2015-03-20-Bain-India_Philanthropy_Report_2015_32页_2mb

India Philanthropy Report 2015 Summary

Core Content

This report, the fifth edition of Bain & Company's India Philanthropy Report, outlines the evolution of philanthropy in India and provides recommendations for sustaining and enhancing its growth. It highlights the progress made since 2010 and the challenges that still hinder the sector from reaching its full potential.

Main Points

• Growth of Philanthropy:
  Philanthropy in India has seen significant growth since 2010, with the number of donors and charitable contributions increasing substantially. The country now has more than 100 million additional donors compared to 2009, and the public profile of philanthropy has expanded.

  • In 2013, 28% of the adult population donated money, and 21% donated their time.
  • Corporate Social Responsibility (CSR) regulations under the new Companies Act are expected to bring about a positive disruption, increasing corporate donations and improving governance and transparency.

• Donor and Nonprofit Dynamics:
  The report explores the relationship between donors and nonprofit organisations, identifying a two-tiered philanthropy space.

  • Tier 1: Sophisticated donors and nonprofit organisations working together to create a positive spiral of growth and impact. These donors are more loyal and engaged, and they contribute not only financially but also through oversight and guidance.
  • Tier 2: Unsophisticated donors and nonprofits trapped in a negative spiral, where donors seek causes out of guilt or personal relationships and nonprofits struggle with fundraising and credibility.

• Key Challenges:

  • Lack of Credibility: Many nonprofit organisations lack transparency and accountability, making it difficult for donors to trust them.
  • Donor Apathy: A significant portion of donors are "disconnected" and do not have a deep interest in the causes they support.
  • Fragmentation: The two-tiered structure leads to inefficiencies and limits the scope of philanthropy.

• Recommendations for Improvement:

  • Greater Cause Orientation: Donors should be more aligned with specific causes, leading to increased loyalty and sustained support.
  • Enhanced Transparency: Nonprofits must improve transparency in their operations, reporting results, and utilising funds.
  • Collaboration and Resource Sharing: Nonprofits should collaborate to improve efficiency, share best practices, and reduce overheads.
  • Standard Assessment Criteria: Independent agencies should develop standard metrics to evaluate nonprofit effectiveness and efficiency, similar to rating agencies in the corporate sector.

Key Information

• Donor Trends:

  • 43% of surveyed donors plan to increase their contributions over the next five years.
  • 40% of HNWI donors focus on education and child welfare, while only 15% support the environment and arts.

• Nonprofit Trends:

  • Over 2 million nonprofit organisations operate in India, with more than 44,000 registered under FCRA.
  • 83% of respondents from larger nonprofits felt they had sufficient funds, compared to 63% from smaller ones.
  • 64% of NGOs believe partnerships among stakeholders are essential for growth.

• Economic and Institutional Factors:

  • The rise of high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) has contributed to the growth of philanthropy.
  • The potential for corporate contributions under the new Companies Act could reach between $2.5 billion and $3.3 billion.

• Social Development Gaps:

  • India still lags behind developed countries in key social indicators. For example, its maternal mortality ratio is 190 per 100,000 live births, compared to 8 in the UK.
  • Only 36% of the population has access to improved sanitation, and there are significant gender disparities in education.

Conclusion

India's philanthropy sector is growing rapidly and has become a global outlier in terms of public engagement. However, the two-tiered structure and lack of trust and transparency hinder its ability to address broader social challenges. To move forward, stakeholders must work together to enhance cause orientation, promote transparency, foster collaboration, and establish standard assessment criteria. These steps will help transform the sector into a more inclusive and effective space for social change.