Visit to the Dakshana Foundation

Effective Philanthropy in action

On 12th September 2022, I wrote a note called “Investing discipline applied to Philanthropy”. It talked about a remarkable not-for-profit education organisation that was started by the US-based investor and writer, Mohnish Pabrai. The organisation is called the Dakshana Foundation. You can read the September 2022 note here.

On Boxing Day 2023, I had the opportunity and privilege to visit Dakshana Valley near Pune in Maharashtra, India which is the main site of the Dakshana Foundation. Every year, Dakshana takes 600 bright but economically disadvantaged children and coaches them for a year.

They come from some of the poorest families in India where the total family income is US dollar 1,000 a year or less.

The children are coached for elite university entrance examinations: the JEE and the NEET. The former is for the elite Indian Institutes of Technology (IIT) and National Institutes of Technology (NIT). The latter is for the medical schools such as AIMMS in New Delhi.

Dakshana has a track record of placing 65% to 80% in these elite institutions. Those who do not succeed can try again or qualify for places in other high ranking institutions. This compares with a national overall success rate for JEE or NEET of 2-3%. These exams are a middle-class and lower middle-class obsession in India and many parents will pay thousands of dollars to Commercial Institutes who coach for these exams.

Dakshana's track record is off the charts. This reflects the great dedication to study on the part of the children and make the very most of their unique opportunity.

The fully loaded cost of getting each elite place is about USD 3000. The children will easily get highly paid jobs and raise their total extended family income to USD 5000 immediately and to USD 10,000 and above in a few years. This is a tremendous ROI on the USD 3000 spent per child.

They will pull their families out of poverty and inspire their communities.

The occasion on Boxing Day was the annual Felicitation Ceremony for students who left this year (600 of them) and have just started at universities and colleges.

To see them all 600 of them in their gowns and mortar boards lining up to receive their medals and certificates was a truly inspiring sight. There was a strong energy and excitement in the air. They greeted their Dakshana teachers with great affection and deference. They were polite but a quite determination shone through. I thought to myself these young people are an important part of the future of India.

One of the speeches was given by a student who had an All-India Rank (AIR) of 120 in the NEET and is studying at NIIMS In New Delhi. He spoke with great passion and fire. He thanked the Dakshana Foundation, his teachers, his fellow students and his parents.

Each student had to come up on the stage to receive a medal and certificate from Mr Pabrai or one of the other eminent guests and a picture was taken. Many of the students reached out to the feet of the presenter in a touching, traditional show of deference and humility.

The location is isolated and costly to reach. Only a few parents were able to attend but what a great occasion it must have been for them.

Dakshana started in a small way in 2013 and 7000 students have passed through it over the last ten years. There are plans to increase the annual intake to 1200 and eventually to 2600. This will need funds.

In the long-term, the institution become self-funding and self sustaining as the management, the teachers and the money will come from the fast growing alumni community. However, money is needed to scale up this amazing life changing project at the moment.

Anybody who is interested in Dakshana's work should go to their website and find out more information. In particular, they should read the detailed and excellen Annual Report written by Mr Pabrai in the same spirit as his hero, Warren Buffett.

One of the three new lecture halls at Dakshana Valley which will be needed for the huge expansion in the number of students. This was generously funded by an Indian-origin supporter based in the United States.

A student receiving their awards from Mr Rajiv Jain, the CEO of Bajaj Finance which is a US$ 57bn finance company. Mr Pabrai looks on.

I strongly believe it is a great organisation which achieves a measurably very high return on investment on the resources it deploys. Any contribution, however small, will be gratefully received and very effectively deployed.