Having completed my professional education nearly 33 years ago (engineering from IIT-Kanpur, management from IIM-Calcutta and PhD in organizational science from USA), I was beginning to “dabble" in some grass-roots-level organizational activities among the tribals of Rajasthan and informal sector workers in UP. One day, someone suggested that I should set up a voluntary organization if I wanted to work towards the empowerment of the poor and the marginalized. As I began to set up PRIA (the Society for Participatory Research in Asia) in 1980, my elders (uncles, teachers, colleagues) began to ask me if I was getting into “charitable" activities for the “welfare of the poor and the needy" in the country. I was bewildered by such queries, because I assumed that my mission was social transformation towards a just and equitable society.

Three decades on, that question still haunts me; it also haunts PRIA, thousands of voluntary organizations, philanthropists, foundations and policymakers in the country.

The business of “doing good" is far more complicated and risky than “do-gooding". Feeding the hungry, curing the sick and educating the illiterate have been important throughout human history. But, philanthropy has also supported, in India as elsewhere, freedom struggles, movements to stop untouchability, violence against women, destruction of natural resources, and efforts at protection and promotion of human rights of minorities, indigenous people, migrants and displaced communities. It is this face of philanthropy—giving for social transformation—which needs urgent attention and expansion in today’s India.

Giving for the well-being of society has been a long part of Indian tradition, even though information about its contemporary patterns is not readily available. At the turn of 21st century, a survey had shown that more than 40% of the households in India make philanthropic donations regularly (PRIA survey: Invisible, yet Widespread, 2002). Interesting trends from that survey showed that the poor and less educated from rural areas make such donations as regularly as rich professionals from urban areas. On the basis of that survey data, it can be now estimated that Indians make donations to “charitable causes" worth 16,000 crore per annum these days.

This is a substantial amount; the key question is what purposes such donations serve. The overwhelmingly dominant purpose is donation to religious activities and institutions; then to relief during disasters and “welfare of the needy" (orphans, street kids, destitute, etc.). A very small proportion of these donations go towards education and health care. Hardly any philanthropic donations support those efforts which are aimed at social transformation.

The present reality in India indicates that large sections of our population remain socially and economically excluded despite growing government spending on social and economic development programmes. The core problem is the absence of transparent and accountable governance at all tiers of institutions in the country today. With nearly 200 crore annual government allocation for development in each district of the country, efforts to ensure effective and purposive utilization of such funds need to be scaled up; what is important is not philanthropy that supports a few hundred schools or clinics, but that which ensures that each government school, clinic, panchayat and municipality delivers quality services to all—yes, ALL—citizens.

Some significant impact on social transformation in India has been achieved through transformative philanthropy. Civil society efforts to promote protection and advancement of human rights and accountable local governance, for example, received flexible initial support from the Ford Foundation; Pratham’s independent Annual Survey of Education Report has been institutionalized through a grant from Google; in promoting capacity development of civil society and local governments, PRIA’s own efforts received such flexible long-term support from DVV Int’l (Germany), CORDAID (Netherlands) and SDC (Switzerland).

Such a transformative philanthropy can be scaled up in India today because citizens’ associations and civil society organizations are active in every district and town of the country; many thousands of them have been able to mobilize and support citizens to claim access to their rights and to organize self-help efforts. However, such efforts at social mobilization and demanding accountability from governance institutions are on the verge of being squeezed out of existence for want of flexible and durable funding. A mere 10% of the total annual philanthropic donations towards such purposes can have a major transformative impact.

How can an ecosystem of such transformative philanthropy be nurtured in India today? What mechanisms and policies are needed to incentivize and channelize increased donations to causes that make our democracy work for all citizens? We lack a modern institutional infrastructure that can professionally channelize individual donations to such efforts. Archaic laws and practices for incorporation of civil society organizations and restrictive fiscal policies and legislation do not encourage making or using such donations; section 2(15) of the Income-Tax Act recognizes welfare and charity alone, not social transformation. There are now moves under the proposed Direct Tax Code to eliminate provisions that can provide financial sustainability to civil society organizations. We need to translate into laws, systems and procedures many valuable principles enshrined in the National Policy on Voluntary Sector (2007).

On the occasion of the 35th reunion of my batch from IIT-Kanpur four years ago, one colleague enquired if this was all I did after graduating from IIT and IIM? I am proud to have been able to make a small contribution towards making Indian society more free, equitable and just. But there are thousands of others like me around the country. And we need to find ways so that millions of others continue to dedicate their efforts towards equity, freedom and justice in our society for generations to come. As philanthropy in developed Western societies continues to show, new issues and challenges will keep coming up that will require societal responses from a strong and independent civil society.