The Naandi Foundation is one of the fastest growing social sector organizations in India today, and with an annual budget of 100 crores, one of the largest as well. But calling Naandi an NGO would be a misnomer. While many NGOs are at best, inefficient, and at worst, corrupt, Naandi prides itself on its integrity and professionalism. To call it non-governmental would also be a tad misleading. Though fiercely independent, its largest client and therefore, partner, is the government, and rightly so, given over 90% of development spending is done by the government. Rather than go head-to-head with the government in pursuing its mission to eradicate poverty, Naandi has built its business model around getting the government to outsource their development projects to them, focusing on three main sectors: child rights, clean drinking water and sustainable livelihoods. As a director of NSEF, I had a chance to sit down with Naandi Foundation’s visionary and outspoken CEO, Manoj Kumar, to learn about what makes Naandi such a success story, and get his thoughts on inspiring young Indians to join him and others like him in the quest to make poverty history in India.
Back in the 1980s, the then Prime Minister Rajiv Gandhi had famously estimated that for every rupee the government spends on development, once that money has greased the palms of several government officials along the way, as little as 15 paisa may reach its targeted beneficiaries. Given the gross inefficiency and flagrant corruption that continues to exist in the government, it is no wonder that as many as one in every three Indians continues to live below the poverty line. If what it touted as the largest caretaker of the poor abdicates its responsibility, does that mean poverty and inequality in India is an inevitability that we must all learn to accept? Certainly not; the greater the problem, the greater the opportunity, especially for bold and innovative entrepreneurs, such as Manoj Kumar.
Manoj went to democratically elected government officials in states such as Andhra Pradesh, Rajasthan, Punjab and Haryana, and told them that Naandi would gladly take on projects such as building and running schools, providing mid-day meals, providing clean drinking water to rural communities or making agriculture more viable for small and marginal farmers, across the entire state. Not only that, it would do so at 80% of the stated government cost; the rest it would raise from corporate channels. Why would these officials agree to outsource work that has until now generated handsome income for them under the table? According to Manoj, two words: “guaranteed outcomes”. Whatever Naandi promises to do, it delivers, he says. A large-scale project, such as bringing 150,000 iron-fortified biscuits, in partnership with Britannia, to children in the state of Andhra Prasesh through Naandi’s mid-day meal program, if done right, can make or break a political career. That is what excites the government. Scale and guaranteed outcomes at 80% of the cost, and an edge over your political opponents at the next election – what’s there not to like? To the extent that a good government is defined not as one that delivers the best services itself, but one that makes adequate provisions for ensuring that the best services are delivered, Naandi’s business model offers a win-win situation.
Since it first began operations in 1998, Naandi has made several strides. Today, it claims to feed over 1.2 million hungry children every day, provide safe drinking water to over 3 million people in rural areas, run over 1700 schools guaranteeing quality education to over 100,000 children and work with 15,000 adivasi small farmers to export over a million kilograms of coffee every year. So, where does Naandi succeed, where other NGOs fail? For one, Manoj believes, the NGO sector needs to stop behaving like a “fanatical Shiv-Sena”. By that he means they are too non-inclusive. To think that the NGO sector can be successful operating independently without either the government’s or the private sector’s help is a fallacy. If instead of shunning the corporate sector, they would involve them, such as by giving them presence on their Board of Advisors, or reaching out to them for help in improving their operations, be it inventory control or supply-chain, they will have a much better chance at inspiring trust and confidence from the private sector. “If corporate leaders trust you, you’ve made it”, says Manoj with unabashed confidence, as his Board includes such luminaries from the corporate sector as Dr. Reddy of Dr. Reddy Labs and Anand Mahindra of Mahindra & Mahindra. Involvement of corporates need not be limited to Board presence alone. According to Manoj, there are other ways of creatively involving them, such as getting them to create a Chair that sponsors the salary of a senior management professional. Naandi does not pay him a dime, he tells me. Pulling out his business card, he proudly points out that as a Kollam Anji Reddy Chair, his entire salary is paid for. It makes perfect business sense. It allows the NGO to hire top-notch talent, meanwhile every time that individual pulls out his or her business card with XYZ Chair clearly listed under his or her name, the sponsor of the Chair gets instant recognition as well.
Manoj’s salary may be paid for, but how does he manage to run an entire organization with talented individuals that can deliver, when by all accounts, one of the biggest challenges that social enterprises face is a shortage of talent as they find it hard to match the fat salaries offered in the private sector. It turns out he doesn’t skimp on his staff’s salaries either. Manoj will go to the best management schools in the country, or even the world for that matter, and agree to whatever salary that would make the candidate happy, and more, provided, of course, that they abide by his credo of “guaranteed outcomes.” They need to have the drive and the ability to successfully deliver stated outcomes on large-scale projects. The CEO of Naandi’s Safe Drinking Water division, Adrien Couton, a former McKinsey consultant and Harvard Kennedy School graduate, is currently spear-heading Naandi’s transition from a for-profit model to a social venture in the water space. Manoj said he was looking for equally talented individuals for his Education vertical as well. As long as he can keep salaries within 10% of Naandi’s budget (which is admittedly large), he thinks it is neither unviable nor unethical to pay generously for the right talent. It is no wonder that in the building in which Naandi Foundation is currently housed in the posh district of Hyderabad, all the cars in the parking lot underneath belong to Naandi’s staff, save for two, which belong to the IT companies that take up majority of the office space in the same building!
Having worked in the banking sector, both traditional and micro-finance, Manoj takes a hard-nosed approach to the idea of social entrepreneurship. For Manoj, if we are to excite more young individuals to work in the development space, we need to first stop calling the field “social entrepreneurship”. “If anything, call it difficult entrepreneurship, or superior entrepreneurship, because that’s what it is. It requires more emotional intelligence, more people skills, and more foresight to predict regulations, but at the end of the day, it is simply about serving another stratum of consumers who happen to be very price sensitive. It’s just another way of doing business”, he says. According to him, social enterprises need not project themselves as saviors of the world. In fact, it is wrong to do so. “If there are going to do that, then they need to be very transparent about how the wealth of the organization will be distributed before it becomes profitable.”
As we concluded the interview, I could not help but notice the large bookcase in his office. I asked him what some of his favorite books were that he would recommend to members of NSEF. As a voracious reader, his list includes Ramachandra Guha’s ‘India After Gandhi’, which he recommends to deepen one’s understanding of Indian politics, and old Russian classics for a nuanced perspective on the human condition of the poor, such as Doestevsky’s ‘The Brother Karamazov’ and ‘How Much Land Does a Man Need’ by Leo Tolstoy, both of which are mandatory reading for all his staff.
That Manoj leads by example is evident. Manoj conducts himself with the same level of professionalism that Naandi has built its reputation on. When his meeting prior to ours overran, leaving us only 5 minutes for the interview, he graciously offered to meet us again the next morning, at which time he gave us a full hour. Why? Because he genuinely believes in the mandate of NSEF to encourage young Indians across the country to contribute meaningfully to the social sector. Manoj’s brand of leadership is sure to inspire Naandi to new heights of success. We wish him all the very best in that endeavor.
