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India’s Philanthropic Ecosystem

Philanthropy plays a groundbreaking role in enabling social change and impact with the society under the structure of transparency and accountability. First published in 2016, this piece discusses the advent of philanthropy in India.  

Over the last few years, global philanthropy is on the rise, primarily due to the initiative taken by the Bill and Melinda Foundation. They played a fundamental role in increasing awareness on humanitarian and social issues which in many ways set the benchmark for global philanthropy. Still, poverty and inequity are rising in the world. According to a report by BCGaround the world, more than $3M children die of chronic hunger under the age of 5 years more than those combined from Malaria and Tuberculosis. Food For Thought estimates 38% of children in the least developed countries have stunted growth due to malnutrition. This could cost the global economy $125B when the children grow up. 19,000 children die every day of preventable diseases. According to UNICEF, 90% of children with disabilities never go to School. Although 90% of the population in developing economies have primary education,130M children still do not understanding of basic concepts. (B:Billions; M:Millions)

# India

India is a Global Outlier among emerging markets based on the level of prosperity with a very high proportion of the population donating to charitable causes. Bain India Philanthropy Report 2015 estimates 100M incremental donors in India since 2009. In 2013 28% of adult population donated money and 21% their time compared to 14% in 2009. Source Pic above: Bain Philanthropic Report 2015

India jumped to 69 position in World Giving Index, up from No. 134 in 2010. Bill & Melinda Gates Foundation for example has invested $ 1 bn in India during the past decade with foreign philanthropic donation doubling from $0.8B in 2004 to $1.9B in 2012.

United Kingdom tops in terms of giving as percentage of the population closely followed by Canada, Ireland and the Netherlands. United States is one of the leaders in charitable donations as a percentage of the population and leads the world in absolute numbers through the enormity of its size in the global economy. The supply side of the philanthropic system has kept pace with private foundations like Azim Premji, Reliance Foundation and NALCO Foundation set up in the past five years. 

Nonprofit organizations under the Foreign Contribution Regulations Act (FCRA) increased from 30,000 to 44,000 in the past ten years in India. Education, Child Welfare and Old Age are the top priority sectors in India with 40% of the HNWI (high net worth individuals) survey respondents cause like education and child welfare. 

# Long Way Ahead

Philanthropy in India is still in nascent stage but lot has been done over the last few years. In the UK, 74% of people made charitable donations while it is still around 28% in India as of 2013. One of the critical enablers not only in India but across emerging economies is accountability and measurability. A framework of safeguards to measure the social impact of donations and negate corruption will drive incremental philanthropic initiatives. Teach For India follows a model of impactful education. One of the most important reasons for taking the LLC model for philanthropy by Chan Zuckerberg model was to bring in more accountability and measurable results in their philanthropic initiatives. 

According to a Bain report, about 50% of donors surveyed said they did not a sufficient number of credible organizations through which they could donate. There are many trustworthy organizations in India in the NGO sector, but a more transparent structure would help in increasing philanthropy in India. 

 

# Iterative but impactful steps 

The best way is of course if every citizen in India could devote a few hours per week on social issues including but not limited to working in NGOs, writing original articles showcasing humanitarian achievements, fostering community through small social and charitable groups etc. Indian government has been proactive in channeling better sanitation in India, considering only 36% of India’s population has access to improved sanitation.

The article first published in 2016 has been revised and edited only for grammatical corrections. A couple of lines and graphs have been removed while a couple of graphs been redone using original data. No additional data has been added to protect the originality of the article.