The/Nudge Institute: Atul Satija on When Funders Should Step In

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Lissa Harris: Can you tell me about the work you do and the problem you’re trying to solve?

Atul Satija: My name is Atul Satija, I’m the founder and CEO of The/Nudge Institute. I started Nudge about nine years ago. My background is in technology. I spent 18 years in technology companies before I shifted to the development sector and started the Nudge Foundation, which is now called The/Nudge Institute. We are trying to solve for the jobs and livelihoods of India’s poor [communities]. The idea is to see if there is something that works for India’s rural poor that we can take to scale.

In that journey, we have tried a few things: scaling poverty graduation [an approach that helps households move out of poverty], presbyopia glasses for income improvement and productivity increase, backyard poultry, and go-tree value chains. In our flagship program the direct work that we do is to determine how we can scale poverty graduation with the government. We chanced upon poverty graduation work that BRAC had done in Bangladesh and many other organizations started leveraging that model in their countries. J-PAL [Abdul Latif Jameel Poverty Action Lab] had done a lot of research on it, for instance. 

We tried it in a pilot in 2019. Over a period of time, we started feeling like there is a structure and design that really works. The question was, how do we really scale it? We evaluated various design choices such as, who will be the large-scale funders for it, who will implement it at scale? 

We came to this thesis. This is the kind of work that the government needs to fund. The implementing agencies cannot be for-profit companies or even nonprofits at scale. Nonprofits will most likely play the role of high-quality technical assistance partners for the governments and the government institutional structures should scale it.

This is the kind of work that the government needs to fund.

– Atul Satija

A few years ago, we started putting this plan into execution. The good news is, we were able to crack government investing in this design. Now we’re starting to see whether government delivers quality that deserves scale and how to support them to get to a minimum acceptable quality. That’s the journey we are on.

We have around $250 million of government capital allocated to poverty graduation in India, thanks to our work with the government over two to three years and convincing them to put capital to this [effort]. Now we are figuring out how to support government through livelihood research, data technology, M&E, and other technical assistance required for them to scale, along with human capacity at various levels to put SOPs [standard operating procedures] and processes in place. That’s a very large part of our work. That’s the program that Rippleworks also came onboard to help with scale funding. 

The other half of Nudge is the livelihood ecosystem play. When ecosystems are healthy, a lot of things happen. If they are not, you may still see one resilient organization like we see a small shoot of green in cement once in a while but you don’t see a forest in cement. You need enabling conditions for a lot of good action to happen. We look at talent, capital, technology, and policy as four vectors to create a good ecosystem in developing domains. In livelihoods, we look at the same. 

We’ve tried multiple things in the past. Most haven’t worked. But social entrepreneurship as a leverage point to create impact has worked for us. We started India’s first pure nonprofit incubator seven years ago. Now we have incubator accelerators and grant challenges to support social entrepreneurs in scaling their work. We have about a portfolio of 200 organizations, about 130 nonprofits and 70 for-profit social entrepreneurs that we have supported. They have collectively done good work.

Budgets have grown. Organizations have grown. It’s apples and oranges, when you start looking at impact data from a diverse set of organizations, but roughly 100 million people in India are impacted by the work of the portfolio. There are 17, Forbes 30 Under 30, within that. There are dozens of Ashoka Fellows and Ackman Fellows. Every single Earthshot Prize winner from India, all the three of them, are The/Nudge Institute organizations. It’s a good ecosystem. 

Lissa Harris: Can you share an example that illustrates the impact of the work you do? How do you know it’s working and what’s the evidence that you look to to determine the impact of your work?

Atul Satija: We’ve used third-party assessment organizations within India to evaluate our work. We’ve used somebody to come and look at our first cohort that graduated and the impact on the lives of the families that went through it. We only worked with the bottom 5% [socioeconomically]. These are families living on an annual income of $300 for a family of five or six. They are the most marginalized in India.

These are usually families that are distressed migrants, which means, when they enter the program, the kids are not able to go to school, they are food insecure. Sometimes they are in neo-bondage where they have some past debts and they are spending six months of a year working to pay that off.

The other six months when they are in the village they are doing some farm labor work. India has a right to work where you can do some labor work for the government, building roads and bridges, and you’re paid for that, so they get 30 to 40 days of work from there. All together, they’re able to feed themselves one or two meals a day for most of the year.

One hundred percent of the program works with women. Typically, we take these women into the program when the family is migrating. Over a period of two to three years, the family reaches a point once you invest in them through consumption grants, livelihood grants, fund livelihood grants and build their capacity along the way with social protection and financial inclusion. 

The beauty of poverty graduation is you bring what governments and nonprofits respectively do well together in a single design. It’s cash plus care. Governments are good at giving cash because that’s a simple product. NGOs are good at care. The cash and care are both required for a family to have assets and capacities to use the assets to make their lives better. This journey, this carefully sequenced series of steps, is what we implement to get a family to a point where we see distress migration comes down by 90%.

We see that families start having three meals a day, also nutritious meals because they have a kitchen garden in place during the program. Most of them start to have higher levels of income. [Graduating from incomes of ] $300 into $500, $600, $700 a year. Not that it’s a lot, but it’s a difference between food safety and not for them…Assets grow by 67% on average, on top of what we give them. They are making money off those assets as well.

Assets could be a herd of goats, or a bigger flock of birds, poultry, or pigs or a small nano-enterprise that they are doing, for example, a coconut water shop on or a juice shop on a highway. So income grows. Assets grow. They start saving, start becoming a part of a farmer self-help group. Sometimes they start taking credit from the loans as well. These are all market outcomes that improve.

What was very surprising for us is that the program is not designed for non-market outcomes. We know some of these things happen, but income, asset saving, and economic resilience happens through direct intervention. 

We see that kids are able to go to school and so educational outcomes improve in the family. And because they have a kitchen garden and their own food, you see health outcomes starting to improve. We see that because they’re not migrating, their mental health starts to improve. We see that women are making money and because of their income, husbands stop migrating. Their role in the family changes. The confidence that they gain from that starts to [grow and you] see them participate in local political action on their own. They’re able to have their civic responsibilities taken seriously. They go and do things for the community. It’s very transformative and you see the impact of it.

There are more things that we are discovering, like the program is very gender-aware and it works only with women. The program itself does not have gender-intentional design. It’s an economic infusion program. We are doing a gender evaluation with the Channel Foundation to see what it is doing. We know it’s a lot that is happening there, partly by design, partly by the derivative effects of the work we’ve done. We are in the early days in seeing the long-term impact of it. But we have cohorts that have graduated two to three years ago, that’s the oldest one. So we’re still studying. This year, we’re doing another study to understand it more. 

Lissa Harris: Sometimes we learn as much from things that don’t work as things that do. Is there an example of something you tried that didn’t work out but that you learned something valuable from?

Atul Satija: I’ll share something that we have tried that hasn’t quite worked and we are keen to know how to make it work. When you put a program in practice directly as a small non-profit, you put all your heart and soul into it and when you realize that the program is working well [it is rewarding]. Then you take the program to the government and you realize that implementing it through a partner, especially when the partner is the government, who is not welcoming this support, but is okay to take it, is very different. We’ve gone through a bit of this. Initially, when we [started], we said we should design the program so it works with very strong processes. Then, we over-processed the processes and gave it to the government. We realized that how they understand processes is very different.

Then we tried again to simplify and said, while they simplified the product by building strong processes, the government’s ability to implement processes is not there. We had to remove it again to keep some level of human dependence and the most important processes in place. We realized that the execution is easier that way. 

The second thing that happened along the way is that we realized that in our program, we never had to worry about the money reaching the family on time. It was a donor-funded program. Money is available to us. When the family needs the money, we have it. When they need an asset, we have it. 

In government programs, the government looks left and right and three months go by and you realize that the family is waiting for money. If that doesn’t come on time, they’ll migrate again. So how do you make sure that the program is designed for forgiveness? In certain sports, [like cricket] the bats are designed to have forgiveness. 

How do you design your programs to have forgiveness [and flexibility] so that a bad quarter where things are stuck does not impact the overall program outcomes in three years? How do you cushion the program a little bit here and there so it can accept slow progress or progress not happening in the direction you want. 

We did not have to do that in the direct program…[Overall], we got better and better in understanding what we can control and what we need to let go. The initial impulse was to control every part of the process and over-design it. We realized that that didn’t work. We had to keep it controlled in the most important places, but release the rest so that it allows for that forgiveness. 

Lissa Harris: In thinking about the support that you’ve received, is there anything that surprised you or that turned out to be really helpful in scaling?

Atul Satija: Yes and I’ll give a little bit of the context before I respond to it directly because it’s important. In our case when the government is spending, let’s say $1,000 per family over three years, our cost comes to about 10% of that cost. 

The problem is that I need a portion of that money upfront so when I go to a state government and say, you should allocate resources for poverty graduation, I know that when they say yes, I can back it up with support from my side. Otherwise, if the government says, I’m not able to raise that money, we lose a lot.

The way it works is that out of my 10 cents to government dollar, I need 60% to 70% coming from CSR [corporate social responsibility] in India, like the corporate social philanthropies. The remaining 20% comes from foundations and actual philanthropy. The sequencing for my support is, if I have support capital, unrestricted capital for this program available from philanthropy up front, I can use that commitment and money availability to go to the governments and convince them to buy into this. Once they buy into this, then I raise the remaining 70% of what I need to commit to later. If I don’t have the upfront money, my confidence in taking a punch with the government and asking them to allocate capital is not there. 

In our case, what happened is when we started getting unrestricted scale support for the program from Rippleworks and other partners like that, including the LIF Foundation and Gates Foundation, each giving a few million dollars. Collectively, that $6 million, $7 million, $8 million, $10 million that we had from various partners in unrestricted funding allowed me to go to the government and say, if you put $100 million, I can commit $10 million to your state. I could do it in multiple states in parallel because I just needed 20% to 30% of my portion of the capital. [For instance], if the government is putting 100 and I’m putting 10, I just need a $2 to $3 commitment to get the government to commit 100. It’s a 55X leverage.

The unrestricted support upfront to scale the programs became very transformative for us because it actually built my business plan. Without that, the plan has no legs. Our spending happens much later, because that $2, I take to the government, which takes six months to commit, and then the money comes a year and a half later, but I need that $2, one and a half years before the government money hits the ground to do that. And because we can reuse that capital in multiple states, it allows for that leverage. 

Unrestricted support upfront to scale the programs became very transformative for us.

– Atul Satija

Lissa Harris: You’re always looking way down the road to actual program implementation. Does that always seem far off?

Atul Satija: Yes, with the government that is the case. Philanthropic capital also comes [into play] at different points. As it starts to increase, you start making bigger and bigger commitments. If I had even more of that capital, I could have gone to governments and asked them for even bigger commitments. Government doesn’t worry about a few hundred billion here and there. Today, how much we ask the government to allocate towards poverty graduation is a function of how much upfront capital comfort I have and how much risk I can take on. It was very transformative.

Lissa Harris: What role do you think trust plays in your relationship with funders, and how can a funder cultivate trust?

Atul Satija: There are three things in trust. When I look at trust from the donor’s eyes, not from my eyes, part of it is character, part of it is capability, and part of it is performance. A donor can trust me on my character, that I’m trying to do good work with good intent and good commitment, but they may not trust me on my capability to deliver. Then there is performance. You may be capable and you may have a character, but even with capability and character not everything works. Enabling conditions matter a lot as well in delivering extra performance.

In venture philanthropy, in particular, the early-stage funders look at lesson performance because performance is all in the future. Most donors are reasonably smart in their [gut] check on character, capabilities — where the gray zones usually are in the early stage philanthropy. Performance, data and character are easy to judge.

Trust is super critical. Doing the due diligence to do your own judgment on capability or character, or even look at past performance and potential. After that, not interfering in the program because donors may end up hurting the programs by getting too involved because it’s very difficult to have context setting in different countries and geographies. So knowing when to help and when not to interfere is an important judgment to build for funders to partner well with the operating ecosystem. 

It’s very important for donors to [operate like] venture investments and private equity. You do all the due diligence before, but once you make the investment, then you go with the entrepreneur and the team to say, they know what they’re doing best and our job is to support. That relationship is critical. 

Lissa Harris: What bold shifts do you think are needed in the funding landscape to center the voices of those who are closest to problems?

Atul Satija: The voices of the communities where the problems exist are super critical. There is nobody else who can explain. Only a patient knows where the patient is experiencing pain. Doctors can guess and they can do the test, but the patient just knows because they are experiencing it every day as patients.

Communities are the ones struggling with say water or health of their animals or health of their soil or the problems with the rains not happening, or rains coming too often or at odd times, etc. They know it and they’ll tell you. Unless we listen to [what they have to say] with a lot of intent and very sharp ears, you miss the most important things. It’s super critical to have that voice at the table.

Personally, I feel like where we go a little bit haywire is when we think solutions can almost always come from communities as well. I disagree with that. Problems are best understood by spending time on the ground and having the voice of the community, but the solutions need all voices. How do you have a broader toolkit on how to solve a problem, including the wisdom of the communities, but also other tools that are available on the technology side, policy side and all the other domains and disciplines that come together to create a good solution. 

For problems, there is no better voice than the community. For solutions, it’s community plus a lot more.

Lissa Harris: What type of support did you receive from Rippleworks? 

Atul Satija: We did get a talent grant and during the COVID pandemic — a summer support grant. That was very helpful in Nudge for investing on the People and Culture side, in talent acquisition, segment marketing for our talent, branding and employee value propositions. All of these investments were done thanks to their capital. A couple of our people also went through some coaching programs at Rippleworks and overall it was successful. 

Lissa Harris: Can you share any lessons learned from receiving the talent grant to develop skills?

Atul Satija: Yes, three things happened with that and I’ll share broadly. The People and Culture team used to be 2% of the Nudge investment, earlier 1 1/2% to 2% of our budget. In the nonprofit sector in India, the salaries have gone in very different directions depending on the kind of organization. The sector has seen churn for certain skills quite a lot.

We are a generally conservative organization in salaries. We saw that a lot of people would say, for impact function or this function or that function the market is materially higher. We saw some people say, ‘I want to do this work, but I also want to balance my financial needs.’

So two things happened. One I was not ready to go without proper data and understanding of where the sector is, to start changing salary structures just to respond to short-term noise here and there. So we underwent a salary and compensation benchmarking [process]. It was done by a third party. Now, we have hired Deloitte to do more custom benchmarking for different functions of the Nudge benchmark against similar organizations. The journey of compensation benchmarking with somewhat nuanced understanding started with the talent grant. 

The second thing is within the organization, we never used to do employee engagement services. We started using a third-party tool called Extra 10X—an Indian startup. They have a very good technology platform that is built on top of practices and it’s called ENPS, so Employee NPS survey.

It does anonymous surveys of the entire organization and 90%, 95% of my employees participate in that survey. It happens every single quarter now. It gives me a dashboard of each people manager in the company all the way up to me in four buckets: our policies, processes, practices, and principles. Within processes, it will break down into leaders, managers, and teams. Within policies, it will break down into compensation, career development, communication, decision-making. 

When we started, my Employee Net Promoter score (NPS) was sitting at 34. We had a very clear dashboard on what to look at, it went from 34 to 39 to 44, then 41, then back to 44. Now we are targeting to cross 50. That investment in understanding the organization across all parts and what people are saying was really helpful. We started investing in that recently.

We also started doing internal employee value propositions as well as external employee value propositions. Manager development consultants were hired to invest in our manager development program. We started doing something called Jigyaasa. Jigyaasa, it’s a Hindi word that means curiosity. We started an online webinar series called Curiosity. A lot of people who are looking at the development sector started joining. On average, at webinars, 175 to 200 people join, and we see 30 to 40 people apply to Nudge at the end of the webinar.

All of these things, talent segment marketing, employee value proposition, employee engagement surveys, manager development programs, compensation benchmarking—we almost had zero practices like this in the organization before the [talent] grant. That played a huge role in helping us get started on this journey. Now we are investing about 3 1/2% to 4% of our budget in People and Culture.

Lissa Harris: You mentioned the importance of the unrestricted grant in being able to scale up and to attract other funding. Are there any requirements or touch points with funders from unrestricted grant funding that are helpful to you?

Atul Satija: Rippleworks has been a wonderful partner…It’s a very high-trust relationship. I would love to have a slightly more engaged partnership with Rippleworks than we have today. Part of it is our own busyness, remote geography, opposite time zones, and that they do not have any field person in India. How can we leverage the fact that Rippleworks has done the homework, done the due diligence and seen our work? How can they help us? 

I don’t know the right model. But it’s also a function of donor strategy itself. How do you figure out a way to create more capital leverage of the work that Rippleworks has already done evaluating us? Is there a soft or hard collaborative design where Rippleworks can come together with other funders and have a downstream conversation or hypothetically, once a quarter, five of our grantees will come and for 15 minutes, they’ll talk about their work?

The engagement with Rippleworks has been less so from our side. We have not invested as much and that would have been ideal. This is especially for organizations in India and it may not be true for Africa. When we look at ecosystems outside India, it’s largely to seek support. Whether it is knowledge or impact or technical assistance or funding as the biggest one. 

Sitting in India, we do not understand the ecosystem of funding in the U.S. Africa is different because Africa’s development sector is entirely built by global aid. India has had more restrictions for global aid than Africa has had. Hence, Indian organizations historically have not depended as much on philanthropy from the U.S. UN agencies, multilaterals, bilaterals —The Big Eight— there is just nobody that understands that game. How can the Indian ecosystem learn about the broader ecosystem of support from the U.S.? That would be of huge value.

Nudge is a relatively more aware organization of the funding ecosystem in the U.S. relative to some of our peers, but I still feel like we’re operating in the dark most of the time ourselves. So proactive partnership to create some of that knowledge, best practices, sharing case studies [would be beneficial]. 

India’s largest non-profit, as you know, is $50 million, minus Akshaya Patra Foundation, which is now touching $100 million. India doesn’t have [multiple] $50 million non-profits. In a country where the nonprofit sector is so small, at least on the budget side, this would be of huge leverage.

Lissa Harris: How did the capacity-building support from Rippleworks impact your work and do you have any advice for funders when it comes to deciding what kind of non-monetary support will be useful?

Atul Satija: We’ve seen that most of the horizontal help, like the help in marketing, communications, fundraising, strategy, people capabilities, leadership capacity, all these horizontal domains are super critical. 

Sometimes there are knowns and unknowns, for example, you’re not even aware of what your organization is missing. In most cases, people know what can unlock the next level of growth. Our good entrepreneurs have some sense of it, if not a very accurate sense of it. So creating that horizontal support ecosystem is very healthy.

In Nudge, when I look at my portfolio of the 200 organizations we support, the number one request from the organization is help getting the next check, or fundraising help. We chose to say that, look, we can’t be good in everything. Let’s just try to be the best in helping our portfolio get access to the downstream capital from us. If we do that well, then we know that we are passing the baton to the next one to build that muscle well.

For that, everything that’s required, helping them hire fundraisers, helping them go through fundraising courses, helping them understand the funding landscape, helping them understand how to write good proposals, maybe communications and social media. Everything is linked to that one piece you’re trying to solve for the portfolio. Another approach is to say, should we try to provide all services?

Rippleworks’s strategy is great because they have designed themselves to be light, and they are relying on a large ecosystem of horizontal competence from a variety of people. Hence, that matching is important. They become good at finding capacity in the U.S. for various people and connecting them with organizations. That model works.

For other funders that model could be specific saying, we’ll be the best in building leadership capacity for all our nonprofits, and that itself is great. You can build up from that. Both [approaches] work.

Lissa Harris: Since you received both capacity-building support and financial support from Rippleworks. Can you share your thoughts on the timing and sequence of how that unfolded? 

Atul Satija: Our scale grant happened first, talent grant happened second, and then the support that we are getting from them in various capacities is happening in parallel. Rippleworks was just starting to look at India when our scale grant came. We were one of their early India grantees. Now, they’ve probably increased the portfolio. It worked out for us. For them as a funnel, it’s a good design to start engaging with the portfolio or ecosystem to start providing support. The ones that you see are starting to find traction, through that process, you can find a scale grant pipeline. That works well. 

Lissa Harris: What does the broad picture of funding look like for you and where does most of your funding come from, whether government or foundations?

Atul Satija: In large part, our programs are funded by the government. But we don’t take government money. We encourage the government to allocate money for poverty graduation design and that money goes to a quasi-government department, and we provide our money in-kind to our people through government programs. If you exclude the government money that doesn’t touch much.

Our portion of the money that we work with varies by year. If you take the three to four years, about 60% [of our funding is] coming from corporations in India and then 30% coming from foundations in India and outside of India. The last 10% would be individual HNIs, high net-worth individuals, who are giving us the money and that’s mostly going to build a corpus for us. Think of it as an endowment. We take corporate CSR money for programs, foundation money for unrestricted, and individual money for corpus to have all colors of money from all channels. We clearly demarcate that for ourselves.

Lissa Harris: You mentioned the pace of government rollout for programs. What other challenges have you faced in navigating support for the work that you do?

Atul Satija: It’s two-part. We are able to help [persuade] the bureaucrats in India well, but [persuading] the ministers has been hard for us. We have not been able to get to the government at the highest levels to convince them to work with us at the speed and scale at which we want. We’re still learning and building that muscle and skill. We don’t know what the right influencing mechanisms are or what others have tried to use that has worked for them. 

The second piece is we have done reasonably well in convincing the donors to come and support us, but our bandwidth to understand how to work with the donors has been a huge missing link. The organization understands what to do and how to do it, but the bandwidth and the capacity, on the fundraising team [for instance], has been hard.

We have one person in the U.S. I have had five positions open in the U.S. for the last year, but finding good fundraisers and investing in building that team has been the hardest, especially in the U.S. for us. In India, it’s no different. Building a very strong resource mobilization team, or development team has been hard. We’re not able to institutionalize that knowledge to start seeing the scale, which we have seen in some U.S. organizations. That’s the biggest bottleneck.

Building a very strong resource mobilization team, or development team has been hard.

– Atul Satija

Lissa Harris: If you were to give advice to funders who want to see social ventures like yours be successful, what would you tell them?

Atul Satija:The Indian ecosystem needs, beyond the money, strong partnering to help build a stronger base of support from the U.S. and help understanding how the U.S. landscape works. Second, how to hire and build a team in the U.S. that helps you build an organization that has support from the U.S. coming as a proper channel. How to find collaborative pathways with other donors and downstream funders for Indian organizations and things of that nature. We actually have had very good experience working with venture philanthropy donors. 

Lissa Harris: What would you say are the top three that you need to unlock your ability to scale and sustain this work?

Atul Satija:The number one thing is how do we get governments to allocate funding? How do we mainstream economic inclusion in India by convincing the ministers in the country to prioritize it? That’s a skill we have to develop and sell. That’s missing right now. The second is our ability to support the government in implementing with quality. That requires a lot of nuanced understanding of how to build systems and processes and structures inside the government. The third is the people capacity. Within Nudge, having the right level of succession planning, leadership of on-ground capacity to work with the government is the biggest one. The people capacity to work on these are the big constraints we have right now.

Lissa Harris: Thank you for your time. 

Lissa Harris is a freelance reporter, science writer (MIT ’08), and former local news entrepreneur based in upstate New York. She is currently working as a consultant on capacity-building and local solutions-oriented community projects in the rural Catskills.

* This interview has been edited and condensed.

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