Under-30s take centre stage in Indian philanthropy
Under-30s take centre stage in Indian philanthropy
New Delhi: Nearly a year ago to the day, Bill Gates and Warren Buffett paid a visit to India’s billionaires, asking them to consider taking a “giving pledge” and donating half their wealth to worthy causes before they die.
While India’s philanthropists are still far away from meeting that challenge, a report on Indian philanthropy released on Wednesday at the third annual Indian Philanthropy Forum in Mumbai shows that Indian giving is clearly on the rise.
Bain and Co.’s India Philanthropy Report 2012 finds that India’s affluent donated 3.1% of their income last year compared with 2.3% in 2010. And more than half of the respondents surveyed promised to increase their giving in 2012.
Significantly, younger high net-worth individuals, or HNIs (under the age of 30), are emerging key players in philanthropic decision-making, according to the report. In the US—ranked highest by individual per-capita giving in the world—philanthropy has long been the realm of older people. Famous American philanthropists such as John D. Rockefeller, Buffett and Gates spent their youth accumulating wealth, only focusing on “giving back” later in life. Indians appear to be bucking this trend, according to the report. To be sure, even in the US, efforts by Gates and Buffett have ensured that young entrepreneurs such as Mark Zuckerberg have signed away a significant portion of their wealth to charity.
Younger philanthropists aren’t merely more involved than their American counterparts—they are also eager to increase the amount they give. According to the survey, 57% of young philanthropists say they will increase their charitable contributions this year, as compared with 49% of those who were over 30 years old. Education remains the most popular cause among philanthropists, the report found, though the priority given to food and clothing has jumped twofold.
Such involvement is no small thing, given that India has the youngest millionaires in all of Asia—and among the fastest-growing population of HNIs in the world, according to the most recent Asia-Pacific wealth report published by Merrill Lynch. Today, most of India’s billionaires are in the age group of 31-45, against the bulk of HNIs in Hong Kong and Japan being over 66. The ranks of India’s ultra-wealthy grew by 20% in 2010 alone, and is expected to double by 2015. This trend, some believe, means there is enough wealth waiting to be tapped for worthy causes in a country with one-third of the world’s poor. Gates suggested in a recent interview with Matthew Bishop, author of the book Philanthrocapitalism, that India has the potential to be the most philanthropic nation in the world, second only to the US.
The preponderance of a younger, new wealthy class in India’s still-nascent philanthropic space presents challenges, too. According to the Bain report, close to 80% of those surveyed admitted that they were “novice donors”, with less than three years experience in the sector. “If 77% are self-reported novices, and it takes three to five years to become intermediate, then we have a real risk that a large percentage of those funds are not creating the significant impact that they could have, because novices lack the rigour and analytical approach of more experienced givers,” said Deval Sanghavi, co-founder of Dasra, an organization that connects Indian philanthropists to worthy causes. “There’s a very real risk of newer philanthropists having a few failures with bad NGOs (non-governmental organizations), and giving up.”
Concerns over lack of accountability among NGOs remain a serious obstacle, and was cited by 53% of HNIs and emerging HNIs as a key factor preventing them from giving more. While this has dropped from 70% of HNIs last year, Sheth says he suspects that is more an indicator of increasing sophistication among philanthropists than any real improvement in the NGO sector. “What that means is philanthropic organizations need to spend more time nurturing givers, working with them, more time advising them and getting their competence up,” said Sheth. “They will have to do do a lot more basic education and cultivation with a donor in India as compared with the US.”
Despite such obstacles, Sanghavi remains optimistic. “Only 15 years back, the tech entrepreneurs were the novice givers in the US, and they were the ones that have created significant amount of innovation in philanthropy—not the Rockefellers or the Carnegies,” said Sanghavi. “It’s this new breed of novice philanthropists that will be the drivers of change in India.”
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First Published:20 Mar 2012, 10:15 PM IST
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