Giving Compass' Take:

• In order to survive the pandemic, IDR's Vidya Shah claims creating transparent relationships between funders and nonprofits is essential for organizations to survive.

• How are you creating transparent relationships during the pandemic? 

• More than ever, nonprofits need support to sustain themselves. Learn about how you can help.

Funding for both nonprofits and companies has been severely affected by the COVID-19 crisis. To survive, it is important that they find common ground to work together.

Inflows from Foreign Institutional Investors (FIIs) in June were the highest ever in 2020 and drove the Indian stock markets up by eight percent. In addition, many of our top funds, whether focused on private, public, or the alternatives markets, have had large global institutions as investors. These investors have brought with them an increasing emphasis on ESG (Environment, Social, and Governance) performance.

We, as donors, have had to have several conversations with nonprofit leaders to say that this is not a year to be ambitious or start new programmes. This is just a year to protect what you have, and there will be a cost to it. You may not be able to see progress, in fact, you might actually slip further back, especially in areas such as education, women’s rights, and violence. We don’t know how much regression is going to happen, but this is not the time to worry about that. As our former Reserve Bank of India (RBI) governor Raghuram Rajan put it, it is the time for relief, repair, and reform.

When we talk to nonprofits to understand their situation, I get a feeling that they aren’t telling any of their donors what’s really happening with them. One reason is the fear that if they don’t tell their donors what they want to hear, they will stop receiving funds.

In their attempt to retain their current donors, nonprofits aren’t thinking about how to pivot and adjust to the new reality. They aren’t considering the fact that they might have to change their strategy and ‘business model’, that too permanently.

Read the full article about creating transparent relationships by Vidya Shah at India Development Review (IDR).