NEW DELHI—March 2, 2023—The social sector expenditure in India has seen an annual growth of 32% over FY 2021 to reach INR 22.6 lakh crore in FY 2022, driven primarily by growth in public sector spends which accounts for nearly 95% of total expenditure. Despite the growth, India is still significantly short of NITI Aayog’s target to achieve UN SDG goals by 2030.

With the public spending growth rate likely to normalise to historical levels, it is private philanthropy that needs to step up and play a catalytic role in bridging the funding gap. According to the India Philanthropy Report 2023 (IPR) by Bain & Company and Dasra, released today, overall private philanthropy is expected to expand at 11% annually over the next five years, driven by strong development in three segments: CSR, family philanthropy and retail.

Jishnu Batabyal, Partner in Bain & Co, said, “The weight of social sector commitments is being carried largely by the government. However, public funding growth will likely level out to pre-pandemic levels. Therefore, the imperative is on private philanthropy to realise its full potential and bridge the funding gap in India. Private philanthropy can play a catalytic role in building bridges at the intersection of government, businesses, foundations, civil society, and communities.”

In FY 2022, private giving remained flat at INR 1.05 lakh crore. Corporate, HNI and affluent individuals and Retail giving saw growth in FY 2022, while UHNI and international funding declined.

CSR spending that contributes 30% of private giving, has seen a robust annual growth rate of 13% over the last five years to reach INR 27,000 crore in FY 2022. The fact that many businesses have started giving more than the government-mandated 2% has helped fuel this surge even further, with BSE 200 companies contributing an additional INR 1,200 crore over the 2% mandate in FY 2022. In terms of sectoral allocation of funds, healthcare and education continue to lead the way with about a 55% share of contributions. While CSR spending grew at a slower pace of only 5% in FY 2022, it is expected it to sustain its historical growth and reach INR 52,000 crore by FY 2027.

Family philanthropy, which accounts for 33% of private domestic contribution, has grown at 12% over the last five years, reaching INR 29,600 crore in FY 2022 and is expected to grow at an annual rate of 12% till FY 2027 (excluding Azim Premji).  Contributions made by UHNIs (net wealth >INR 1,000 crore), HNIs (net wealth of INR 200–1,000 crore), and affluent givers (net wealth of INR 7–200 crore) together make up family philanthropy.

The rise in HNI and affluent giving is driven by an increase in HNI and affluent population, with combined contribution increasing by 11% over FY 2021. HNI and affluent giving is expected to grow at 11% annually till FY2027. UHNI contributions, on the other hand, have been volatile with contributions (excluding contributions by Azim Premji) dropping by 5% in FY 2022, despite a 9% increase in their cumulative wealth. Over the years, growth in contributions by top donors has been moderate. With current level of contribution, UHNI giving is expected to see an increase of 17% till FY2027. Indian UHNIs who donate substantially less across all wealth levels could boost their total contribution by 8–13 times if they matched their counterparts in China, the UK, and the US

Neera Nundy, Co-founder and Partner, Dasra, said “Indian philanthropy is led by families, who bring their values to the journey. This segment has seen a steady rise, with growth in HNIs/affluent givers, and further expected to increase by 12% from FY22 to FY27. Philanthropy infrastructure is critical to leverage this growth and mitigate volatility. GivingPi, India's largest family philanthropy network of 200 strong, will unleash funding and impact that builds community resilience.”

Within Family philanthropy the two cohorts that have emerged as harbingers in reshaping giving by diversifying their giving portfolio and adopting catalytic ways of giving are – “The Now-Generation” givers, which comprises professionals and first-generation entrepreneurs, and “the Inter-Generational givers”, which comprises of the current generation of traditional family philanthropists.

Inter-Gen and Now-Gen are increasingly leveraging data, technology, and narrative building to make giving more effective. Emerging evidence from GivingPi suggests that there is a clear shift from giving based on personal motivations to building a stronger India. Both cohorts are keen to nurture community resilience, strengthen philanthropic infrastructure, and build capacity of nonprofits. Giving behaviours of Inter-Gen and Now-Gen funders suggest a positive directional shift in philanthropy as we head towards India@100.

Both Inter-Gen and Now-Gen givers are open to adopting catalytic giving approaches, which is a combination of i) Openness to learning, ii) Unrestricted funding, iii) Collaboration. More than 70% of givers displayed high or medium catalytic giving potential, have a greater appetite for investing in pooled funding vehicles, and want to take advantage of cross-learning opportunities. 31% of Now-Gen donors are investing in ecosystem strengthening. Furthermore, there is a large shift in aspirations towards investing in ecosystem strengthening by both Inter-Gen and Now-Gen cohorts (41%). 

Arpan Sheth, Partner, Bain & Company, said “Both the Now-Generation donors as well as the Inter-generational donors are showing promising shifts in the “where” and “how” of giving. They are embedding intersectional lenses that focus on building the philanthropic ecosystem, climate action and GEDI (gender, equality, diversity and inclusion), while also reimagining giving approaches through collaboration, cross-learning, and flexible funding.”

 Retail giving with 36% contribution to domestic private giving, rose 18% over FY 2021 to INR 32,700 crore in FY 2022, driven by increased contributions to NGOs, disaster relief funds, and community giving. This increase was primarily driven by a 20% growth in community giving to support one another in times of need.

The report highlights the crucial role all the cohorts of givers within private philanthropy will play in bolstering inclusive and sustainable development given the large funding gap.

• Narrative-driven retail giving is well positioned to address urgent and important community needs.
• Corporate India, which is bound by the CSR framework, can direct funding towards scaling proven non-profit initiatives.
• HNIs and affluent givers are an emerging cohort with high potential to strengthen the philanthropic ecosystem.
• UHNI givers can play a particularly important role in strengthening the philanthropic infrastructure by providing flexible and long-term capital.

Neera Nundy, Co-founder and Partner, Dasra said "India needs stronger philanthropy infrastructure to not just unlock more risk-taking funding but also ways to support collaboration, learning to accelerate families giving journeys."

Philanthropic infrastructure is the common denominator across funder segments. When strengthened, it can unlock greater funding for the social sector at large. Philanthropic infrastructure can be strengthened by supporting nonprofit capacity building, setting up investment-ready vehicles, bolstering strategy advisory, and providing funds for research, innovation, monitoring, and evaluation.

Editor's note: To arrange an interview, contact Sitara Achreja at Sitara.Achreja@bain.com/ +91 9810367013 or Ishani Pahwa at Ishani.Pahwa@bain.com /+91 9899512912 from Bain & Company and Shibani Gosain at shibanigosain@dasra.org / +919818781848 or Prachi Pal at prachi@dasra.org / +919953890780 from Dasra.

About Dasra

Dasra, meaning ‘enlightened giving’ in Sanskrit, is a pioneering strategic philanthropic organisation that aims for a transformed India where a billion thrive with dignity and equity. Since its inception in 1999, Dasra has accelerated social change by driving collaborative action through powerful partnerships among a trust-based network of stakeholders (corporates, foundations, families, non-profits, social businesses, government, and media). To date, Dasra has catalyzed more than $300 million towards social causes in India, supported over 1500 diverse NGOs across the country, advised more than 750 philanthropists, foundations and corporates, published 200+ research reports and whitepapers, and impacted the lives of over 90 million people. 

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