Gurugram-based startup Impactify is using AI and analytics to help corporates identify the right partners from the CSR and social sector by automating the process through algorithms.
Non-profit organisations and projects that claim to create social impact in the development sector are often met with scepticism. While non-profits struggle to find funds, companies that look to invest in the social sector as part of their corporate social responsibility (CSR) face difficulties in finding the “right partner organisations” to collaborate with and drive impact.
Sudeep Gupta (35), an IIM Lucknow alumnus and an employee at SBI Card, recalls the time when he was given the responsibility of setting up a CSR division for the company.
He says, “I was given a few crores of rupees by the company to spend towards setting up a CSR division, and I set about finding the right NGOs and social organisations to partner with. I spent around nine months meeting and interacting with NGOs, studying various project proposals, and then picking the right ones to collaborate with.”
He adds: “The company’s board posed a very pertinent question – ‘How do we trust these NGOs?”.
After a lot of thinking, Sudeep realised that to address the issue of trust and transparency in the operating methods of NGOs, a technological solution would be helpful, which would help both the partner organisations and non-profits.
Hence, he quit his job and setup Impactify in 2017 along with his childhood friend Joy Sharma, a former McKinsey employee.
The Gurugram-based startup provides a suite of end-to-end tech solutions to connect NGOs with corporates and other sponsors to drive change in the social sector. Impactify also helps NGOs reduce overhead costs, streamline their process, and helps the sponsors by improving the NGOs’ credibility and building trust between stakeholders.
The founders say, that their startup can facilitate Rs 587 crore worth of funding for 2,857 social sector projects through its digital marketplace. Impactify, which mostly focuses on Tier II and Tier III cities and rural India, claims to have helped over 1,000 NGOs create business cases and proposals to acquire CSR funding.
The Impactify model
Despite companies having the resources and the intention to create positive change, they are often unable to identify the right NGO partners across different geographies who are working in specific sub-sectors such as environment, healthcare, education, etc.
This startup’s team says that it aims to bridge this gap by identifying stakeholders and assess the credibility of the project while measuring the impact of the live project.
“Impactify aims to accelerate and structure the interactions between the private and social sectors. By harnessing digitisation, it aims to bring a structural change in the system and build the capabilities of NGOs through its affordable offerings,” Sudeep explains.
The startup employs AI and analytics on its platform to address the problem of matching the right potential partners from the CSR and social sector by automating the process entirely through algorithms.
According to the founders, these technologies can also be applied to collate and organise project data, as well as monitor the execution of projects and how resources are used, on a real-time basis.
The platform ensures that the projects are listed only from verified and credible organisations by assigning them a trust score the minute they go live, while aiding corporates/CSR sponsor, donors, etc., channelise their funds towards projects relevant to their objectives. Impactify also works with NGOs to ensure that all relevant project details which the sponsors require for efficient decision making are clearly defined, which includes project timelines, budget estimates, beneficiary definition, and expected impact.
The founders say, once matched, the platform’s integrated project management and monitoring interface reduces the administrative burden for both the NGO and the sponsor. The easy-to-use interface allows NGOs to report on the progress of projects/programmes live from the ground. In addition, it also helps sponsors to manage their entire portfolio of social spend, track project progress, and witness the impact achieved through their spending.
The need and challenges
“Currently, the social and CSR sectors are spending on problems without actually measuring its impact. There is a need to measure and analyse the inputs against the outcomes they deliver. If the impact can be measured, it can be amplified and replicated across various projects. The opportunity and potential for technology-driven solutions that can address this can have significant implications on a national and global level,” says Sudeep.
As per the latest World Bank data, India spends around 3.8 percent of GDP on education, and 1.4 percent of GDP on health, which is below the world average of 4.4 percent and six percent, respectively. In addition to this, the funds from international aid agencies coming into the country are approximately Rs 1-1.5 lakh crore, while the CSR spends range between Rs 10,000 to Rs 15,000 crore.
In 2013, the government amended the Companies Act, mandating firms with a net profit of Rs 5 crore and upwards to spend at least two percent of their three-year average annual net profit on CSR projects. Hence, over the years, the total CSR spends by 19,933 Indian companies in FY 2016-17 reached Rs 13,465 crore across 21,117 projects.
But Joy says: “Over the last several years, the social sector has been struggling with stagnant or declining budgets. For several NGOs in the country, it is often a choice between trying to address social issues by spending on specific programmes and projects, and exercising fiscal prudence to stay afloat, and thus compromising on higher impact and outreach. Another major challenge has been the accurate measurement of impact from various projects and programmes, as well as replicating the same impact at scale.”
While platforms such as Goodera, UnLtd, and Villgro also provide digital solutions to the social sector, including non-government organisations (NGOs), for-profit social ventures, and CSR companies, Sudeep says that Impactify is “the only player in the social sector which serves both NGOs and sponsors.”
“We also help NGOs with their internal communications by digitising and automating various workflows by aggregating live project updates and tracking the utilisation of funds. The end-to-end technology support has also helped to increase the productivity of organisations by 20-200 percent,” he adds.