It is no secret that one of the biggest challenges for nonprofits is the relentless cycle of grant-chasing that leaves little room for the work that matters most. At ILSS, the leaders we work with often lament that the time they need to spend on building strategy, strengthening teams, and deepening community relationships is instead consumed by the never-ending pursuit of the next grant. The result is organisations that are doing extraordinary work under extraordinary pressure, but rarely with the financial foundation their mission deserves.

Breaking free from this cycle requires a fundamental shift from reactive fundraising to strategic resource mobilisation and treating funding as a long-term organisational capability to be built. This article explores what that shift looks like, why it matters, and how nonprofits across India are beginning to make it.

The Funding Challenge in India’s Social Sector

Many nonprofits in India operate in perpetual short-term cycles of project-based grants, annual renewals, and donor timelines that rarely align with the pace of on-ground impact. This, in turn, affects all other aspects of functioning. India’s social sector funding is estimated to have reached approximately ₹25 lakh crore in FY2024, yet despite this growth, the sector remains approximately ₹14 lakh crore short of NITI Aayog’s projected demand, a gap expected to widen to ₹16 lakh crore by FY2029 (India Philanthropy Report 2025, Bain & Dasra). When funding is in doubt, hiring becomes uncertain. When hiring is uncertain, program continuity suffers. And when program continuity suffers, the communities that nonprofits exist to serve bear the cost.

The most costly consequence, however, is leadership time. When senior leaders spend a significant portion of their energy securing the next grant, that energy is unavailable for strategy, culture-building, and the programmatic oversight that drives impact.

How Building Diverse and Sustainable Funding Streams Actually Works

A single funding source is not a foundation; it is a single point of failure. The organisations that achieve genuine financial sustainability are those that build a diversified portfolio: multiple channels, multiple relationships, and multiple timelines flowing simultaneously.

The opportunity to diversify is real and growing. Private sector funding grew by approximately 7% from FY2023 to FY2024, reaching approximately ₹1,31,000 crore, and is expected to accelerate to 10–12% growth over the next five years, largely driven by family philanthropy from UHNIs, HNIs, and affluent individuals (India Philanthropy Report 2025, Bain & Dasra). Family philanthropy increased by 15% in 2022–23 and is projected to grow at an annual rate of 16% until March 2028 (India Philanthropy Report 2024, Bain & Dasra). For nonprofits willing to invest in donor relationships and storytelling, this represents a significant and growing opportunity.

Long-term funding does not materialise from one-time transactions; it grows from consistent, authentic engagement, impactful storytelling, and from treating donors as partners in a shared mission rather than sources of revenue.​​​​​

Financial Resilience Leads to Long-Term Impact

The organisations that break free from the short-term funding cycle are the ones with the clearest strategy, the strongest donor relationships, and the internal capacity to sustain both. Strong fundraising systems free leadership to focus on creating impact, building organisations, and serving communities. Sector initiatives from leadership programs to peer networks to structured fundraising training are essential infrastructure for this work.

When organisations invest in their own capability, they build the foundation to move beyond day-to-day survival towards the long-term impact their mission demands.

About the Author

Yashika Sharma
Senior Associate – CoE – Fundraising

Yashika is a social development professional with experience across youth leadership, program management, fundraising, and advocacy. She has led national programs on gender justice and youth development, designing multi-location initiatives, building cross-sector partnerships, and amplifying grassroots voices in global advocacy spaces, including the United Nations General Assembly. Her work spans ethical communications, inclusive storytelling, and facilitating safe learning spaces for young people on leadership, SRHR, mental health, and economic empowerment. Over time, she transitioned to driving national and international programs integrating advocacy, capacity building, and art-based facilitation. Yashika holds a Master’s in Philosophy and currently works as Senior Associate at ILSS’s Centre of Excellence for Fundraising.

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The social sector has been in the news lately for the increasingly dynamic environment in which nonprofits function, amidst the growing regulations and compliances. Under the circumstances, social purpose organisations (SPOs) require more than their regular ounce of passion, grit and resourcefulness to make meaning of the work they do and showcase impact on the ground. The work of an SPO focuses typically on core development issues where they support the larger government machinery or address those emerging societal needs that fall through the cracks but are critical for the people of that particular geography. SPOs often have to maintain a delicate balance between funder expectations on quick SRoI (Social Returns on Investment), while staying true to the ‘purpose’ and ‘outcomes’ for which they exist, in an environment of ‘deficit’ perpetuated by the challenges and constraints of the ecosystem. Here the critical role that an effective leadership can play for the nonprofit cannot be stressed enough.

So, what does it take for an SPO (social purpose organisation) to truly leverage its presence and existence for the greater good? What are the critical issues that the board leadership of a nonprofit has to grapple with? The question might sound obvious, but it is worth exploring. The answer may be viewed through two lenses: regulatory or mandatory and outcomes-based.

Discover – The ILSS Board Leadership Program

Strategic Vision and Planning: Nonprofits are bound by statutory obligations they are mandated to comply with. In addition to having a clearly defined vision, mission and medium to long-term goals, it is equally important for the organisation to outline a complementary strategy to achieve the same. This is not a one-time activity and research indicates that organisations that keep revisiting their strategy at regular intervals and are responsive to their ecosystem are successful in achieving desired outcomes and stand a much better chance of scale and growth. Equally important is to keep a sharp focus on the on-field activities that define the work of the nonprofit, in line with the organisation’s vision and mission.

At times, a nonprofit may be found struggling to stay true to its charter, which defines its goals and purpose, mainly due to the larger existential challenges related to survival and sustainability. As a result, they may encounter diminishing brand recall and value and may struggle to effectively communicate their purpose of existence. The disconnect may creep in over time, especially when leaders get pulled into sustaining the organisation and increasingly fail to stay connected with the ground reality. Often, the leader might have to spend significant time ‘managing’ the board as opposed to ‘leveraging’ its strength. When clarity of purpose takes a backseat, it may also lead to muddling of roles and responsibilities, resulting in the team losing focus and accountability due to an unclear roadmap.

Statutory/ fiduciary responsibilities: Fiduciary responsibilities are the foremost priority for any social sector organisation. As important as the work, it is equally important for the leadership to give due importance to compliance, stay within the confines of fiduciary rules and sustain the ethical and moral health of the organisation. Not having a clear understanding of the laws governing nonprofits may also lead to a lack of understanding of the canons that govern SPOs. This, coupled with a misguided sense of moral high ground regarding the transformative work they do, sometimes clouds the reasoning of the leadership. A small transgression for the larger good can lead to undermining the impactful work it does.

Effective Governance Structures: As part of its effective organisational governance, it is the board’s direct responsibility to establish and enforce a code of conduct for the organisation and ensure that it is strictly adhered to. This does not just act as a deterrent but helps the organisation to operate smoothly and percolate best practices of effective governance across the ranks. Organisations must also be vigilant and avoid any conflict-of-interest situations within that might undermine the basic tenet and purpose of the nonprofit. Lack of oversight in matters of organisation policies can lead to unpleasant precedents detrimental to the health and credibility of the organisation. Board leadership must ensure that the head of the organisation is fully supported in implementing measures towards proper oversight and adherence to rules.

Risk management policies: Certain acts of an SPO can either jeopardise its tax-exempt status or otherwise harm the organisation’s viability. Everyone within the organisation, irrespective of their role or position, should be made aware of potential violations. This should be fortified with sound risk management policies to report and investigate alleged wrongdoing. Failure to comply can potentially damage the credibility of the organisation, including loss of its nonprofit status.

Managing Internal Conflict: Even the best of teams may at times have differences of opinion on ways of handling any implementation-related challenge or any other aspect of organisational work. Having effective conflict resolution procedures in place helps to avert situations from spiralling out of control and destabilising the rhythm, albeit temporarily.

Performance Assessment: Optimising the resources at its disposal, making judicious use of scarce resources and planning for contingencies are ways in which nonprofits can secure themselves against a turn of adversity. This sounds very reasonable, but in reality, it is extremely challenging to cap expenses. This stretches the financial bandwidth of the organisation. Often founders have to play the delicate balance of purpose over resources without being really cognizant of the tipping point. There need to be mechanisms, benchmarks and metrics of performance to assess the health and performance of the organisation.

Communication and Transparency: This works at two levels – internal and external. Clarity in communication and transparency are important building blocks to embrace a culture of trust within any organisation. It is also understandable that many organisations may not be comfortable sharing too much information about their work for fear of it being duplicated. This is a concern for every nonprofit. However, in the current times, there is a general trust deficit with regard to nonprofit entities. Under the circumstances, reluctance or failure to divulge details of its functioning, may be misconstrued and lead to further loss of trust in the organisation. This is a game of perception which needs to be played carefully. The organisation is well within its right to choose what and how much to divulge. Drawing the fine line between transparency and confidentiality is critical to the way the nonprofit will be perceived.

To conclude, the organic growth of any organisation in the social sector is natural and relatable. But not losing sight of the larger picture comes with practice and patience. One way for the organisation to ensure this is by consciously infusing diversity in the board leadership and bringing in members with a diverse set of perspectives, skills and expertise. The board should not hesitate to ask the founder/leader tough questions. Similarly, the latter should not shirk away from the uncomfortable questions surrounding growth, sustainability, scale, outcomes and impact. Effective leadership strategies can help make this shift and convert every issue into an opportunity leading to growth and sustainability of the organisation. Nonprofits may sometimes feel they are in a fishbowl and have to operate accordingly. However, a well-thought-out structure and a forward-moving plan ensure that the board leadership is able to avert or contain many of the challenges it faces.

The government, on its part, has been making attempts to streamline the sector into a functioning and interconnected ecosystem so that it can shed its age-old image of being ‘unorganised’. One example of this would be platforms like the Social Stock Exchange, which presents a wonderful opportunity for nonprofits to raise funds and leverage for advocacy in the spirit of transparency and greater collaboration. Attempts like these are aligned with the principles of effective governance and sound leadership strategies.

About the Author

Samina Alam
Lead – Centre of Excellence for Board and Governance

Samina Alam heads the Centre of Excellence for Board and Governance at ILSS. With nearly two decades in education and skills, she has led large-scale, multi-stakeholder initiatives across geographies for corporates and nonprofit organisations, driving systemic education reform, curriculum design, training, and impact assessment. An entrepreneur at heart, she co-founded an education startup, launching preschools for peri-urban communities and employability skills programs. A ‘Social Entrepreneur’ awardee in Masterpreneur 2015 (CNBC Awaaz), she previously served as CEO of SEEDS Impact, leading work across education, livelihoods, and health. Passionate about gender equity and expanding opportunities for marginalised communities, she brings an entrepreneurial approach to leadership.

Reference articles:

1. https://www.truist.com/resources/wealth/foundations-endowments/article/five-key-governance-issues-your-nonprofit-needs-to-address
2. https://sederlaw.com/common-governance-issues-that-non-profits-face/#:~:text=Failure%20to%20Establish%20and%20Enforce,what%20is%20not%20acceptable%20conduct.
3. https://www.nseindia.com/sse

The post Critical Board Leadership Issues in Governing Nonprofits for Excellence appeared first on India Leaders for Social Sector.

Amidst resource constraints, nonprofits often undervalue individual donors due to challenges in accessing, converting, and engaging them.

Regularly accessing, converting and engaging individual donors amidst resource constraints are primary challenges for nonprofit organisations, leading them to undervalue this channel of giving. However, the advantages of individual donations are too high to not address these challenges. Cultivating individual donors is worthwhile as they largely provide broad-based support which allows nonprofits to grow, adapt, and maintain the autonomy necessary to pursue their mission without the constraints that sometimes accompany large-scale institutional grants. Secondly, decision-making is faster for individual donors than for institutional funders. Finally, if an individual donor converts to a champion of your work, the giving can potentially be multigenerational.

Around 31% of surveyed households in CSIP’s How India Gives report indicated ‘nobody approached for support’ as the reason for not giving. This is an indicator that better awareness is key to unlocking more individual donations for the sector. Digital platforms like email, social media, and WhatsApp can help unlock individual giving by providing easy access to potential donors. Most people likely to give are already online, making it easier to reach, engage, and inspire contributions. With some investment in marketing, organisations can build visibility for their work, circumventing their challenges around access and engagement.

Collective Fundraising

A golden opportunity for organisations to catalyse individual giving is by leveraging structured giving campaigns open to the social sector at large. These are usually positioned around ‘giving moments’ or culturally and socially relevant occasions when people are primed to give. In India, Daan Utsav (the Joy of Giving Week), celebrated from 2 to 8 October every year, has become a major national movement for giving. Whether it’s individuals donating to their favourite cause or entire communities participating in acts of kindness, the week encourages people to give, volunteer, and support social causes in diverse ways. Similarly, global movements like Giving Tuesday have gained traction in India. GivingTuesday is held annually between 27 November and 3 December, five days after the Thanksgiving holiday in the US and has been able to mobilise USD 13 billion since its launch in 2012.

These moments tap into a collective spirit of generosity, amplifying participation and making it easier for nonprofits to engage new donors. They act as powerful levers for mobilising widespread support and present a crucial opportunity for nonprofits to build awareness, create emotional connections, and encourage first-time donors to step forward.

Most importantly, these are resource-efficient ways for organisations to reach a large number of people to build visibility and raise funds for their cause. These campaigns provide centralised resources for marketing which reduces individual marketing costs for participating organisations. They also streamline the planning and execution of the campaign, informed by best practices from previous campaigns, reducing efforts towards this.

Crafting Communication to Encourage Giving

“Individual giving is largely driven by the desire to give back or ease guilt.”

Individual giving is driven by personal motivations primary among them being the desire to give back or consciousness of guilt. To effectively engage people in giving, particularly during moments like Daan Utsav or Giving Tuesday, nonprofits must appeal to both the emotions and the subconscious inclinations that drive decision-making.

Driving Emotional Engagement

“Authentic, transparent communication about how funds are spent is key to inspiring trust, a crucial factor in driving donations.”

Science shows that the decision to donate is primarily emotional with people more likely to act when emotionally engaged. This can be achieved through compelling storytelling. Research indicates that people are twice as likely to donate to an identifiable individual than to abstract figures, making this approach particularly effective. Emotion-driven storytelling around transformative change resonates more deeply than statistics alone. For example, the #HelpIndiaBreathe campaign, which focused on providing oxygen support during the COVID-19 crisis, successfully used emotional storytelling to highlight the urgent needs of patients, driving significant donor engagement. Finally, your communication must be authentic and transparent in informing the audience on how their money will be spent. The ability to inspire trust has been found to be most important to determine giving.

Anchoring Your Ask

When creating donor asks, it’s important to think carefully about structuring the ask for donations. One useful consideration is the ‘Goldilocks effect’, which refers to the tendency people have to choose a middle option when given several choices. In simple terms, donors are likely to pick an amount that feels ‘just right’ — not too small or too large. For example, if you offer options like ₹100, ₹150, and ₹300, many will choose ₹150. Keeping this in mind, it can be useful to share the average amount donated by an individual. People are sensitive to information about the generosity of others and are likely to donate amounts in the same ballpark.

Utilising Aversion to Loss

Emphasising the tax benefits people might miss out on if they don’t act can trigger a natural aversion to loss, encouraging them to make a donation. This approach has been heavily used in creatives by CRY (Child Rights and You), emphasising the financial advantages of giving, particularly at the end of the financial year.

Leveraging Social Proof

Offline, people are more likely to add to a non-empty donation box than an empty one. Similarly, people are more likely to give online if they see other people giving. Testimonials from people genuinely invested in the mission resonate deeply with the audience. This helps people feel a sense of belonging with a community of givers encouraging them to join in. Testimonials from past donors, influencers, or celebrities can also be useful. While selecting public figures for endorsing a cause, it is essential to ensure that their presence lends credibility to the work and there is authentic alignment between the individual’s motivation and your cause. The US-based Society for Nonprofits provides research-based tips and traps to ensure the effectiveness of celebrity endorsements.

Also Read: Storytelling for Fundraising

In conclusion, unlocking the potential of individual giving is not just an opportunity for the social sector—it is an imperative. As India’s philanthropic landscape evolves, nonprofits must move beyond traditional funding channels and embrace strategies that tap into the vast pool of individual donors. Organisations that have never run fundraising campaigns can start with collective platforms which provide the required structure. These platforms are also critical for the sector at large to accelerate the transition of this channel of giving from informal to formal. In the long term, this focus can transform individual giving into a powerful, sustainable source of support that fuels the social sector and drives long-term impact.

About the Author

Meenal Manolika
Senior Program Manager

Meenal Manolika is a social sector professional leading projects focused on capacity building, strengthening communities, and knowledge dissemination, with emphasis on fundraising for social change and advancing gender equity. At ILSS, she works with the Centre of Excellence – Fundraising, leading the India Fundraising Conference and developing knowledge resources to strengthen fundraising capabilities in the sector. Previously, she was with Sangat, a South Asian feminist network, where she designed and implemented capacity-building programs, campaigns, and cultural interventions for gender justice. Meenal holds a Bachelor of Engineering from BIT, Mesra and has worked as a software engineer for Verizon Data Services India. She has also been a Young India Fellow (2015-16) at Ashoka University.

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