| The Philanthropy Space, India and CAF Indian Philanthropy: Coming of Age Indian Philanthropy is coming of age. Barclays Wealth recently did a global survey of rich people and concluded that the US, Ireland, South Africa and India now lead the way in charity among high net worth individuals. But the more insightful finding was that Indians are motivated to be volunteers (giving their time) than benefactors (giving money). An earlier report on the space by Bain & Co. titled "State of Philanthropy in India" estimated that philanthropic donations amount to 0.6% of India's GDP. While this is better than Brazil (0.3%) and China (0.1%), it is low compared to the U.S. (2.2%) and U.K. (1.3%). The report also stated that individual and corporate donations in India make up only 10% of charitable giving, while in the U.S., they are responsible for 75%. It takes time for philanthropic markets to mature, and India still has a long way to go. The number of wealthy in India has been growing manifold after the economic reforms in the early 1990s. While the concept of "daana" has existed since time immemorial, strategic giving is still to find root here. Many with new wealth have not until recently begun letting go of their hard-earned wealth. While philanthropy is coming of age, Indians continue to face the teething problems of a country BEGINNING to give strategically. It is also critical to note that Indian tax law doesn't really reward or encourage giving the way US tax law does. High Networth Giving A Wall Street Journal Article - dated 3rd December 2010 said that Indian billionaires are finally reckoning with the philanthropy call. 2010 was the year the Tatas gave $50million to the Harvard Business School. This was the largest international grant ever received by the institution. 2010 was the same year that Shiv Nadar with his net worth of around $4.2billion decided to give 10% for philanthropic activity. Shiv Nadar, Chairman, Founder and Chief Strategy Officer of India's fourth largest software outsourcing company HCL Technologies Ltd., has pledged to set aside 10% of his wealth for philanthropic purposes. Mr. Nadar has a personal net worth of $4.2 billion and ranks 201 on the Forbes billionaires list. Mr. Nadar's trust—the Shiv Nadar Foundation— largely works in the field of education and has already established a not-for-profit engineering college in the southern Indian city, Chennai. Azim Premji, Founder and Chairman of Wipro Ltd., said he plans to transfer 88.46 billion rupees ($1.95 billion) of his equity in the company to the philanthropic trust focusing largely on education. Mr. Premji is the world's 28th richest man (and India's third richest) with a net worth of $17 billion according to the Forbes billionaires list. The Azim Premji Foundation works largely in rural India in partnership with various state governments to help them improve the quality of education. The foundation is also setting up a university for the poor in the southern Indian state of Karnataka. Sunil Bharti Mittal, Chairman of Bharti Enterprises, whose flagship company Bharti Airtel is India's largest mobile phone operator, has set up the Bharti Foundation for the education for the underprivileged children. Mr. Mittal is |
|
87th on the Forbes list with a personal wealth of $7.8
billion. The need of the hour Because of the recent spurt and interest in the "giving" space, critical questions of transparency and accountability are also being raised. And justifiably so. Until recently, the Indian voluntary sector was estimated to have 1.2 million NGOs, according to a 2001 study by the Society for Participatory Research in Asia and the Johns Hopkins University, US. The Central Statistical Organisation recently put the number at 3.3 million. NGOs' willingness to be honest and open about the way they spend their donors' money is becoming increasingly important to public regulators, intermediaries and most importantly the donors themselves. No longer is it only about "giving". There is now a need to strategise giving. Donors want to be sure that their donations are not subject to fraud or wasteful spending due to inefficiency. Apart from the sheer numbers, there are a few factors that make it essential for you to check the bona fides of an NGO. While the sector is regulated by multiple laws and authorities, say sources at Charities Aid Foundation India (CAF India), a non-profit organisation, its credibility is often questioned because of lack of transparency (about existence, performance, finances, output and outcome) and absence of performance benchmarks. The fact that there is a general lack of public awareness about the voluntary sector only compounds the problem. From a Recent Article in Outlook Money, dated January 26th 2011 Evolution and Recent Innovations in the Space Amidst a growing interest in philanthropy, HDFC Mutual Fund in February announced the launch of a unique debt product to support needy cancer patients, a first for the AMC industry. Dividend earned under the product christened HDFC Debt Fund for Cancer Cure, a three-year close-ended capital protection oriented income scheme, will be donated to the Indian Cancer Society, HDFC's charity of choice. "At an individual level, people want to give back to society but do not know where to go. A doctor serves society by treating patients free, we will use our distribution network to get good subscriptions for the scheme and help the cause." - HDFC's Chairman, Deepak Parekh. In March, the spotlight is on Asia once again as Bill and Melinda Gates and Warren Buffett travel to India to meet with some of India's leading business leaders and philanthropists. In a letter published in The Times of India, they write, "[w]e do not come as preachers, but more like cheerleaders. It will be an honour to meet with those families who will be able to join us next month in Delhi, to hear about their own thinking and to speak of the deep satisfaction we have derived from our work in philanthropy." The media in India are already covering the upcoming trip from various angles. Many in the philanthropy field are looking forward to the excitement that the visit will generate. However, like the China trip, crucial questions are being raised. Will Indian philanthropists publicly announce their philanthropic intentions? Is there an Indian context to philanthropy that is shaped by their history and traditions? Despite the growth and professional development of the non-profit sector in India, why are we not seeing a significant increase of individual and corporate giving? |