India needs $750 million in flexible funding to build 100 ‘non-profit Unicorns’ in 5 years: Report

India will require nearly $750 million in flexible funding over the next five years to build 100 ‘non-profit unicorns,’ a new report released on Thursday said. The report finds that nearly 80 per cent of the surveyed non-profit organisations struggle to scale due to the lack of flexible capital.

The report – ‘The Flexible Funding Gap for Non-Profit Unicorns’ – part of the ‘Ease of Doing Good’ series by Change Engine, estimates that this translates to $150 million annually, just about 1% of India’s total philanthropic giving.

‘Non-profit unicorns’ are organisations capable of reaching at least one million people or 5% of their target user base.

Flexible funding refers to financial contributions that are unearmarked or softly earmarked, allowing organisations—particularly non-profits, UN agencies, and humanitarian groups—to allocate resources where they are most needed rather than being restricted to specific projects.

“This funding rigidity forces organisations to spend disproportionate time on fundraising, rather than focusing on innovation and impact. The issue is not the absence of capital but how it is designed and deployed. Respondents indicated that with greater flexibility, they would invest in strengthening core teams, prioritising innovation, pilots, and evidence generation,” the report said.

Change Engine, a first-of-its-kind accelerator for non-profits, supports exceptional founders to build non-profit unicorns - organisations that can impact a million people meaningfully.

Unrestricted capital

“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," said Varun Aggarwal, Co-founder, Change Engine.

In the last few years, Change Engine has worked with 10 impactful organisations which have raised over $2M in follow-on funding.

“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," Shubham Bansal, Co-founder of Change Engine, said.

Key findings of the report

• Lack of flexible funding: 80% of surveyed non-profits struggle to scale due to a lack of startup-style innovation capital; 1 in 2 organisations have less than 10% unrestricted capital.

• Restrictive regulations: 55% cite regulation as the primary constraint for raising unrestricted (i.e. not tied to a program) funds, followed by a poor understanding of non-profit cost structures and benchmarks amongst funders.

• Limited sources: 55% organisations raised flexible funding from HNIs (High Net Worth Individuals) and only 33% from domestic foundations. Also, domestic foundation funding is skewed in favour of large organisations (with budgets more than ₹5Cr.), leaving very few sources of capital for early-stage organisations.

• Small cheque sizes and one-time grants: 60% organisations reported that typical cheque sizes are less than ₹10 lakhs, and most of these grants are one-time. Only 4 in 10 domestically funded organisations have ever received a multi-year grant. Just 2 in 10 surveyed organisations secured more than ₹50 lakh in multi-year support.

• Flexible funding is innovation funding: If teams had more flexible funding, 75% would invest in hiring talent, 32% in bolder experiments, 27% in technology and data, the survey highlights.