Opinion | The future of giving is linked to personal wealth3 min read . Updated: 05 Nov 2018, 08:48 AM IST
With more wealth, it is not unreasonable to expect that the volume of philanthropic giving will go up
The recent CAF World Giving Index 2018 indicated that India has slipped 43 spaces in ranking and now comes at 124 among 146 countries, but since this index measures giving only on three parameters, it doesn’t really cover the scope of philanthropic giving.
The recent upsurge of personal wealth in India has coincidentally aroused an interest in Indian philanthropy, and not unnaturally, in its future. Is it here to stay or is it a temporary phenomenon? What will be its size and shape? What are its determinants? Will it make any difference to the condition of Indian society, in say two decades from now? Whether there will be a disruptive change in the current situation such that it will propel Indian philanthropy to make a quantum leap, both quantitatively and qualitatively, will depend on several factors. Among these are the rate of economic growth, the culture of giving, technological development, the role of religion, emergence of new social issues of concern, role of the media, government policies and regulation, and diaspora giving. However, clearly the most important will be the increase in wealth due to economic growth.
With more wealth than can be spent, it is not unreasonable to expect that the volume of philanthropic giving will go up from the present $5-6 billion or 0.3% of India’s GDP (Bain and Co. reports), to approx. 0.5% of GDP, since along with increased individual giving, mandated company giving will also go up with increased profit.
A number of other changes, now under way, are also likely to get strengthened. One of these is a broadening of the donor class to include not only the traditional business class, but also donors from the world of sports, entertainment and other professions. A large number of small donors from the middle class are already contributing to philanthropic causes, and with economic expansion this number will expand considerably.
Many of today’s donors are younger, more educated, many of them in the West, and influenced by ideas and practice of philanthropy there. Many of them prefer to be called change-makers rather than philanthropists, indicating the purpose of their giving. This is reflected both in how they give and for what.
No longer is philanthropic giving limited to giving donations or grants to non-profit organizations, but includes what is called venture philanthropy, i.e. investing in profit-making social ventures whose goal is not profit making as such but providing much-needed social goods and services like cheap energy, transport or healthcare to those at the bottom of the pyramid. One is likely to see more of this happening along with the use of new types of instruments such as development impact bonds now being used by the UBS Optimus Foundation to finance a rural education project in Rajasthan.
The younger generation of philanthropists is more data and technology oriented, and looks for scientific and technological solutions to today’s problems. Many of them believe in getting concrete evidence of the impact of their giving by using metrics. Technology will therefore likely play an even greater role in the future, making more and better information available to donors for decision-making, and for better understanding of problems.
Driven by new attitudes, and new technology, philanthropy of the future will also be more innovative in the use of funds. The younger high-networth individuals, are likely to call the shots, more likely to take risks with their money, and more likely to want to spend their money here and now, rather than leaving it to foundations to spend over time.
One expects more diversification of causes supported, with less investment in bricks-and-mortar items like building of schools and hospitals,
While it will undoubtedly become more dynamic, one does not see Indian philanthropy become a potent force for changing a patriarchal, casteist and class-conscious society in the midterm. Whether it will be able to make any impact on income inequality, which is growing alongside the wealth, is also doubtful since it will require a radical departure from the present practice of merely filling niche needs, rather than being really disruptive.
Presently, donors complain of lack of accountability on the part of beneficiaries, citing it as a major reason why they give less than they can or ought to. But there is a lack of ethics among donors too, and hopefully there will be less of this in the future as philanthropy matures.
In the future, big-ticket philanthropy will coexist with smaller, more engaged giving.
Pushpa Sundar is the author of Giving With A Thousand Hands: The Changing Face of Indian Philanthropy.