New Gen is Transforming Indian Philanthropy

India is falling short in its social sector spending; Ultra-high net worth Indians contribute significantly less compared to their peers globally; Retail giving is expected to grow sharply in the coming years. These are a few observations from the India Philanthropy Report 2023, produced by Bain & Company, in collaboration with Dasra, a Mumbai-based a non-profit, which connects corporate philanthropists with NGOs. Excerpts:

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Now-Gen givers, who are professionals and entrepreneurs with first-generation wealth, and Inter-Generational givers, which includes the current generation of traditional family philanthropists, are transforming giving by looking beyond historical funding preferences and beginning to focus on underrepresented causes.

Over 90% of Inter-Gen and Now-Gen donors from our sample want to be increasingly involved in emerging causes such as climate change; gender, equity, diversity, and inclusion (GEDI); and strengthening philanthropic infrastructure. Most of these Inter-Gen and Now-Gen givers are open to adopting catalytic ways of giving: willingness to share insights, unrestricted funding, and collaborative funding. Giving behaviours of Now-Gen and Inter-Gen funders suggest a positive directional shift in philanthropy as we head towards India@100.

Private philanthropy has a unique role to play in building bridges by working at the intersection of government, businesses, foundations, civil society, and communities. It is critical to harness diverse resources and patient capital that strengthens the philanthropic infrastructure towards fostering greater learning, innovation, and collaboration. This will enable ecosystem stakeholders to create a transformed and resilient India where no one is left behind.

India’s social sector spending as a percentage of GDP grew from 8.6% in FY 2021 to 9.6% in FY 2022 due to 35% growth in public spending. Despite this progress, India remains well short of NITI Aayog’s estimate (13% of GDP) of total annual funding required to achieve United Nations Sustainable Development Goals (SDGs) by 2030.

The public sector has been carrying the weight of social sector spending in India, accounting for 95% of total spending. However, with an expanding budget deficit, higher debt burden, and increased crude oil prices, private philanthropy needs to step up and play a catalytic role in bridging the funding gap in India.

Overall, private philanthropy has grown at a moderate pace of about 8% from FY 2017 through FY 2022, despite foreign funding remaining stagnant. In FY 2022, private contributions totaled about $13 billion (INR 1.05 lakh crore).

Corporate social responsibility (CSR), family philanthropy (ultrahigh net worth individuals [UHNIs; net worth above INR 1,000 crore], high net worth individuals [HNIs; net worth of INR 200–1,000 crore], and affluent individuals [net worth of INR 7–200 crore]), and retail giving cumulatively contributed about 86% of private philanthropy in India and are expected to remain the foundation of private giving in India.

CSR spending has grown at 13% over the last five years, reaching $3.3 billion (INR 27,000 crore) in FY 2022. While it grew at a slower pace in FY 2022, we expect it to sustain its historical growth and reach $6.4 billion (INR 52,000 crore) by FY 2027.

Family philanthropy has grown at 12% over the last five years, reaching $3.6 billion (INR 29,600 crore) in FY 2022 driven primarily by a growth in HNIs/affluent givers (net worth of INR 7–200 crore). UHNI contributions have been volatile with contributions (excluding contributions by Azim Premji) dropping by 5% in FY 2022, despite a 9% increase in their cumulative wealth. Indian UHNIs continue to donate substantially less compared to peers in the US, UK, and China.

https://www.bain.com/insights/india-philanthropy-report-2023/

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