Social impact and making money go hand in hand

Avanti Fellows, a not-for-profit venture to help under-privileged students get into IITs and other good colleges has now added a for profit segment to its business. Here's why

Had Akshay Saxena, 31, not stepped off the much-treaded path his education at Indian Institute of Technology, Mumbai, his career at Boston Consulting group and his master’s at Harvard University were hurtling him towards, the course of 18 year old Vedant Somani’s life might have been different.

Somani, born and bred in a remote district in Andhra Pradesh, would probably never have made it to IIT, Chennai. His life would, in all likelihood, have followed the path of his own father’s — an insurance agent who supports his family of four on an annual income of less than Rs 3 lakh. The indelible impact of Saxena’s decision on Somani’s life cannot be overemphasized.

Ankur Goel, from Yamuna Vihar in East Delhi, studying in his first year at IIT Delhi, says his father runs a small business, earning an yearly income of about Rs 1.8 lakh to support his family of five. Goel first heard of the Joint Entrance Examination (JEE) when Avanti came to his school, Rajkiya Pratibha Vikas Vidyalaya, and spoke to them about it. Goel took the enrolment test and was selected as an Avanti Fellow. He was given free coaching at Vidyamandir— at the time Avanti had not yet set up its own learning centers— and cleared the JEE exam. He made it to IIT, Delhi, the first in his entire extended family to have done so.

Set up and off the ground in 2012, Avanti Fellows helps children from low-income background, who have virtually no hope of making it to an IIT, medical colleges or any good engineering college, do so. Initially, Saxena (co-founder and president) and Krishna Ramkumar (co-founder and chief executive officer) — both from Indian Institute of Management, Mumbai — had thought they would provide mentorship to such students and help them make their way to such institutes. Both were keen to give back to the society in a way that connected to their alma mater, from which they learned much.

But over time, they realised it was not that these children lacked mentorship. The problem was the quality of education they received here in India, which was atrocious. “You can mentor them all you like; it won’t get them anywhere. We realised we had to teach them,” says Saxena.

They also realised they had to teach the kids themselves as the conventional coaching institutes were very expensive and access for children from under-priviledged backgrounds was almost impossible. They also had to teach differently for the model to be viable, with the use of more technology and less teacher time.

So, Avanti decided to experiment with the way teaching was done. Saxena managed to rope in Eric Mazur, his dean for physics at Harvard University, to help design innovative classroom material that focused more on peer learning and, in a way, converted education from an art form to a process. This meant Avanti learning centers did not need teachers who were experts in math and science themselves. As long as the teacher was alert, kept an eye on which students were coping and which were not and the material at hand, the way the class was structured did the rest. There was no conventional lecturing in classrooms.

The students were also assigned mentors (these are volunteers selected by Avanti Fellows) who helped them through the process. Both Goel and Somani say without their mentors, they may not be where they are today.

To start with, the Avanti fellows programme was run at the Navodaya government schools with a small group of 25 students, of which almost 40 per cent made it to IIT and others to reasonably good engineering colleges.

But over time, the partners realised if they need to innovate, create a new paradigm with some scale, they needed money. So, Saxena and his partner decided to set up a for-profit model that runs parallel and supports the non-profit venture, to help build scale, expand faster all over India and attract funding more easily.

So, Avanti separated the boards and functioning of the two businesses, with Saxena being the only common link. The non-profit will serve students who will never be paying customers and will work with government and municipal schools with the most impoverished sections. The for-profit can support this as the two serve different audiences. Avanti fees for coaching students is around Rs 35,000 versus Rs 1-1.5 lakh at a conventional institute. The Avanti teachers are not subject experts and are not as well paid as the conventional coaching institute teachers, relying much more on the content and pedagogy developed for Avanti.

The 18 Avanti learning centers, spread all over Delhi, Mumbai, Kanpur and in-learning centers in Chennai have students coming in for 15 hours a week. In certain cities, the centers cater to both paying and non-paying students. From this year, Avanti will start new centers in places such as Muzzafarnagar, Bijnor, Chapra in Bihar this year. These places have very poor science and mathematics education even in high school and there are virtually no proper coaching centers.

In 2011, the company had three employees and 25-odd children. Today, the company has over 100 full-time employees, of which 70-odd work in the for-profit venture and 30 in the non-for-profit. In the coming academic session, the total number of children is expected to be around 5000.

Funding has been easier with the emergence of impact investors (companies investing in projects that have a wider social impact. These investors provide patient capital up front and allow companies like his to develop their model without too much pressure. Once the model is set, one can go to commercial investors and raise funding since it will be a commercially viable business, explains Saxena. Avanti’s first round of funding came from Pearson Affordable Learning fund. Last week, the company received a second round of funding from PALF and the Dell foundation.

Further, he says since social impact is hard cored into the business, even when he raises commercial funds, his business remains a social enterprise. The approach has been that we want to solve this problem. If we solve this problem, there is money to be made and we want to make that money, says Saxena, arguing that if the goal was simply to make money, there are many easier and better ways of doing it.