Interview

‘Money does what you make it do’

As a qualified chartered accountant, Naghma Mulla understands more than a bit about money. That understanding has surely come in handy for the chief executive of EdelGive Foundation, the philanthropic arm of the Edelweiss Group, among India’s leading financial services enterprises.

Ms Mulla, who is also a director on the board of EdelGive Foundation, is associated with a clutch of other social development organisations, giving her a ringside view of the sector, its potential and its responsibilities. In this interview with Christabelle Noronha, she opens up on a range of issues, from the importance of collaborations to the challenges of maximising philanthropic impact in the Indian context. Excerpts:

Partnerships are the bedrock of building and expanding philanthropy in India. Can you tell us how this collaborative model works at EdelGive?

Edelweiss was a young company back in 2008 when it decided to create a nonprofit; that’s when EdelGive was set up. The agenda was plain and simple: to bridge the gap between profit and nonprofit in terms of our resources, which were articulated as money as well as time and skills.

I am from the financial sector and when I joined EdelGive I had no clue what the development sector was about. I came with a fresh pair of eyes, and at a time when the sector did not get much attention. During my first two years I made a lot of field visits and had conversations with a lot of people. We were giving grants of about 2 million each to different NGOs. I call that phase of our giving intuitive philanthropy. We realised that our small grants were having a limited impact, but that a lot was possible if we brought more partners like us together. That’s when we decided to focus on the end objective and that happened through a collaborative partnership model.

Our partnership model is structured on the recognition that we cannot do everything. We have the finances, we understand how to monitor money, and how to ensure this money delivers a return; that’s our capability. But the fact is we cannot engineer social change on the ground.  We have partnerships with those who are better than us at what they do; that leaves us to do what we are good at.

How do you go about deciding on matters such as sphere of work, scale and the nature of giving?

It is something that has developed over the last 10 years. We had a straightforward process earlier where annual grants were given to small and midsized NGOs. Our collective pool was limited; we had the agency to use it the way we wanted but our support was limited to the size of the pool we had.

We chose education because we thought it was pertinent. Then we thought, ‘OK, whoever gets educated would want to earn a livelihood’, so we zeroed in on livelihoods and skilling and — since women are critical — gender. What we had in spades was the desire to make a difference.

The process of moving money cannot be emotional ... For money to work towards the best possible result, you have to craft a process that’s beyond question.”

Soon it dawned on us that something was off, that we were merely scratching the surface. In education, for instance, we say we will give access to schooling. We have 95% of our children enrolled in primary education but only about 40% get to secondary school. That’s why we started looking at what could be done to help children continue with their education. 

We also considered skilling, where the funding model in India is, according to me, completely counterintuitive: we concentrate on the demand for skilling while ignoring the aptitude for it. How can we assume that all poor people are happy becoming plumbers and, if they are women, beauticians?

When the drought in Marathwada [in Maharashtra] happened in 2012-13 and farmers faced devastation, I was shocked to realise that people thought farmers were a separate category of people, not included in livelihoods. Most urban stakeholders thought of livelihoods from an urban lens of skilling; farming did not fit into their framing of livelihoods. That year we wrapped up our entire skilling portfolio and moved almost 40 million in grants to rural livelihoods.

We didn’t know much about rural livelihoods; our aim was to fund people to earn where they live and we wanted water to be at the centre of everything. In our gender portfolio, we moved from life skills for women to ensuring social justice and access to finance (there’s a clear connection between the two).

While the portfolio was growing stronger and bigger, funding partners started joining us. We reckoned that if our partners were going to trust us and this was not going to be a one-time thing, then we needed to create a process that was sterile, repeatable and accountable. That’s how the collaborative model began; there is a separation between purpose and process.

The process of moving money cannot be emotional. Money does what you make it do. For money to work towards the best possible result, you have to craft a process that’s beyond question. That brings us to the crucial part: purpose. The collaborative model is driven by purpose and multiple stakeholders; the governance and money-moving components are standard.

Members of the EdelGive team with women beneficiaries of a livelihoods programme in Kotapad in Odisha’s Koraput district

What are the challenges in finding the right partner or NGO?

There are two challenges. One is that there are too few of us and the other, strangely, is that there are too many of us. We did a dipstick survey and found that 99% of NGOs have access to 1% of capital and 1% have a lot. We are in a sector that is supposed to be dedicated to equality, but we have created a structure where the grant mechanism is unequal, where people are classified into winners and losers. 

How do we select the NGOs we want to work with? Instead of looking at 10 of them and choosing two or three from the lot, we went the opposite way. We sought out the best in the areas we were interested in and we made the whole approach dignified. We didn’t judge these organisations on how well they wrote their proposals or how good their English was. We wanted to know what the problem was and what their plan or solution was, and it’s fine if the project took three years instead of one.

We work with around 130 NGOs and we are always a little worried about making wrong decisions, but our way of managing our grants is friendly and intensive rather than report-driven.

The regulatory changes of recent times have not been good for Indian nonprofits, with funds drying up for many of them. How has this affected EdelGive?

We have been impacted, for sure. We had plans to work in spheres where funding is inadequate, but as soon as the regulatory requirements were imposed, many NGOs had to reduce their capacities. Foreign grants not filtering through has broken the backs of many organisations.

Indians are traditional givers, but most of that giving is directed towards religious causes or support of less privileged family members. We are still not comfortable with giving, institutionally or individually; our muscle for giving to social development causes is fairly weak. It is also my belief that we are not invested in the problems of the nation beyond the headlines, so we don’t feel we need to participate in funding solutions for these problems.

We have emerged from being a poor country but I am surprised by our bias on poverty. There is a belief that the poor are lazy and that the privileged have worked hard to succeed. When sensitive, decent and educated people form opinions of this kind, it has a societal impact. Maybe the only good thing about the changed regulatory regime is that now we have no choice but to ourselves pay to solve our problems.

The sustainability equation is central to the objectives of any programme or initiative, but that’s hard to realise. How do you work around this reality?

The entire design of the grant-giving mechanism is unsustainable. We have disallowed corpus building and we have capped operational costs. The fact is that every grant-giving model is unsustainable on its own.

We need to look at sustainability differently. We need to be comfortable with earning and allowing others to earn. We need to be comfortable with having costlier programmes and saying that these cost money.

What have been the effects of the pandemic on the social development sector in the context of migrant workers, particularly women?

The vast majority of these women have not come back; they have been lost to the labour market and their rights have been compromised. As for the development sector, the capacity of organisations to pay for even basic amenities became a big challenge. Funders wanted to give only for programmes because we wanted to put food in the mouths of the poorest and not see the cost of delivering that.

There is a large segment that has the capacity to give but does not understand the social sector, which, for its part, does not know how to demystify itself.”

People did spend a lot on charity but it all went into direct cost, which made for a weaker service pipeline. It’s heartbreaking to say but we made this a service delivery model. That changed the basic nature of what we think is facilitation for the poor. But the pandemic did create more givers.

Women’s rights leaders and activists in a village in the South 24 Parganas district of West Bengal at a meeting called to discuss how to address issues of violence in the community

What’s your view on the potential of philanthropies, nonprofits and others in the social sector to do lasting good in the Indian context? How much of this potential is being realised?

The potential is massive and we are nowhere close to realising it. There is a large segment that has the capacity to give but does not understand the social sector, which, for its part, does not know how to demystify itself. The gap between giver and receiver is large and this has serious consequences.

You are a chartered accountant (CA) by profession. Why the decision to work in the development space?

Though I loved studying it, I hated working as a CA. It was boring and it didn’t give me any sense of purpose. I studied it honestly because I was a good Muslim girl who needed a quality education before she got married. So, at 22, I was a CA. I didn’t disappoint my father and it was my convenient way out. But to realise as a young working CA that I had spent five years of the best part of my life studying something I didn’t want to continue with was quite devastating. 

What are your interests beyond work, and do you have time to pursue these?

I love writing, which I find therapeutic. I’ve not been able to write much lately but I write whenever I am upset — or happy.