“Which government department will take this over?” If you are a leader of a nonprofit, how many times have you heard this question from a funder?
At a point in time in the 1990s, this question made sense. The Indian state was expanding service delivery across the country, while many nonprofits, working with a mix of public and private funds, were filling gaps in public provision. These organisations were not only delivering services differently; they were also widening the state’s sense of what was possible. In underserved parts of the country, many of them laid the ground for rights-based work and for demanding more of the state.
But over the last three decades, this has gradually changed. It’s no longer enough for a nonprofit to show that their programme works. Even in places where the state cannot or will not reach, or won’t engage as a neutral party, or show little interest in addressing a problem, organisations are all expected to demonstrate that their pilots will end in state absorption.
Our own reporting as a sector reveals the instinct. It’s all success stories of the state’s approval and adoption. Funders speak the same language. A CSR head asks for a ‘convergence strategy’, a foundation wants the ‘pathway to policy adoption’, and everybody wants to know about ‘government ownership’ and whether the model has been ‘institutionalised’. I might be strawmanning a little here, but not by much–we all have read these proposals.
The risks of singularly pursuing state adoption
Consider organisations whose value lies in challenging the state. CSR money is poorly suited to this: few company boards want a line item that antagonises a regulator.
First, activism is meant to build enough pressure to hold the government accountable on multiple fronts. The state accommodates and absorbs the particular demand being made–say for greater accountability in the provision of a public good. What it cannot do is to take up the job of demanding accountability. That act of ‘demanding’ must still be left to non-state actors.
In the absence of sustained pressure by civil society, even the state’s concessions can be reversed. We have seen this in the gradual erosion of the employment guarantee, or the Right To Information laws. Constant vigilance is the price.
The second risk emerges when substituting for the state is the only option. In large parts of Jharkhand, Chhattisgarh, the Northeastern states, and the tribal belts of central India, non-state provision isn’t a short-term arrangement. Civil society organisations must work there because they know the state will not, and the reasons could be many.
If funders adopt a strictly short-term approach, declining to invest in these organisations’ long-term capacity because their role is presumed to be temporary, they shortchange both the people who live in these regions and the organisations that serve them.
A school or a clinic funded as an interim measure will remain badly run because the implicit assumption is that at some point the government will take over, which is unlikely to happen in these areas.
The third is what all of this does to nonprofits themselves. Most know that their programmes and organisations need to be there for the long run, but funders often ask for projects that can be quickly handed over. We have trained generations of nonprofit leaders to treat their own organisations as eventually dispensable, making little to no investment in the very things that make them last: corpus funds, reserves, second-line management, and the slow accumulation of knowledge and judgement.
Fourth, our framework of operation has stayed focused on the state while people’s aspirations have moved on. A household in Ganjam may depend on a son’s remittance from Surat, a labour contractor, a self-help group loan, and a mobile network. Their lives cannot be neatly categorised into the development sector’s thematic areas.
The measure of a good programme is how gracefully we can leave it.
But we nonprofits, for reasons of organisational coherence and in order to respond to donor requirements, compartmentalise our work into themes and institutional categories, often missing the connections and the contradictions. Conventional development sector work focuses on, for example, funding financial inclusion in a district, without making connections with issues of labour mobility, remittances, and portable entitlements.
And finally, we need to ponder over the cost of seeking legitimacy from the state alone. Legitimacy that is granted by the state can also be recalled, as many organisations have discovered recently to their peril. One indicator of this in the past decade has been the number of organisations with active FCRA registrations, which have fallen to about half their original number.
In Exit, Voice, and Loyalty (1970), Albert Hirschman argued that when an institution declines, the people attached to it have two broad responses: they can leave, or they can stay and complain. According to him, these aren’t equivalent. Exit is clean and quick and tells you nothing. Voice is messy and slow, but importantly it’s the only one that carries information back into the system–and the need for it does not go away.
Our sector has built an entire theory of success around exit. We call it handover, or sustainability, or transition plan, but the shape is the same: the measure of a good programme is how gracefully we can leave it. If you take Hirschman seriously, that’s a strange thing to optimise for–particularly in the places where there is nobody to hand over to, and where leaving isn’t a strategy at all.
What we would have to build for 2050
In 2026, the Indian state is richer, stronger and more centralised than it was in 2001. It will certainly be even more sophisticated in 2050. Power and control are moving upwards into national schemes and into centralised political command. At the same time, delivery still runs through states, contractors, private providers, and thin strands of frontline workers.
Education and digital public infrastructure offer a peek into how this may look by 2050. If 40 percent of children are already outside the public education system, is a remedial programme within government schools still the right investment? Or is it better regulation and oversight of the affordable private schools that parents have already chosen—not necessarily because those schools are good, but because, often, it is better in many respects than the government school nearby? This is the same phenomenon that I described earlier: families are already exiting public systems for education, healthcare, and employment. Yet our programmes continue to ask which government scheme they should improve and the institutions they actually rely on. Or else, by 2050, that gap will be wider rather than narrower.
If the social sector wants to matter in the India of 2050, it has to stop defining success in terms of adoption into government systems.
Digital payments offer another illustration. The state may build the payment infrastructure, but if people transact through private apps, those companies shape what users see, what they pay, and how their data is used. Decisions about fees, access, and data will then depend not only on public infrastructure but also on how much market power private platforms wield. A state may be stronger and more present in people’s lives but it may still not be able to deliver what people want. Meanwhile our programmes still assume that it can.
If the social sector wants to matter in the India of 2050, it has to stop defining success in terms of adoption into government systems. Examples exist of models that have stayed outside the state in their core operating model. Take the member-owned model of Amul, for example, which reached a scale and level of economic viability government initiatives could only dream about. Organisations like SEWA and MKSS have steadfastly represented the interest of informal sector workers without being rolled into a government agency.
The answer is to work harder on the task of building institutions outside the state.
Institutions take at least twenty years to build. If we want a social sector capable of working this way in 2050, we have to begin now. We need organisations designed to persist and evolve, and we need to treat routes to scale outside state adoption as real strategic choices, not exceptions.
The money to make that possible already exists. While the CSR mandate has created a predictable annual pool running into thousands of crores, very little of it funds institutions. No one is willing to pay for years of accumulated experience that sharpens judgement. That will only change when family foundations are willing to fund the organisation itself, and not just the next project.
The same holds for activism, which also needs a way to be paid for. CSR money won’t do this, and foreign money is now harder to rely on. We need a few deep-pocketed Indian funders who decide that accountability work is worth paying for over a long period, even when it’s slow, adversarial and hard to measure.
None of this means that an organisation should keep doing the same thing forever. But that’s different from saying it has failed if no department takes over the programme. Some work may move to the government, or may inform the government’s regulatory role. Some may sit better with local institutions, communities or other private organisations. And some work may remain useful especially because it remains outside the state.
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Know more
- Read why Indian nonprofits must collaborate to survive.
- Read more about how government-nonprofit partnerships function.
