Sectors in need of funds like science, health, education, rural development need generous HNI
The immense possibilities for philanthropy are highlighted by the donation of Rs 425 crore from the families of IT company co-founders Mindtree, Subroto Bagchi and NS Parthasarathy to the Indian Institute of Science. IISc, which ranked in the top 100 of the Times Higher Education World University Reputation Rankings last year, will establish medical facilities focused on cutting-edge clinical research and innovation. Philanthropy in India is growing but the flow of funds is too small despite the fact that the country has many high net worth individuals (HNIs).
National HNIs funding local causes could help offset the squeeze applied by the FCRA’s restrictions on global nonprofit contributions in India and the pandemic’s blow to low-income people. The number of Indian billionaires has risen to around 142 in 2021, with only the United States and China ahead. But a Harvard Kennedy School study of nearly 1.6 lakh foundations in 22 major countries found that 97% of foundation assets totaling $1.5 trillion are concentrated in the United States and Europe. Not only is the ranking of Indian foundations extremely low, but their expenditure ratio (expenditure to assets) was 3% compared to 9% in the United States and 37% in Spain.
The 2021 India Philanthropy Report by Bain and Dasra notes that philanthropic funding in 2020 increased by 23% to Rs 64,000 crore. While foreign contributions, CSR and individual donations stagnated at 80% of fundraising, family philanthropy accounted for most of this increase. A study by Edelweiss predicting 4 lakh Indian HNI families by 2025 with assets totaling Rs 360 lakh crore compared to 1.5 lakh families with assets Rs 140 lakh crore in 2018, reveals high growth potential for family philanthropy. The founders of Mindtree are like other generous tech HNIs. The technology sector accounted for 26% of family philanthropy while it accounted for only 9% of HNI families. With India’s government spending on areas such as science and technology, health and education being extremely low relative to GDP compared to other countries, philanthropy can help bridge the gap. Will our HNIs increase in power?
This article appeared as an editorial opinion in the print edition of the Times of India.
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