How a forward-thinking approach has enabled The Catalyst Group to drive social impact for 30 years

For the past three decades, The Catalyst Group, a social enterprise organisation, has made significant impact across three categories–service/investment platforms, people and domain-focused platforms, and financing platforms.

Starting with Catalyst Management Services (CMS) in 1994 to develop solutions and investments for scale, impact, and sustainability, it has, over 30 years,  added more group entities responding to diverse sectoral needs.

These include Swasti Health Catalyst for health and social development, Vrutti to provide opportunities for small producers; Fuzhio for making markets work for the poor and the planet; Green Foundation to create ecosystem diversity for sustainable rural livelihoods; Catalyst Foundation-a social enterprise platform; Solvist Financial Services, and Impact Catalysts Foundation.

So far, the Group has served two million vulnerable people, placed Rs 3,000 crore in the hands of the community, incubated and sustained 200 community organisations, raised Rs 10,000 crore for social causes, and worked across 25 countries.

In a conversation with SocialStory, Shiv Kumar and Raghunathan Narayanan, Co-founders of The Catalyst Group, trace the evolution of the group, the catalysts for different verticals, and the need for a collaborative approach for affirmative action.

Edited excerpts from the interview:

Social Story (SS): How did you meet Raghu (co-founder) and how did your vision align to start Catalyst Management Services 30 years ago?

Shiv Kumar (SK): Raghu and I went to the same college (Indian Institute of Rural Management, Anand, Gujarat), but I think our real relationship started when we joined the Karnataka Co-Operative Oilseeds Growers Federation Limited in 1991, and along with a few others, managed to turn it around and make it a very resilient organisation, focused on farmer returns.

This gave us the confidence and the trust that if we could turn around one co-operative, we should be able to help others. That’s where our journey as Catalyst Management Services started to help cooperatives and NGOs in the sector to make them more scalable and impactful.

SS: Can you take us through the evolution of the Catalyst Group over the last 30 years?

SK: I would describe the journey in three stages. One, our theory was very simple–we had the management skills and the sociology background to make other change agents successful. Working with institutions in the social sector was a key focus for CMS.

In the second stage of our journey, we were getting very impatient, because when you provide advice or consulting support, you feel this could be done by us easily, right? We understood we needed to work directly with people because it’s a great learning experience, and we would be able to test our capabilities. Thus, we started our domain organisations, Swasti, Vrutti and later, brought the Green Foundation into our fold.

Our idea was not just to interact with communities but also build community institutions. These experiences with farmers, workers, and street vendors gave us enormous depth of thinking and failures to understand what works and does not.

In the third part of our journey, we found that when we work with people, there are many things which affect their lives which are way beyond their sphere of influence and control. This is where we explored our interest at the systemic level to shape systems to work for the poor. So, in essence, our journey began with institutions, moved onto people, and the system and sector levels.

SS: What were the different catalysts for starting the verticals?

Raghunathan Narayanan (RN): When we started, we used our management expertise to improve the efficiency and effectiveness of our development partners.

When we started looking beyond management support, two things were very important—people whom we were trying to engage with and bring a change, such as a female sex worker, a trans person, a small or medium farmer, fisher folk or a MSME.

The second is the domain needed for their lives and livelihoods. So, the domain expertise along with the ecosystem they operate in was very important. Swasti was about health and well-being and we had to work on ground and with the communities. It required long-term and a different kind of funding, legal system, and people. It was similar for Vrutti and Fuzhio, because based on the kind of engagement, the type of people and domains of engagement, different verticals were required.

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SS: What was your initial way forward?

SK: The group has evolved organically. Raghu’s passion around juvenile diabetes kick started our work on health and once we started working with patients and their families, my passion of working in public health also matured. We needed a platform in which we can grow public health and attract talent.

Swasti is today a WHO adviser, a part and an advisor to a number of platforms. I do not think CMS would have been accepted like that. Again, the Swasti format, I wouldn’t use for Vrutti.

RN: The DNA for sustainable development is a combination of four things–the strength of communities combined with the power of the state, the efficiency of the market and the reach of the facilitators. This is the concept I apply to the ground.

Many times, development doesn’t happen because these four factors don't come together, because of the format legally. And more importantly, I would say that the purpose is great, but it should have freedom. Freedom comes with money.

One thing which we were very clear at the start was we would have profit and non-profit arms. This way, we could actually bring change, and over a period of time, and were able to respond to various opportunities and our own aspirations.

SS: Interestingly, a lot of people believe that profitability and social impact cannot go hand in hand…

SK: It’s imperative to understand what this profit is for. Profit for shareholder value, for founders’ exit or for purpose. We believe in the third one. Surplus forces efficiency, brings about innovation and frugality to ensure you are delivering value to the customers who are the part of the system. The best example of this is Amul, which has delivered tremendous value to milk farmers and made millionaires.

We believe in social enterprise. There are three I’s that are important to us–intellectual freedom, innovation, and the intelligent people we are working with. We treat communities, farmers, and sex workers as catalysts; intelligent people we learn a lot from. As a group, we are strategically aligned, but also operationally independent. Also, social impact is moving towards a more collaborative approach, where you have all kinds of partnerships from government to private stakeholders.

SS: What have you learned from this collaborative approach with diverse partners?

SK: Let me give you an example. When vaccination had to be scaled during the peak of the pandemic, we came up with VaxNow, an initiative that brought in donors pledging $1 for every vaccine delivered on ground. We enrolled NGOs and gave that one dollar to them on the results-based model—vaccinating vulnerable communities that did not have access to it. We were able to scale up the vaccine delivery to 25 million people. We believe collaborative working is no longer an option given climate change and the size of challenges, it’s the way to do it right. We are part of many collaboratives, nationally and globally.

The Community Action Collab was started during the pandemic and has 380 partners–a mix of academic, government, civil society, and the private sector. We are completely aligned with the fact that large scale problems can only be solved with such collaborations in coalition.

SS: What are your thoughts on strategic philanthropy… or the business of doing good?

RN: It is understood that when money comes, so does power. But it also becomes a responsibility of how to use that power. 'Strategic' to me is going deeper into the conditions that are currently keeping the problems in place. What I am seeing is a corporate-initiated funding not going into the depths of norms and structural issues, etc.

SK: My interpretation is that philanthropists should take more risks and give more. What they are giving, in my mind, is far lesser than they should. It should also be patient capital, looking at a long-term view. I would say all three are important–more money, better ways of giving it and also for them to take a learning approach to giving.

(The story has been updated to correct a typo.)