From the Business Today profile of the philanthropic investment firm founded by Pierre Omidyar, founder of Internet company eBay.
Unlike other philanthropic organisations, ON does not come with a project-centred approach. Rather, it enters with the intention of building institutions. The two main requirements are: the organisation should fit into the ON portfolio and be scalable.
Swati Ramanathan, Chairperson of the Indian Urban Space Foundation and co-founder of Janaagraha, an NGO working on urban quality of living, says the benefit of ON comes from its disciplined funding. In Janaagraha’s case, while $3 million (Rs 13.8 crore) was given for three years, a third of the funds is for unrestricted use, while another third is tied to achievement of pre-determined metrics and the final third portion depends on the ability of the organisation to raise at least twice as much from other sources.
This, according to Jayant Sinha, Mumbai-based Partner, ON, ensures that the organisation makes the most of the network’s money – leveraging to raise more funds and building fund-raising capacity. And, like a venture capital firm, this also ensures there is an exit built into the investment. As a proportion of overall funds, ON’s contribution tapers over its period of investment.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at [email protected]
