Indian philanthropy is growing rapidly, and is now ready to take on some of India's greatest challenges such as livelihood creation, health care, education, energy, and clean water for India's poorest. Tackling such challenges will require much more than just making donations and running directly-controlled institutions, it will require broad-based engagement with NGOs, governments at all levels, and civil society.
According to Bain & Company's India Philanthropy Report 2011 annual charitable giving in India has tripled in the past five years from $2 billion to $5-6 billion. Charitable giving in India as a percent of GDP is now twice that of China or Brazil (0.6 per cent vs. 0.2 per cent and 0.3 per cent), but well below US and UK levels (2.2 per cent and 1.3 per cent of GDP respectively). Moreover, individual contributions still represent only 26 per cent of total charitable contributions in India. With the immense wealth creation in India in the past few years, individual contributions are bound to increase rapidly and this will likely drive continued rapid growth in giving.
The largest philanthropies operating in India today include the Tata Trusts, the Bill & Melinda Gates Foundation (BMGF), the Azim Premji Foundation, the Shiv Nadar Foundation, the Ford Foundation, the Michael and Susan Dell Foundation, and the Omidyar Network. Several corporate groups are also very active including the Bharti Foundation, the JSW Foundation, the Aditya Birla Trusts, and the Infosys Foundation. In addition, there are many other trusts and foundations that are working in various regions of the country.
Most Indian philanthropies believe that social impact is best achieved by directly managing educational and medical institutions. Thus foundations have become direct service delivery behemoths themselves. For instance, the Bharti and Shiv Nadar Foundations run hundreds of schools in rural areas. The Aditya Birla Group runs schools, hospitals, and a major scholarship programme. The Tata Trusts have founded and support several major institutions ranging from Tata Memorial Hospital to the Tata Institute of Social Sciences.
These institutions, since they are directly controlled by philanthropies, are transparent and accountable to their donors. Moreover, they have extraordinary positive impact on their local communities. In many ways, Mumbai has been shaped by the generosity of its great philanthropists such as the National Centre for Performing Arts. Nonetheless, national-scale impact on issues such as livelihoods, education, and health care for the base of the economic pyramid can only be achieved through broad-based engagement with NGOs, government at all levels, and civil society. Such engagement requires not only direct service delivery, but also NGO capacity building, partnerships with governments at all levels, and extensive advocacy.
The BMGF Avahan AIDS Initiative and the Premji Foundation exemplify this approach. The BMGF Avahan Initiative to reduce the spread of HIV/AIDS in India was launched in 2003 and $338 million has been committed to this program. The Avahan Initiative conducted intensive research to understand how best to contain HIV/AIDS and then launched a multi-dimensional effort that involved over a hundred NGOs, various government agencies, and direct community involvement with thousands of peer educators. High-risk groups were identified across six different states and prevention programs were implemented to change behaviour to contain the growth of the epidemic.
Similarly, the Premji Foundation is working across multiple dimensions of India's K-12 education system to improve educational outcomes nationally. First, it is establishing a large university, which will train talent, conduct research, and grant degrees in education and economic development. Second, it is setting up institutes in various district towns to provide on-the-ground support to education professionals through course materials, assessments, and continuing education. Third, it has established an assessment and accreditation institute to develop and propagate high standards of educational excellence across the educational system. Finally, the Premji Foundation is planning to build 200 schools to help in local capacity building and to raise awareness about quality education. Mr. Premji has donated $2 billion to the Premji Foundation to fund these programs.
BMGF's Avahan Initiative and the Premji Foundation's efforts demonstrate that philanthropies can aspire to deliver systemic nation-wide impact. Gearing up to address these challenges requires not just vision and significant long-term financial commitment, but also a professional philanthropic organisation. Such an organization must have outstanding leadership, a skilled and motivated team, and appropriate operating processes to deliver on its mission.
Importantly, these philanthropic organizations must develop close partnerships with India's best NGOs: making multi-year grants to NGOs; assisting NGOs in becoming well-run, disciplined organizations; and holding them accountable for results. Finally, philanthropies must conduct and freely share research on their programs - such knowledge may yield leveraged impact if government and other social sector organizations use these findings in their own work.
India's tycoons have built great global businesses, we also need their talent and capabilities to they must turn their attention to building great philanthropies that can take on India's most difficult social challenges.
The author is Managing Director of Omidyar Network India Advisors
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