What’s Missing From India’s Joy Of Giving

Indians are giving to charitable causes more than ever. Still, that pales in the face of challenges the nation’s trying to overcome: from poverty to lack of sanitation and quality education.

The country has the fastest-growing population of the ultra-rich and ranks fourth in the number of billionaires. That coupled with rising middle-class incomes propelled charitable giving in India to an all-time high in recent years. Its ranking on the Charities Aid Foundation’s World Giving Index improved to 81 in 2017 from 91 a year before. Philanthropic funding from private individuals surged sixfold to Rs 36,000 crore in five years through 2016, according to a joint report by Bain & Company and Dasra. Private donations now make up about 32 percent of the total contributions to the development sector, more than double than in 2011.

“There has been an increase in personal philanthropy over the last decade,” said Natasha Patel, director of strategic philanthropy at Dasra. “But the gap between the quantum of funds being channelled to the social sector versus required is still sizeable.”

Problems are abundant. The nation ranks 130 on the United Nations Development Programme’s Human Development Index that scores countries based on parameters like inequality in income, life expectancy, gender inequality, education, hygiene, and pollution. That’s worse than BRICS peers, none of whom are outside the top 90.

Neither is India any closer to improvement on the Sustainable Development Goals Index, where it ranks at 112. SDGs are a collection of 17 targets set by the United Nations General Assembly that aim to address poverty, hunger, health, education, global warming, gender equality, sanitation and social justice by 2030.

The state takes care of most of these needs. About 68 percent of the funds raised for India’s social sector still come from the government, Charities Aid Foundation said. But the public services delivery system is leaky and inefficient, and the government also has to maintain a fiscal balance. Philanthropy needs to fund the shortfall, and it’s nowhere close. Individual giving in India, according to the CAF’s 2016 report, is just 0.37 percent of the gross domestic product compared with 1.44 percent in the U.S.

“The scale of the problem we have is huge whether you take up education, food, water or pollution,” Sandeep Aggarwal, former chief executive of online donation platform GiveIndia and an independent philanthropist, said. “I don't think there is a set number for it (the gap), but it’s massive.”

The government has reiterated its commitment to achieve the sustainable development targets by 2030. That’s more a paper plan. Bain & Company estimates that India will have a funding shortfall of $8.5 trillion to achieve the goal. The UN itself says that emerging market economies need $3.3-4.5 trillion funding every year to meet the targets.

Another key hurdle remains sensitising people towards giving. An Oct. 2017 paper for the Philanthropy for Social Justice and Peace by Caroline Hartnell highlighted that India still remains a largely unequal society where old wealthy families prefer to pass on their fortune to the next generation. She found that it’s the first-generation entrepreneurs are the real drivers of philanthropy in India.

That doesn’t mean Indians are averse to giving. “We Indians give a lot,” Aggarwal said. “But if you look at a typical household, a lot of the giving goes to God.”

Numbers validate that. A study by the National Sample Survey Organisation between 2014 and 2015 found that rural Indians spend around 9 percent of their monthly per capita consumer expenditure on religious services. The number in urban India was slightly lower at 5.7 percent. In both cases, that amount spent on religion was higher than even basic services like sewage disposal and sanitation.

That share of the wallet needs to be institutionalised towards philanthropy. “The culture of giving has always been there in Indian society, and there is a social tradition to give to community needs,” said Hari Menon, Director of Philanthropic Initiatives, Bill & Melinda Gates Foundation. “Modern Indian philanthropy, in terms of structured, institutionalised giving by ultra-high net-worth individuals is still at a formative stage.”

Trust Deficit

Funding is just one aspect. The other is how the money is put to use. Hartnell’s study suggests that lack of trust, capacity and accountability at non-governmental organisations and the shortage of talent in the field are some of the reasons holding back philanthropy in India.

That may also be because people tend to donate to causes that resonate with them, not for the functioning of the organisation working towards the cause, according to Jyotika Bhatia, founder of Srujna, an NGO that provides skill training to the underprivileged women. “For example, the donors are okay buying a sewing machine or raw material rather than paying for the programme co-ordinator’s salary that organises tailoring training.”

There is also gap in connecting givers to NGOs. “The donors often do not know where to donate and whom to support,” Bhatia said.

Strategic and impact-based philanthropy, the kind that Dasra and the Gates Foundation advocate, are trying to plug that hole.

Goal-Based Giving

Philanthropy is not just about writing cheques anymore, according to Menon said. Strategic giving, he said, can add to effectiveness in execution of programmes and also provide useful data and evidence that could then aid policy makers, especially in a country of India’s size and complexity.

As it matures, Patel said, goal-oriented giving will bridge the gap disconnect between NGOs and philanthropists. That will deepen their understanding of the sectors and help in selecting the right grantees and measuring progress, he said.

Events like DaanUtsav—earlier called the Joy of Giving week—also help create a culture of philanthropy. Till its tenth year in 2018, the event has engaged up to 80 lakh givers and has been endorsed by Azim Premji, Amitabh Bachchan and Lata Mangeshkar, among others. And the giving week, organised from Oct. 2 and 8, goes beyond donations and encourages people to step out and help.

As Aggarwal said: “It’s not about just the money, it’s about taking that effort of taking the extra food on the table, stepping out and find someone in need. It’s not difficult to find a hungry person in India.”