Philanthropic funding of individuals up 6-fold to `36,000 cr in five years

The philanthropic ecosystem has been thriving due to the combined efforts of both the public and private sectors, the report said.

Philanthropic funding from private individuals in India recorded a six-fold increase in recent years to around Rs 36,000 crore in 2016, up from approximately Rs 6,000 crore in 2011, a study by Bain & Company said. “A large portion of this amount has come from a few established givers who have pledged large sums of their net worth to philanthropy. This uptick in private philanthropy is only expected to increase in the future,” the report said.

The report has indicated that more than 40 per cent of high-net-worth individual givers aimed to increase their contribution towards philanthropy over the next five years. “Improving macroeconomic conditions such as the uptick in GDP per capita have no doubt contributed to the increase in ultra-high-net-worth individual (UHNWI) households, leading to more philanthropic activity,” the report said.

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The number of UHNWI households has doubled since 2011, and their net worth has tripled during this period. The number of people who have volunteered their time and money between 2009 and 2015 has also increased, up 2 times and 1.5 times, respectively.

The philanthropic ecosystem has been thriving due to the combined efforts of both the public and private sectors, it said. Overall, total funds for the development sector have grown at a healthy rate of around 9 per cent over the past five years, increasing from around Rs 150,000 crore to Rs 220,000 crore, the Bain report said.

While the government remains the largest contributor (Rs 150,000 crore in 2016), its share has been declining steadily. Private contributions primarily accounted for the Rs 70,000 crore five-year growth, it said. “Private donations made up 32 per cent of total contributions to the development sector in 2016, up from a mere 15 per cent in 2011.

In response to the requirements of the Companies Act 2013, companies have begun focusing on their CSR activities. However, in relative terms, the share of corporate philanthropy in funds raised for the development sector has declined. In 2016, firms accounted for 15 per cent of the total share of private philanthropy, down from 30 per cent in 2011, the report said.

Looking ahead, the government has proposed amendments to the Companies Act 2013 that seek to provide greater clarity on CSR provisions. Foreign sources are no longer the biggest sources of private philanthropy. “Although philanthropy from foreign sources has continued to increase over the years, the domestic market has overtaken it. The rapid growth of philanthropy from individuals bodes well for Indian philanthropy,” it said.

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“More Indians are becoming wealthier, as reflected in the Forbes billionaires list in which India ranks fourth among countries with the most billionaires. Coupled with the increase in philanthropic proclivities, it becomes even more important to understand the individual philanthropist,” it said.