In recent years, India, a country known for its rich history of giving and charitable traditions, seems to be witnessing a concerning trend: the decline of philanthropy, according to a Bain report. What could this mean? What are the broader implications of this? What are the on-the-ground realities of this?
According to Amit Chandra, Managing Director of Bain Capital India, “Giving seems to be nascent in India, where the legacy of giving is very rich, where philanthropy has been pioneering for the rest of the world. This is a country where the Tata family and the Godrej family nurtured the thought that society is the cradle of wealth and a part of it belongs to society. And, therefore, they put back large parts of that wealth back for the benefit of society. Soon, thereafter, the West caught on to that concept and we had a series of extraordinary wealth creators in the West. But, for a long period of time, that was forgotten, particularly in the 70s, 80s and the 90s, which I would call ‘the graveyard of Indian philanthropy’, where the back of giving was truly broken amongst the wealthy. But, it wasn’t broken amongst the lower middle class, because I think the middle class and the lower middle class still cared about the people around us. But, I think the wealthy went into a massive preservation of wealth mode. Only in the last 10 to 15 years, there’s been a re-emergence of philanthropy in India”.
“We’re actually in the first phase of rebuilding what used to be a pioneering society… I believe there’s an extraordinary amount of wealth creation happening in Indian society and all of us should be very grateful that we’re living in a phase, where we’re seeing rapid wealth creation, particularly amongst the wealthy and the ultra-wealthy… I expect a lot more to happen in Indian philanthropy. I believe this is the golden age of Indian philanthropy”, opines Chandra.
Chandra states, “Whatever we do, it’s always going to be the case that the government is going to massively dwarf philanthropic spending and that’s true about any country… We need to make sure that the wealth we give informs better social spending by the government… We need to take risky decisions, where the government cannot go and fill those gaps. When we engage with social causes, we engage our minds and if we’re divorced from doing anything, then we build walls around us, which makes us unengaged citizens… If you look at how much people give, it’s a percentage of their disposable income and it’s actually very little”.
According to Cyril Shroff, Managing Partner at Cyril Amarchand Mangaldas, “I think there are a lot of competing priorities at India Inc. There are generational transitions that are going on. There’s the ‘Amrit Kaal’ and the India-on-the-rise phenomenon. Whilst the graph is going upwards, I think there are competing demands on capital. Plus, there’s, probably, a lack of education about how to do philanthropy”.
“The good news is that as far as the younger generations and younger industrialists of recent wealth are concerned, there is a lot of curiosity. People do want to learn about it, there’s an opportunity for showing structures, how it should be done and how the money will be spent well. I think there’s a basic confusion between CSR and philanthropy, in some cases, there’s confusion between ESG and CSR, as well. So, there’s a fog of knowledge and perhaps, one of the things that professionals, like us, should do is demystify how to do philanthropy”, adds Shroff.
“People don’t necessarily give in an organized way. People give more money to beggars than they give to not-for-profits. If you want to see societal change, you have to basically invest in formal schools of giving, like schools, hospitals and organizations trying to partner with the government to solve problems. Sure, beggars are important, but we’re much better off making sure a beggar works well. Intuitively, all of us are, basically, virtually feeding the creation of a beggar economy by giving two times as much money to beggars than to institutions willing to solve the bigger problems… I think we need to be more strategic about our giving”, quips Chandra.
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