New Delhi, Feb 26 (.) India will need to unlock nearly USD 750 million in flexible funding over the next five years to build 100 “non-profit unicorns” capable of reaching at least one million people each, according to a new report by Change Engine here on Thursday.
The report, The Flexible Funding Gap for Non-Profit Unicorns, is part of the “Ease of Doing Good” series and is based on one of the largest surveys of Indian non-profits focused on flexible capital.
It estimates that India would need approximately USD 150 million annually — just about 1pc of the country’s total philanthropic giving — to enable the rise of 100 high-impact non-profits operating at a population scale.
The study defines “non-profit unicorns” as organisations capable of meaningfully impacting one million people or 5 percent of their target user base.
However, nearly 80 percent of surveyed organisations reported that they struggle to scale due to the lack of flexible or unrestricted capital — funding that is not tied to specific programs and can instead be used to build teams, invest in systems, experiment with new models, and plan long-term strategies.
The findings reveal deep structural challenges in India’s philanthropic ecosystem. One in two surveyed organisations reported having less than 10pc unrestricted capital.
About 55 percent cited restrictive regulations as the primary barrier to raising unrestricted funds, while others pointed to funders’ limited understanding of non-profit cost structures and benchmarks. Access to flexible capital also remains limited and uneven.
Around 55 percent of organisations reported receiving flexible funding from high-net-worth individuals (HNIs), while only 33 percent accessed such funding from domestic foundations.
The report notes that domestic foundation funding is disproportionately directed toward large organisations with annual budgets exceeding Rs5 crore, leaving early-stage organisations with few funding options.
Cheque sizes remain small and largely short-term. Nearly 60 percent of organisations said typical grants are under Rs 10 lakh and are usually one-time in nature. Only four in ten domestically funded organisations have ever received a multi-year grant, and just two in ten secured more than Rs 50 lakh in multi-year support.
The report argues that flexible funding is essentially innovation funding. If given greater flexibility, 75 percent of organisations said they would invest in hiring better talent. About 32 percent would undertake bolder experiments, while 27 percent would invest in technology and data systems.
The rigidity in current funding structures forces non-profits to spend disproportionate time on fundraising rather than on innovation and impact delivery. According to respondents, the issue is not the absence of capital but the way it is designed and deployed.
Varun Aggarwal, Co-founder of Change Engine, said, “Beyond doing good to society, non-profits are also economic enablers. Funders must fund non-profits like startups, providing flexible funding to nurture innovative solutions to have a population-size impact on the deepest problems of India. Unrestricted capital gives non-profits the freedom to experiment, adapt, and innovate, enabling solutions rooted in the realities and evolving needs of the communities they serve.”
Shubham Bansal, Co-founder of Change Engine, added, “India has produced more than 100 startup unicorns through patient, risk-tolerant capital. If India is to meet its social development goals (SDGs), it needs a comparable number of non-profit unicorns to drive impact at India’s scale. Lack of flexible funding is one of the biggest bottlenecks for non-profits to scale. The capital exists; what’s needed now is the willingness of funders to deploy it differently and support of policymakers to ease regulatory constraints.”
To address the systemic bottlenecks, the report outlines recommendations for funders, corporate CSR leaders, and policymakers.
For domestic foundations, the report suggests moving from one-year grants to three-to-five-year commitments as a default model. It recommends making 90pc of grants unrestricted and dedicating a share of funding to early-stage organisations.
. SAS AKU