Can 2020 be the year Indian Diaspora change how poverty is tackled in India?

Can 2020 be the year Indian Diaspora change how poverty is tackled in India?

January 17, 2020 | Author: Dr. Ambika Sampat, Business Development Lead, Acumen

I was born and raised in Zambia among a large Indian diaspora community.  My extended family in India, whom I visited regularly for my first sixteen years of existence, instilled within me a strong ‘Indian identity,’ from the culture and traditions, to exposure to ancestral villages contrasted by the fast-paced city life. Add to that, I attended boarding school in the Himalayas in a town called Mussoorie, and in recent years, have delved into Vedic knowledge on a path of self-discovery. I feel immense gratitude to have access to ancient Indian wisdom and customs, which I may not have ever been exposed to if it weren’t for my heritage.

And yet in India there lies a stark polarity. The same India I hold in high regard for its universal wisdom, fast-growing economy, rich flavors and culture, artistic talent and entertainment, appetite for jugaar (frugal) innovation, representation in the Forbes top 10 Rich lists and others, simultaneously, has half a billion citizens living below the poverty line.

This juxtaposition is what drew me almost a decade ago to join a sector-leading organization, Acumen, a non-profit global venture fund, which has revolutionized philanthropy in India. Since 2001, Acumen has leveraged the power of entrepreneurship by raising donations to invest as capital in social enterprises addressing the India’s biggest challenges. There are two parallel forces keeping India’s poor stuck in a cycle of poverty. These include:

  1. Low productivity, limited market access and vulnerability to climate change are stifling the earnings of smallholder farmers, the majority of India’s rural poor.
  2. Lack of skills and employment opportunities are suppressing the upward mobility of youth and women, preventing the next generation from breaking the cycle of poverty.

While millions of dollars of philanthropy and development aid have been invested over the years, the poverty cycle remains largely unbroken. Studies demonstrate that some of the core ineffective solutions keeping the problem at hand include:

  1. A ‘philanthropy giving gap’ of up to $430 million annually in relation to the giving potential of Indian diaspora, whose net worth exceeds $200 billion in the top four geographies (the United States, United Kingdom, United Arab Emirates, and Singapore)[1] due to well-studied motivational and structural barriers.
  2. Individual charity in India is among the lowest worldwide.[2] While philanthropy is growing at a rate of 15 percent per year between 2014 and 2018 in India, individual charity as a percentage of GDP is less than 0.05 percent (~$2.7B) in India compared to 1.7 percent in the US (~$250B).
  3. Isolated individual giving efforts leading to frustration over low, unsustainable social impact.
  4. Current philanthropic giving in India is primarily focused on traditional grant-based NGO funding, which can be impactful but doesn’t address systemic issues.

To address these issues, a new approach must be considered. The scope of social enterprises — companies whose mission is to create impact beyond shareholders, and includes stakeholders such as the poor, the environment, employees, or more — has expanded into diverse sectors, including renewable energy, workforce development and agriculture. Acumen’s mission is to change the way the world tackles poverty by investing “patient capital” (long-term, philanthropically-backed equity investments and loans) in social entrepreneurs solving complex challenges affecting the poor.

The organization is committed to accompanying entrepreneurs with technical support and access to networks and to measuring social impact, not just financial returns. Today, we count $125 million of patient capital invested in 126 companies that have transformed the lives of 263 million low-income people. India is our first ever and oldest investment geography beyond investing in entrepreneurs. Acumen has an India Fellows Program which equips extraordinary individuals with the knowledge, support system, and practical wisdom to drive positive change in our society. Over a hundred Acumen India Fellows have gone on to set up game-changing companies and organizations and play key roles in shaping the conversations about business and poverty within government and corporations. Today, India boasts one of the most mature impact investing markets in the world, and Acumen’s companies, such as LabourNet, Orb Energy, and LifeSpring Hospitals, and several other leaders are scaling to impact millions of more lives each year. To learn more on Acumen India, click here.

Our audacious goal over the next three years in India is to improve livelihoods and resilience of 25 million Indians. And this can only be accomplished through collaboration and building partnerships across various influencers in the sector, including individual donors, family foundations, corporations, investors and governments.

Now is a unique and urgent time for the Indian diaspora to come together as one pioneering force to transcend from a charity mindset to a strategic philanthropy one.

In the words of David Stead, Executive Director of Philanthropy and Development of Charities Aid Foundation (CAF), “In order to create a strong culture of giving the Indian diaspora needs to come together to share their experiences and discuss how to enable more effective giving… Such a convening space would enable collaboration between individuals to explore solutions to the many social, economic and environmental issues we are facing at both local and global levels”.

In 2020, Acumen is putting forward a revolutionary model whereby the Indian diaspora have an inimitable opportunity to drive long-term change and deliver outsized social impact in India through a new ‘donor collaboration’ model. This model enables collaboration amongst pioneering philanthropists to co-create a philanthropy vehicle that will unlock much-needed capital across the industries that impact the poor. Through the journey, philanthropists will gain access to knowledge, networks and visibility into the impact their catalytic capital can make when invested in leaders and entrepreneurs that have the humility to see the world as it is, and the audacity to imagine what it could be. We are committed to building an India and leadership that stands with the poor, listens to voices unheard, and recognizes potential where others see despair.

As a fellow citizen of this diaspora, I couldn’t be more excited to bridge the divide I have come to know about India and call on others to join us in bringing dignity and equity to low-income Indians. Are you with us?

[1] Dalberg 2017, Diaspora giving in India

[2] BBC, 2019, Why India’s rich don’t give their money away

 

Dr. Ambika Sampat is the Business Development Lead at Acumen. At Acumen, Ambika manages Partner engagement across Europe and Asia, resource mobilization and revenue generation across multiple sectors in developing markets. Simultaneously, Ambika co-leads a global online health transformation platform, FITBANKER, co-founded with her husband, Ronnie Rich, committed to putting an end to lifestyle-induced diseases. A biomedical scientist with a PhD in Obstetrics & Gynecology, she is a global citizen who has lived across 4 continents and delivered numerous talks on international platforms across multiple geographies on health, investing, and leadership. Dedicated to personal development and service to humanity, she is constantly investing in discovering her True Self through spiritual education from the ancient Vedas.

To get involved with Acumen, please contact Ambika at asampat@acumen.org.