Total private philanthropic funding in India is estimated to grow at approximately 12 per cent annually in the next five years, according to India Philanthropy Report 2022 (IPR), co-created by Bain & Company and Dasra.
FY 2021 is said to have witnessed a 20 per cent jump and most of this rise has been a result of increased government expenditure. However, gaps remain.
“With the total supply of funds at an average 7 per cent of GDP in recent years (8.3 per cent in 2021, however), India is still short of NITI Aayog’s estimation of the total annual funds needed to achieve its UN SDG commitments by 2030,” the report noted.
The result is a deficit of ₹8-lakh crore for FY 2021 and ₹10-lakh crore for FY 2026 if the same trajectory continues. Private-sector funding stems from two major sources: foreign and domestic philanthropists. Domestic philanthropists include corporations and individuals. The report calls out past trends for each of these funding sources indicating that overall private giving (domestic and foreign) has stayed relatively flat over the past few years.
While private domestic giving has grown at a moderate pace of 8 to 10 per cent year-over-year, private foreign giving has contracted in FY 2021. CSR has grown both in absolute terms and in its contribution to overall private giving. Retail giving — largely unorganised — has grown marginally and constitutes between 25 per cent and 30 per cent of total private domestic giving.
Social sector funding
With a disproportionate increase in wealth during the pandemic and a possible increase in relative giving (giving as a percentage of net wealth) as more tech entrepreneurs and NowGen philanthropists enter the fray, the cohort holds the potential to play a crucial role in meeting the country’s social sector fund requirement, the report noted.
It added that, as compared with other countries including China, the UK, and the US, Indian HNIs donate substantially less across all wealth brackets. This trend can change, especially with the rise of Indian start-ups and young tech entrepreneurs.
Radhika Sridharan, partner, Bain and Company, said, “Economic indicators establish that although the country’s economic trajectory has been strong, its development story can hardly be called inclusive. Progress and access to opportunities have missed the most vulnerable geographies and populations. It is imperative that the pace of action accelerate towards inclusive and sustainable development — now more than ever.”