Philanthropic funding in India on a steep growth path
The value and volume of philanthropic contributions has been increasing rapidly in India over the last decade, and the time has come to channel this funding into areas that are most in need to ensure equitable growth. This is according to Bain & Company’s latest India Philanthropy Report.
Bain & Company has been tracking philanthropic contributions in India for a number of years now, revealing promising upward trends from one year to the next. India has a growing population of ultra wealthy individuals, who are increasingly turning their attention towards doing their bit for social and economic welfare.
At a corporation level, the mandatory 2% contribution into corporate social responsibility (CSR) efforts since 2013 have driven many organisations to increase and consolidate their contributions towards social development in the country. Most businesses have detailed CSR policies in place that are available publicly.
In 2010, philanthropic funding in India stood at Rs 12.5 thousand crores, a number that has grown to Rs. 55 thousand crores by 2018. Individual contributions have been occupying an expanding share of these contributions, growing from 26% of total funding in 2010 to 60% by 2018.
While the nature and versatility of funding across India’s philanthropic landscape is evolving, one area where philanthropic funding has fallen short up until now is in the alignment of major contributions with areas of highest need.
Bain’s report from last year already shed some light on the reasons behind this gap. While contributions from most philanthropists are substantial and distributed across a variety of areas, the funding portfolios are often finalised in one go and rarely revisited to match evolving trends or areas of need.
When these portfolios are first being finalised, most philanthropists choose an area of personal interest to receive their contributions, rather than areas of need.
The previous edition of the philanthropy report examined philanthropic practices and areas of potential improvement, while the latest report looks into the manner in which these practices are manifesting themselves. In the areas where philanthropists have channeled their contributions, there has been a positive change.
However, there are vulnerable segments of Indian society that have come to be neglected by the philanthropic wave. Women of all ages are among these sections. Bain reports that gender equality efforts receive approximately 1% of all philanthropic contributions and CSR funds.
As a result, gender equality is an issue that persists to a significant degree in India, and the country places among the lowest in the world with respect to gender parity ratios. This is despite several economic reports that suggest that increasing female participation in the economy will give the country an unprecedented boost.
There have been efforts to promote female education, particularly in economically disadvantaged areas, although these have been few and far between. The authors highlight that ensuring that all adolescents in India complete their education will boost India’s GDP by five times.
Another area that needs attention, according to Bain, is development of economically impoverished geographies across the country. While India’s overall performance on various Sustainable Development Goals (SDG) metrics has been high, certain areas have not felt the benefit of this development. These areas, alongside others across India, need support with water sanitation, sewage treatment and toilet access, among a range of other needs.
“India’s progress in the social sector is yet to address all areas of critical need. Philanthropy can play a catalytic role in accelerating progress across the vulnerable segments, especially those where there is some political will and civil society action already at work, thereby helping India accelerate its journey towards an inclusive and sustainable development by 2030,” explained Arpan Sheth, co-author of the report and partner at Bain & Company.
