Why donors keep asking for sustainability

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.

The invisible cost of GRAP 

Delhi slips into a public health emergency as air pollution reaches hazardous levels every winter. The government responds by invoking the most stringent measures under the Graded Response Action Plan (GRAP III and IV), suspending all construction and demolition activities, halting infrastructure projects, and restricting dust-generating work. These steps are necessary and justified for pollution control and the health of people. However, the cost of Delhi’s clean air policies is disproportionately borne by construction workers and daily wage labourers, whose livelihoods are abruptly and completely cut off.

Delhi has a massive daily wage construction labour force, estimated between 10-12 lakhs workers, with only around 5.4 lakhs officially registered (around 2.6 lakh active). Construction restrictions under GRAP III and IV are designed to curb particulate pollution, particularly PM10, a major contributor to Delhi’s smog. However, the construction sector is sustained almost entirely by informal labour. Migrant workers, hired through layers of contractors, work without written contracts, income security, or social protection. When work stops, wages stop instantly. There are no savings to fall back on, no paid leave, and often no local support systems. For these workers, a week-long (or longer) pollution shutdown can mean hunger, unpaid rent, mounting debt, or forced return to their native places under distress.

The injustice lies in the fact that these workers are not the architects of Delhi’s pollution crisis. Air pollution is the result of long-term structural failures, like unchecked urbanisation, rising private vehicle use, industrial emissions, poor public transport planning, weak enforcement of environmental norms, and regional factors like stubble burning. Construction workers operate within this system, responding to demand created by the city’s growth. Yet, when pollution peaks, their labour is the first to be criminalised, as if survival itself were an environmental offence.

The common defence of GRAP rests on a false dichotomy between public health and livelihoods. This framing assumes that income loss is a tolerable short-term sacrifice in the interest of long-term health. For daily wage labourers, livelihood and health are inseparable. Loss of income leads to undernutrition, stress, untreated illness, and increased vulnerability. Clean air achieved by pushing workers out of their wages is a policy failure and not a public health success. India’s environmental governance has consistently overlooked this social dimension. While regulations effectively restrict polluting activities, there is little institutional thought given to compensating those who lose income due to regulatory action. 

On 18th December 2025, the Delhi Government announced financial assistance of  INR 10,000 through Direct Benefit Transfer (DBT) to registered construction workers affected by the curbs under GRAP. While this is a welcome announcement by the Government, a clear policy solution is required in the long run for the provision of minimum wages to construction workers and daily wage labourers, both registered and unregistered, for the duration of GRAP shutdowns. This compensation should not be framed as charity or welfare, but as a rightful payment for income loss imposed by public policy in the interest of collective well-being. If the state mandates a halt to work for environmental reasons, it must also accept responsibility for the economic consequences of that mandate.

The most viable way to finance this support is through a dedicated ‘pollution tax.’ Delhi already collects various environment-linked charges, including green cess on vehicles, environmental compensation from polluting industries, and penalties for regulatory violations. These revenues can be consolidated into a Pollution Mitigation and Compensation Fund. Additional sources could include congestion charges in high-traffic zones, higher fees on large real estate developments, and stricter fines on construction firms that violate dust-control norms. Those who contribute most to pollution should bear the cost of its social mitigation.

Beyond immediate compensation, such a policy would also strengthen environmental compliance. When workers are protected from income loss, resistance to pollution-control measures will also decline. Environmental regulation will become a shared responsibility rather than an imposed punishment. Over time, this approach can build public trust in pollution governance, which is currently eroded by perceptions of unfairness and elite insulation from consequences.In the longer term, Delhi must move towards cleaner construction technologies, year-round dust control enforcement, better urban planning, and formalisation of labour. But these structural reforms will take time. Until then, compensating workers during pollution-induced shutdowns is a matter of basic justice. Environmental policy that ignores inequality risks becoming morally hollow and politically fragile. Clean air should be a shared achievement, not one built on empty stomachs and silent suffering.

First published at LinkedIn on 22nd December 2025

Data is Divine

“In God we trust. All others must bring data.” This quote, made by W. Edwards Deming holds true (and may even supersede God for some as Divine).

I have been in love with data right from my school years and the mysteries of the world it holds. I have tried to develop data driven models on human relationships, the movement of animals, finding patterns in the ways of the world, and later designing programs of social impact for challenging poverty, and policy development. In the end, we all are data, from the moment we are an idea until long after we pass away.

“Data is divine” highlights the growing understanding of data’s vital significance in modern society, in much the same way that religious or spiritual values have directed civilizations throughout history. In today’s digital age, data powers innovation, decision-making, and advancement in all fields, including governance, research, business, healthcare, and lifestyle.

1. Data as a source of truth: Data is frequently regarded as an impartial depiction of reality, providing information on trends and occurrences that may be imperceptible to anecdotal experience or intuition. In this way, data has a unique position as the basis for making well-informed decisions and uncovering hidden facts.

2. The power of data in innovation: Data is driving advancements in domains like healthcare, finance, and climate science and is revolutionizing industries as it powers AI/ML and sophisticated analytics. This emphasizes how data has the “divine” ability to spark significant change. The use of data for enhancing human welfare, from preventing pandemics through data-driven epidemiology to lowering inequality by studying societal trends has been in use. When applied sensibly and morally, it can aid in resolving some of the most pressing issues facing society.

3. Data as omnipresent: From the apps we use daily to the systems that manage our cities, data is present everywhere in the modern world. Its pervasiveness is comparable to a certain “divine” quality in that it affects almost every facet of contemporary life, whether we are conscious of it or not.

4. Data and ethics: Data carries a great deal of responsibility along with its power. Similar to supernatural knowledge, there are significant ethical ramifications to the way we collect, use, and safeguard data. Data misuse can result in inequality, manipulation, and privacy violations. As a result, it is crucial to handle data with dignity, openness, and ethics.

“Data is divine” also implies that we must treat it with deference and accountability while simultaneously appreciating its immense importance in shaping our future. We need to balance the power of data with ethical considerations as our world grows more and more data driven. The following are some crucial strategies to preserve this equilibrium,

1. Data privacy and informed consent: People ought to be in charge of how their information is gathered, kept, and utilized. It is not appropriate to force them to divulge information. Companies must be open and honest about their data practices so that users know what information is being gathered and why. Clear and informed consent should not be buried in complicated terms and conditions. Data literacy is essential among general population so that they are aware of the consequences of disclosing personal information, and the dangers of data misuse.

2. Data minimization: Only gather information that is absolutely required for the current job. This reduces the possibility of abuse and shields people from needless exposure. I’ve seen in recent years how social development initiatives gather and store vast amounts of data, with donors coercing their nonprofit partners to obtain it, yet this doesn’t address any societal issues. It is crucial to have a conscious grasp of what is needed.

3. Data bias and fairness: AI/ML systems may reinforce or increase biases found in the training data. Therefore, diversifying datasets, employing inclusive development techniques, and reviewing algorithms for bias are all necessary to ensure fairness.

4. Equitable data access: One way to lessen inequality is to make sure that data access and its advantages are shared equitably among all communities. This entails preventing the reinforcement of systemic disadvantages while ensuring that marginalized groups have access to data-driven insights.

5. Data governance and accountability: To ensure that data is utilized properly, organizations and governments must establish robust data governance policies and ethical frameworks. To stay up with the latest developments in technology, these policies must be revised regularly. It is imperative to establish unambiguous lines of accountability for the handling and utilization of data. Data practices can be kept moral and in line with social standards with the support of independent oversight organizations or ethics boards.

6. Regulation and legal safeguards: Strong data protection laws that impose restrictions on how businesses and organizations can gather, keep, and handle personal data must be enforced by governments. Laws that address issues like accountability for algorithmic judgments, eliminating discrimination, and safeguarding human rights in AI-driven systems are crucial for the ethical application of automation and artificial intelligence. Because technology is changing so quickly, regulatory models must be adaptable and flexible to support innovation and enable quick responses to emerging ethical dilemmas.

7. Data for social good: Data can and should also be used positive social impact including lowering inequality and poverty, combating climate change, and improving public health. Governments, corporations, and civil society organizations working together can help guarantee that data is used morally and for the good of society. These collaborations may result in common frameworks for the ethical use of data.

A multifaceted strategy including legislation, transparency, public education, and proactive governance is needed to strike a balance between the power of data and ethical issues. Prioritizing the defence of individual rights, maintaining equity, and advancing the common good while fostering innovation should be the main goals of ethical data use. Through cultivating a culture of accountability and responsibility, we can leverage data’s promise (and divinity) without sacrificing moral principles.

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

Cover Photo: This is an AI generated image.