A 16-year-old boy visiting an orphanage in Lonavala some years ago made himself a promise. True to his word, he went to battle it out on Wall Street, contribute to the staggering success of bigwigs like JP Morgan , only to come back and pledge all that expertise to the greater good.
“At that orphanage, I was deeply moved and realised how lucky I was to have a home, a family, and to even be able to go to school. I finished my education and became an investment banker. Being on Wall Street was beyond thrilling, but I knew I must use my financial skill for a greater social purpose.”
In his quest to explore more effective revenue models for social enterprises, he published a research paper with Harvard Business School on innovative ways to finance a venture. This also took him to Singapore, to garner entrepreneurial know-how at BCG. He explored two concepts – social impact bonds and crowdfunding. Although the former, he felt, was near impossible to implement in India, the latter – which was a raging success in the US, had shown little development in India with massive untapped potential.
What you didn’t know about the success of crowdfunding
There are three key factors in crowdfunding. First, the sheer number of people interested in giving in India to social or religious causes is close to 350 million – which is the entire population of USA.
India’s internet penetration has been bullish ever since the smart phones became the fourth necessity of life. Our broadband reach is not great, but 20 million mobile internet users are being added every quarter, according to the research of Piyush Jain. There is a higher percentage of people doing online transactions in India than some of the developed western countries. Our plastic money, that is, debit cards and credit cards, aren’t a part of many wallets yet – but digital wallets are poised to solve this problem.
Upon inspecting the way social enterprises were going about with their operations, Piyush discovered that most of their costs can be eliminated and in turn impact can be maximised.
“Crowdfunding has been a part of our DNA since decades – we just didn’t have the technology to extract the most out of it. I remember we would get donation forms in school and go door-to-door to collect money for different campaigns. Today, most NGOs still rely on bulky call center operations as well as door-to-door donation drives to get funds, but these entail major costs – and almost 60 per cent of what they raise is used in covering those costs. This is a colossal waste of a massive amount that an NGO could have otherwise put to better use.
The guru of creating maximum impact
Piyush’s Impact Guru was incubated at Harvard Innovation Lab a year ago as a digital crowdfunding mechanism for NGOs and various other causes. It empowers individuals and corporates to give to meticulously vetted non-profits in India on their highly curated platform. With its technology platform, the cost can drop to as low as 5–10% – which is the commission they charge from the organisations they host.
As a platform, what Impact Guru is banking on is the power of social media.
“Social media is playing such an important part in our daily lives that everyone’s Facebook wall is now an invaluable digital real estate that has potential to be used for social good.”
He built a robust database of organisations in need and vetting them with due diligence on the grounds of transparency, impact, statutory compliances with the FCRA act. After having rejected almost 90 per cent of their prospects, they now have a resource of 30 organisations that they are hosting on their platform.