A new report titled India Nonprofit Report – Role, Evolution, and Impact, released by global management consulting firm Kearney and strategic philanthropy organization Dasra, highlights significant challenges faced by India’s nonprofit sector. The report reveals that while NGOs play a crucial role in the country’s development, 72% of them struggle with funding shortages, raising concerns about long-term sustainability.

The study is based on 400 survey responses from NGOs operating across India, 30 in-depth interviews, and official NGO Darpan data. It explores the transformative role of nonprofits, their operational challenges, and their evolving impact on communities. The report categorizes NGO functions into three key roles: ecosystem development, service delivery, and knowledge building. Many NGOs operate across multiple roles and shift their focus over time depending on internal capabilities and external influences.

According to the findings, 74% of NGOs operate at the grassroots level, addressing urgent issues in underserved communities. However, only 22% had a financial corpus fund last year, highlighting a widespread financial vulnerability. The lack of stable funding puts the sector at risk, making it difficult for organizations to sustain their impact. The report notes that 92% of NGOs consider core funding their biggest challenge, as they rely heavily on short-term funding, CSR contributions, and government grants, which often lead to operational instability.

To assess NGO success beyond traditional growth metrics, the report introduces a new social impact taxonomy with three scaling approaches:

• Scaling deep: Expanding programs within a specific community or geography.

• Scaling up: Extending services to more communities or geographic areas.

• Scaling across: Influencing decision-making institutions, systems, and policies.

The report recommends that NGOs focus on strengthening operational capacity, fostering collaborations, articulating their impact effectively, and sharing successful models to drive large-scale development. For the government, it suggests recognizing NGOs as partners in policy innovation and development. For donors, it encourages a deeper understanding of scaling dimensions and the importance of providing long-term, flexible funding.

With many Indian NGOs developing impactful and scalable programs, the report suggests that these organizations have the potential to influence global development strategies. To ensure long-term success, stakeholders must work together to address funding gaps, support innovation, and create a sustainable ecosystem for nonprofits.

Source: Kearney & Dasra (India Nonprofit Report – Role, Evolution, and Impact)