Giving Compass' Take:

• Aastha Singal explains how Indian philanthropy is falling short and how individuals and organizations are working to unleash its potential. 

• How can funders share encouragement and learnings across cultures to encourage global giving? 

• Learn about the opportunity to scale impact by giving in India. 

While India has witnessed a strong philanthropic momentum in the recent past, a significant portion of this comes from a few established figures who continue to lead individual giving.

According to the Indian Philanthropy Report released by the Bain & Company, the individual philanthropist funding has seen strong growth of 21 per cent per year since 2014, ultra-rich contributing to about 60 per cent of the total private funding in India, estimated at INR 43,000 crore but 80 per cent of it comes from Azim Premji’s donations to his philanthropic organisation alone.

The report suggests that if Premji’s contributions are excluded, donations of INR 10 crore and above have declined 4 per cent in India since 2014. Ironically, the proportion of individuals worth over $50 million has grown by 12 per cent and is expected to double in both volume and wealth. The combined net worth of UHNI household can increase from INR 1,53,000 crore in 2017 to INR 3,52,000 crore in 2022.

According to the Giving USA, the individual and bequest contributions to the US’s total private funding in 2017 were approximately 80 per cent. Upon comparing India’s weighted average participation with the US, the Bain report suggested an additional strategic giving potential of INR 40,000 to 60,000 crore from large UHNI donors alone, indicating a potential increase of 2.5 to 3.5 times the current level of giving.

Indian philanthropy sector is a closed system with little publicly available data and a standardized review process. “There are several HNIs in India who are involved in philanthropy. Many choose to keep it confidential, some support local issues (religious, or close to their location). Some of them hesitate to fund NGOs fearing the funds may be used transparently,” stated Nivedita Das Gupta, India Country Head, Miracle Foundation.

Moreover, the system fosters a lack of trust between funders and NGOs and an aversion to risk. Most NGOs operate in the unorganized sector and hence convincing corporates to contribute capital for a cause becomes challenging, leaving the funds unutilized. “Everyone in the philanthropy eco-system are (treated as) infallible saviours, creating a reluctance to admit error and share failures and open up our work to public scrutiny,” Shah expressed.

While NGOs complain that funders are apathetic to grassroots challenges, refuse to fund organisation costs but still demand detailed audits and monitoring reports, want great leadership but at inadequate salary costs, funders believe that accountability and transparency are absent in the sector, NGOs cannot or do not want to scale, do not measure their work adequately or effectively and are poor at fundraising, he added.

Read the full article about Indian philanthropy by Aastha Singal at Entrepreneur India.