Giving Compass' Take:

• India Development Review unpacks the findings of an AVPN report on effectively funding sustainable livelihoods in India.

• How can funders use this feedback to shift efforts in the region? What philanthropic culture shift is needed to create change at scale? 

• Learn about a project focused on empowering women with sustainable livelihoods.

Having interviewed sector experts and 44 organizations working on sustainable livelihoods, the following findings have emerged from the report:

Issues around impact

Achieving impact in livelihoods needs long-term engagement

Programme-funding support–particularly for nonprofits–for short durations of  one to two years is counter-productive. Not only do long-term partnerships allow for more impactful implementation, they also allow for systems for sustainability to be set in place. Myopic, short-term funding, on the other hand, leads to piecemeal development, with no mass impact.

Funds from CSR are especially restrictive

Corporates are accustomed to a pace that is not realistic for development interventions, and they tend to seek immediate impact. The short time commitments from corporate donors is a significant barrier to realising impact, and often, CSR partners only commit to supporting programmes for a year or two, even when they have been designed to run for several years.

Establishing market linkages finds little support

Building businesses takes time, and when providing a product or service, there is an entire value chain that needs to be set up in order to accomplish production. Often, these value chains tend to be non-existent, and need to be created from scratch.

Ecosystem Development

Separate funds, and partnership development are key

Developing the sustainable livelihoods sector requires its own stream of funding support, separate from project implementation or product and service development.

Rise of innovation and entrepreneurship

Organizations are moving towards market-based models

Due to the instability of grants, organizations are now starting to develop hybrid models —funded partly by donors, and partly by revenue.

Donors are wary of risks; but the sector needs innovation

Though the need to invest in entrepreneurship has been heavily emphasised, funders are apprehensive about funding ‘risky’ models, and prefer to channel funds into large organisations that can take projects to scale. This risk-averse attitude results in organisations having to self-finance new projects or pilots.

Entrepreneurship, particularly for women, is a critical source of employment generation

The emphasis on self-sufficiency within the market-based approach highlights the need to build entrepreneurship in India –building job creators would mean creating more jobs.

Donors prefer skilling, but the current approach to skill development is flawed

According to interviewees, most donors prefer skilling over entrepreneurship development, due to the ease of measuring indicators such as job placements, salaries, and retention rates.

Read the full article about funding sustainable livelihoods from India Development Review.