Exploring localisation in India’s philanthropy and civil society ecosystem

Asia-Pacific, Family, HNWI, and independent philanthropy, Philanthropy ecosystems and infrastructure

By Ami Misra, Associate Director and Prachi Pal, Team Lead, Dasra 

The imperative need for investments 

India has witnessed significant economic growth over the past decades. As per the India Philanthropy Report 20241, this growth is primarily driven by sectors such as technology, manufacturing, and services, contributing to the rise of India’s first-generation wealth creators and professionals. Despite this economic progress, India remains one of the most unequal countries globally with approximately 234 million people living in poverty– the largest number globally2. The top one per cent holds nearly 40.6 per cent of the national wealth, leaving less than three per cent for the bottom 50 per cent of the Indian population3. 

The public sector still contributes to 95 per cent of the total social sector expenditure. Over the last five years, India’s social sector spending experienced a robust annual growth of 13 per cent, reaching approximately USD 280 billion in FY 2023 i.e. 8.3 per cent of the total GDP. Private philanthropy grew 10 per cent in FY 2023, to USD 15 billion. This faster growth (versus five per cent annual growth from 2018 to 2023) was driven by growth in family philanthropy (15 per cent) and retail giving (12 per cent). However, global philanthropy inflows to India have remained flat over the past five years (three per cent)4.  India still falls short of NITI Aayog’s5 estimated target of 13 per cent of GDP required to meet the SDGs by 2030. 

The private philanthropy sector in India, valued at INR 1,210 billion as of last year, faces potential challenges due to global funding shifts towards low-income countries and vulnerable regions, affecting the growth of foreign private funding in India. This poses a critical question: How can local philanthropy be harnessed to drive inclusive growth and socio-economic transformation in India?

The shift towards localised philanthropy 

India’s philanthropy ecosystem is evolving rapidly. Several factors contribute to this growth and shift in giving patterns, including the catalytic role of family philanthropy, the emergence of a new generation of wealth creators, the burgeoning of collaborative platforms, and the diversification within the giving ecosystem. Today, several Indian philanthropists are more focused on addressing systemic issues.

Family philanthropy has long been integral to Indian culture and nation-building efforts. Wealthy Indian families are increasingly channelling patient and flexible capital into building institutions, supporting underserved causes, and strengthening philanthropic infrastructure. A notable shift is the growing influence of distinct cohorts in philanthropic decision-making based on gender and age. Leaders like Rohini Nilekani and Raj Mariwala are shaping civil society and philanthropy discourse, driving momentum in their circles of influence. This new approach is characterised by a greater focus on intersectional and intersectoral solutions, which aim to build future-proof community resilience.

With a growing number of first-generation wealth creators who are professionals and entrepreneurs – there is an intention to engage in philanthropic activities earlier in their careers. This shift is characterised by a strategic approach to philanthropy, likely informed by their experiences in the start-up and corporate structures. Initiatives such as the ACT Grants by Prashanth Prakash and the Rainmatter Foundation by the Kamath brothers are examples of strengthening the infrastructure. Such platforms are helping funnel knowledge and resources to improve philanthropic decision-making and distribution across the ecosystem. Both these initiatives have been targeted while adopting long-term visioning in their approaches. 

In addition to family philanthropy, collaborative platforms are emerging as key players in India’s social sector. The number of collaboratives established in India per year has surged by about five times in the past three years6. These platforms bring together a range of stakeholders, including experienced and emerging funders, NGOs, and government bodies, to pool resources and amplify the impact of philanthropic efforts. By fostering multi-stakeholder partnerships, collaborative philanthropy can enhance the capacity of civil society organisations and ensure that resources are deployed more effectively.  

Furthermore, India has completed ten years of rolling out the mandatory compliance i.e. Corporate Social Responsibility (CSR) law. More corporate players are fulfilling the requirements and investing in multi-year projects. The CSR mandate requires companies above a certain threshold to allocate two per cent of their average net profits towards social initiatives, diversifying the flow of resources into the non-profit sector. 

Pivoting for the future

India has 240,000 registered non-profit organisations (NPOs)7, and a small proportion access foreign funding. In 2022, 13,520 NPOs received foreign contributions worth USD 2.8 billion, with the average grant size per NPO being USD 200,0008. However, NPOs play a critical role as official development partners to the government at the federal and local levels, building awareness among underserved communities, and strengthening last-mile access to services. Rooted in decolonisation movements from over a century ago, India’s non-profit ecosystem is mature and agile. Engaging diverse funder cohorts will be critical for creating a positive, sustainable impact. While localisation alone cannot unlock the sector’s full potential, targeted engagement and collaboration can.

With a robust global focus on India, the country can offer replicable solutions that prioritise the needs of the Majority World. Based on preliminary insights, solutions developed in India are already extending to countries in Asia and Africa. These solutions are currently being implemented in 32 countries in these regions9. India’s robust presence as a scaling lab for critical solutions to the world’s most complex issues is a harbinger for a future where the Majority World is empowered to solve for itself. As India’s philanthropic landscape evolves toward more localised sources and agile civil society organisations, global philanthropy can play a crucial role in preparing the country for its next phase of development – India for the World.

_______________________________________________

  1. https://www.bain.com/insights/india-philanthropy-report-2024/
  2. https://www.undp.org/arab-states/publications/2024-global-multidimensional-poverty-index-mpi
  3. https://www.oxfamindia.org/knowledgehub/workingpaper/survival-richest-india-story
  4. https://www.bain.com/insights/india-philanthropy-report-2024/
  5.  NITI Aayog is India’s premier policy think tank, guiding national economic and social development, fostering cooperative federalism, and driving transformative reforms.
  6. https://www.bain.com/insights/india-philanthropy-report-2024/ 
  7. https://ngodarpan.gov.in/ (accessed in August, 2024)
  8. https://www.business-standard.com/india-news/ngos-of-delhi-k-taka-received-major-chunks-of-foreign-contributions-govt-123032900965_1.html 
  9. These countries include Afghanistan, Bangladesh, Cambodia, Cameroon, Congo, Cote d’Ivoire, Egypt, Ethiopia, Fiji Islands, Gambia, Ghana, Indonesia, Kazakhstan, Kenya, Malawi, Myanmar, Namibia, Nepal, Nigeria, Oman, Pakistan, Papua New Guinea, Philippines, Rwanda, Saudi Arabia, Senegal, South Africa, Tanzania, Thailand, Uganda, Vietnam, Zambia, Zimbabwe.

 

Additional Reading 

Ami Misra                         and                     Prachi Pal

Ami Misra is the Associate Director at Dasra, where she is involved in advisory research and has led flagship reports on underserved sectors as well as the philanthropy ecosystem.

Prachi Pal is the Team Lead, at Dasra, where she drives thought leadership on India’s philanthropy ecosystem.

To get first access to our blogs every month, subscribe to our newsletter here.

Press ESC to close