneurial experience can also produce misplaced expectations. The article cautions against expecting non-profits to operate at startup speed, assuming business methods will transfer directly to complex social problems, or demanding more precise metrics than the work can reasonably provide.

It also identifies a possible bias towards solutions that can be replicated widely. A locally effective intervention may deserve support even when it cannot be expanded using a familiar business model.

Keep assessment rigorous and pay for it

The writer does not advocate abandoning impact assessment. Instead, the commentary proposes judging philanthropic returns through social outcomes and policy change, with explicit attention to what is measured and over what period.

Donors should cover the full cost of that assessment and share lessons beyond the organisations they fund, it argues. For shorter reporting cycles, funders should use information recipients already generate rather than require a separate set of bespoke forms and indicators.

The proposed shift is therefore not from accountability to unchecked spending. It is towards funding arrangements that leave room for uncertainty and learning while reducing the administrative burden imposed on organisations with less bargaining power.