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| India giving: Rich open hearts and wallets |
| BS Reporter / Mumbai Jun 30, 2011, 00:58 IST |
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A couple of months back, wealthy Indians had Warren Buffet and Bill Gates, both known for their philanthropic activities, asking them to reach out for their wallets to give for charitable causes. The good news: Reports suggest wealthy Indians increased their philanthropic spending last year and were likely to continue doing so in future.
According to the ‘India Philanthropy Report 2011’, a report that tracks individual and corporate spending towards philanthropic activities, donations made by wealthy Indians stood at $5-6 billion in 2010. The figure has risen by at least 50 per cent since 2006.
The report brought out by Bain & company, a global business consulting company, included a survey of over 300 wealthy individuals, including 100 high networth (HNI) individuals with assets of more than $ 1 million, focused on private giving within the country.
The report found that the wealthy were now giving away 1.5-3 per cent of their annual household income — education, food, housing and shelter being the most popular causes for distribution of private wealth. Interestingly, about 40 per cent of them planned to increase their philanthropic donations over the next five years.
India’s HNI population is growing and is the third-largest — after China and Brazil. According to the 2010 World Wealth Report by Capgemini and Merrill Lynch, India’s wealthy population grew 50 per cent between 2008 and 2009. With the HNI population, private charitable work has also been growing.
India’s private charitable donations had stood at 0.3-0.4 per cent of GDP in 2010 — up from the 0.2 per cent in 2006.
Among the developing countries, India is now one of the leaders, along with China and Brazil, in charitable giving. However, the country still lags behind developed countries. Private giving (including bequests) in the US accounted for 2.2 per cent of GDP in 2009 and 1.3 per cent in UK in 2010. (See chart).
The report highlights one of the key reasons for the disparity: Individual donations in India still constitute only 26 per cent of all private charitable contributions, while corporate donations and foreign funds make up the remaining 74 per cent. In the US, on the other hand, individual charitable donations are 75 per cent of all private giving; and, in the UK, they make up 60 per cent.
Some of the biggest constraints holding back private donors in India are lack of accountability and transparency in charitable organisations and tax laws that deter giving.
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