Mumbai: Domestic capital in Indian charitable organizations is soon expected to grow, even though most investments have so far come from foreign donors, according to Arpan Sheth, author of consulting firm Bain and Co.’s annual India Philanthropy Report. As local investments rise, Indian philanthropists are putting a higher bar on measuring the impact of each rupee invested in charitable activities, Sheth said in an interview. He was attending the Dasra Philanthropy Week in Mumbai on Wednesday. Edited excerpts:

Why have stakeholders like foundations, non-governmental organizations and governments not been able to create standard metrics to measure philanthropic impact in India?

Everyone has their own measure and definition of the impact they are creating. How does one measure? It is by looking at how many people they employ or by looking at how many people they have employed. As a donor, you want to know how effective that rupee is that you are giving away.

Aavishkaar Venture Management Services Pvt. Ltd , an early-stage investor in social enterprises, plans to come up with a India-specific matrix. Can it work?

It depends on who they have involved in dialogue and what sectors they are focusing on that matrix and how they do it. If it is very broad-based with all sectors covered, it could actually work because clearly there is a need for something like that.

One, you need to start having a conversation around the impact and definitely need a metric for it. Second, see how the organization is delivering on the basis of that metric. Though Piramal is right, that measuring might take a few more years. However, dialogue on measuring can actually start much earlier.

What’s the potential for domestic capital in philanthropy, considering the fact that a lot of investment in India in the social sector is made through foreign capital?

Domestic investments will increase over time. But we will continue seeing a majority of the funds being foreign for quite some time.

What is the potential that you see in impact investing for not just social but also in terms of financial returns?

I think impact investing plays a really important role for the ecosystem as a whole. And one of the great things about impact investing is that it brings in talent into the system, which otherwise might not participate. Yet, it gives people enough to earn and get a living from.

This is the fourth edition of the India Philanthropy Report by Bain. What are the changes that you have noticed?

Indian philanthropy has evolved with the ups and downs of the economy. In these four years, I have seen the participation and dialogue going up by various stakeholders. For example, the numbers and quality of people coming to events like the Dasra Philanthropy Week have gone up visibly and the conversations I have had over the years with people have improved. But a big change in Indian philanthropy will come in the next 10 years when the next generation comes in.

It has been difficult for NGOs to focus on both the quantity and quality of measuring philanthropic impact because of paucity of resources. What can NGOs prioritize in such a situation, quantity or the quality of impact?

Honestly, looking at the need for help in India, which is so huge, the quantity is more important.

We are talking about millions of people and their livelihood. So, quantity matters to reach people in large-scale. Afterward, quality matters, once you have reached the scale to make it sustainable.

If you can create impact with scale and quantity both and increase its sustainability and quality overtime, that’s what we need.

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