Fellow Connect June 2011

fellowconnect an Ashoka Publication

June 2011

Direct Tax Code

How does DTC impact your work ? www.india.ashoka.org

Dear Ashoka Fellows,

entrepreneurs, your knowledge is being sought after by the masses.

You have in your hand the third issue of Ashoka FellowConnect. Encouraged by the positive feedback we have

For them to build a better understanding of how the social

received from several Fellows, we have yet again increased

sector in India is evolving, they need more good quality

the number of pages of FellowConnect to 16.

content. Content that is based on our rich experiences in the scores of areas that we work in. Content and

We are pleased with the support you have extended to this

information that reflect our learned view of the prevailing

quarterly magazine that attempts to offer a platform to

social situations, possible solutions, future trends, and

share your rich knowledge among fellow social

those that occasionally offer guidance.

entrepreneurs. We are glad that more Ashoka Fellows are committing themselves to contribute to this magazine.

The good news is that today we have the luxury of choosing the media we want to publish such content for

We firmly believe that this magazine must publish more

our target audience. Traditional media such as newspaper

content and information that are contributed by Ashoka

and print magazines are always open to accepting good

Fellows. We urge you to send us articles that generate

quality content.

healthy discussions among the members of the Fellow Ashoka FellowConnect is the stepping-stone for us to

community.

generate and share our expertise, knowledge and We also welcome you to write to us with your views on

experiences through content that eventually is picked up

what you would love to read in the forthcoming issues of

by the mainstream media for consumption by the masses.

FellowConnect.

Let us strive towards this goal.

Social entrepreneurship is increasingly becoming popular

If you have an article, an idea for an article or content in any

in India. The concept is gaining visibility with more social

other form, send them to us.

entrepreneurs being written about in the media.The youth today are keen to be connected with social causes and are

Ashoka's technology team has been busy developing the

willing to explore opportunities to launch entrepreneurial

Hub, an exclusive online platform for the Fellows. Besides

ventures that are socially relevant.

an article that provides you more information on the Hub, this edition comes to you along with a small booklet that

This increased visibility also throws a challenge at us.

Consumers of media today require greater amount of information and knowledge. They want to know not just the success stories of social entrepreneurs but also several other aspects of the journey. As leading social

provides you a sneak peak to the Ashoka Hub. We wait to hear from you.

Warm regards, Manoj Chandran

Ashoka is pleased to share with you the news that Bill Drayton, CEO and Founder of Ashoka: Innovators for the Public has been awarded the Prince of Asturias Prize for International Cooperation, Spain's highest honor. An international jury carefully weighed the impact and influence of all 25 global candidates, before determining Bill to be the best fit for this year's honors.

2

fellowconnect

Globalizing Impact Over the past three decades Ashoka

For Dream A Dream, this was an opportunity to present

Fellowship has grown to include

our work, our plans to scale and our core philosophy to a

leading social entrepreneurs from

global audience with influence, capital and networks. It gave

over 70 countries.Through a rigorous

us a platform to explore potential collaborative

internal selection process, Ashoka

opportunities to take our work into the global arena.

Globalizer identifies Fellows within this network who carry the greatest potential to catalyze global systems change. These entrepreneurs are challenged to further refine their leading social innovations in order to adapt their strategies for accelerated global spread.Throughout this intense process they are supported by experts from the Globalizer team, working alongside advisors from McKinsey & Company and Ashoka Support Network of business leaders committed to social change.

Ashoka Fellow Vishal Talreja, Co-founder and Director, Dream A Dream, was part of the Globalizer held during March 26-28,

The most important takeaway from the Summit was the idea of “Scaling Your Impact and NOT your Organization�.

For Dream A Dream, it gave a whole new perspective to our scale plan. For as opposed to scale in the business space, here scale was really about exploding your impact with very little resources and in the quickest time possible with an impact so far-reaching that it has the potential to solve a global problem.

2011 in Stockholm, Sweden. Vishal shares his experience of being a part of this global event.

The design of the summit itself was quite remarkable. For two months before the summit, we worked with a

When you put together a bunch of inspiring people

successful business entrepreneur and a consultant from

irrespective of their backgrounds, ethnicities and

McKinsey to tighten our scale strategy and plan. At the

geographies, magic is bound to happen.

Summit we got exclusive time with some of the most successful entrepreneurs from across the world to share

I was part of the Ashoka Globalizer Summit, which was held during March 26-28, 2011 in Stockholm. And, it was a lifechanging experience for me as an entrepreneur looking to scale my organization and its impact.

The Ashoka Globalizer Summit is a unique opportunity that brings together 16 Social Entrepreneurs (Ashoka

our idea, philosophies and scale plans.The most important value-add of the panel was the thought-provoking questions they asked, pushing our limits of creative thinking and innovation. The informal nature of the summit itself helped to continue these conversations through the three days.

Fellows) and 16 senior and successful Business Entrepreneurs from across the world. The focus is on

Additionally, sharing our models with other Ashoka

supporting Ashoka Fellows to take their impact and work

Fellows gave us inputs and ideas on some core challenges

to other countries that might have similar challenges.

we were currently facing but maybe some other

fellowconnect

3

entrepreneur had already found a solution to them. Sharing

from each other's experience.

of personal stories added a huge emotional inspiration to the whole summit.

The Globalizer Summit has been one of the most thoughtprovoking and inspiring forums I have attended in the past

The panel discussions were interspersed with expert

few years and was definitely most relevant at this juncture

sessions on different models of scale. For example, sessions

of Dream A Dream's journey as we look to scale our

on open source and smart networks helped deepen our

impact across national and international borders.

understanding of “How to scale impact? And we learnt

Upcoming Ashoka Changemakers Competitions Ashoka Changemakers is a global online community that supports everyone's ability to be a changemaker by inspiring, mentoring and collaborating with other members of the community at every level of changemaking. Changemakers hosts collaborative online competitions to identify and connect the best social innovators and implementers.

Ashoka's Changemakers will launch two very important competitions shortly to source innovation in the field of media and health respectively. Here are brief details on them.

Citizen Media : A Global Innovation Competition Media connects people to their world, gives voice to their ideas and dreams, and equips them with knowledge to improve their lives and the lives of others. In all these ways, media catalyzes participatory citizenship, on both a local and global scale. But even in this age of pervasive media, many millions of people marginalized by political and economic barriers lack access to even the most basic tools of information -- thereby depriving them of valuable input and connection, and depriving the rest of the world of their voices.

Ashoka Changemakers and Google hope to change that by inviting the world's citizens -- notably you -- to enter Citizen Media: A Global Innovation Competition.The competition will be launched on July 13, 2011 and will be packed with activities that would engage our thought process around the theme throughout the participation period.

For more information, visit www.changemakers.com/citizenmedia on July 13, 2011 (site would be inactive before that).

Continued on Page 11

4

fellowconnect

We Welcome New Ashoka Fellows To Our Family Samuel Goldman, D.light Design Sam has invented an inexpensive, universal solar-powered lighting solution which will reduce health hazards and carbon emissions while simultaneously enhancing productivity.

His lighting solution can leapfrog a grid network without the use of electricity. Such versatility renders Samuel's solution applicable for both rural and urban regions. In addition to improving health and safety standards, the solar powered solution also prevents approximately a 100 percent of greenhouse emissions.

Shilpi Kapoor, BarrierBreak Shilpi is building an eco-system in India that enables differently-abled people to fulfill their rights. Through her work Shilpi is systemically eliminating information discrimination by empowering differently-abled people to demand accessibility by transforming the e-space, bringing innovative technologies for inclusion to the Indian market, building public awareness through world class accessibility conferences and lobbying with the government.

Pushkin Phatriyal, Executive Director, Central Himalayan Environment Association Pushkin Phartiyal has established a community led environmental governance system that promotes sustainable livelihood opportunities in the Himalayan region, by conserving and facilitating the regeneration process of forests and natural resources. Based on the premise that price-incentives drive proactive community management, Pushkin gets the government and the international carbon market to value "ecosystem services" (goods/services from nature) to create economic incentives for local communities to compute carbon sequestration, sustainably manage their natural resources and a marketplace for stewarding those services.

Svati Bhogle, Sustaintech Private Limited Svati has come up with a distribution system to counter the use of inefficient cooking stoves by street food vendors in India that enables them to easily own fuel efficient stoves, save money on fuel and make better profit. Built on ecological considerations, these improved stoves not only increase their incomes but also ensure better health for both vendors and their consumers.

fellowconnect

5

Corruption Is A Bigger Fight The

recent

movement

against

hours. Post lunch, the Lokayukta would hold a court and all

corruption and the call for the Jan

the complaints were taken up. Relevant officers from

Lokpal bill to be passed by the

various departments would also be present and if we could

Parliament saw the entire nation

resolve the case, a decision was announced immediately.

come together in an unprecedented

Else, a week's time was given to the officer to resolve the

manner. Ashoka Fellow Dr H

issue. It was a wonderful mechanism that worked.

Sudarshan, who has been a member (Vigilance Director) of the Karnataka Lokayukta, shares his views on the various aspects of corruption and the role of social entrepreneurs in this movement.

On Lokayukta and the Grievance Redressal Mechanism

“It is good to see that we have seized the opportunity. We now need to go to the people.”

Credit should go to Justice Venkatachala, and now Justice

When I was the chairman of the task force for health and

Hegde, for efficiently utilizing Karnataka Lokayukta Act..

family welfare set up by the Government of Karnataka, we

There are also other methods such as prevention of

were asked to look at the entire health sector in the state

corruption, under which traps and drives are conducted.

and make recommendations to improve the healthcare system.We made 12 major recommendations and pointed out our concerns. Corruption in the healthcare system was the issue that topped the list.

There are inherent weaknesses in the Lokayukta system. I have seen the functioning of the Independent Commission Against Corruption (ICAC) in Hong Kong. They had a similar issue in 1970s. They created an independent body.

During that time, I had the good opportunity to meet

The recruitments to ICAC are direct.Whereas in the case

Justice M.N. Venkatachala. He invited me to join the

of Lokayukta, officials are on deputation from various

Karnataka Lokayukta as vigilance director – health,

departments.It has been one of our suggestions to the

education and social welfare.

government that Lokayukta should be given the powers to

The unique opportunity at that time was the Grievance Redressal Mechanism. Justice Venkatashala was the first Lokayukta to say that we should go to the people than they approaching us at our Bangalore office with their grievances. During the first round, we went around all the districts. In the second round, we covered all the Talukas.

We spent a day in a Taluka and covered the entire state, reaching out to the people. In each Taluka, we would first visit all the public offices – the hospitals, tahsildar's office, food and civil supplies department, etc. We had a judicial team that would collect complaints during the morning

6

directly recruit its officials.

The Lokpal Bill and implications The Lokpal Bill is a welcome move. I am happy to see that the efforts of Anna Hazare,Arvind Kejriwal and others have moved us closer to realizing the Lokpal Bill. However, it may not be comprehensive to focus only on the Lokpal Bill.

In my view, it is a good beginning.We should try and bargain for a comprehensive act for district, state and national level mechanism for both prevention of corruption and an effective grievance redressal mechanism. fellowconnect

It is good to see that we have seized the opportunity. We

should be no exemption for any offices in the country.

should now go to the civil society and engage into a wider

Social entrepreneurs in the fight against corruption

consultation and try to involve the people. In the discussion, we should also include the various other aspects, including the role of state Lokayuktas and the

Social entrepreneurs have a huge role to play in two spaces

district level ombudsmen.

on the issue of corruption - prevention of corruption and

Clearly, a lot of thinking has gone into drafting the Jan Lokpal Bill. Inputs were collected from the Karnataka Lokayukta, too. We have learnt lessons from the inherent weaknesses of the state Lokayuktas and want to ensure that this done not take place under the Jan Lokpal Bill. An important question to ask is how much power can be given

creating awareness. In their sphere of influence, they can use tools such as Right to Information to prevent corruption. More importantly, since they have a higher degree of influence on the masses, they can impact the mindset of the masses by creating awareness about the perils of corruption.

to Jan Lokpal. I learn that citizens can directly write about

At the root is this issue of corruption as a culture. In my

their grievances to the Jan Lokpal. I think it will be

experience, I have noticed that corruption exists at

unmanageable if all those simple issues that can be resolved

different degrees in the geographies of India. And, it has to

at the district or state level are sent to the Jan Lokpal. We

do a lot with the culture. In some Indian states people do

need to segregate for a more efficient management of

not have the culture to give bribes, and hence we see lower

grievances and complaints.

levels of corruption there. And, I believe that social entrepreneurs have a much larger role to inculcate a

“This is a space where every single citizen has a role to play as a changemaker. Social entrepreneurs can help citizens become aware of their role as changemakers to fight the issue of corruption.�

culture of discouraging corruption.

There is a need for the fight against corruption to become a movement. I see this throwing up huge opportunity at two broad levels.

Social entrepreneurs should come together and explore opportunities to collaborate to create innovative solutions.They are known for their creative skills and ability to develop unique solutions to social issues.There already are a lot of social entrepreneurs who are implementing

The other point of discussion is whether Lokpal should

different solutions – some have helplines while a few others

have powers over investigative agencies such as the CBI. In

are using the RTI route. When they collaborate, I believe

my view, these agencies should remain autonomous. Lokpal

the impact can be far reaching.

should be able to give the cases to the agencies and ask them to investigate. The latter should, however, operate independently.

I also feel that judiciary should not be excluded under the

Secondly, this is a space where every single citizen has a role to play as a changemaker. Social entrepreneurs can help citizens become aware of their role as changemakers to fight the issue of corruption.

Jan Lokpal bill. Definitely, they should be covered, too.There fellowconnect

7

Direct Tax Code How Does DTC Impact Your Work ?

The Direct Tax Code (DTC) was brought in to replace the

the new features being brought in by the DTC and the

present Income Tax Act, 1961. The DTC was initially

impact it will have on the self-sustainability of not for profit

disclosed to the public in August, 2009, following which the

organizations.

government received more than 1500 representations, which in turn led to a revised discussion paper being released by the government in June 2010.The DTC 2010 is presently tabled before the Lok Sabha and may be passed in the Winter Session of the Parliament in 2011, with a view to be implemented from April 1, 2012. The Code in its present format may impact NGOs and hence it is extremely topical and relevant to civil society in India today.

Ashoka

organised a consultation on the Direct Tax Code(DTC), in

In the concluding session, the participants brainstormed on ways in which not-for-profit organizations (NPOs) across India could meaningfully advocate policy change in the Direct Tax Code. It was decided that a representation must be made to the Standing Committee on Finance of the Parliament, highlighting the key issues and the changes that need to be made to the DTC in order to safeguard the interests and sustainability of NPOs.

order to assist Ashoka Fellows in understanding the new

It was also decided that NDA and KPMG in association

tax regime that is being brought in by the Code. The idea

with Ashoka would organize a web-based consultation for

behind the consultation was also to understand if the

the benefit of the civil society organizations to make them

Ashoka Fellows felt it necessary to engage in advocacy to

aware of the problems that they would face in light of the

get the DTC amended and made more favourable to civil

proposed DTC regime.This would be done with a view to

society organisations. The consultation involved

generate awareness on these issues and also in order to get

understanding both for-profit and not-for profit structures

a buy-in from all major NPOs in India towards the

and experts engaging in problem-solving with the

representation.

participants.

A formal representation will be made to the Standing

On May 27, 2011, Ashoka: Innovators for the Public, in

Committee on agreed lines by end of July. In the event, you

association with premier tax firms Nishith Desai

would like to get involved in making a representation to the

Associates (NDA) and KPMG, hosted a consultation in

Standing Committee of Finance of the Parliament, please

Mumbai on 'De-coding the Direct Tax Code'.

write to alahiri@ashoka.org. The large issues

The consultation started with discussions on the policy behind the Direct Tax Code. NDA and KPMG presented

Sl. No.

(I)

8

Issue Non Profit Organizations (NPOs) on par with any other taxpayer

identified which would specifically impact NPOs are as follows:

Change being brought in by Direct Tax Code Under the DTC, NPOs have to pay tax @ 15% on the aggregate of the surplus (post allowed accumulation) in excess of INR 1 lakhs. Under the existing law, NPOs enjoy total exemption from income tax subject to the fulfillment of the conditions prescribed in section 11/12.

fellowconnect

Taxability of business incidental to charitable activity

Genuine charitable organizations earning additional income from incidental activities (in the interest of sustainability) may lose tax benefits due to ambiguities in the definition of 'incidental business' and 'charitable activity'.

(iii)

Charitable purpose vs. charitable activity

The Income Tax Act provides for an inclusive definition of 'charitable purpose' wherein the purposes were specified. The DTC has substituted the word 'charitable purpose' with 'charitable activity' which seems to be narrower in scope thereby increasing the ambiguity in the law.

(iv)

Constraints on Application The current law provides for an accumulation to the extent of 15% of the gross and Accumulation of receipts for an indefinite period without any condition related to application of Income the same. In addition, if the remaining 85% of the income is not applied then it shall be accumulated/set apart for a period of 5 years to be applied for specified charitable purposes provided the same is invested in specified modes of investment.

Under the DTC, an NPO can accumulate 15% of total income or 10% of gross receipts, whichever is higher for carrying on charitable activities.The amount set apart /accumulated has to be applied for carrying on charitable activities over a period of 3 years, provided the same remains deposited in specified modes of investment.

(ii)

Power to cancel registration

Power of Commissioner of Income Tax (CIT) regarding cancellation or withdrawal of approval has been extended to cases where activities of NPOs are not in accordance with any law applicable to it or under which it is was registered.This is a very wide power being given to the Commissioner.

Method of Accounting

The current law allows accrual as well as cash basis of accounting and income has to be computed accordingly.

Under the DTC, every NPO, other than a section 25 company has to mandatorily follow cash system of accounting.

Compulsory activities on an annual basis

The DTC proposes that NPOs need to carry on charitable activities during the financial year to retain their NPO status.

Therefore failure to perform charitable activities in any particular year may lead to a loss of tax benefits.

Conversion into business organization

Under the DTC, an NPO shall be taxed at the rate of 30% of its net worth if it converts or merges with a for-profit organization or fails to transfer all its assets to another NPO within 3 months from its dissolution. In certain cases this may also lead to double taxation.

There is no such provision in the current law regarding conversion of an NPO into a business organization.

(ix)

Impact of Anti-Avoidance Rules

The general anti-avoidance rules proposed in the DTC gives wide discretion to the Commissioner of Income Tax to deny any deduction/incentive or impose tax if he is of the view that the arrangements are abusive or are not backed by any commercial substance. It is possible that these anti-avoidance rules may in certain cases result in loss of tax benefits for genuine NPOs as well as Donors.

(x)

In-sufficient incentives for donors

The DTC only allows a 50% deduction for donors who contribute to registered charities. Existing benefits such as the 100% deduction for eligible projects or schemes under section 35AC of the Income Tax Act seem to have been removed.

(v)

(vi)

(vii)

(viii)

fellowconnect

9

Everyone A Changemaker: What Does It Mean To Me? effecting change.

DrTaraThiagarajan Recently, in a conversation with Manoj Chandran, Director of Marketing at Ashoka in India, I had the opportunity to learn about Ashoka Innovators for the Public and its vision of 'Everyone a Changemaker' (EACH).

It's a

bold statement that got me thinking. What does it really mean for everyone to be a changemaker?

Yet Everyone a Changemaker to me says something profoundly different. Not a top down approach with a few people trying to effect change but a societal paradigm where everyone is somehow involved in a march towards progress. And to think of it in this way topples most of our common frameworks when we consider the circumstances of the large majority. Take P. Manikantan from Vadipatti in Tamil Nadu. He is 33, 12th grade educated and works as a Panchayat Clerk. He has lived in the same village since birth and interacts only with his neighbours

Let's focus first on changemaker. When is it that any one of us can become a changemaker? First, it requires dissatisfaction with the status quo, a desire for something to be different. The origins of such desire usually stem from one of two things: an exposure to something different that seems somehow better in comparison, better in standard

and relatives. The last time he ventured beyond 2 km from his village was over a year ago, and that was a rare occasion.

He has a phone but he mainly uses it as an alarm clock, calculator and camera. He only makes a few calls a year.

And when asked what he'd like to achieve in the next five years, he shrugs. He doesn't know.

and therefore worthy of emulation, or the emergence of new ideas and innovations that are typically better solutions for common problems. New ideas and innovations, however, don't come from thin air.The mind is an open system and relies on input from its external environment to trigger its meanderings. The more diverse the inputs, the more possibilities it might explore and the more ideas and innovations it will produce. What we choose to cogitate on depends profoundly on our field of experience and frame of reference.

Of the 6+ billion 'everyone', most people have this sort of profile. Only 15% are college educated and more than half live in small rural communities that they rarely leave. For these people the edge of the world is a walk away, typically

5

kms

encompassing ecosystems of less than

Then of course, there is the next step: the translation of this desire, idea or innovation into something real – real change.

This is often even harder. This step most likely takes resources and a valuation of one's personal opportunities and risks. Do I have what it takes? Can I find the resources?

Is it worth it for me to do this? How far do I really think I can get? Can I convince other people that this is worthy?

Ashoka Fellows are a small group who have made this

5,000 people, the population of one high rise block in Mumbai. In these small communities everyone knows everyone and everyone knows what everyone else knows. Exposure is highly limited, information flow is minimal and diversity is rare. There is little to feed the desire for change - it is virtually impossible to create new paradigms out of thin air.

journey, crossed these barriers and are slowly but surely

10

fellowconnect

And furthermore, when you live in a small closed-knit

information in whatever capacity they operate. What if

community like a village, there is a stronger force to

every Ashoka Fellow consciously seeded conditions for the

conform, for everyone to agree. Nothing worse than

Manikantan's of the world to see new possibilities? To do

conflict with the neighbours that you have to bear day after

this faster and better requires dialogue and discussion

day, year after year. Such conformity and the ensuing

among one another and with the greater communities to

groupthink are not fertile grounds for change. So what can

seed new perspectives and ways of doing things and spread

possibly be done to make good on a statement as bold as

the stories of methods that work.

'Everyone a Changemaker'? To me it is about seeding conditions of change across the world that enable more people to experience the conditions that provoke change – the constructs of possibility.

This means connecting

fragmented communities in ways that allow information to flow more freely, so that more people gain greater and

It is only then that a few changemakers can grow to become more changemakers and even more changemakers until everyone is participating in change in a world with one global standard, marching relentlessly to a better place. And when that happens, imagine the possibilities. Imagine what mankind might accomplish!

more diverse exposure to the world. To get there it is imperative that today's small group of changemakers work

(The author is Chairperson of Madura Microfinance Ltd. She

towards consciously seeding these conditions, connecting

also blogs at www.physicsofpoverty.com)

impoverished communities with resources and

Continued from Page 4

Upcoming Ashoka Changemakers Competitions Making More Health:Achieving Individual, Family, and Community Well-Being Of all the advances to look forward to in the 21st century, none may be more critical – and more promising – than those in the field of health. Never before have innovations in human networks, technology, and science been so poised to converge for the improved health of all the world's citizens.

The Making More Health competition, launched by Ashoka's Changemakers in partnership with Boehringer Ingelheim, seeks innovative models that are transforming the field of health to sustainably increase the well-being of individuals, families, and communities.

We welcome solutions and collaborations along the entire health continuum, from prevention and lifestyle, to detection and treatment. Here is the link to the competition site which would provide detailed information on everything vis-a-vis the competition post its launch on July 6, 2011: www.changemakers.com/morehealth. The entries period would remain open until Sept 21, 2011.

For queries and clarifications, please contact Indrani Sharma, Community Manager - Asia at isharma@ashoka.org.

fellowconnect

11

Ashoka Hub: An Exclusive Online Platform For Fellows Ashoka Hub is a limited-access online space where Ashoka's social entrepreneurs and strategic partners find one another, exchange resources and self-organize for collaborative action. It was conceived through a partnership with Ashoka's Venture-Fellowship and ITI Teams, and codesigned with a core group of 25 Ashoka Fellows. It will extend to Fellows, Staff and Ashoka Support Network members, as well as carefully vetted external partners.

For 30 years, Ashoka has been facilitating offline collaborations among Fellows to tackle a broad spectrum of issues in the citizen sector. Moving forward, Fellows can collaborate autonomously

PEOPLE

on-demand, in a many-to-many way through Ashoka Hub. Fellows themselves designed the space to solve fundamental issues in the citizen sector by: * Lowering the high cost of sharing actionable, real-time knowledge among social change practitioners * Reducing challenges to achieving economies of scale by deploying shared resources toward shared goals * Accelerating the development of trust and common language between the citizen & business sectors Enabling Connections The platform enables users throughout the global Ashoka network to: *

Find one another easily

*

Contact one another easily

*

Share up-to-date information about their work

OFFERS

Exchange resources: * Users can post needs, such as the need for free legal consulting, media contacts or partners in the field. * Users can promote events, both public and private, such as a focus group, a meeting, a conference or an online discussion. * Users can offer resources to the community, such as job openings, expert advice or partnerships.

NEEDS

Who's There?

Ashoka Hub is a private community, where we hope you will build trusting relationships. In addition to Fellows from around the world, Ashoka staff and members of the Ashoka Support Network from around the globe will join you on Ashoka Hub. The Ashoka Support Network consists of donors and partners whose vision and work is aligned with Ashoka, and who work with us closely to support Fellows and the sector as a whole.

12

fellowconnect

Get Started To start using Ashoka Hub, go to http://hub.ashoka.org, and log in using your email address and a temporary password, then follow the steps in the attached guide. We look forward to being connected!

How it Works?

As an Ashoka Fellow, you can activate your Ashoka Hub profile to present your new idea and your story as a social entrepreneur to the community. Once logged in, you can integrate your Ashoka Hub profile with other online social networks and tools including Facebook,Twitter, LinkedIn and Skype.

Tags: Ashoka Hub uses “tags” to identify people, offers, needs and events throughout the site.You

EVENTS

can choose tags for yourself and for the offers, needs and events you create based on our lists of fields, locations and populations. If you don't see the tag you're looking for, you can simply create a “free tag”.

Following: “Following” is the easiest way to stay up-to-date on the offers, needs events and people that matter to you.We'll start by having you automatically follow some tags then you can decide what you'd like to stay up-to-date on by changing and adding tags.

ONEs: You can follow people, offers, needs and events individually or follow tags related to the fields, locations and populations you care about. Following tags related to you will ensure that you'll learn about the most relevant opportunities on Ashoka Hub. Digest: Based on what you're following,Ashoka Hub will generate a weekly email digest with new opportunities that we think are relevant for YOU. If you follow the tags that interest you most,

INFO

your weekly digest should bring the most interesting updates straight to email your inbox each week.

Note The initial version of Ashoka Hub will be available in seven languages: Arabic, Chinese, Dioula, French, German, Hindi, Japanese, Portuguese, Spanish and Swahili. As the site develops, so will language capabilities.

Ashoka Hub has been built as a flexible, iterative endeavor that relies on consistent feedback.We welcome your reflections, experiences, suggestions and testimonials.

fellowconnect

13

Impact Investing: Hybrid Models Needed While the spectrum of capital

up of operations, which in turn allows those businesses to

available for impact investing has

hire the best talent available.

grown significantly over the past two decades, and explosive growth has taken place in the kinds of institution involved in the sector, the field is still young and there is as yet no industry standard and little consolidation.

There are two main challenges ahead: first, how can different forms of capital work together across institutional structures and constraints in order to deliver maximum social impact? Second, how can this be done at scale since scaling up requires both operational excellence and

Image courtesy: eHealthpoint

traditional philanthropy. Not-for-profit organizations,

“This type of hybrid business also allows for scale up of operations, which in turn allows those businesses to hire the best talent available�

commercial organizations seeking market-based returns,

The challenge that still needs to be overcome is how to

quasi-commercial organizations that attract a blended

create hybrid legal structures with independent

form of capital, even government social welfare

governance norms whose incentives are aligned in such a

programmes – all are active in the sector. Ancillary

manner that philanthropic capital is not used as a cheap

organizations like social investment banks, consulting firms

subsidy for greater returns to commercial investors.

and network organizations have also increased significantly

Creating structures where part of the commercial return

in number.

goes back into the pool of philanthropic capital is, we

innovation in creating the kinds of hybrid institution able to attract many forms of capital.

While capital previously came only from philanthropic and government finance, today it also includes public equities, private equity, debt and venture philanthropy, as well as

In the Indian healthcare sector, for example, the greatest need is to reach a low-income consumer base effectively by increasing efficiency, developing streamlined protocols and enhancing skill levels dramatically. The solution lies in developing hybrid business models where governments can work with the private and not-for-profit sectors through special-purpose vehicles that can attract philanthropic capital and public finance for market creation activities.This type of hybrid business also allows for scale

14

believe, part of the answer. Regulatory reforms that allow innovative public-private initiatives to be established without unnecessary red tape would open the door to this.In order for these structures to work, governments need to rethink their tendering processes so that organizations do not bid for and win tenders as loss leaders. This happens repeatedly in South Asia, and the winning bidder inevitably fails to deliver because of its cost structures. Not only is a transparent bidding process

Ashoka Fellow Connect Magazine

critical; its management must also be outsourced to

creative thinking in the use of public and not-for-profit

organizations that understand the cost and income

sector assets.There are a few notable exceptions: the new

implications of tenders they receive.

social impact bond developed by Social Finance in the UK;

Another crucial element is adequate capitalization. To

and Life Spring Hospitals, a for-profit, low-cost, high-quality

achieve large-scale social impact, investments have to

maternity hospital chain promoted by Hindustan Life Care,

come in at the business's critical growth period when

a Government of India healthcare company, and Acumen

working capital is stretched and traditional private equity

Fund, a global not-for-profit social venture fund.

firms won't invest because their return expectations and timeframe don't match the needs of the business. As a result, there is currently a significant lack of impact capital in the US$7 million to $10 million per investment range in this sector. In order for the not-for-profit sector's assets to be made more efficient, hybrid for-profit structures need to be developed which can embrace a number of

Maximum impact can be achieved without huge advances in technology or a scattergun approach to supporting firsttime entrepreneurs. By introducing appropriate hybrid investment structures and leveraging existing assets and infrastructure, investors can make a real difference in the social impact space.

organizations. For example, many not-for-profit eye

(Varun Sahni is managing director at Impact Investment

hospitals could roll up under one brand and focus on

Partners. Email varun.sahni@impactinvestmentpartners.com

increased efficiency and protocols, and in turn have greater impact. These also need to be adequately capitalized so

This article was first published in Alliance Magazine, which

that they can attract the medical and management talent to

publishes content on philanthropy and social investment. As an

do this. Finally, there is a continuing need to encourage

organization based in India, you can sign up for an electronic

start-ups. In this regard, we believe there is not enough

subscription free of charge at www.alliancemagazine.org.)

The Platform: Ashoka Housing For All Quarterly Newsletter

The Platform is Ashoka HFA's (Housing for All) quarterly newsletter. Through the newsletter we hope to keep you informed about our work. HFA India is currently facilitating market-based models that provide quality homes at affordable prices.

Read and download the June 2011 edition at http://india.ashoka.org/housing-all-newsletter-platform

Fellow Connect Magazine

15

A Collaborative Framework for Rural Innovation Supriya Sankaran

Over the past years, Ashoka has focused on electing leading social entrepreneurs with innovative solutions for farmers and rural citizens and supported them to spread and share their insights with the larger aim of advancing the field of rural innovation as a whole.

Towards this, over the last few months, Ashoka India and Africa teams have been working together to map the work of Fellows. Having narrowed down the barriers and solutions pursuant to discussions with our Fellows and other experts in the domain,Ashoka drew up a mosaic of solutions created by entrepreneurs on a regional basis. Regional meetings were also organized in India and Africa with select Fellows to identify trends and patterns in the sector from the entrepreneurial and innovation lens.

In May 2011, Ashoka staff from Africa, India and the global office met at Washington DC to take these discussions further.

This meet threw up interesting insights. It was observed that while innovations are important vehicles for social change, the right collaborative platform that will catalyze the space to take the innovation of Fellows further, will be important to transform the field. Given that issues (education, health, livelihoods, governance etc) are intrinsically connected, the new paradigm has to enable entrepreneurs to take advantage of existing innovations and access different products and services that are available.

We observe that several Fellows have products and services that are critical for other players to scale or stabilize their work.

In this context, we are exploring the idea of creating a national / global platform that will create incentives for entrepreneurs to share ideas and solutions with each other and attract changemakers to the rural space.We believe that if the appropriate information is aggregated to facilitate economic transactions on such a platform, different stakeholders will be incentivized to come together and Fellows will be able to enhance value for their communities.Another opportunity we are seeing is in the integration of the health and agriculture space.The thinking envisions the larger debate on food security moving towards 'nutrition security' resulting in a paradigm shift in farming practices, supply chain, market opportunity and related process.

Ashoka will spend the next three months, working with Fellows and other experts, to determine more concrete steps to test, shape and materialize these ideas. In the meantime, we welcome any thoughts on these insights. ( The author is Venture Manager at Ashoka India ) Dear Ashoka Fellows, Ashoka FellowConnect is a communication platform for Ashoka Fellows. We look forward to hearing your experience of reading the third edition of Ashoka FellowConnect. We welcome Ashoka Fellows to use this platform to share their knowledge, points of view and other information with others.You can either send your letters to our postal address or drop me an email at manojc@ashoka.org – Editor Editorial Team : Manoj Chandran and Vallabh Rao Address : 54, 1st Cross, Domlur Layout, Bangalore 560071, India Printed at : Maya Printers LLP Ph:26591311 / 9449767501

www.india.ashoka.org

Š Ashoka Innovators for the public