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India's wealthy families donate Rs 12,000 crore in FY20

Education and health-focused funding accounted for the bulk of the share of family philanthropy funding at 47 per cent and 27 per cent, respectively. Wealth is also concentrated in a few cities - most wealthy families are based in Mumbai, Delhi, and Bangalore who channel their funding there

twitter-logoJoe C Mathew | March 15, 2021 | Updated 12:13 IST
India's wealthy families donate Rs 12,000 crore in FY20
India's wealthy tripled its family philanthropy corpus

India's private-sector funding to philanthropy rose 23 per cent in FY 2020, to Rs 64,000 crore, as compared to FY 2019. The increase in fund allocation was driven by family philanthropy which tripled its corpus, growing to approximately Rs 12,000 crore in fiscal year (FY) 2020, says India Philanthropy Report 2021, co-created by Bain & Company and Dasra.

The report, the 11th in an annual series, shares a comprehensive perspective on the growing philanthropic space in India. It said all other sources of private sector funding - foreign, corporate and retail - remained stagnant while fund flow from high-net-worth individuals (HNIs) or families grew.

While foreign contributions account for a quarter of all funding, domestic corporation donations also known as Corporate Social Responsibility (CSR) account for 28 per cent and retail investors account for another 28 per cent. The remaining 20 per cent comes from family philanthropy, also the biggest source of growth, accounting for almost two-thirds of the increase in funding since FY 2019.

"It is indeed heartening to see that something that is integral to Indian culture -- 'giving' to those who need it is coming of age. 2020 has been a year of hard truths. This is a wake-up call to reimagine our approach towards strategic and collaborative philanthropy and the impact it can have. The case for family philanthropy is clear and so is its transformational potential," said, Dinkar Ayilavarapu, partner, Bain & Company.

Education and health-focused funding accounted for the bulk of the share of family philanthropy funding at 47 per cent and 27 per cent, respectively. Wealth is also concentrated in a few cities - most wealthy families are based in Mumbai, Delhi, and Bangalore who channel their funding there.

"Family philanthropy can collectively shape India's development agenda. Having partnered closely with over 300 family givers in the last 22 years, Dasra has seen the pivotal role that families play in addressing some of India's most complex challenges. Nurturing the nascent family giving ecosystem with enhanced support can be transformational for India," said Neera Nundy, co-founder of Dasra, a strategic philanthropic organisation.

The India Philanthropy Report 2021 indicates that the depth of India's wealth is expanding, with an increasing number of Indian ultra-high-net-worth families. "If these families start giving in line with their global peers (2 to 3 per cent of their wealth), family philanthropy could generate an additional annual investible corpus of Rs 60,000 crore to 1 lakh crore for the nonprofit sector. Such giving would be transformational, more than quintupling current family philanthropic giving (Rs 12,000 crore in FY 2020) and nearly doubling the size of nonprofit private funding in India. Understanding how to unlock this corpus is key, but equally important is planning for formalised support that family givers are bound to need as they enter philanthropy," the report said.

The report emphasises the openness to greater collaboration between funders, government, and NGOs, resulting in the co-creation of solutions to complex social issues. "The importance of unlocking groups outside of the existing cohorts of families to increase their giving could also bring significant impact. In addition, nurturing city circles to solve local issues could prove to be a catalytic model, especially when led by the influence and credibility of local champions. There is also great potential for entrepreneurship to fuel family philanthropy," it said.

Also read: India to see 63% more ultra-high net worth individuals by 2025

Also read: Hurun Global Rich List 2021: Kiran Mazumdar Shaw richest Indian woman entrepreneur

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