Art of giving

The recently released list of India’s top philanthropists in 2019-20, compiled by Edelgive Foundation and Hurun India, tells a familiar story — of Azim Premji and family being the top philanthropist, donating ₹7,904 crore, with Shiv Nadar and family and Mukesh Ambani and family in the second and third spots, donating ₹795 crore and ₹458 crore, respectively. Other prominent donors in the top 10 are Kumarmangalam Birla, Anil Agarwal, Ajay Piramal along with their respective families, and Nandan Nilekani. It will not be an exaggeration to say that the sums raised annually through individual philanthropy (in the region of ₹45,000 crore, according to Bain and Company’s estimates) are underwhelming, given the fact that, according to Credit Suisse’s 2019 report, 4,460 Indians have a net worth of over $50 million each (over ₹350 crore). India has over 750,000 dollar millionaires as of mid-2019. Yet, according to Bain’s 2019 report, large donations, those above ₹10 crore, by ultra-high net worth individuals (defined by the report as those with a net worth of over ₹25 crore) comprise 55 per cent of individual philanthropist funding “and about 80 per cent is Azim Premji’s donations”. Global wealth studies point out the really wealthy have not been impacted by Covid, even as the incomes of large sections have taken a hit. The kitty for social spending needs to expand when health and education sectors are under stress.

India’s annual social sector spend, excluding State budget outlays, amounts to over ₹3-lakh crore, of which private contributions account for ₹70,000 crore (individual contributions of about ₹45,000 crore; CSR of about ₹12,000 crore; and the rest from foreign sources); multilateral funds in the form of Overseas Development Assistance amounts to ₹17,000 crore; and the rest is the Central budgetary outlay. ODA assistance is likely to suffer in a time of world recession, while foreign NGOs have been sidelined by the government. With CSR outlays unlikely to be buoyant now, the tab needs to be picked up by the government and India’s millionaires. Funds can be channelised through social stock exchanges (SSEs), with SEBI having drawn up the ground rules in this regard.

Individual philanthropists, ODA and CSR have focused on health and education. However, assessments by the OECD as well as research into SSEs point to the potential for more synergy in these areas. SSEs focus on ‘projects’ and short-term outcomes, to be reported at frequent intervals as desired by regulators; however, institutions cannot be built overnight. While the MCA oversees CSR spends, a plethora of laws governing trusts and charities has created scope for tax avoidance and misuse of funds. This should be looked into. Philanthropy has a crucial role to play in a country where human development is out of sync with its economic and financial profile.

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