The Leadership Gap No One Is Funding
Why India's social sector needs to build the leadership infrastructure to match the capital flowing into it
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For years, leadership development has been treated largely as a corporate concern.
CXO mentoring. Succession planning. Board effectiveness. Executive coaching. Leadership programmes.
We have built an entire ecosystem around helping people who run businesses become better at running them.
The social sector has largely been treated differently.
There has been enormous attention on funding the mission — CSR, philanthropy, government programmes, impact investing, and, increasingly, institutional capital. But much less attention has gone into the people who have to deploy that capital, build organisations around it and turn it into outcomes.
I think that needs to change.
India's social sector has a capital infrastructure that is becoming increasingly sophisticated. Its leadership infrastructure has not kept pace.
And this may be one of the most important leadership challenges the sector will face over the next decade. The evidence for that isn't just intuition — it shows up in the numbers. In the US, where this is best documented, nonprofit CEO turnover runs at roughly 19%, well above the 12% seen across other industries, and only around a third of organisations have a written succession plan in place. India-specific data of this kind is harder to come by, but the underlying pattern — capital scaling faster than leadership capacity — doesn't respect borders.
The money has arrived. The complexity has arrived.
India's social sector is no longer a collection of small, founder-led organisations operating primarily on philanthropic grants.
Section 135 of the Companies Act created a significant and recurring CSR funding pool — somewhere between ₹30,000 and ₹40,000 crore a year, and rising. Foreign funding comes with its own governance and compliance requirements under FCRA. Government programmes operate at enormous scale. Impact investing and blended finance are bringing new forms of capital into the sector.
All of this is good news.
But the nature of the organisations receiving that money is changing too.
An organisation seeking institutional funding today needs to be able to demonstrate financial stewardship, governance, reporting, measurement, compliance, risk management and the ability to execute at scale. Under Section 135 alone, boards have to constitute CSR committees, CFOs have to certify expenditure, and larger CSR spends now require independent impact assessment. Each of those is a specific competency someone inside the organisation has to hold — not a form that fills itself.
That gap shows up in the numbers too: unspent CSR funds reportedly hit a five-year high of close to ₹1,500 crore in one recent year, with roughly a fifth of obligated companies spending below the mandated 2%. That isn't primarily a shortage of willing money. It's a shortage of organisations capable enough, on the governance and delivery side, to be trusted with it — a talent gap wearing a compliance costume.
These aren't administrative requirements sitting alongside the mission. They increasingly shape whether an organisation can deliver the mission at all.
A board has to understand risk. A CEO has to build systems. A CFO has to bring financial discipline. Programme leaders have to manage larger teams and budgets. Regional leaders have to deliver consistently across geographies. And frontline workers have to translate programmes into changes in people's lives.
The money may come through a grant, a government programme or an investment.
But someone still has to make all of that work. That is where I think the constraint increasingly lies.
Not in intent. And not necessarily in funding.
In leadership capacity.
We know what good organisational leadership looks like
There are already powerful examples within the social sector — and the numbers behind them are worth sitting with.
Aravind Eye Care System, founded with 11 beds in 1976, now performs more than 250,000 cataract surgeries a year — roughly 60% of the volume the entire UK health system performs, at about a hundredth of the cost. It didn't get there through a compelling mission alone. It got there through standardised, assembly-line-inspired surgical workflows and a self-funding cross-subsidy model, where paying patients fund free or subsidised care for the majority, at identical clinical quality.
BRAC, now the world's largest NGO, reaches well over 100 million people a year and generates roughly 80% of its budget from its own social enterprises — a deliberate move away from aid dependence toward business-style operating discipline.
Akshaya Patra has served over 4 billion cumulative school meals through centralised, semi-automated kitchens under ISO 22000 quality certification, and is the Indian government's largest NGO partner in delivering the national school meal scheme — a role it earned because that operational architecture made government-scale delivery credible.
In all three cases, operational discipline is closely connected to the mission, not a compliance layer sitting beside it.
That is an important distinction.
Governance should not simply be about making a non-profit easier for a funder to trust. The more useful question is whether the organisation has the leadership capability to deliver its mission reliably at scale.
That is a much higher bar.
Governance may improve efficiency and donor confidence — the research on that is fairly solid. Whether it reliably produces better outcomes for the people being served is a harder question, one the data doesn't yet let anyone answer with confidence. The sector should be willing to hold itself to that question as rigorously as it holds everyone else to theirs.
Leadership is not one problem. It is three.
When we talk about the leadership gap in the social sector, I think we often focus on the wrong layer.
There are at least three different challenges.
1. The board and C-suite
At the top of the organisation, many of the questions look familiar to anyone who has spent time in a corporate boardroom.
How do we scale without losing control? How do we build a strong second line? How do we allocate capital? How do we manage risk? How do we professionalise without destroying the culture that made the organisation successful? And how do we think about succession?
This is where experienced corporate and institutional leaders can make a real contribution — and we're already seeing that talent move.
Amit Chandra stepped down as Managing Director of DSP Merrill Lynch in 2007, at the peak of his career, to devote more time to philanthropy. He and his wife Archana co-founded the A.T.E. Chandra Foundation and have committed to giving away upwards of 75% of their annual income. He now sits on the boards of several social-sector institutions alongside his continuing corporate roles. Ashish Dhawan made a similar move after building ChrysCapital into one of India's leading private equity firms, going on to found Central Square Foundation and Ashoka University. Rohini Nilekani took the other route — building her governance credentials from within the sector over two decades, founding Arghyam and now chairing Rohini Nilekani Philanthropies, while also sitting on the Audit Advisory Board of India's Comptroller and Auditor General.
The expertise exists, on both paths in.
The harder question is how to create enough structured opportunities for that experience to reach the leaders who need it. It matters here too: Bridgespan's research into nonprofit leadership turnover found that among leaders who left for another organisation, roughly half cited a lack of leadership development opportunities as a reason for going.
2. The programme and regional leadership layer
This is, in my view, the most underserved layer.
These are the programme directors, state heads and regional leaders who are increasingly responsible for large budgets, hundreds or thousands of people and complex delivery environments.
Five years ago, they may have been managing a programme. Today, they may be running an institution within the institution.
They are making decisions about talent, budgets, partnerships, government relationships, technology, measurement and scale — often without having someone experienced enough to sit across the table and help them think through those decisions.
This is where mentoring can be particularly useful.
A leadership course can teach a framework. A consultant can help solve a defined problem. But there are decisions where what you really need is someone who has been through something similar.
Someone who can say: I've seen this before. This is what I would worry about. This is the question you may not be asking. And this is what I learned when I got it wrong.
That kind of judgement is difficult to put into a curriculum. It becomes particularly valuable when someone moves into a role that is considerably larger or more complex than anything they have previously handled.
3. The frontline
And then there is the hardest layer.
The community health worker. The self-help-group leader. The livelihood worker. The frontline person standing in a village, working directly with the people a programme exists to serve.
This is not simply a smaller version of the executive leadership problem. It is different.
A programme director needs organisational judgement. A frontline worker often needs the ability to persuade, coach, diagnose and change behaviour — repeatedly, locally and in context.
And the numbers make one-to-one mentoring impossible. You can realistically match a few hundred experienced mentors with a few hundred CEOs, trustees or senior leaders. You cannot do that for tens or hundreds of thousands of frontline workers.
The answer therefore has to be different: peer-led coaching, cascaded capability, and — increasingly — technology that carries expertise directly into the worker's hands rather than requiring all of it to live in her own training. N. Chandrasekaran makes a version of this argument at national-economic scale in Bridgital Nation: that digital and AI tools can augment a frontline worker's capability directly, so that someone with minimal training, equipped with the right tool, can do competently what used to require years of accumulated judgement.
Rang De is a working example of this logic already operating in India. Founded in 2008 by Smita Ram and Ramakrishna NK as a peer-to-peer lending platform, it connects individual social investors — lending from as little as ₹100 — with rural borrowers who have no credit history a conventional bank could assess, reaching them through a network of roughly sixteen field partners who do the last-mile vetting a platform alone cannot. It pairs that human network with digital rails — Jan Dhan accounts, Aadhaar-based eKYC, UPI — that let a borrower be verified and funded without a loan officer's personal judgement standing in the gap. Over 93% of its borrowers are women.
The answer to every leadership problem cannot be to find more senior mentors. Sometimes the better answer is to build systems — human and digital — through which good judgement can spread.
From funding organisations to building capability
This is where I think the conversation needs to move beyond training.
The social sector does not simply need more courses on leadership. It needs more opportunities for people to learn from leaders who have already dealt with the problems they are now facing.
Training transfers knowledge. Mentoring transfers judgment.
A first-time CEO dealing with a board crisis does not necessarily need another presentation on governance.
A programme director managing a ten-fold increase in budget does not necessarily need another classroom session on financial management.
They need someone who has been there. Someone who can challenge their assumptions. Someone who can share what worked — and, just as importantly, what didn't.
This is why models such as Social Venture Partners, Acumen's Fellows and Academy programmes, and institutions like the Indian School of Development Management (ISDM) — built specifically to professionalise leadership for this sector — are interesting. They recognise that building an organisation requires more than capital.
Acumen's model is a specific instance of a broader idea worth naming: blended finance, where philanthropic capital absorbs a disproportionate share of the risk — as a first-loss layer or a guarantee — so that commercial capital, which wouldn't take that risk alone, is willing to follow. India's own CSR pool is starting to move this way too. Samhita's Collective Good Foundation, working with partners including 360 ONE Foundation, has structured credit-guarantee instruments it describes as CSR- and FCRA-compliant, using CSR capital to absorb risk that would otherwise keep lenders away from underserved borrowers. It's early, and the regulatory question of how far this can scale is still being worked out case by case. But it's a sign of where the more sophisticated end of this capital is headed — and structuring a credit guarantee responsibly is a materially harder leadership competency than writing a grant cheque.
You can fund an organisation.
But if you don't strengthen the people running it, you may simply be funding the same constraint at a larger scale.
But there is a trap we should avoid
There is an obvious objection to this argument.
Should we really be importing corporate governance into organisations whose purpose is fundamentally different?
The answer is: not wholesale.
Corporate governance can create its own distortions when it becomes an exercise in making organisations legible to funders rather than accountable to the people they serve. An organisation can become very good at producing reports, metrics and board presentations without necessarily becoming better at changing lives. Development literature has names for this pattern — isomorphic mimicry, the overhead myth — and it's a real danger, not a hypothetical one.
There is also an asymmetry in how accountability is often designed.
Most formal governance mechanisms point upwards: to the CSR committee, the donor, the government, the board.
But the organisation ultimately exists to serve someone else. The people at the bottom of the accountability chain should not become invisible simply because the people at the top are satisfied.
So the leadership we need is not leadership that simply makes non-profits look more like companies. It is leadership that can hold both forms of accountability: to the people providing the capital and to the people the capital is intended to serve.
That is a much harder brief. The first kind of accountability can quietly eat the second if nobody is paying attention.
Building the next layer of leadership
India has spent considerable energy building mechanisms to move capital into the social sector.
We now need to pay similar attention to how capability moves through the sector.
At the top, that means creating more structured opportunities for experienced corporate and social-sector leaders to work with CEOs, trustees and emerging institutional leaders.
In the middle, it means giving programme directors and regional heads access to sustained leadership relationships, rather than relying mainly on occasional workshops.
At the grassroots, it means building models where capability can spread through peers, communities and technology rather than relying on one-to-one intervention.
These are different problems, and they need different solutions.
But there is a common thread.
A good leader does more than make better decisions. They help other people make better decisions. Those people, in turn, develop others. Over time, that is how an organisation builds institutional capacity.
The opportunity
I believe India's social sector is entering an important transition.
The question is no longer simply whether the sector can attract capital. It increasingly can.
The harder question is whether it can build the leadership capacity required to deploy that capital well.
Capital can fund a programme. Technology can help scale it. Good governance can provide the guardrails.
But when reality refuses to follow the plan, it is leadership that determines what happens next.
That is why I believe mentoring should become a more important part of the social-sector ecosystem.
Not as philanthropy. Not as a corporate volunteering exercise. And not as another leadership course.
But as one way of making hard-won experience available to the next generation of leaders.
India has learned how to fund social impact.
The next challenge is to build the leaders who can turn that capital into lasting impact.
Trust us to get your leaders to be at their best!
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