“Social entrepreneurs identify resources where people only see problems. They view the villagers as the solution, not the passive beneficiary. They begin with the assumption of competence and unleash resources in the communities they’re serving.”
– David Bornstein, Author, ‘How to Change the World: Social Entrepreneurs and the Power of New Ideas.’
In India, small scale and community-based organisations are instrumental in creating employment opportunities in rural areas. Small businesses account for around 40% of the total exports from India.[1] Over the past decade, the innovative and lucrative impact of the Social Enterprise (SE) model has led to notable growth in the sector. The SE space is populated by a strong network of organisations providing invaluable support to early-stage social entrepreneurs in the form of expertise, resources, and networks, helping them to build their enterprises. According to the British Council, India is already home to around 2 million SEs.[2]
“A mixture of professionalism, efficiency and genuine interest and concern for our work. The Foundation would probably not be registered today if it was not for iProbono. It was not just the money saved but the support to get something done which we were unsure how to do. So iProbono’s support made something happen, which otherwise would have taken much longer.”
Rahul Noble Singh, Chief Financial Officer of Rangsutra Crafts India
Rangsutra Crafts India (Rangsutra), established by Sumita Ghose in 2006 as an artisan collective, is one such social enterprise. When Ghose was unable to acquire a loan, she reached out to the artisans she was working with through Urmul Trust in Rajasthan. One thousand artisans pitched in INR 1,000/- each from their own savings to kick start Rangsutra. Now the organisation works with around 3,500 artisans from across the country and 2,000 of them are Rangsutra’s shareholders. On average, an artisan affiliated with them earns INR 5,000/- per month.
Rangsutra seeks to bridge the gap between rural artisans and global consumers to develop sustainable livelihoods and revive India’s rich craft heritage. Their core value is respect for both the producer and the consumer; they ensure a fair price to the former as well as quality products to the latter. The organisation is largely women-centric; 70% of the members are female artisans. They develop traditional craft skills like hand embroidery and handloom weaving. Since 2011, Rangsutra is also focusing on workshops for the development, monitoring and quality control of new products. To reaffirm their faith in the artisan shareholders, they decided to take on the entire gamut of operations from designing and production to marketing, in its 10th year of business.
As an unlisted public limited company, Rangsutra was significantly burdened with legal compliances while simultaneously managing the important relationship with their 2,000 shareholders. Rangsutra approached iProbono for legal advice on shifting compliance from FabIndia and going independent. They wanted to change their for-profit company model into a non-profit entity in order to attract funds and disaggregate the social aspects of their work, such as cluster development, training, and capacity building, from the more commercial aspects. They required legal advice to determine the best vehicle for the entity.
iProbono met Rangsutra’s requirements with lawyer Priti Suri of PSA Legal, who advised them to register the entity as a Trust, drafted the trust deed and assisted them throughout the process of registration. Satisfied with the same, Rangsutra later sought advice on the following as well:
- Registration under section 12A of the Income-tax Act, 1961.
- Registration under section 80G of Income-tax Act, 1961.
- PAN Card application for the Trust.
In addition to the legal advice, our lawyer connected them to the chartered accountants from Harpreet Jaspreet & Associates, who provided requisite financial services for Rangsutra.
Rangsutra is transforming the lives of many weavers and artisans across the country, from Rajasthan to Manipur. iProbono is extremely proud to have contributed to the success of such an empowering initiative and we hope to continue our association with them in the times to come.
[1] Annual Report, Ministry of Micro, Medium and Small Enterprises, Govt. of India, 2017-18.
[2] British Council, ‘Social value economy; A Survey of the Social Enterprise Landscape in India’, 2016.
