No impact of demonetisation on philanthropy as donations surge
New Delhi: Demonetisation did not have an adverse impact on charitable donations. In the 12 months since it was announced, philanthropic giving has only seen a steady rise.
Experts believe that while the scrapping of high-value banknotes, which amounted to 86% of currency in circulation on 8 November 2016, may have partially affected corporate social responsibility (CSR) spending of some businesses, a proliferation of online payment systems and technologies ensured that the impact of demonetisation on the giving space was not adverse overall. New technologies and payment systems made it easy for both donors and recipients to benefit from micro donations that had previously been a tedious and costly process.
Charitable giving at GiveIndia, the country’s largest online charity portal with more than half a million registered donors, recorded Rs23.85 crore of donations from 149,738 donors from 1 January till date. This amount is almost the same as the corresponding period last year.
Ketto, another online giving portal, saw Rs55.1 crore come in from about 200,000 donors between 6 November 2016 and 6 November 2017, as compared with Rs46.1 crore from around 120,000 donors during the period from 6 November 2015 to 5 November 2016.
Donations through iCharity, an online charitable and fund-raising organization for supporting non-profits and individuals, recorded a 1100% and 225% increase in quarters 3 and 4 of financial year 2017 respectively, as compared to quarter 2. “It (demonetization) definitely had an impact on cash donations which went down in the short term,” said Vaishali Sinha, founder of iCharity.
Mayukh Choudhury, co-founder of Milaap, a crowd-funding platform, attributes the surge to the growth of digital payments. “More and more people are now resorting to crowd-funding to avail of better opportunities without monetary constraints,” he said.
According to Atul Satija, CEO of GiveIndia, an online donation platform, while there wasn’t any material impact of the note ban on philanthropy, “on CSR funding, we have seen small and medium-sized organizations focusing on handling changes in their businesses due to the reforms, and hence slowing down or pushing out their decisions on CSR”.
The view is echoed by Rakesh Bharti Mittal, co-chairman of Bharti Foundation, who noted that demonetisation had not affected the CSR initiatives of major corporate entities but had impacted medium-scale companies. “Companies are delivering profits, and have already been spending. So they will continue to do so. In fact, there are very serious and huge initiatives which have been kicked off in this period. I have not seen any problem in that,” Mittal said, adding that the impact will be “short-term”.
Abhishek Tripathi, director-CSR advisory at PwC India, said that there was no visible impact on CSR owing to the broadness of the Companies Act and CSR Rules. “However, some companies which come under the purview of CSR would possibly have gotten impacted due to demonetisation, thereby impacting their CSR spend. However, the overall cumulative CSR spend would not have got affected.”
Major non-profits receiving donations through online and mobile gateways did not witness any significant impact of demonetisation.
Child rights organization Child Rights and You (CRY) CEO Puja Marwaha said that in the year since demonetisation it was observed that donor sentiment was “affected” for a short period. “However, since CRY as an organization does not accept donations in cash, we were not significantly impacted since cheques and online forms of donations go through the banking system which are tracked and accounted for.”
Vishal Chowla, director of resource mobilization for Save the Children, emphasized that the non-profit did not experience any impact of demonetisation since it has a “rigorous mechanism” for receiving donations from individuals through electronic means and the banking system. “We continue to experience stable growth in our fund-raising,” he said.