What has been the impact of family philanthropy in India?
Pandemic also reinvented philanthropy in India. Gautam Adani recently pledged to donate $7.7 bn to social causes. But is the family philanthropy by ultra-rich Indians making the desired impact?
Krishna Veera Vanamali New Delhi
Asia’s richest man celebrated his birthday a bit differently this year. To mark his 60th birthday, Adani Group Chairman Gautam Adani and his family, whose net worth is estimated at $98.1 billion by Forbes, have pledged to donate Rs 60,000 crore or $7.7 billion to a series of social causes. The donation will be managed by the Adani Foundation, which is led by his wife Priti Adani.
With this Adani joins the ranks of billionaires like Mark Zuckerberg and Warren Buffett, who have committed large parts of their wealth for philanthropy.
Philanthropist Azim Premji said this should set an example that entrepreneurs can try to live Mahatma Gandhi’s principle of Trusteeship of Wealth at the peak of their business success. Indeed, the average age of giving in India is dipping every year and stands at 66 now.
In FY21, Premji donated $1.3 billion or Rs 9,713 crore to charity. His foundation has an endowment estimated at $21 billion. The family of HCL Technologies founder Shiv Nadar was the second biggest donor according to a 2021 Hurun India report.
Adani’s pledge is almost half of what Bill Gates and Melinda French Gates donated to their foundation in 2021, while the former couple’s total donations are valued at $74.6 billion.
Jamsetji Tata, who set up Tata Trusts, is the most generous individual of the last century, with total donations of over $102 billion at current value.
Private giving in India stems from four sources -- foreign, corporate, retail and families.
CSR, family philanthropy and retail giving account for approximately 84% of overall private giving, with foreign contributions making up the rest, according to the India Philanthropy Report 2022 by Dasra and Bain & Company.
Family philanthropy overall forms about one-third of total private giving and is expected to grow at a robust 13% per year until FY26, driven by increasing wealth and a rise in the number of technology entrepreneurs.
Family philanthropy has fewer constraints than other sources, enabling a broader impact on the social sector. These donors have a greater ability to innovate, influence public policy, build institutional capacity, and experiment with new forms of funding.
They can also go far beyond grant-making as most funders come with extensive and technical knowledge in their respective fields, and have deep networks across functions and industries.
But family philanthropy has its biases. Of the three major sources of private giving, CSR is the most widely distributed across sectors, while family giving is majorly concentrated in education and healthcare even as India lags in several other sectors. India also lags on gender equality indicators than on indicators related to health and education.
Similarly, funding is concentrated in Tier-1 cities.
Adani’s donation will be utilised in the areas of healthcare, education and skill development with a special focus in rural regions.
India’s ultra-rich could potentially increase their donations by 8 to 13 times if they can match the giving as a percentage of wealth of their UK, Chinese and US counterparts.
Anant Bhagwati, Partner, The Bridgespan Group says, over the next 5 years, family philanthropy could grow to 40% of total private giving. Unlike CSR or retail, family giving can back causes that deliver long-term results, he says.
How the Adani family deploys its large $7.7 billion donation is also key. While a good number of family philanthropists engage with NGOs through grant-making, not all NGOs can absorb scale funding of the sort offered by these families.
Gautam Adani has said that three expert committees will be formed to formalise strategy and decide allocation of funds, with a plan to add one or two more focus areas in the coming months. Adani Foundation will have to build the right talent, enhance its institutional capabilities further, and develop strategies to drive change in the targeted areas.
First Published: Jun 27 2022 | 7:00 AM IST