Importance of small-scale philanthropy

Pushpa Sundar | Updated on August 12, 2019

HNIs usually fund projects that are self-promotional. When small donors back social projects, the results can be remarkable

Does it really matter from society’s viewpoint as to who gives for charitable purposes, and for what, and how? Yes, it does.

It is not only the total quantity of charitable giving in a society which determines what kind of impact it has on society, but also the nature of giving. Contributions by high net worth individuals (HNIs) and by a large numbers of small donors have different implications for societal development.

Typically, donations by HNIs go for mega projects of some kind, such as building new institutions; large scale conservation of heritage, or the natural environment; scientific research; or starting social enterprises.

Though concerned with finding solutions to complex global problems, the philanthropy of HNIs is more self-seeking — acquiring name and fame for the giver. Though there are instances of collaboration, the rich givers generally prefer to be the sole players, thus possibly limiting the impact of their projects. More significantly, high-end philanthropists are less interested in giving for issues of social justice such as gender parity, affirmative action for the marginalised, reform of the legal system in favour of the poor, democratic reforms or tribal rights. Anything controversial is generally avoided by most.

Anand Giridharadas, author of a highly critical study of philanthropy, Winners Take All, suggests that we will never achieve social justice through “a system that perpetuates vast differences in privilege and then tasks the privileged with improving the system.” The problem, as he sees it, is not just that those with privilege cannot truly understand the needs of those without, but rather that the mechanisms inherent in creating economic inequality cannot be used to reverse the imbalance.

According to him and other scholars, high-end philanthropy works on manifestations of poverty and on an incremental developmental agenda which does not engage with fundamental and systemic causes of exclusion and injustice to which they or the system to which they belong have contributed.

Moreover, according to Bain and Co., which tracks Indian philanthropy trends annually, if Azim Premji’s humongous contributions are left out individual giving by HNIs has actually seen a 4 per cent decrease in recent years.

On the other hand, according to a recent report by Sattva, giving by large numbers of small givers is dynamically growing. In 2017 alone, ordinary citizens contributed ₹34,242 crore for the local community, religion, disaster relief, and non-profits. This kind of giving has the advantage of giving people a say in solutions to local problems.

The small giver is unconcerned with promoting himself, aware that his contribution to a cause or organisation is but a drop in the ocean. Small givers contribute because of an interest in solving local problems. In giving they buy into the cause and become engaged in doing something about it. Giving at this end is likely to be more activist in nature and more likely to back dissent than high-end philanthropy. Aggregated, it can have a significant impact.

Informal giving

However, the problem here is that though, prima facie, the total individual giving looks big in absolute numbers, analysis shows that 90 per cent of this (₹30,700 crore), is informal giving, predominantly in cash, either to religious organisations, or to help dependants, staff, employees or the homeless. Formal giving which is directed to transformative change, accounts for a mere 10 per cent, and that too is split primarily between giving to non-profits, and giving towards disaster-relief. While informal giving for distress relief of any kind is no doubt needed, it is the more formal giving which, collectively used, addresses the basic developmental issues of society and brings change. Unfortunately, because of the smallness of size and the fact that it can be sporadic, it is not able to sustain large projects which need committed and sustained funding to produce results.

So clearly different goals need different kinds of philanthropic funding. High-end philanthropy is important for large scale disruptive change. Philanthropy at this end is wasted on charity in the narrow sense of distress-relieving charity, or even in supporting grassroots causes which are best funded through aggregating small giving for collective action. Social justice issues are best funded through collective philanthropy. Different measures are required to stimulate the two kinds of giving.

The writer is author of ‘Giving With A Thousand Hands: The Changing Face of Indian Philanthropy’.

Published on August 12, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor