By Gyan Pathak
The Constitution of India guarantees safety of life and property, but both are unsafe in the hands our current government in the helm of affairs. To ease the miseries of the people, several private national and international philanthropist individuals and organisations are working. Indian philanthropic contribution has surpassed the international contribution with the enforced Corporate Social Responsibility (CSR), but it too is in great disarray. Philanthropic help is not reaching the people who need it most. Spread of the activities is uneven and is mostly centred in only few relatively developed states. The help is also limited to only a few areas. There is a lack of coordination among the philanthropists. Many of them are doing the same thing while most other areas are ignored. The worst is, its linkage with the strategies centred more around saving taxes than helping the needy.
Economic growth, domestic regulation on Corporate Social Responsibility and global interest in India’s development have been transforming the role of domestic philanthropic giving in India for three decades. It bodes well for the potential for philanthropic giving, says a recent OECD report. It also mentions that global interest in India’s social and economic development is high making it the largest recipient of international philanthropic flows, but official development assistance (ODA) as percentage of Gross National Income (GNI) has decreased.
It is strange that OECD had invited 178 of the largest CSR and philanthropic organizations in India to be part of the survey, but they were found generally reluctant to be its part, particularly family and corporate foundations. Since they were reluctant to share financial philanthropic data, OECD had to limit it to only 50 large organizations. The quality of philanthropic activities and spending is therefore not known for the greater part of the activities.
However, it came to light that domestic funding has at least matched international philanthropic funding in recent years with close to USD 1.8 billion in domestic spending between 2013 and 2017. Education, health, and rural development attracted the largest funding. Some other areas, like gender equality, receive very limited funding. Domestic philanthropic giving is highly concentrated in the States of Maharashtra, Karnataka, and Andhra Pradesh. Comparing funding from private giving with poverty rates reveals that domestic philanthropic giving in India focuses rather on populated areas than those with high poverty incidence. It is worth mentioning that 33 per cent of the domestic and CSR funding is received by education, 22 per cent by health, 13 per cent by multisector, 7 per cent by environment, 7 per cent by water and sanitation and 18 per cent by other sectors.
Philanthropic activities in the country have mainly three sources of funding – domestic, international, and ODA. Due to lack of coordination there are incidence of overlapping and opportunities for collaboration. Health and education clearly stand out as two main priority areas for philanthropy and CSR in the country. There is scope for more coalitions and to explore how to achieve impact at scale when it comes to these areas. For water supply and basic sanitation, there are important overlaps in funding among ODA, international, and domestic philanthropy, as well as CSR and public spending. This suggests potential for more large scale partnership between ODA donors, private donors, and the public sector.
Increasing domestic philanthropic flows also pose a new challenge for the non-profit sector. Additional resources from mandatory CSR and larger voluntary donations from individuals and foundations are becoming available. Therefore, it is urgent to strengthen the ability of the non-profit sector to further absorb those resources and transform them into positive development outcomes.
The real challenge in mapping philanthropic activities in India lies in the non-availability of the full and real data making quantification of domestic philanthropy challenging. Data disclosure is for the most part voluntary: apart from CSR, which is reported to the Ministry of Corporate Affairs, and foreign contributions under the Foreign Contribution Act, private philanthropic funding is not regularly identified and no data is being collected by States or federal government. Majority of grant-making organizations do not publish yearly reports with the allocation of their grants. Nevertheless, estimates place philanthropic funding as high as USD 10 billion a year as of 2018, predominantly from donations made by High Net Worth Individuals and family foundations. In case of CSR, according to the data collected by the Ministry of Corporate Affairs in 2015, the latest year currently available, approximately USD 1.4 billion was disclosed as CSR expenditure from 5097 companies under Companies Act.
Philanthropic works have now become ever important because income inequality in the country has increase in the last three decades as measured by the Standardized World Income Inequality Database. The share of pre-tax national income held by the top one per cent of the distribution rose steadily from 12 per cent in 1993 to around 22 per cent in 2017.
The philanthropic sector in India is not regulated by a single government agency and there is no private or public organization that consolidates information for all philanthropic organizations, nor an association of these organizations that performs this role. It has been made more complex by the fact that any non-profit legal entity involved in education, health care, religion or community development can be referred to as a ‘foundation’ and can legally registered under the same legal structure that regulate charitable institutions in India. While CSR is regulated by the Ministry of Corporate Affairs, non-profit organizations are registered under various Registration Act – both at the central and state levels. Pubic trusts are regulated by the States through Trusts Acts; however, in the absence of a Trust Act in a particular state, the principles of the Indian Trusts Act apply.
Moreover, the Indian philanthropic ecosystem has no reporting standards in the country, resulting in the absence of data about private philanthropy in terms of allocation, sectors targeted, geographical distribution, or the ultimate impacts of these expenditures.