Wealthy Indians shell out 3% of income on charity: study

Wealthy Indians gave 3.1% of their income for charitable purposes in 2011, according to the Bain & Company's India Philanthropy Report 2012. The figure was 2.3% in 2010.

"India's young and wealthy have an especially strong commitment to giving back. We are encouraged by the emergence of the next generation of donors, who are even more committed to supporting this charitable culture as their wealth grows," said Arpan Sheth, partner, Bain & Company, Mumbai and the report's author. In India, more than half (52%) rich people planned to give more in 2012, and of them about two in five planned to increase their giving by 10% or more.

 

The 2012 Bain canvass showed that education was the most popular cause for giving in India, but it registered a sharp increase in the second most popular category, food and clothing. Housing and shelter rounded out the top three. Also, around half of this year's survey respondents said lack of accountability among charitable organisations prohibited them from increasing contributions.

Younger wealthy Indians gave a smaller proportion of their income for charity at 2% as compared to 3.9% for their older peers. But almost 60% of the younger group planned to increase donations in 2012. Two-thirds of all surveyed expected to increase donations in the next five years, with two in five saying they will increase giving by over 20% in that period.

The report said that donations by Indian affluent as a percentage of their income, still lagged behind their Western counterparts. United States, at 9.1%, is among the highest. The survey also showed significant charitable momentum building in India among all age groups. Nearly four out of five of those surveyed said they were 'novices' at charitable giving, with less than three years of philanthropic experience, versus only 13% of high net worth individuals in the United States.

The global business consultancy's report surveyed 400 wealthy individuals with more than Rs 4 lakh in assets, excluding primary residence, consumables and collectibles. Overall, more than 60% of the survey group was under 40 years of age with more than one-third being 30 years or younger.
 

Education is the most popular cause for charity
Category	2010 (% of respondents)	2011 (% of respondents)
Education	5	5
Food & Clothing	1.8	4.6
Housing/shelter	2.3	2.4
Healthcare	0.6	1.7
Sports	0.1	0.4
Arts & Culture	0.1	0.3
Lack of financial accountability is the biggest hurdle to increasing contributions
Key factors inhibiting contribution growth	2010 (% of respondents)	2011 (% of respondents)
Lack of transparency and accountability	70	53
Unfriendly tax laws for donations	60	43
Unaware of channels for routing money	54	43
Peers influencing amount of contribution	24	26
Capital requirements for regular business	19	10
Focus on wealth creation	18	9
Source: India Philanthropy Report 2012