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Tuesday, August 11, 2020

‘Giving away money is a lot harder than it seems’

The scale of India and the scale of India’s problems are such that even if you combine all the government spending and all philanthropic spending, we’re not going to make enough of a dent," says Ingrid Srinath.

Written by Kavitha Iyer | Updated: November 4, 2019 9:45:49 am
mumbai city news, Philantrophy, Corporate philanthrophy, billionaires, Ashoka University, Poverty, Economic disparity, Indian Express Ingrid Srinath, director, Centre for Social Impact and Philanthropy, Ashoka University.

The Ashoka University’s Centre for Social Impact and Philanthropy, which works with grant-makers and civil society to grow their scale, recently held a summit in Mumbai on innovations in the social sector. The Centre’s director Ingrid Srinath spoke to Kavitha Iyer about change that is effective, replicable and sustainable. Excerpts:

Why is innovation needed in the social sector or philanthropy, and why now?

The scale of India and the scale of India’s problems are such that even if you combine all the government spending and all philanthropic spending, we’re not going to make enough of a dent. If you look at the sustainable development goals (SDG), the largest shortfalls in the world are going to be in India. We’re trillions of dollars short of meeting those goals. We’re going to have to do things differently if we’re going to have any chance of changing that. As brilliant as somebody’s work may be in one district or five districts, if we can’t find a way to replicate that model or to scale it across 600 districts, we’re not going to make a dent. The SDGs are one part of it. The aspirations of people are outpacing our ability to meet them, whether on jobs, education, health, child rights, women safety. Clearly, even when things have been effective, they haven’t been at the scale of effective enough or effective sustainably. That’s why we need innovation.

What kind of innovation? Can you give us an example?

The Right to Information Act, NREGA ? these are innovations as much as putting a laptop in every classroom or changing the way curriculum is developed. Look at the kind of mobilisation via WhatsApp across the country, for different kinds of causes, some of which you may or may not agree with. But the reality is that it is a really simple technology that is being used to change minds at the scale of hundreds of millions. There are also some mobile phone app-driven technologies such as those used by anganwadis and ASHA workers; they’re low cost, easy-to-replicate innovation that is saving lives.

Why do Indian billionaires not give away their money?

Some do, and some don’t. Azim Premji or the Tata and Birlas have been donating large sums for years and decades. The short answer is we don’t know ? there is no research on this. If I have to guess, I would say there are some factors. One is that we are still not at that stage of wealth creation that we’re certain this is here to stay. In many cases, it is first generation wealth. It’s still a new phenomenon to be this wealthy. Also, giving away money is a lot harder than it seems. Having been a fundraiser and a grant-maker, I know giving away money is harder than raising it. It sounds ludicrous, but is true. To find the right partner, to figure out the right programme is harder than just asking for money. The government tells us there are 3.1 million NGOs. I have never seen this list. Nobody I know has ever seen this list. We have been trying for the last two years to get a hold of this list. As a culture, we believe the right hand shouldn’t know what the left hand is doing when it comes to charity. People don’t talk about their charity, so there are no good role models. We also don’t have a clear norm — as a middle class person, how would you know what’s a good percentage of your income to give? We don’t know what the average Indian gives. The only data available is the finance minister’s reports on revenue forgone in her budget speech that gives you an idea of how much tax exemption was claimed. It doesn’t tell you how much people gave. If we know how much people gave, we would perhaps know where we stand. Better data would help.

Is the government’s role key and how do you rate policymaking on philanthropy?

For one, there is no focal point within the government for this sector. Like for the business sector, there is the ministry of corporate affairs, there is no equivalent body for the non-profit sector.

Tax incentives for philanthropy have been gradually reduced over the years to just one, the 80G, where you can write down your income by 50 per cent of what you have donated. If you compare it with other countries, while in India you can reduce your taxable income by 50 per cent of what you donated, in Singapore they will let you deduct 125 per cent of your contribution. They’re actually incentivising philanthropy. Then there is a series of policy points that prevents non-profits from ever becoming sustainable — if you use more than 50 per cent of FCRA money for your institutional costs then you lose FCRA, even donors who want to fund institutional costs can’t do it; under CSR, people are really restricting themselves to a list of items; if a charity decides to set up its own income generating activity, it will lose tax exemptions as soon as revenues exceed income by a certain percentage; if you don’t spend 85 per cent of the money you raise this year, it will become taxable.

If they had to design a policy framework to ensure that non-profits never achieve sustainability, this would be it. There are a number of different policy changes that can be made. The NITI Aayog commissioned us recently to review all these policies. We have submitted the report and they’ve asked us to do some follow-up work. I am optimistic, but cautiously so.

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