For too long, project-based funding has dominated the landscape of Indian philanthropy. While well-intentioned, this model inherently limits long-term impact. Characterised by short-term horizons, strict restrictions, and a focus on immediate deliverables, such grants often leave organisations with limited flexibility to respond to evolving community needs, invest in crucial innovation, or strengthen their core capabilities.

The findings of a 2022 study by the Bridgespan Group and GuideStar India, revealing that 83% of philanthropic grants in India offer only a single year of funding, underscore the challenges NGOs face in long-term strategic planning. Moreover, the limited allocation for essential indirect costs--such as building staff capacity, upgrading technology, or strengthening institutional infrastructure – inadvertently stifles ambition and hinders high-impact organisations from developing the resilience, talent, and data systems needed to drive systemic change.

This siloed approach also discourages vital collaboration and cross-programme learning. Non-profits are often compelled into a cycle of pursuing short-term, easily measurable outputs, rather than tackling the deep-rooted causes of complex societal challenges. To truly foster sustainable development, Indian philanthropy must shift from simply funding projects to investing in potential – through flexible, multi-year commitments that empower organisations to think big, take calculated risks and drive lasting change.

Transformative capital reimagines philanthropy as a catalyst for fundamental structural change, rather than a temporary fix for surface-level symptoms. This approach rests on three key pillars: Unrestricted funding, which grants NGOs the agility to respond effectively over extended periods; pooled capital, which fosters alignment among diverse stakeholders around shared objectives; and patient timelines, acknowledging the non-linear nature of meaningful systemic progress. The Asia Gender Equality Fund compellingly demonstrates how patient capital can powerfully advance both gender equity and environmental resilience. The round one and two of the Fund strategically supports mission-driven organisations across Asia that place women at the heart of climate solutions, fostering inclusive and sustainable livelihoods. This approach recognises women not just as beneficiaries but as essential agents of change.

Waste Warriors, a grantee of the Fund round two, exemplifies this through its community-led approach to transforming waste management in India. Their Paryavaran Sakhi (friends of the environment) model trains and equips women to manage waste in their communities, enabling them to take on entrepreneurial roles, particularly in tourist destinations near the Jim Corbett Tiger Reserve. This initiative highlights the potential of empowering women to drive environmental sustainability.

The Fund’s pooled structure allows donors to support innovative solutions while distributing financial risk. Its emphasis on multi-year, flexible funding has enabled Waste Warriors to make the Paryavaran Sakhi model sustainable, supporting women's transition to self-employment. This illustrates how trust-based, flexible funding can unlock local expertise, accelerate systems change, and demonstrate women's pivotal role in achieving environmental impact.

To achieve meaningful systemic shifts, we must also significantly expand the pool of available capital. This is where the power of innovative financing models comes into play. By strategically deploying philanthropic funds to de-risk investments, blended finance models attract commercial capital to sectors traditionally perceived as too uncertain, such as climate adaptation initiatives or expanding health care access for vulnerable populations in remote regions. This approach not only aligns incentives and brings new stakeholders to the table but also propels socially oriented enterprises that offer sustainable, market-based solutions to reach the last mile.

A notable example of a blended finance initiative in India is the SAMRIDH Healthcare Blended Finance Facility. This facility strategically combines public and private capital to enhance health care services across the nation. By leveraging grants and concessional debt, it supports innovative health care solutions, with a particular focus on bolstering climate resilience and strengthening access for underserved communities. The facility has achieved success in mobilising additional private sector investments, demonstrating a leverage ratio of approximately 10-12 times the initial philanthropic funding. This means that for every $ 1 of philanthropic capital, the fund has successfully attracted an additional $ 10 to $ 12 from other sources, predominantly commercial or private investors.

India’s early successes in the realm of blended finance underscore the significant untapped potential to scale innovative, impact-first capital models across various sectors.

For India to truly overcome its paradox of progress, philanthropy must boldly transcend the limitations of conventional project-based giving. Unrestricted, pooled, and patient capital, strategically amplified by the power of blended finance, holds the key to dismantling the systemic barriers that often confine NGOs to a state of perpetual survival. By prioritising trust, fostering genuine collaboration, and focusing on long-term, sustainable impact, philanthropic funders in India can evolve from generous donors into visionary architects of enduring positive change, paving the way for a brighter and more equitable future for all.

This article is authored by Naina Subberwal Batra, CEO, AVPN.