How venture-like philanthropic capital has the potential to unleash impact at scale

This article is authored by Aakanksha Gulati, CEO, ACT.

“I took a walk in the forest and came out taller than the trees”.
Thoreau’s quote rings true of both the incredible challenge, as well as the unprecedented opportunity, that India’s social sector presents today. The sheer scale of India’s challenges are well known, but it is also being met with a growing cadre of impact-focused founders. These are brave souls who have the courage to immerse deeply in our issues – be it in our learning and skilling gaps, lack of access to health care or the rapidly declining air quality and evaporating water – as a result of which our nation’s universities and early-stage incubators are brimming with innovation and new technologies to address complex developmental issues. Combine this with increasing impact funding - The India Philanthropy Report 2025 forecasts a staggering ₹45 lakh crore in social sector funding over the next four years – and it would seem like the golden era of social innovation.

Philanthropy

Despite these promising trends, however, the reality that unfolds on the ground is that charitable grants fund vital work, but often lack the engine to unlock exponential growth – i.e. innovative models that can address population-level scale. In contrast, traditional venture capital has done exactly with incredible success over the last decade – but demands returns that pure social enterprises cannot promise, leaving high-potential, impact-first ideas stranded in ‘pilot purgatory’. This has given rise to a new approach towards funding urgent solutions that address both market gaps and developmental challenges. Patient venture-like philanthropic capital – also known as venture philanthropy - is risk-tolerant, catalytic, philanthropic capital deployed for transformative, rather than incremental, impact.

Venture philanthropy’s core function is to act as a catalyst. Post the incubator stage, where founders develop an early idea or what we call an MVP (Minimum Viable Product), impact founders in India struggle to raise traditional capital to take their idea from product- to model- stage. This is a great entry point for patient philanthropic capital - still early, high-risk, and with the explicit goal of developing or proving a model so that can work at scale. If this happens, it will allow for larger, more traditional funders to follow. Venture philanthropy, therefore, combines a venture capital-like lens with an impact-first focus of traditional philanthropy: Startup agility and accountability are critical to iterate rapidly to crack product-market-fit, alongside a deep focus on ensuring the solution creates deep, meaningful impact for vulnerable populations or towards climate impact. Together, this capital spurs innovation for public good, rather than only market growth.

Moreover, when this patient capital is also unrestricted and non-dilutive, it provides a much-needed runway for social entrepreneurs to build vital interventions across education, health, climate resilience, and women empowerment – all complex challenges that require deep immersion into the challenges, and time to build these solutions with care and a focus on long-term sustainability. These are critical pillars of India’s development journey, which require not only innovation but deployment at scale. Patient capital’s tolerance for risk is exactly what yields outsized returns on impact– even when some grants do not deliver, some can drive significant, scalable change.

Consider, for example, Rocket Learning, which created a free AI-enabled solution that leverages WhatsApp groups to disseminate early childhood learning modules to low-income parents and Anganwadi workers to enable learning at home and at government centres. This is a demographic for whom “learning” typically begins when a child steps into a government school at age six. In contrast with high income children globally, this means that children from low-income families in India lose almost four years of critical early childhood learning years – an incredible loss given up to 90% of brain development happens by the mere age of five years. Rocket Learning is a great example of a solution fuelled by both individual and institutional venture philanthropy. ACT, for example, wrote a series of small checks in the first three years of their journey starting with 33% of their annual budget, dropping to single digit percentage three years later. During this time, Rocket Learning has scaled from reaching 10,000 to 35 million students, and their annual budget from about ₹one crore to more than ₹40 crore. The initial catalytic funding built a track record that attracted follow-on investment, creating a path to financial sustainability. After just five years, they now reach 15% of India’s public pre-schools and educators in partnership with state governments and national ministries.

Tech-first social solutions are emerging as a key link between impact and scale, with the government increasingly championing tech in on-ground programming. Khushi Baby, offering digital health tools for community workers, and Periwinkle, offering an easy-to-use cervical cancer screening device, are working with state governments of Karnataka and Punjab to digitise last-mile health delivery. With the confluence of catalytic capital, innovative tech, and government adoption, India can build new pathways to advance health access at scale.

What also distinguishes this new wave of impact is its foundational use of technology. Patient capital targeted at tech-enabled ventures does more than support a single solution; it scales an entire system.

Patient capital can help build robust, data-driven technological architecture. This is critical because it enables exponential reach and ensures last-mile integrity. A well-designed digital platform, like Rocket Learning’s, can onboard millions of users without a linear increase in cost or complexity. Solutions like Khushi Baby’s digital health records ensure data integrity and service delivery in the most remote areas, where traditional paper-based systems fail.

This is significant for social impact because it creates strong public infrastructure and new standards of best industry practices. This tech-centric approach is what allows catalytic capital to achieve systemic impact, changing how entire sectors like education and health care can operate for a Viksit Bharat.

Venture philanthropy is an important funding catalyst during the early days for social entrepreneurs, it is not the end. When entrepreneurs are able to successfully establish proof of concept, they can unlock much larger flows of capital and institutional adoption. The urgent task now is to codify these learnings and scale venture philanthropy in India. The question is no longer if catalytic grant capital works, but instead how we can channel more capital into this tried and tested model.

The way forward involves three critical shifts. Firstly, large philanthropic foundations and CSR programmes must allocate a dedicated portion of their portfolios to high-risk, catalytic bets, mirroring the ‘angel’ segment of an investment portfolio. Secondly, startups must focus closely on collaborating with government partners, creating tech for public good that can be ultimately absorbed and scaled by the state. Lastly, patient capital must be funnelled into high-impact verticals where technology can be most disruptive, such as climate adaptation and agricultural resilience.

As India’s philanthropic pools swell, we must be as innovative with our capital as we expect our social entrepreneurs to be with their solutions. Patient capital is essential for turning India's vast developmental ambitions into systemic realities. It’s time to build the bridge.

This article is authored by Aakanksha Gulati, CEO, ACT.