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Home >> NPOs >> Pratham

A point of light in Mumbai

By developing a low-cost distribution channel, an Indian nonprofit organization can deliver child education and nutrition programs for just a few dollars a child per year.

The McKinsey Quarterly, 2001 Number 1

When designing a social-welfare program for poor countries, many nongovernmental organizations (NGOs) attempt to replicate its Western, middle-class counterparts. Preschools are a good example: they are sponsored by multinational funding organizations, which rent or build classroom space, hire certified teachers, purchase supplies, and build central administrative offices in each city where they operate. Such institutions do create an excellent learning environment, but at $30,000 or more in initial investments (for preschools that can accommodate 30 to 50 children) and up to $75 per pupil a year, they are costly. Reaching tens of thousands of children in this way would be prohibitively expensive for most community-based organizations in developing countries.

But the story of Pratham, a nonprofit institution in India (see sidebar, "About Pratham"), proves that a small organization can make a huge difference, in this case fighting the formidable challenges of illiteracy and malnutrition among the poorest children in Mumbai (formerly Bombay). Pratham’s basic approach—identifying underused resources and making full use of them—holds many lessons for other small social-service agencies around the world.

The founders of Pratham knew that the key to learning, especially for preschool children, is the interaction between teacher and student; all else is secondary. Pratham thus decided to rely exclusively on donated infrastructure and to adopt a novel approach to building a network of effective teachers. Its goal was to create a preschool program whose initial capital costs would be minimal—even zero—and whose ongoing costs would amount to less than $10 a child annually.

To accomplish this, Pratham has developed innovative solutions to the age-old nonprofit problems of raising money and recruiting staff. First, by forming links with other community organizations, local governments, and corporations, Pratham has spent almost no money assembling the infrastructure needed for its thousands of preschools and other educational programs. And by tapping into an unusual pool of workers, it has built—at very little cost—an extraordinarily energized and effective corps of teachers, most of whom have no higher education and no work experience.

This "capital-light" strategy has created a low-cost but effective outreach program that serves more than 100,000 children in Mumbai and can easily be scaled up. In fact, Pratham is now using this network to provide a raft of other useful services at very little incremental cost. A health program started in 1999, for example, costs only 50 cents a child each year because it is administered through Pratham’s preschool network.

Building the system

For most of its six-year history, Pratham has not owned a single building or vehicle or paid rent for any space, including its administrative offices. Only recently was the organization forced to build rooms for a number of classes, on donated land, after some of them had lost their premises to demolition three times in a row—one of the hazards of relying on donated space. Taking into account average rental rates in the poor areas of Mumbai, this reliance on free space almost halves the program’s cost, saving $80 to $100 a year on each balwadi ("preschool").

By adopting a decentralized model of neighborhood classes, Pratham ensured that small children could easily walk to school. Classes are held in spare rooms in community centers, mosques and temples, municipal schools, or the buildings of other organizations. When nothing else is available—as is the case for over half of the balwadi—classes meet in teachers’ homes (Exhibit 1). A partnership with the Mumbai government permitted Pratham to hold its remedial-education and computer classes in municipal schools.

Partnerships have provided the necessary infrastructure and more. Several corporate partners, such as ICICI (formerly the Industrial Credit and Investment Corporation of India) and Hindustan Petroleum, have gone far beyond their typical level of involvement with nonprofit organizations by providing office space and equipment and by lending employees, at full salary, to serve on Pratham’s executive group. A local university and an international foundation fund other members of the executive group.

Other corporations have committed more modest financial support or in-kind contributions, such as computers and employee volunteers, who play a variety of administrative and support roles in Pratham.1

Pratham quickly realized that such partnerships would require an open organization that welcomed people at different levels and locations, and on a variety of terms. Instead of limiting donors to an arm’s-length role, as many nonprofits do, Pratham invites companies to be part of the organization, creating a powerful sense of ownership among both donors and staff members. This policy encourages personal initiative on the part of the people connected with Pratham, ranging from the young balwadi teacher who asks a friend to help start another balwadi to the corporate chief executive who asks another CEO to help start a Pratham program in the city. Successful partnerships are usually created by key corporate employees who have a strong commitment to Pratham and lead their companies’ involvement with it.

Clearly, this policy involves trade-offs. A lack of control over the physical infrastructure means that class venues are sometimes below par: an outdoor classroom becomes unusable during heavy rains, for example. It is harder to create an effective management group when members come and go, and welcoming the various contributions of many different donors requires creativity and tolerance. But a willingness to welcome managers from a variety of companies has allowed Pratham to build a more professional management team than most nonprofits have, and the diversity of viewpoints has sharpened its strategy. Most important, Pratham’s capital-light approach has enabled it to grow and to reach more children (Exhibit 2)—a real achievement in a nonprofit world where most organizations remain small.

In fact, Pratham has achieved its goal. Each balwadi costs an average of only $7.50 per child a year, allowing the organization to expand the program rapidly to reach 53,000 children. Given this success, Pratham has replicated the balwadi model in order to provide a bridge program for older children who have dropped out of school. Its costs per pupil are higher than those of the balwadi because teachers have a longer school day—five hours versus three. Last year, Pratham launched a computer-assisted-learning program that costs only $4 per student a year because corporations donate the computers, and municipal schools provide space and utilities such as electricity and heating. It also launched a remedial program that places community representatives as teachers’ assistants in municipal-school classrooms to help children who are struggling academically. On average, all these programs cost roughly $10 a year per pupil (Exhibit 3).

Pratham’s approach has led to unexpected benefits as well. The requirement that each neighborhood find a rent-free place for preschools has ensured broad community involvement and support. Conducting classes in public venues has increased awareness and acceptance among parents.

Developing effective teachers

Although Pratham’s capital-light strategy has enabled it to grow, the organization’s ability to develop committed and loyal teachers is the key to its social impact. Recruiting and training more than 6,000 teachers and 250 supervisors who receive below-market stipends has not been easy. Ensuring the consistent delivery of quality instruction is perhaps even more difficult, considering that most of Pratham’s teachers have a high-school education or less and no teaching experience.

Recruiting and retention

Overcoming these problems has required creative new solutions to the nonprofit version of the "war for talent" because Pratham pays balwadi teachers only 250 rupees (about $6) a month. Unskilled jobs such as domestic service pay two to five times as much. Sometimes Pratham’s teachers earn up to 200 rupees more from tuition fees, but many waive them for poorer parents. From the outset, it was obvious that Pratham couldn’t afford certified teachers and would be unlikely to attract people already working full-time for a living. Instead, the organization decided to recruit people from outside the workforce and to give them extensive training.

In India, as in many other developing countries, unmarried young women traditionally don’t work outside the home. These women, many of whom have had a fair amount of education, make ideal balwadi teachers. To attract them, Pratham has seen to it that balwadi teachers work only part-time and in their local communities. It has also publicized the importance and social impact of the program, thereby increasing the job’s social stature, and has actively cultivated the organization’s brand name.

Young women who would otherwise not be working thus join Pratham to help their communities. Since its first wave of hires, found as organizers canvassed Mumbai’s neighborhoods to sign up children for the program, recruiting has relied exclusively on word of mouth. Turnover is low: until two years ago, when nearly a thousand top-performing balwadi teachers moved on to teach bridge courses or to serve in the remedial program, most Pratham teachers had worked for their balwadi since its inception. The few teachers who leave typically do so because they are moving or getting married, though many others who marry stay on. Job vacancies are never even listed, since departing teachers find and train replacements before leaving.

To inspire this kind of loyalty, Pratham builds a sense of community and empowerment among its staff, much as it does among its corporate partners. A balwadi teacher views her class almost as a start-up venture, since she is likely to have started it and developed its activities herself. Pratham’s highly decentralized organization fosters this sense of ownership: balwadi in Mumbai are divided into 50 autonomous mahila mandals ("women’s groups"), each registered as a separate NGO. Budgets, training, and oversight processes for all programs are determined centrally, but all other details are left to each teacher and ward. Pratham’s ultimate vision is for these women’s groups to become completely self-sufficient, linked to headquarters only for training and oversight. Already, several balwadi now finance themselves through a combination of tuition fees and contributions from local charities. This decentralized approach has solved a problem all large organizations face: how to release the creativity and energy of thousands of people and avoid bureaucratic inertia.

Even as new programs have been added, Pratham’s recruiting strategy has proved unexpectedly robust. When the organization started to open its computer-training centers, it was thought that a more formal recruiting program would be needed. Before recruiting began, however, word of mouth generated a surprising number of applicants (including some who had better-paid jobs) with basic computer skills. These people wanted an opportunity for advancement, and the computer-center teachers have since formed their own companies and are franchising their model in poor areas of Mumbai.

Pratham’s recruiting strategy can easily be applied outside India. In all countries, a large number of people don’t work full-time, for a variety of reasons. The challenge for nonprofits is to use their creativity to develop positions that can make use of the knowledge, skills, and enthusiasm of these people.

Ensuring high-quality instruction

Many nonprofit organizations—and many companies—believe that giving workers freedom means ignoring performance management. Pratham has taken the opposite approach: by maintaining strict performance standards and providing systematic training, it can turn people without teaching experience into effective instructors who then have the freedom to develop their balwadi.

Today, Pratham maintains 24 teams responsible for both preparing and evaluating teachers. The teams run rigorous pre- and in-service training programs for them, attend their meetings, and make frequent unannounced visits to every balwadi, where teachers are evaluated on how children respond and behave in class. Children, in turn, are evaluated for physical, behavioral, and cognitive development, and report cards are sent home three times a year. This type of formal training and monitoring infrastructure is rare in the nonprofit world because of budget constraints and a reluctance to spend money on overhead. But Pratham has found that such an infrastructure is critical to achieving the organization’s goals.

The ultimate test of Pratham’s strategy is its impact on educational outcomes, and here the evidence is overwhelming. A recent study found that Pratham’s balwadi students are far more likely to go to primary school than are children who haven’t been to preschool.2 More than 40 percent of the children in Pratham’s bridge course program are now in school, and tests show that they are doing better in language arts and mathematics than their classmates. In the remedial program, tests show that the number of children with no literacy or numeracy skills dropped by half and that the proportion of older children achieving basic educational competencies doubled.

Leveraging the organization

Greatly improving the educational prospects of more than 100,000 poor children—at a cost of about $10 a year for each child—is impressive enough. But the story doesn’t end there. With a low-cost delivery model firmly in place, Pratham can now provide a variety of other services at very little incremental cost.

In 1999 Pratham took the first step to leverage its organization. It knew that the key to a successful social-service program is finding a way to reach the target population, especially if it consists of preschool children, who are beyond the reach of postnatal programs, but too young for school. Pratham’s preschools, as well as its other educational programs, are thus an important delivery system that could be leveraged for a variety of purposes.

In starting up a health program for preschool children, Pratham knew from the experience of its own balwadi that for its students, malnutrition was a serious problem affecting both attendance and performance. A survey of 250 children found that more than 90 percent were anemic, nearly 80 percent were clinically malnourished (they had less than 90 percent of the median weight for their age group), and 50 percent showed clinical signs of multiple vitamin deficiency, including conjunctivitis, skin inflammation and dryness, and inflammation and fissuring of the tongue. Most of the children suffered from intestinal parasites and lacked basic immunizations. Malnutrition had clearly put all of the children at risk for long-term damage and developmental delays, ranging from blindness and respiratory disease to stunted growth and reduced mental capacity.

To leverage the existing network of preschools, it was necessary for treatments to be cheap, require no medical skills to administer, have few side effects, and address highly prevalent, easily treatable conditions. The overall program had to minimize the time and training required of teachers. Three treatments fit the bill: a vitamin A supplement taken every six months, an iron–folic acid supplement taken about 120 days a year, and albendazole, a medication taken once every three months to eliminate intestinal parasites. To measure the impact of the treatments, each child’s height and weight are measured and recorded every three months.

Pratham hired only 40 supervisors to oversee each of the health "camps" where treatments are given. Teachers received several hours of instruction on administering the treatments, on recording height and weight, and on explaining the program to parents. The payoff for using the existing network of preschools is a health program that costs only 50 cents per child a year—less than one-fifteenth of the cost of creating a program from scratch.

The impact of Pratham’s health program has been quite dramatic. After only nine months, 73 percent of the children had a weight gain greater than expected for their age. The proportion of children above the 50th percentile of weight for their age actually increased to 18 percent, from 3 percent (Exhibit 4).3 The children have more energy, better attention spans, and sharper memories. There have been fewer sick days. Over time, the number of mild illnesses that turn into severe (or even life-threatening) ones should fall. In the long run, the children in Pratham’s health program will be better prepared to start and succeed in school.

All organizations struggle with the choice of sticking to a narrow mission or expanding. Expansion entails risks: an organization can dilute its effectiveness and erode the support of its donors if it strays too far from its original objective. But in showing how new programs can be implemented quickly and cheaply through an existing distribution system, Pratham’s health program provides an innovative model for nonprofit groups to follow. Pratham itself could team up with other nonprofits and allow them to provide services to its children. After all, many kinds of intervention in the lives of children, such as the health program, might indirectly contribute to Pratham’s educational mission by improving their overall welfare. Just as the business world is moving away from vertical integration and relying more on outsourcing and specialization, nonprofit groups must now learn to join forces and leverage one another’s strengths.

At a time when most nonprofit organizations that address poverty in the developing world have built costly infrastructures, Pratham is a refreshing alternative. By developing partnerships that go far beyond traditional donor relationships, it has built a capital-light organization whose main asset is its people. By developing a systematic and rigorous training and monitoring process, it has created a network of effective teachers who have relatively little education or job experience. Now the organization is leveraging its critical asset—a low-cost distribution channel—to expand its impact.

A low-cost, replicable program model has made it possible for Pratham to grow rapidly and to expand beyond Mumbai. By adopting this strategy, even small organizations will find that they can have an enormous impact.

About the Authors

Rukmini Banerji is a member of Pratham’s executive group; Madhav Chavan is Pratham’s cofounder and program director; Paresh Vaish is a principal in McKinsey’s Mumbai office; Atul Varadhachary is a consultant in the Houston office.


1 Pratham’s corporate support has broadened to include several large donors, which contribute $20,000 to $200,000; 15 medium-scale donors ($2,000 to $20,000); and more than 250 small-scale donors (up to $2,000).

2 A larger (and soon-to-be-completed) study is comparing the educational achievements of Pratham’s students with those of students without preschool experience.

3 The height of the children will start to catch up after a year or two of treatment, but many of them will probably leave the program before these gains are registered. 

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