Home CATEGORIES Business Ethics & Philanthropy Surge in Private Philanthropy Boosts India’s Social Sector in 2023

Surge in Private Philanthropy Boosts India’s Social Sector in 2023

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Corporate Philanthropy
 
Private philanthropy in India witnessed remarkable growth during 2022-23, exceeding the average annual growth rate observed over the preceding five years. This surge, driven primarily by increased family philanthropy and retail giving, signals a significant shift in the landscape of charitable contributions within the nation.
The latest edition of the India Philanthropy Report, jointly produced by Bain & Company and Dasra, unveils striking insights into the realm of private giving. In the fiscal year 2022-23, private philanthropy, encompassing corporate social responsibility (CSR) funding, wealthy donations, and contributions from retail sectors, surged by 10% to reach a staggering Rs 1.2 lakh crore.

Trends and Insights

While compliance with CSR mandates notably increased during this period, with a doubling in the number of companies adhering to the 2% CSR requirement, the growth in CSR spending remained moderate at 7%. This contrasts sharply with the robust expansion witnessed in family philanthropy and retail giving, registering growth rates of 15% and 12%, respectively.
Radhika Sridharan, a partner at Bain & Company, attributes the moderate growth in CSR spending partly to the lingering effects of the COVID-19 pandemic. However, she notes a positive trend in the broadening donor base, with smaller companies increasingly participating in philanthropic endeavors.
Despite the crucial role of CSR funding in supporting the social sector, commitments by companies tend to be short-term, hindering long-term planning and execution. Neera Nundy, co-founder of Dasra, emphasizes the need for greater continuity and strategic alignment in corporate philanthropy efforts.
Healthcare and education continue to command a significant share of CSR funds, while allocations to environment and sustainability initiatives are steadily increasing. Furthermore, young, first-generation donors are venturing into non-traditional areas such as climate change and diversity, signaling a shift towards more holistic philanthropic approaches.

Foreign Contributions and Regulatory Challenges

Foreign private giving, while estimated at Rs 23,000 crore in FY23, faces a slow trajectory amid heightened scrutiny and regulatory constraints. Despite this, India remains an attractive destination for foreign funders, though increased focus on low-income countries may divert attention away from India’s exceptional growth story.
India’s total spending on the social sector has seen a commendable annual growth rate of 13% over the past five years. However, this falls short of the targets set by the Niti Aayog, which estimates a 13% of GDP spending requirement to meet UN Sustainable Development Goals commitments by 2030.

Conclusion

The surge in private philanthropy underscores a transformative shift in India’s social sector landscape, with increased participation from diverse stakeholders driving positive change. However, as India navigates the evolving philanthropic landscape, addressing regulatory challenges and fostering long-term sustainability will be critical in achieving meaningful impact and advancing social development goals.