NGO to start 'social mutual fund' for rich to invest

Ashoka, an NGO which functions as a social incubator "" funding social entrepreneurs with ideas and projects for social construction "" will replicate its successful Mexican advisory funding model in India. In Mexico, the organisation advises the UBS group on social investments.

Ashoka will initiate a fund, with investments from high net worth individuals (HNI), which will promote social causes. For social entrepreneurs, the fund will provide the much-needed capital. In Mexico, the model has been active for over 12 months now. Ashoka did not however reveal the amount of social funding undertaken through the model.

Senior officials from Ashoka said that the organisation will promote the model in India and Brazil in the next three to four months. Ashoka will create social investor-friendly products which will be built on the mutual fund model.

They added that currently the source of funds for social innovators is the government and foundations. These two are prone to change.

While the government's focus may waver, foundations switch projects if results are not seen within the stipulated period. This leaves the social entrepreneur on a shaky ground. "As a result, we plan a different funding model. An alternate low risk instrument for HNIs, and a steady source of funds for social causes," they said.

Ashoka will play a facilitating role by advising potential investors, institutions and banks on the opportunities. Social innovators will be chosen as is done in Mexico. There, Ashoka holds a contest at intervals calling for social innovations and ideas. From the lot, five are chosen and funding based on the need is provided.

Ashoka has a presence across 53 countries and has 1,500 fellows or social entrepreneurs funded by it working on projects that further social causes.

The organisation's presence is the strongest in developing countries like India, Brazil and Mexico.