Why donors keep asking for sustainability

October 26, 2026 Leave a comment

I have often been asked by the funding partners, ‘How will this project be sustained after the funding ends?’ While it is a reasonable question, it is also often the wrong one. The development sector has turned ‘sustainability’ into a synonym for ‘what will happen when the donor stops paying?’ The donors ask NGOs to build lasting solutions while often funding them through short-term, restricted projects that make long-term institutional and financial resilience harder to achieve. The real test of sustainability is the possibility of value created by the funding that can continue beyond the project cycle, and whether the economic, institutional or public systems exist to carry that value forward.

If a donor spends money on training women entrepreneurs, establishing community institutions, improving health services or creating livelihood opportunities, it is entirely reasonable to ask what happens when the grant ends. Nobody wants an intervention to disappear the moment the donor’s logo disappears from the last banner. But before asking how a project will survive without the donor, we should ask what exactly is supposed to continue, who is expected to take responsibility for it, and whether the conditions exist to make that possible.

A three-year project can be financially unsustainable but socially transformative, and it can end because its purpose has been achieved. A community institution can survive without the NGO but require continued public or market support. A livelihood intervention can become sustainable because participants increase their incomes, while the organisation delivering it remains dependent on philanthropy. And sometimes ‘sustainability’ simply means that the NGO promises to find another donor, which often is the least convincing of all. For years, development organisations have been encouraged to think about sustainability as an exit strategy. The donor funds the intervention often for 1-3 years, the NGO builds capacity, creates local ownership, establishes linkages and prepares an exit plan, and then the donor leaves and the model is expected to continue. While the logic is attractive, ending external funding and creating sustainability are not necessarily the same thing.

The OECD’s longstanding definition of sustainability in development evaluation focuses on the benefits of an intervention continuing after donor funding ends. That is a useful starting point, but it immediately raises a more important question of what will allow those benefits to continue? Government may take over, communities may contribute, users may pay, markets may generate revenue, or another institution may assume responsibility. Or the intervention may change behaviour or strengthen systems sufficiently that continued external support is no longer necessary. These are fundamentally different pathways, yet grant proposals often treat sustainability as a generic quality that can be added through a paragraph near the end of a concept note.

Consider a women’s entrepreneurship program that trains 5,000 rural women, organises producer collectives, provides business support and connects them to markets. If a donor asks how the program will be sustained after three years, the answer depends entirely on the model. Perhaps producer collectives will become commercially viable, or an anchor company will continue purchasing from the enterprises, while the financial institutions in the entrepreneurial ecosystem will provide working capital, and women will eventually pay for business services. Each possibility requires a different intervention design. If sustainability depends on markets, the project must build a viable market proposition. If it depends on government, public institutions need to be involved from the beginning. If it depends on producer collectives, those organisations need governance, capital and commercial capability. If another donor will be required, the project should be honest about that rather than presenting donor substitution as financial sustainability.

Donors increasingly expect NGOs to be resilient, adaptive and financially sustainable, while many NGOs are funded through short-term, restricted project grants that make precisely that difficult. Recent evidence from Bridgespan’s 2025 research, based on responses from 460 nonprofits and interviews with 51 nonprofit leaders, funders and intermediaries from India, found growing movement towards multiyear funding and greater recognition of core organisational costs, but continuing gaps in organisational development and financial reserves, particularly among smaller and non-metro organisations. Earlier Bridgespan research found that 83% of Indian NGOs surveyed had difficulty securing funding for indirect costs, while more than half had fewer than three months of reserves. Only 18% said they invested adequately in organisational development. Another analysis of 40 relatively well-funded Indian nonprofits found that actual core costs ranged from 5% to 51% of total costs and averaged 19%, while the average coverage provided by key donors was only 9%.

Funders ask organisations to be resilient while funding them as if their only legitimate expenditure is the activity that can be photographed and counted. Donor grants fund the field worker but not always enough of the management system that supports the field worker, training but not necessarily the organisational learning required to improve it, and program delivery while hesitating to fund reserves. Funders ask NGOs to diversify their funding while providing little unrestricted money with which to build their fundraising capacity. Then, three years later, the funder asks why NGOs are not sustainable.

Instead of asking an NGO, ‘How will you sustain this project when our funding ends?’, donors should instead ask, ‘What needs to be true for the benefits of this intervention to continue, and what role should our funding play in creating those conditions?’ This question recognises that philanthropy is often most useful when it finances a transition between two states. A grant can demonstrate that an idea works, absorb early-stage risk, strengthen institutions, develop markets, improve technology or support innovations that government and commercial finance are not yet prepared to fund. The grant should help create the conditions for the next stage. That may mean public financing, market revenue, community ownership, institutional adoption, commercial investment or another form of philanthropy. The appropriate pathway will vary by intervention, for example, a rural entrepreneurship program and a community health program should not be expected to arrive at sustainability through the same route.

This also means donors should sometimes be prepared to fund the less glamorous parts of sustainability. Financial systems are not exciting, NGO reserves are not photogenic, good middle management rarely features in impact stories, and neither do information systems, HR, audit, leadership development or fundraising capacity. Yet these capabilities determine whether an organisation can survive shocks, retain good people, manage resources and deliver programs consistently. Flexible funding is therefore not necessarily the opposite of accountability. It can be an investment in the organisational capacity required to deliver accountability well. A strong organisation with adequate systems and reserves may actually be better positioned to manage restricted program funding, and respond to changing circumstances and protect donor resources.

Then there’s another very important aspect of development programs, where everything cannot be sustained. Some projects end and achieve the desired results/purpose during their lifecycle. A delivery model may become obsolete, a technology may get replaced, a program may fail to produce meaningful results, or a community may no longer need an external intermediary. Continuing to fund something simply because it has existed for five years is institutional inertia and not sustainability.

The objective should therefore be sustainable value, not sustainable projects. This matters because many development challenges are systemic. Poverty, women’s economic exclusion, malnutrition, tuberculosis, climate vulnerability and the lack of decent employment cannot generally be ‘solved’ by a three-year project. At best, a project can change part of the system like improve a service, strengthen an institution, alter incentives, demonstrate a model, influence policy or help people acquire assets and capabilities.

Sometimes the honest answer will be that an intervention requires long-term funding, and there is nothing inherently unsustainable about that. Governments continuously spend money on education, public health, roads, social protection and environmental management. We do not ask whether a public hospital will become financially self-sustaining after three years, but are more interested in it producing sufficient public value to justify continued investment. Perhaps philanthropy should adopt some of the same logic. A community health program that requires continued financing may still be highly valuable if it prevents disease at a cost society is willing to pay. A program supporting children with special needs may never generate revenue, yet its social value can be substantial. 

So sustainability cannot always mean, ‘Can this generate its own revenue?’ That is a business-model question. For many social interventions, the better question is that, Who has a legitimate reason and capacity to pay for this value over the long term? The answer is an appropriate combination of market, government, communities, and philanthropy as per the need. This also places a responsibility on NGOs to become more honest in how they answer sustainability questions. A reassuring paragraph about capacity building, community ownership and exit strategies is not necessarily a credible plan. It’s better to be honest about it and say that the interventions may require continued public expenditure, or a livelihood project would need several more years beyond the grant cycle before it can cover its operating costs, and show the pathway. If another donor will be required, explain why and what will be different by then.

Sustainability becomes more credible when it is treated as a theory of how an intervention will continue to create value, rather than as a promise that the NGO will somehow find money after the current grant ends. We have turned a ,legitimate development objective into a ritual of grant writing. Every proposal has a sustainability section, a sustainability framework, and an exit strategy. Yet none of these, by themselves, answers the fundamental question of what will make this intervention continue to work when the source of money ends. A serious answer requires thinking about incentives, markets, institutions, behaviour, public finance, community ownership and organisational capability. It may require more than one source of funding and more than one institution. It may take five years rather than three. It may require unrestricted funding rather than another tightly earmarked project grant. And sometimes it may require accepting that the value created by a program is important enough to warrant continued investment. Perhaps, then, donors should stop treating sustainability as the final question in a grant proposal, but should be one of the first. So, instead of ‘How will you survive without us?’, the donor should ask, ‘What will exist, who will own it, who will pay for it, who will maintain it, and what should our role be when the grant ends to make the impact sustainable?’ While these are harder questions, I think, they can also lead to better projects. The most sustainable thing a donor can fund is NGOs capability, institution, market, public system or community ownership that makes the original grant less necessary over time.

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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Behavioural Systems Approach to Rural Entrepreneurship Development

October 12, 2026 Leave a comment

The popular approach to rural entrepreneurship in India often includes providing poor households with access to credit, skills training, subsidies, or market linkages, which will naturally lead to entrepreneurship development. This assumption has shaped countless development programs led by governments, NGOs, microfinance institutions, and multilateral agencies. Two individuals living in the same village, receiving identical training and similar financial support, often experience vastly different entrepreneurial trajectories. One may build a sustainable enterprise, expand into new markets, and improve household income, while another may abandon the effort entirely despite possessing comparable resources. Conventional development frameworks struggle to explain this divergence because they remain overwhelmingly focused on material inputs rather than behavioural systems.

I am proposing the READ Framework (Readiness, Exposure, Aspiration, and Direction), which can shift the analytical lens from resource scarcity to behavioural conditions that shape economic action. Rather than treating entrepreneurship as a linear outcome of financial or technical support, the model suggests that enterprise creation depends on a dynamic interaction between psychological preparedness, social exposure, aspirations for mobility, and clarity of execution pathways. This perspective is particularly important in contemporary India, where entrepreneurship has become central to the national development narrative, and yet rural livelihoods remain constrained by social inequality, institutional gaps, and behavioural barriers that are often invisible within conventional policy frameworks.

India’s economic transformation over the past three decades has generated significant growth, but it has also exposed structural contradictions. Although India aspires to become a major global economic power, a large proportion of its population continues to live in rural areas dependent on fragile agriculture-based livelihoods. According to the World Bank, nearly two-thirds of India’s population still resides in rural areas, while agriculture contributes a relatively small share of GDP. This imbalance has intensified pressure on rural households to diversify income sources beyond farming. Rural entrepreneurship is therefore increasingly viewed as a pathway for employment generation, women’s empowerment, local economic resilience, and reduction of distress migration. Government initiatives such as Startup India, Mudra Yojana, and the National Rural Livelihoods Mission reflect this policy emphasis. However, despite substantial investments in microcredit, self-help groups, and skill development programs, many interventions continue to produce limited or unsustainable outcomes. The limitations of conventional entrepreneurship models arise partly from their assumption that individuals act rationally once economic barriers are removed. The prevailing logic can be summarised as a straightforward sequence of inputs leading to skills, enterprise, income (Inputs -> Skills -> Enterprise -> Income).

Development economists such as Abhijit Banerjee and Esther Duflo have demonstrated that poverty fundamentally shapes cognition and decision-making. Scarcity creates what behavioural economists describe as a ‘bandwidth tax,’ reducing people’s ability to plan long-term, tolerate risk, or experiment economically. Poverty is therefore not merely a shortage of money, but a condition that influences imagination, confidence, emotional resilience, and perceptions of possibility. The READ framework is developed upon this intellectual foundation but advances it further by conceptualising entrepreneurship as an interconnected behavioural ecosystem rather than a collection of isolated economic variables.

The framework proposes that entrepreneurial outcomes are a function of four interacting dimensions: Readiness, Exposure, Aspiration, and Direction.

E = f(R,Ex,A,D)

The formulation is simple and treats entrepreneurship as emergent behaviour rather than a direct consequence of inputs. This framework rejects the assumption that entrepreneurship automatically emerges when capital or skills are introduced. Instead, it recognises that deficiencies in any one behavioural dimension can undermine the entire entrepreneurial process. An individual may possess technical capability but lack confidence, another may have ambition but no understanding of viable business pathways, making entrepreneurship an emergent behaviour shaped by multiple interacting conditions rather than a predictable economic reaction to incentives.

The first dimension, Readiness, refers to the psychological and situational preparedness required to undertake entrepreneurial activity. This includes emotional resilience, confidence, time availability, family support, and willingness to tolerate and adapt to uncertainty. In rural India, readiness is deeply shaped by social structures such as gender norms, caste hierarchies, and family expectations. A rural woman may receive training in tailoring, computer operations, or food processing yet still hesitate to establish a business because domestic responsibilities, mobility restrictions, or patriarchal control limit her ability to act independently. Similarly, entrepreneurs belonging to marginalised communities may face exclusion from traditional market networks or social resistance when attempting to enter certain occupations. Readiness, therefore, is not simply an individual psychological trait but a socially conditioned state shaped by power relations and everyday realities.

Readiness also resonates strongly with the capability approach developed by Amartya Sen, who argued that development should be understood not just in terms of resources but in terms of people’s actual freedoms to pursue lives they value. Sen distinguishes between capabilities and functioning. Individuals may possess capabilities in theory, yet structural and social constraints may prevent them from converting those capabilities into real economic action. The READ framework extends this insight into the domain of entrepreneurship by recognising that the existence of opportunity alone does not guarantee participation.

The second dimension, Exposure, is about the importance of social learning, networks, role models, and market visibility. Entrepreneurship is rarely an isolated individual act, and is deeply influenced by social environments. Individuals often become entrepreneurs because they observe others navigating similar pathways successfully. In many rural communities, however, exposure to growth-oriented enterprises remains extremely limited. People may encounter only subsistence-level economic activity and therefore struggle to imagine entrepreneurship beyond survival-oriented self employment. A young person in a remote village who has never interacted with digital commerce, branding strategies, or scalable enterprises may lack exposure to viable economic possibilities, and not necessarily ambition or intelligence.

Economic sociology has consistently demonstrated the importance of networks in shaping entrepreneurial success. Urban startup ecosystems thrive partly because of dense social environments that provide mentorship, peer learning, investment access, and visible examples of success. Rural entrepreneurship programs often fail to replicate such ecosystems because they focus narrowly on asset distribution or technical training. The READ framework’s emphasis on exposure therefore addresses a major gap in existing development practice. Exposure is not simply informational, as it also creates legitimacy. Seeing people from similar social or economic backgrounds succeed changes what individuals believe is socially and economically possible for themselves.

The third dimension, Aspiration, is socially conditioned and unevenly distributed. Development programs frequently assume that poor households naturally aspire toward upward mobility. Sociologist Pierre Bourdieu argued that social structures shape individuals’ ‘horizons of possibility,’ influencing what they perceive as achievable for people like themselves. Similarly, economist Debraj Ray has written extensively about the ‘aspirations window,’ suggesting that exposure to successful peers influences economic ambition and long-term planning.

In many rural contexts, especially among historically marginalised communities, entrepreneurship may not appear imaginable as a pathway to transformation. Young people may aspire primarily toward government employment or urban migration because these trajectories are socially visible and culturally validated. In contrast, business ownership may appear risky, uncertain, or inaccessible. The READ framework recognises that aspiration is not simply a motivational issue but a socially produced cognitive condition. This insight has profound policy implications because it suggests that entrepreneurship promotion requires more than financial support, and often also requires interventions that expand people’s imagination of possible futures.

The fourth dimension, Direction, refers to clarity regarding viable pathways, execution strategies, and market navigation. Many rural entrepreneurs possess determination and ambition but lack strategic guidance. They may not know how to identify profitable sectors, understand customer demand, access supply chains, navigate regulations, price products competitively, or scale operations sustainably. Traditional entrepreneurship programs frequently provide generic training but fail to offer long-term mentoring or strategic support. Participants may learn technical skills without understanding how to build viable enterprises in dynamic market environments.

Direction has become increasingly important in India’s digital economy, where market participation requires familiarity with e-commerce platforms, logistics systems, digital payments, and branding practices. Without adequate guidance, rural entrepreneurs often remain trapped in highly localised, low-margin markets vulnerable to competition and economic shocks. The READ framework’s emphasis on direction therefore highlights the need for sustained mentoring ecosystems rather than one-time training interventions.

The proposed READ framework uses a systems orientation, with an understanding that human behaviour does not operate through isolated causal pathways. Entrepreneurial action emerges from interactions between psychological, social, economic, and institutional conditions. A person may possess high aspiration but lack direction, leading to frustration rather than enterprise creation. Another may have exposure to successful entrepreneurs but insufficient readiness due to household resistance or emotional insecurity. By recognising these interactions, the framework aligns with broader systems-thinking approaches increasingly influential in public policy and development studies.

The framework can prove to be useful when examining women’s entrepreneurship in rural India. Many livelihood programs targeting women measure success primarily through participation rates or loan disbursement numbers. However, women’s formal inclusion in enterprise programs does not necessarily translate into genuine entrepreneurial autonomy. Women may technically own businesses while male family members control decision-making and finances. The READ framework suggests a more nuanced understanding of these realities by examining the behavioural and social conditions surrounding enterprise participation. A woman may receive training and capital yet still lack readiness because of household opposition, exposure because of mobility restrictions, aspiration because of internalised gender norms, or direction because she lacks mentorship networks. This multidimensional perspective provides a richer understanding of why many women-led enterprises remain small-scale and economically vulnerable despite extensive policy attention.

At the same time, the framework raises important conceptual and methodological questions. Behavioural dimensions such as aspiration or readiness are difficult to quantify reliably. Self-reported surveys may suffer from social desirability bias, contextual inconsistencies, or cultural variation. Constructing a robust ‘READ Index’ would therefore require careful psychometric validation and adaptation across diverse social contexts (I am working on defining and designing the Index, and will publish once I am ready). Rural India is not a uniform behavioural landscape, as aspirations, gender norms, and economic expectations vary significantly across regions, castes, religions, and linguistic communities.

Another concern is that behavioural frameworks can unintentionally shift responsibility onto individuals while underemphasizing structural inequalities. Entrepreneurial failure is not always the result of behavioural deficiencies. Infrastructure gaps, poor logistics, corruption, climate shocks, monopolistic market structures, and digital exclusion remain major constraints. A highly motivated entrepreneur with strong exposure and clear direction may still fail because of unreliable electricity, exploitative intermediaries, or lack of transportation infrastructure. Behavioural systems approaches should therefore complement rather than replace structural analysis. Otherwise, there is a risk that development discourse becomes overly individualised, framing poverty as a problem of mindset rather than political economy.

The framework also raises broader questions about the increasing romanticisation of entrepreneurship within contemporary development policy. Entrepreneurship is often presented as a universal solution to unemployment and rural distress. However, not every individual seeks or benefits from entrepreneurial risk. Many rural households prioritise stability and security over growth-oriented enterprise. Excessive emphasis on entrepreneurship can obscure the state’s responsibility to generate decent employment, strengthen public services, and reduce structural inequality. The READ framework has the potential to become most valuable when used as an analytical and program-design tool rather than as an ideological justification for reducing state responsibility.

Despite these concerns, the framework can offer substantial practical relevance for policymakers, NGOs, and development practitioners. If empirically validated, it could reshape the design of rural livelihood programs across India. Interventions could move beyond transactional models toward more relational and behaviourally informed approaches. Programs might assess behavioural readiness before enrollment, create peer-learning ecosystems, facilitate exposure visits, incorporate aspiration-building modules, involve families in sensitisation processes, and provide long-term mentoring rather than short-term training alone. Such approaches would recognise entrepreneurship as a socially embedded process rather than merely an economic activity.

The broader significance of the READ framework is in its attempt to bridge economics, sociology, behavioural science, and development practice. It recognises that poverty is not solely material deprivation but also a condition that shapes agency, imagination, and action. By integrating behavioural insights with systems thinking and capability theory, the framework challenges simplistic assumptions about how development occurs. It asks a deeper question than most entrepreneurship programs currently address, that why do some individuals act on opportunity while others facing similar conditions do not? The answer to that question may be central not only to rural entrepreneurship policy but to the future of inclusive development in India itself.

References

  1. Abhijit Banerjee and Esther Duflo, Poor Economics, PublicAffairs, 2011.
  2. Amartya Sen, Development as Freedom, Oxford University Press, 1999.
  3. Debraj Ray, Aspirations, Poverty, and Economic Change, Oxford University Press, 2006.
  4. Pierre Bourdieu, Outline of a Theory of Practice, Cambridge University Press, 1977.
  5. World Bank rural population and development indicators.
  6. International Labour Organization reports on informal economies and entrepreneurship.
  7. NITI Aayog policy papers on women entrepreneurship and rural livelihoods.
  8. National Rural Livelihoods Mission (Government of India) operational and policy documents.

Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organization, foundation, CSR, non-profit or others.

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Digital Literacy vs Digital Confidence

June 15, 2026 Leave a comment

The digital divide in rural India is often described as an access problem. Smartphones are becoming increasingly common, data is becoming more affordable, and women are increasingly present on digital platforms, sharing messages, watching videos, and making video calls. However, this apparent inclusion masks a deeper exclusion. When it comes to using technology for business, like sending payments, managing accounts, registering enterprises on platforms, or selling online, many rural women hesitate. The contradiction is striking as access and skills exist, but ownership and confidence do not. The real barrier to digital inclusion is not digital literacy, but digital confidence.

Consider the experience of a rural woman entrepreneur who runs a home-based food business. She owns a smartphone, uses WhatsApp comfortably, and receives digital payments from customers. Yet she avoids sending money digitally, hesitates to use business apps, and depends on a family member for anything that she thinks is ‘important.’ Her fear of ‘what if something goes wrong?’ is not about a lack of knowledge, but about a lack of trust in oneself. Across rural contexts in India, women are digitally present but not digitally empowered. While they are users of technology, but unfortunately not the decision-makers within it.

Most development programs approach this challenge through the lens of digital literacy. Literacy is usually defined as the ability to operate a phone, navigate apps, recognise icons, or complete basic digital tasks. Training programs, device distributions, and short workshops are designed to tick these boxes. Once completed, women are counted as digitally included. However, literacy does not translate into agency. Knowing how to open an app does not mean feeling confident enough to transact independently. Watching a demonstration does not prepare someone to make decisions in real situations. Literacy teaches what to do, whereas confidence determines whether one dares to do it.

Digital confidence, unlike literacy, is rarely named, measured, or funded. It refers to a person’s trust in their own ability to use technology without fear, their willingness to make mistakes, and their sense of belonging in digital spaces. This confidence is more psychological than technical, emotional rather than instructional. For rural women, digital confidence is shaped by years of social conditioning that discourages experimentation, independence, and risk-taking. Without this confidence, technology remains something to be handled carefully or delegated to others.

The reasons for low digital confidence among rural women are structural and gendered. Financial fear is a major factor, with stories of fraud, which are often exaggerated, circulating widely. A single mistake can lead to loss of money, blame from family members, or public embarrassment. Cash, by contrast, feels safe and visible as it can be counted, corrected, and recovered. In this context, avoiding digital tools becomes a rational choice rather than a sign of ignorance.

Gendered control over technology further weakens confidence. In many households, men act as informal gatekeepers of digital systems. Even when women own phones, passwords, banking apps, and registrations are often managed by husbands or sons. Over time, this creates dependence and reinforces the belief that digital decision-making is not a woman’s responsibility. What begins as ‘help’ slowly turns into exclusion.

Men are often allowed to experiment, fail, and learn, while women, especially in rural settings, are not afforded the same grace. A mistake made by a woman is quickly interpreted as evidence that she should not be engaging in business or technology at all. This low tolerance for failure discourages curiosity and reinforces caution. When the social cost of error is high for women, playing safe becomes the only viable strategy.

Design and language barriers also play a role, as many digital platforms are not built for first-generation users. Interfaces are cluttered, English-heavy, and filled with technical or financial jargon. For women with limited formal education, each unfamiliar term reinforces a sense of exclusion. Technology begins to feel alien, designed for someone else, and confidence erodes further. The consequences of low digital confidence are visible in how rural women run their enterprises. As a result, businesses remain informal, small, and dependent on intermediaries. Family members or middlemen step in to handle digital aspects, capturing control and value. Instead of reducing inequality, technology ends up reinforcing existing power structures.

Evidence from the ground suggests that when confidence is addressed, outcomes change. In India’s SHG networks, women who participate in repeated, hands-on digital practice sessions gradually begin to transact independently. Rural women entrepreneurs who learn in peer groups adopt digital tools more confidently than those trained in isolation. The turning point is rarely a new app or feature; it is the moment a woman completes a task on her own and realises she can do it again.

Building digital confidence requires a different approach. Repetition matters more than certification. One-time trainings raise awareness, but confidence grows through continued practice. Peer role models are powerful, especially when women see others from similar backgrounds navigating technology successfully. Safe spaces for failure are essential, allowing women to learn without fear of financial or social consequences. Trusted human support through community facilitators, SHGs, or NGOs provides reassurance and continuity that technology alone cannot offer.

For policymakers, donors, and practitioners, this demands a rethinking of program design. Success should not be measured by the number of women trained or devices distributed, but by independent usage, decision-making, and willingness to explore digital tools. Budgets must allow for handholding, follow-ups, and time. Behavioural change cannot be rushed, and technology should not be treated as a shortcut to empowerment.At the policy level, digital public infrastructure holds enormous promise, but only if it is designed with gendered realities in mind. Women-first user experience, local-language interfaces, and community-based support systems are essential. Digital inclusion must be understood as a question of agency, not just access. Until rural women believe that the digital world belongs to them and they are confident to click, transact, and decide, technology will remain an accessory rather than a catalyst for entrepreneurship and change. The future of rural women’s enterprise will be built not just on smartphones, but on the transformative moment when a woman says to herself, ‘I can do this,’ and acts without fear.

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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Why good projects struggle for funding

April 6, 2026 Leave a comment

The social impact sector’s irony is that some of the most thoughtful, community-centred, transformative projects struggle to secure funding, while others that are not so well designed, and sometimes even superficial, find their way into donor portfolios. This contradiction is often explained as a failure of proposal writing or organisational capacity, but such explanations only scratch the surface. The deeper truth lies in understanding donor behaviour, including the incentives, constraints, and biases that shape funding decisions. Good projects are overlooked not because they lack merit, as ‘merit’ is not the primary currency in the funding ecosystem, but because of factors like alignment, risk perception, measurability, and institutional incentives.

At the core of the problem is the simple fact that donors do not fund the ‘best’ projects; instead, they support those that align with their priorities. Every donor operates within a specific thematic, geographic, and strategic framework, often influenced by board directives, political factors, or institutional legacy. A project that is highly relevant to a particular community may still be rejected if it does not fit neatly into a donor’s current focus areas. This creates a subtle but significant distortion in the sector, as organisations begin to design projects around donors’ language and preferences rather than the lived realities of communities. In this process, genuinely valuable ideas can become invisible, not because they lack worth, but because they are misaligned with funding narratives.

This is further compounded by the deeply risk-averse nature of development funding. Donors are not neutral actors, and they are accountable upward to their boards, governments, shareholders, or trustees. This shapes a cautious approach to funding, where the emphasis is on minimising risk rather than maximising impact. Established nonprofits with proven track records are preferred over emerging grassroots organisations, even when the latter may have deeper contextual understanding. Similarly, tried-and-tested models are favoured over experimental or innovative approaches. The consequence is a filtering mechanism that systematically excludes many high-potential projects simply because they appear uncertain or difficult to manage. Ironically, the very qualities like innovation, localisation, and adaptability that make a project transformative are often the ones that make it seem risky.

Now there’s a growing emphasis on measurability in funding decisions. Donors desire clear metrics, defined outputs, and quantifiable results for results-based management and data-driven accountability of projects. While this has enhanced transparency, it has also created a bias toward interventions that can demonstrate immediate, tangible results. Projects focused on infrastructure, service delivery, or training programmes tend to perform better because their outputs are easily measurable. Conversely, initiatives aimed at changing social norms, empowering communities, or strengthening institutions struggle to articulate their impact within the same frameworks. The most complex and deeply rooted development challenges are often the least measurable within the funding cycle, and therefore the least fundable. Good projects operating in these areas are disadvantaged not because they are ineffective, but because their effectiveness cannot be readily quantified.

The nature of donor engagement further complicates the picture, despite frequent references to ‘partnership,’ much of development funding remains transactional. Organisations submit proposals in competitive, opaque processes with limited opportunity for dialogue or feedback. In such an environment, relationships matter enormously. Organisations with prior visibility, networks, or access to donor ecosystems often have a significant advantage, even if their projects are not fundamentally stronger. Trust, built over time, can outweigh the intrinsic quality of a proposal. Conversely, new or lesser-known organisations, particularly those operating at the grassroots level, find it difficult to break into these networks. As a result, good projects often fail not on their own terms, but because they are evaluated in isolation, without the benefit of relational context.

This dynamic is closely tied to a broader structural bias within the global development ecosystem. Local organisations, despite being closest to the communities they serve, receive only a small fraction of direct funding. Donors frequently cite concerns around compliance, financial risk, and administrative capacity, which leads them to channel funds through larger intermediaries. While this may simplify management from the donor’s perspective, it creates a distance between resources and realities. Local initiatives, which may be highly effective and deeply embedded, often remain underfunded or entirely excluded. This is not merely an operational issue, but reflects an implicit hierarchy of trust, where proximity to power and familiarity with donor systems are valued over contextual knowledge and lived experience.

Equally important is what might be called the ‘proposal illusion’, with the tendency to compare the quality of a project with the quality of its documentation. In practice, donors assess proposals, not projects. This places a premium on articulation, structure, and the ability to translate complex realities into donor-friendly language. Organisations with access to skilled writers, consultants, or international exposure are better positioned to succeed, even if their fieldwork is not exceptional. On the other hand, grassroots organisations that may be doing outstanding work often struggle to present it in ways that resonate with donor expectations. The result is a system where storytelling can overshadow reality, and where good projects are overlooked because they are not packaged effectively.

Time horizons further skew funding decisions as donors tend to operate within short funding cycles, typically ranging from one to three years, with success evaluated within this limited timeframe. This creates a preference for projects that can demonstrate quick wins, rather than those that require sustained engagement over longer periods. Yet most of the development challenges, like education reform, livelihood transformation, and social cohesion, are inherently long-term and demand patience, continuity, and iterative learning. When funding is short-term, even well-designed projects can struggle to show meaningful results, making them less attractive to donors. This leads to what is often described as the ‘pilot trap,’ where innovative ideas receive initial funding but fail to scale or sustain due to a lack of long-term commitment.

Another big challenge is the persistent reluctance to fund organisational overheads. Donors often prefer to allocate resources directly to programmatic activities, placing limits on administrative costs such as salaries, systems, and governance. This undermines the very foundations that enable effective implementation. Strong organisations require robust systems, skilled personnel, and institutional stability. When these are underfunded, the quality of implementation suffers, reinforcing donor perceptions of risk and inefficiency. This creates a vicious cycle in which organisations are unable to build capacity, and good projects become difficult to execute at scale.

Underlying all of these factors are the incentives that shape donor behaviour. Funding decisions are rarely neutral as they are often influenced by a range of external and internal considerations. Corporate donors are often guided by brand alignment and visibility, favouring projects that can be showcased or communicated easily. Philanthropic foundations may be influenced by leadership vision, legacy goals, or thematic interests. In each case, the logic of funding extends beyond impact alone. Good projects that do not align with these broader incentives may struggle to gain traction, regardless of their potential.

Bilateral and multilateral donors operate within geopolitical frameworks, where aid allocation may reflect strategic interests as much as development priorities. In the wake of global economic slowdowns, traditional sources of Official Development Assistance (ODA) are shrinking. The U.S., U.K., and several European governments have all announced significant cuts to their ODA budgets. These reductions should have sparked debates about the failures of the aid system, but they largely passed with little reflection. The outcome is a development finance environment that’s simultaneously more selective and more risk-averse. Funders now prioritise large-scale, measurable, and politically ‘safe’ projects that can boast short-term, quantifiable results. Small-scale social initiatives, particularly those addressing systemic or cultural issues like inequality or governance, find themselves outside the funding radar. Even when progressive funding streams exist, for example, climate justice or inclusive innovation programs, they come wrapped in new conditionalities of alignment with national development strategies, ESG benchmarks, or private-sector co-financing. These conditions further alienate grassroots actors who can’t meet such formal requirements.

It is also important to acknowledge a more fundamental constraint of scarcity, as the pool of available funding is limited, while the number of worthy projects is vast. Even in a perfectly functioning system, not all good ideas can be supported. This introduces an element of competition that is not purely based on merit. Projects must not only be good, but must also be timely, visible, and strategically positioned. In such an environment, marginal differences in presentation, alignment, or relationships can determine outcomes, leaving many strong proposals unfunded.

Projects that are technically sound but insufficiently rooted in community realities often struggle to convince donors of their sustainability. Funders have been increasingly looking for evidence of participation, co-creation, and local ownership. However, these elements are difficult to demonstrate within conventional proposal formats, leading to a gap between genuine engagement and its representation. Good projects that are deeply participatory may still fall short if they cannot adequately convey this dimension to donors.

These dynamics suggest that the funding ecosystem does not necessarily reward the intrinsic quality of projects. Instead, it rewards alignment, clarity, measurability, and perceived reliability. This does not mean that donors are acting in bad faith; rather, they are responding to their own constraints and accountability structures. The system, in many ways, is functioning as designed. However, the consequences are significant, as innovative, context-specific, and potentially transformative projects often remain unfunded, while safer, more conventional interventions dominate.If we are serious about tackling poverty, inequality, and climate injustice, we must start by rethinking how funding itself operates. It is not enough to design good projects, but one must also learn to translate them into the language of donors without diluting their essence. This requires strategic proposal architecture, effective communication, and relationship-building. For donors, the challenge is more profound as it involves rethinking risk, expanding definitions of impact, and creating funding mechanisms that are flexible, inclusive, and long-term. Without such shifts, the sector will continue to produce good ideas that never see the light of day, not because they are unworthy, but because they do not fit the system that is meant to support them.

(Cover image generated using AI)

(Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organisation, foundation, CSR, non-profit or others.)

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Cracking the fundraising code

June 16, 2025 Leave a comment

Fundraising is the art and science of turning good intentions into actual impact! Throughout my career I have been raising funds for social impact, for causes of basic necessities like food, water, shelter, livelihood to a green economy, bridges over rivers to even a roller coaster in a developed country. I have been actively involved in raising funds for these causes from as small as $10 up to $50 million from a variety of sources and instruments. As the Head of Development at a nonprofit organization for social impact projects in India, I’ve navigated the corridors of CSR leaderships and foundation offices, and let me tell you, it’s not always smooth sailing. Often, it feels like trying to surf a tsunami with a paper boat!

Corporate Social Responsibility isn’t just a box to tick. It’s a strategic dance between business goals, stakeholder expectations, and social impact. With so many initiatives competing for attention, securing a dedicated slice of the CSR pie often feels like requesting a moment on a crowded stage, and convincing the audience that your act is worth their applause.

Foundations receive hundreds of pitches, each expecting to win the golden ticket. Getting noticed requires more than a well-crafted proposal; it demands storytelling that resonates and relationships that endure. Sometimes, it’s less about what you say and more about how you say it, and how quickly you can make a compelling case before the next shiny pitch distracts them.

Donors want results, but impact is often a marathon, not a sprint. Managing expectations without being over promising is an art. We’ve all faced the uncomfortable moment of explaining why a project’s full fruits may take years to ripen, a diplomatic tightrope walk that can test even the most seasoned fundraiser.

India’s complex regulatory landscape can feel like a labyrinth where one wrong turn can lead to delays or disapprovals. Keeping up with FCRA regulations, tax exemptions, and reporting requirements is a full-time job, and sometimes, it’s like speaking a different language altogether. Ironically, securing funds for a project often means fundraising itself. Resource constraints can limit outreach and follow-up, turning what should be a strategic focus into a haphazard firefight.

A mix of storytelling, patience, relationship-building, and a dash of humour helps. When engaging with CSR and foundations, understanding their priorities, aligning your mission with their vision, and communicating impact clearly can turn challenges into opportunities.

To my fellow fundraisers who are navigating this maze: keep your spirits high, your pitches sharper, and remember, every “no” is just a “yes” in disguise waiting to happen!

Let’s keep the conversation going. Share your stories or tips below, because in the game of social impact, we’re all in this together.

Disclaimer: The opinions expressed are those of the author and do not purport to reflect the views or opinions of any organization, foundation, CSR, non-profit or others.

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