Over the past decade, numerous non-profits have scaled and impacted more than a million lives. We call these ‘non-profit unicorns’. These organisations iteratively develop an innovative solution that lowers the marginal cost of creating impact for each additional person.

For example, Educate Girls developed a community intervention model that has put more than two million rural girls in schools and retained them at just Rs 2,500 per girl.

On the other hand, CHILDLINE India Foundation experimented and perfected a helpline model to counsel children in distress. They now operate the helpline in partnership with the Government of India, covering 602 districts and handling 7 million calls annually.

Need for flexible funding

Change Engine’s ‘The Playbook for Non-profit Unicorns’ (co-authored by one of us) found that such organisations need $500K cumulatively in the first three years for de-risking. Most importantly, the funding needs to be flexible to allow iterative development of an effective lever, which can be scaled.

Line-item-based funding ties the hands of founders behind their backs, hampers innovation, and pushes organisations towards suboptimal solutions. We must fund non-profits like startups — providing them with flexible funding and focusing on outcomes.

Much like startup funding rounds, non-profits receive follow-up donations for demonstrating non-trivial progress. This requires a completely new approach to funding non-profits.........

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