Accelerator grant

In a pay-for-success through grants structure, a CSR funder pays an NPO only after an independent evaluator confirms the agreed social outcomes were achieved. That much is the baseline deal.

An accelerator grant is the extra reward for doing better than the deal required. The workbook's own words: the CSR funder pays out the escrowed capital "partly to the NPO in the form of an accelerator grant up to 10% of the program cost in case the NPO exceeds the pre-defined outcome targets."

It is not meant to fund the core programme again. The workbook says it is designed to support non-programmatic areas — things like research and capacity building — that the core outcome-linked payment does not cover.

The accelerator grant sits inside the four-party pay-for-success through grants structure (section 2.3.1.3):

1. The CSR funder puts capital in an escrow account, earmarked for a pre-defined period (the workbook's own example: 3 years).
2. It appoints and pays for a third-party evaluator, distinct from both itself and the NPO.
3. Outcomes and targets are jointly set up front by the CSR funder, the NPO and the evaluator.
4. An interim funding partner — typically a domestic philanthropic organisation — funds the NPO's actual implementation while the outcomes are being worked toward.
5. At completion or at milestones, the evaluator verifies the outcomes achieved and reports to the CSR funder.

If the NPO met the targets, the CSR funder pays the escrowed capital out — partly to the interim funding partner (to cover its implementation costs) and partly to the NPO. If the NPO exceeded the pre-defined targets, the portion paid to the NPO includes the accelerator grant of up to 10% of the programme cost.

If the NPO did not meet the targets, the CSR funder either rolls the capital over in escrow (if time remains) or routes it to Schedule VII items such as the PM's Relief Fund (if the period has ended). Interest accumulated in escrow simply stays in the account.

Illustrative figures.

A CSR funder places ₹2 crore in escrow for a 3-year nutrition programme run by Anna Poorna NPO, with targets jointly set with a third-party evaluator.

At the end of year 3, the evaluator confirms Anna Poorna reached 112% of its target number of malnourished children brought back to healthy weight — exceeding the pre-defined target.

Had Anna Poorna fallen short of its target instead, no accelerator grant would be paid, and — if the 3-year window had already closed — the CSR funder would route the unused escrow balance to a Schedule VII item rather than to Anna Poorna at all.

Chapter 2, section 2.3.1.3 (Pay-for-success through Grants), names the accelerator grant as the reward mechanism for exceeding outcome targets. Expect a question on the cap (10% of programme cost), on what it is meant to fund (non-programmatic areas such as research and capacity building), and on when it is paid (only if targets are exceeded, not merely met).

• 10% is a ceiling ("up to"), not a guaranteed bonus — it is paid only if the NPO exceeds, not merely meets, its pre-defined targets.
• The accelerator grant funds non-programmatic areas — research, capacity building — not another round of the same intervention.
• This exists only in the pay-for-success-through-grants structure, funded by CSR capital in escrow — it does not appear in the pay-for-success-through-lending structure, which uses a first-loss guarantee instead.
• If targets are missed and the escrow period has ended, funds go to a Schedule VII item (e.g. the PM's Relief Fund), not back to the CSR funder or forward to the NPO.
• Do not confuse the accelerator grant with the interim funding partner's payment, which reimburses implementation cost, not outcome performance.