Family Philanthropy funding in India tripled since 2019, approximately 12,000 Cr in 2020
While all other sources remained stagnant, funding from family philanthropy has tripled its corpus, growing to approximately INR 12,000 crore in fiscal year (FY) 2020, accounting for almost two-thirds of the increase in funding since FY 2019, according to the India Philanthropy Report 2021, co-created by Bain & Company and Dasra.
The report further notes that in FY 2020, private-sector funding totalled about INR 64,000 crore—close to 23% more than in FY 2019. Private-sector funding stems from four sources including foreign, corporate, retail, and high-net-worth individuals (HNIs) or families.
While foreign contributions account for a quarter of all funding, Corporate Social Responsibility (CSR) of the domestic corporations accounts for 28 percent and retail investors account for another 28 percent. The remaining 20 percent comes from family philanthropy, also the biggest source of growth, accounting for almost two-thirds of the increase in funding since FY-2019.
“It is indeed heartening to see that something that is integral to Indian culture —giving to those who need it is coming of age. 2020 has been a year of hard truths. This is a wake-up call to reimagine our approach towards strategic and collaborative philanthropy and the impact it can have. The case for family philanthropy is clear and so is its transformational potential,” said, Dinkar Ayilavarapu, partner, Bain & Company.
Despite this growth in funding, the social sector remains underserved. In addition, the pandemic-induced setback to the social sector clearly indicates that India will continue to face a significant annual funding deficit in the near term.
According to the report, domestic corporations have seen a decline in profitability during the past year, and therefore a reduction in the corpus available for CSR. The CSR corpus has shifted away from traditional nonprofits to COVID-19 relief initiatives. International nonprofit contributions had already declined by nearly 30 percent over the past five years, too.
However, family philanthropy has been a strong support to many COVID-19 causes. Philanthropic capital in this space is primarily funded by personal family wealth—family givers are individuals or families who self-identify as such. Scaling up domestic family philanthropy is also critical to accelerating the development sector and to India achieving its Sustainable Development Goals (SDGs).
"Family Philanthropy can collectively shape India's development agenda. Having partnered closely with over 300 family givers in the last 22 years, Dasra has seen the pivotal role that families play in addressing some of India's most complex challenges. Nurturing the nascent family giving ecosystem with enhanced support can be transformational for India." said Neera Nundy, co-founder of Dasra, a strategic philanthropic organisation.
However, family philanthropy has its biases. Education and health-focused funding dwarf other causes and continue to receive a higher share of family giving at 47 percent and 27 percent, respectively.
This bias is especially stark given India lags in several sectors, since it is behind on gender equality indicators than on indicators related to health and education, which receive a significantly higher share of domestic philanthropic funding compared with gender equality which sits at only 1 percent.
The wealth is also concentrated in a few cities- most wealthy families are based in Mumbai, Delhi, and Bangalore who channel their funding there, leaving a greater need in “aspirational districts.”