Donors will give more if NGOs convey impact, says Bain

Wipro Chairman Azim Premji might not need much convincing to part with his wealth for the greater good, but India’s private philanthropists — who gifted about 3.1 per cent of their household income in 2011 — are likely to contribute much more if the country’s non-governmental organisations (NGOs) communicate with their donors more effectively.

“If NGOs could step up their game to improve their impact creation and communication,” a report by business consulting firm Bain & Company said, “26 per cent of donors would increase their philanthropic contributions. This is likely to create an uplift of about 20 per cent in donations from impact-motivated high net worth individuals (HNWIs).”

Bain’s outlook — based on a survey of 180 HNWIs, 40 NGOs and 20 detailed interviews — projects that such an increase could mean an increase of five per cent in the total private donation corpus in India. “Private philanthropic capital is vital. Yet, India’s economic growth rate has recently declined to around 5.4 per cent. This contraction in growth has led to donors putting a higher bar on understanding the impact of their giving before they commit to causes,” the report added.

The survey revealed while 90 per cent of donors are satisfied with the impact of their contribution, only 38 per cent receive at least a quarterly communication from the NGOs they fund, and 60 per cent do not receive regular communication. “And, of those NGOs that communicate, the majority do not convey any information about the impact of their efforts. All told, fewer than two in 10 donors are periodically updated on the impact of their donations,” the report noted.

The larger problem, however, is that there isn’t enough clarity around impact assessment, Bain’s report asserted. While donors seek quantitative metrics, these do not always accurately state the achievements in long-term projects such as gender justice, drug rehabilitation and Dalit empowerment. “It is imperative that donors and NGOs align on what should be measured, and how and when that measurement should occur,” it added.